Pradera SFR v. American Housing Ventures

FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
5/12/2026
2026 Tex. Bus. 25

The Business Court of Texas,
Fourth Division

PRADERA SFR, LLC, §
§
Plaintiff, §
§
v. § Cause No. 25-BC04A-0015
§
AMERICAN HOUSING
VENTURES, LLC, §
§
Defendant. §
§

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OPINION
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Syllabus ∗
In a plea to the jurisdiction, Defendant challenged the Court’s authority to hear this
case by arguing that the Plaintiff’s claims do not meet the statutory amount in controversy
required for this court’s jurisdiction. Applying Texas’s well-established plea to the
jurisdiction standard, the Court concludes it has subject-matter jurisdiction to hear this case.
Accordingly, the Defendant’s plea to the jurisdiction is denied.

∗
NOTE: The syllabus was created by court staff and is provided for the convenience of the
reader. It is not part of the Court’s opinion, does not constitute the Court’s official description or
statement, and should not be relied upon as legal authority.
OPINION
¶1 Before the court is Defendant American Housing Ventures, LLC’s (“AHV”)

Plea to the Jurisdiction challenging the court’s authority to hear this case filed on February

27, 2026. Plaintiff Pradera SFR, LLC (“Pradera SFR”) filed a response on March 16,

2026. The court held a hearing on the matter on April 15, 2026. After considering the

parties’ arguments, the court denies Defendant’s plea.

BACKGROUND

¶2 This case arises out of a real estate development project (the “Pradera

Project”) and subsequent copyright infringement lawsuit. Under the Pradera Project’s

Development Agreement, Pradera SFR was the owner, and AHV was the development

manager of a community of 250 detached single-family rental homes in the Culebra

Corridor in San Antonio, Texas. The Pradera Project was completed in 2020. In 2021, the

Parties in the present case, Pradera SFR and AHV, were sued for copyright infringement by

Kipp Flores Architects (“KFA”), an architectural firm with which AHV had previously

worked, in connection with the Pradera Project. See Kipp Flores Architects, LLC v. Pradera

SFR, LLC et al., C.A. No. 5:21-cv-673-XR (W.D. Tx. 2021).

¶3 As alleged by Pradera SFR, under the Development Agreement, AHV

assumed various obligations related to the management of the project. This included the

obligations to perform the duties of a sophisticated development manager, act in good faith,

act in Pradera SFR’s best interest, and manage project architects and plans in compliance

with the law, including federal copyright law. The Development Agreement also imposed
certain insurance obligations and required AHV to indemnify Pradera SFR for losses arising

from AHV’s defaults, gross negligence, or willful misconduct.

¶4 During the project's development, AHV initially approached KFA to be the

architect for the Pradera Project’s architectural drawings and plans. Pradera SFR and KFA

ultimately did not reach an agreement on contractual terms. AHV later engaged KTGY

Group, Inc. (“KTGY”) as the architects for the Pradera Project. KTGY prepared the

architectural drawings and plans for the development of the Pradera Project.

¶5 As alleged by Pradera SFR, discovery obtained during the 2021 copyright

infringement lawsuit showed that AHV shared KFA’s copyrighted plans with KTGY and

instructed KTGY to use KFA’s plans in developing the plans KTGY was contracted to

produce for the Pradera Development. Pradera SFR further alleged that the resulting

derivative plans from KTGY were used in the construction of the rental homes in the

Pradera Project and incorporated in the project’s marketing materials. According to

Pradera SFR, KFA notified AHV of the copyright infringement issue several years before

KFA filed suit, and AHV did not disclose these concerns and represented to Pradera SFR

that KTGY’s plans were independently developed.

¶6 Development of the Pradera Project continued, and KFA filed suit in 2021

against AHV, Pradera SFR, and KTGY, asserting claims for copyright infringement in

connection with the use of KFA’s plans and related marketing materials. Pradera SFR

alleged at the hearing on the present matter that, because the challenged designs had been

used in connection with the construction of the homes in the Pradera Project, it faced a

potential exposure of up to $70,000,000 in disgorgement damages.
¶7 In 2023, all parties to the 2021 copyright infringement suit (Pradera SFR,

AHV, KTYG, and KFA) participated in mediation. As alleged by Pradera SFR, during the

mediation, AHV refused to execute a settlement agreement unless Pradera SFR and AHV

simultaneously resolved all pending crossclaims between them, including indemnity-

related disputes arising under the Development Agreement. According to Pradera SFR, the

Parties negotiated under a mediation deadline requiring execution before midnight that

same day. With the options of either resolving the issue with AHV or remaining exposed to

the potential disgorgement damages in the pending copyright claims, Pradera SFR agreed

to a settlement with AHV.

¶8 All parties to the copyright infringement lawsuit entered into a Settlement

Agreement. Under the Settlement Agreement, Pradera SFR and AHV agreed to a global

settlement that mutually released claims arising from the Development Agreement,

Pradera Project, and 2021 KFA copyright litigation. However, Pradera SFR alleges that

under the Settlement Agreement, it expressly retained certain indemnity claims against

AHV. Specifically, Section 3 titled “Retained Claims” of the Settlement Agreement

provided that any retained indemnification claim would be limited “to the extent of

remaining coverage under the USIC Policy, with any recovery limited to any insurance

proceeds received by AHV from USIC.”

¶9 The Settlement Agreement also contained a forum selection clause

designating the United States District Court for the Western District of Texas as the forum

for disputes arising under the agreement. In 2024, Pradera SFR sued AHV in that court to

enforce the Settlement Agreement and assert the indemnity claims it alleges it reserved
seeking fees and costs allegedly incurred in the FKA copyright infringement litigation.

