The Texas Supreme Court has reversed a Dallas Court of Appeals decision dismissing the appeal of a party who challenged the validity of a settlement agreement approved by the trial court.
1 Coventry Court, LLC v. The Downs of Hillcrest Residential Association, Inc. (No. 24-1047; January 9, 2026) arose from a dispute over a fence between a homeowner’s association and a property owner. On the day of trial, the parties executed a document that the Association believed to be a binding settlement agreement but the property owner claimed was a nonbinding “agreement to agree.” A month later the Association sent the owner a draft settlement agreement that it claimed “mirror[ed] the terms of the settlement agreement.” When the owner refused to sign it, the trial court held a hearing regarding dismissing the case for want of prosecution. At the hearing, the parties disagreed over whether a binding settlement agreement existed. The court requested the parties to file a copy of the alleged agreement appended to a proposed final judgment for the court’s determination.
The Association duly filed the agreement it asserted was binding and moved to render final judgment. The owner objected and requested 30 extra days to work out a final settlement. The court sided with the Association. The owner moved for a new trial or, alternatively, to correct or modify the judgment. That motion was overruled by operation of law. Both parties presented their own versions of a final settlement agreement but again failed to agree. The Association moved to hold the owner in contempt for disobeying the trial court’s order. After a show-cause hearing, the trial court granted the motion and fined the owner $15,000, in addition to ordering it to sign the Association’s draft agreement. The owner did so (under threat of jailtime) but filed an appeal, which the court of appeals dismissed, holding that the owner relinquished its right to appeal by executing a final settlement agreement. The owner filed petitions for review and for mandamus relief. SCOTX granted review.
In a per curiam opinion, the court reversed. “As we have long recognized,” the court wrote, “appellate courts have not only the inherent power to ascertain their own jurisdiction, (internal citation omitted), but also the ‘obligation’ to do so (citation omitted). The court of appeals determined that the parties’ settlement agreement met the requirements of Rule 11 for an enforceable agreement, but when the owner challenged the validity of the agreement, it didn’t inquire into the merits of the owner’s argument. Without hearing oral argument, consequently, the court granted the petition for review, reversed the court of appeals’ judgment dismissing the owner’s appeal, and remanded to the court of appeals for further proceeding. Moral of the story: make sure the other side agrees to your settlement before using the trial court’s authority to force them to sign it.
