In another of the real estate disputes that appear to be popular in the Business Court, the court has granted summary judgment to Plaintiff that sold a $76 million apartment complex in Weatherford to a real estate management firm.
The Mark at Weatherford Owner, LLC v. Darwin German, Individually, and Darcorp Management Group, Inc. d/b/a Darwin German Real Estate (2026 Tex. Bus. 22; May 6, 2026) arose from a real estate deal that fell apart soon after closing. Plaintiff (The Mark) agreed to sell an apartment complex to Defendants for $76.75 million, but ended up having to extend them $4.7 million in credit to complete the transaction. As collateral, Plaintiff accepted membership units in Darcorp with the understanding that the loan would be repaid in full within months. Plaintiff also negotiated an agreement under which Plaintiff could demand that Defendants immediately repurchase the units if certain “automatic triggers” occurred. The agreement further obligated German personally “to use reasonable efforts to reacquire Plaintiff’s interest by December 31, 2023, and prohibited Defendants from retaining any fees or distributions arising from the property until the redemption of Plaintiff’s interest.
After more than three years, Plaintiff never got repaid, and the parties disputed whether any of the triggers happened. In November 2025, Plaintiff exercised its right to demand repurchase of its interest, now valued at more than $6.2 million, based on Defendants’ failure to remit fees and distributions owed to it, failure to take reasonable efforts to reacquire the interests, and other alleged defaults. Defendants refused. Plaintiff filed suit for declaratory judgment and quickly moved for summary judgment.
In an opinion by Judge Stagner, the court granted the motion. The court first determined what the agreement meant by “default,” one of the automatic triggers. Defendants argued that the term was ambiguous because the agreement “incorporates defaults from multiple underlying agreements—each of which recognizes different categories of default, including events of default subject to cure periods, extended-cure defaults, and various forms of “Manager Defaults” and “Manager Bad Act Defaults”—without specifying which of those categories quality as an “Automatic Trigger.” But as the court pointed out, the plain language of the agreement used the general term “default” without qualification, not the “more granular taxonomies of default” appearing in the underlying agreements. Because the dictionary defines the term as a “failure to do something required by duty or law,” the agreement meant any default, whether material or not. The agreement, consequently, was not ambiguous.
Defendants also disputed the term “payable” as it related to the fees or distributions that must be remitted to Plaintiff until its interest was redeemed. Defendants contended that “an amount is ‘payable’ only if the obligor has the funds actually available to pay it—in essence, that liquidity is a predicate to obligation.” Plaintiff argued that the term simply referred “to amounts that are due or owed, regardless or whether the obligor currently has the means to satisfy them.” Again, the plain meaning of “payable” simply “speaks to the existence of an obligation, not to the obligor’s ability to satisfy the obligation at a given time.” In other words, one can’t ignore an invoice or a promissory note just because of lack of funds to pay it. In this instance, Plaintiff owed Defendants a fee at closing and a Property Acquisition Fee, neither of which was paid because, Defendants alleged, they didn’t have the money. And that’s not a defense in a breach of contract claim.
But it wasn’t all bad news for Defendants. The court rejected Plaintiff’s argument that the agreement required any fees or distributions must be paid to Plaintiff first, until redemption of its interest. According to the agreement’s text, however, that requirement applied only to “fees or distributions directly or indirectly from the Property ….” Consequently, the court ruled, only fees or distributions arising from the property were owed to Plaintiff, not those generated from unrelated transactions. Nonpayment of that money didn’t constitute a default under the agreement.
The court rejected Plaintiff’s contention that Defendants’ YouTube video about the acquisition of the property violated the agreement’s confidentiality provision and, thus, a default. The record didn’t support summary judgment on that issue. It further disagreed with Plaintiff’s assertion that Defendants failed to use reasonable efforts to reacquire Plaintiff’s interest by the end of 2023. Observing that “[t]he concept of ‘reasonable efforts’ is inherently contextual,” the court didn’t find the evidence in the record so “one-sided” as to justify summary judgment on that issue. The agreement also didn’t define “reasonable” to give it an objective standard.
The issue that clinched the judgment for Plaintiff was Defendants’ nonpayment of the one-time fee and property acquisition fee. Those fees were “payable” to Plaintiff at closing and weren’t paid. There was no dispute that the fees didn’t become legally due, nor did “Defendants point to any provisions making those obligations contingent, optional, or subject to available cash.” Additionally, both fees arose from the property itself, so they were part of the “fees and distributions” owed to Plaintiff until redemption. Plaintiff thus established a default as a matter of law. That default was an “Automatic Trigger” under the agreement as well. The court thus granted Plaintiff’s motion for summary judgment.
