Judge Brian Stagner
The Business Court has granted summary judgment in favor of a real estate developer who argued that a contract with a homebuilder to purchase lots in a subdivision was unenforceable under the statute of frauds.
Riverside Homebuilders, Ltd. v. FG Aledo Development, LLC (2026 Tex. Bus. 53; July 29, 2026) arose from a dispute over the enforceability of a contract for the purchase of 181 residential lots in a subdivision in Parker County. Aledo owned 358 lots in Morningstar Section 1-1 and sought to sell the developed lots to homebuilders. Aledo was owned 50% by KTFW Investments, owned and managed by Kelly Gill, and 50% by Tim Fleet, who owned and controlled Riverside. Aledo agreed to sell 179 lots to D.R. Horton, and Riverside alleged that it made a similar deal for 181 lots. A document called the “Morningstar Contract,” dated October 1, 2024, appeared to grant Riverside the right to purchase the lots, but the document didn’t identify the lots by lot and block, metes and bounds, or recorded plat. Instead, it referred simply to a 71-acre tract and outlined a “mechanism for splitting up the lots within that tract at a later date.”
That mechanism required Horton to first divide all the lots in the development into equal groups, at which point Riverside got 15 days to pick a group. But the contract didn’t limit Horton’s discretion in making the initial division, so until Horton decided to act, Riverside didn’t really have any lots at all. Although a plat was filed a few months later, Aledo declined to amend the contract and refused to convey anything to Riverside after all. Riverside brought suit in the Business Court for breach of contract. Aledo moved for summary judgment on the basis of the statute of frauds.
In an opinion by Judge Stagner, the court granted the MSJ. First, the court made the assumption that Riverside could prove that the contract was validly executed. The question thus became whether the contract satisfied the statute of frauds by sufficiently identifying the property that Defendant allegedly agreed to sell. Under the statute of frauds, a “contract need not contain a flawless metes-and-bounds description, nor must it pinpoint the property without any help from outside evidence. As long as the contract provides a sufficient ‘nucleus of description,’ extrinsic evidence can be used to explain those descriptive terms and trace them to the ground.” But even if parol evidence could be used in this case, it could do no more than what the contract said already: until the lots were divided and pinned down “to the ground,” the contract couldn’t describe the property to be conveyed with any certainty at all. Had the contract given Riverside an “unqualified right” to select a parcel from a larger text, the court went on, it might be enforceable if it adequately described the larger tract and the buyer’s right of selection depended on no further agreements, approvals, or discretionary choices by other persons. That clearly wasn’t the case here.
Even more to the point, the Morningstar Contract expressly acknowledged that it didn’t contain an adequate property description that the parties would get the legal description through a future plat. But, the court pointed out,. “Texas law does not permit parties to postpone compliance with statute of frauds. The contract, when made, must furnish the data necessary to identify the land with reasonable certainty.” Otherwise, the court noted, “parties could sign blank real estate contracts and simply wait for a future survey, plat, or supplemental agreement to cure the defect.” Riverside’s breach of contract thus failed as a matter of law. Additionally, Aledo was entitled to a specific declaration that the contract was not enforceable.