AHV moved to dismiss the action, asserting, among other things, res judicata and

limitations arising from the Settlement Agreement. In 2025, the federal district court

dismissed the action without prejudice, declining to exercise jurisdiction over Pradera

SFR's state-law indemnification claims. Pradera SFR now alleges it incurred approximately

$500,000 in attorneys’ fees and costs in connection with that proceeding.

¶10 Pradera SFR subsequently filed this action in the Business Court, asserting

causes of action for (1) indemnification based on AHV’s breach of duty and gross

negligence, (2) indemnification based on AHV's alleged failure to maintain required

insurance coverage under the Development Agreement, (3) breach of the Settlement

Agreement, and (4) rescission or reformation the Settlement Agreement based on mistake

or fraudulent inducement, or alternatively, mutual mistake. AHV responded by filing the

present Plea to the Jurisdiction.

¶11 In its Original Petition, Pradera SFR alleges that the insurance proceeds

limitation contained in Section 3 of the Settlement Agreement was the product of either

mistake, fraudulent inducement, or mutual mistake. According to Pradera SFR, it was

understood during mediation that AHV maintained insurance coverage through USIC that

would respond to the retained indemnity claim and that AHV knew, or should have known,

that the USIC policy did not provide coverage for contractual indemnity claims and failed

to disclose that information during settlement negotiations. Pradera SFR further alleges

that AHV failed to disclose deficiencies in its compliance with the insurance requirements

contained in the Development Agreement. Pradera SFR alleges that if it had known the
USIC policy would not respond to the retained indemnity claim, it would not have agreed

to limit recovery to available USIC proceeds.

¶12 As stated by Pradera SFR, Section 8.3.3 of the Development Agreement

required AHV to maintain commercial general liability insurance with limits of

$5,000,000 per occurrence and $5,000,000 annual aggregate throughout the term of the

agreement. The Development Agreement further required AHV to maintain blanket

contractual liability coverage, including coverage for the indemnity obligations to Pradera

SFR. Additionally, Section 8.3.7 required AHV to maintain coverage through the “term”

of the Development Agreement, from April 13, 2017, to August 30, 2020.

¶13 While AHV maintained commercial general liability and umbrella policies

through First Mercury that met the required coverage limits and identified Pradera SFR as

an additional insured, Pradera SFR alleges that the First Mercury policies do not provide

coverage for the periods between April 13, 2017, and approximately May 24, 2018, leaving

a portion of the Development Agreement term potentially uninsured.

¶14 Pradera SFR further alleges the USIC policies constituted separate “non-

project-specific” coverage maintained for AHV's general business activities. After Pradera

SFR filed suit in federal court in 2024 seeking indemnification under the Development

Agreement, AHV tendered the claim to USIC, which later denied coverage. USIC stated the

policy did not provide coverage for advertising injury, rather than for the contractual

indemnity claim Pradera SFR sought. Pradera SFR alleges these facts show AHV failed to

maintain the contractual liability coverage and additional insured coverage required under
the Development Agreement. This allegedly further demonstrates AHV knew of those

deficiencies when negotiating the Settlement Agreement.

ANALYSIS

¶15 This court’s jurisdiction is governed by section 25A.004(d) of the Texas

Government Code. See TEX. GOV’T CODE § 25A.004(d). This section provides that this

court has jurisdiction over actions that arise out of a qualified transaction when the amount

in controversy exceeds $5,000,000, excluding monetary requests not at issue here. See id.

Under the statute, a qualified transaction “means a transaction, or series of related

transactions. . . under which a party: (A) pays or receives, or is obligated to pay or is entitled

to receive, consideration with an aggregate value of at least $5 million.” See id. §

25A.001(14). Here, Defendant challenges Plaintiff’s amount in controversy assertion

through a Plea to the Jurisdiction.

¶16 The crux of Defendant’s plea to the jurisdiction centers on Defendant’s

allegation that the claims in Plaintiff’s Original Petition do not meet the statutory amount

in controversy threshold. In its Original Petition, Pradera SFR identifies several categories

of alleged damages, including attorneys’ fees and litigation expenses incurred in

connection with the 2021 KFA copyright infringement litigation and subsequent 2024

federal proceeding, diminished project value, and other costs. Pradera SFR alleges that

these categories of damages, taken together, exceed the amount-in-controversy threshold.

¶17 AHV contends that the Settlement Agreement limits any potential recovery

to the insurance proceeds available under the USIC policy, and that USIC has denied

coverage. However, that argument concerns the enforceability and scope of the Parties’
contractual agreements rather than whether Pradera SFR has pled damages sufficient to

invoke this court’s jurisdiction.

¶18 The legal principles governing pleas to the jurisdiction are well established

in Texas. As the Texas Supreme Court has stated:

A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat
a cause of action without regard to whether the claims asserted have merit.
The claims may form the context in which a dilatory plea is raised, but the
plea should be decided without delving into the merits of the case. The
purpose of a dilatory plea is not to force the plaintiffs to preview their case on
the merits but to establish a reason why the merits of the plaintiffs’ claims
should never be reached.

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000); see also Tex. Dep’t of Parks

& Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). As in this case:

[W]hen a defendant asserts that the amount in controversy is below the
court’s jurisdictional limit, the plaintiff’s pleadings are determinative unless
the defendant specifically alleges that the amount was pleaded merely as a
sham for the purpose of wrongfully obtaining jurisdiction, or the defendant
can readily establish that the amount in controversy is insufficient, as for
example when the issue in dispute is a license or right rather than damages.
A plea to the jurisdiction cannot be used to require the plaintiff to prove the
damages to which he is entitled in order to show that they exceed the court’s
jurisdictional limits. The plaintiff’s allegation of damages in excess of
jurisdictional limits suffices to show the amount in controversy, even if
damages cannot ultimately be proved at all. Were it otherwise, the plaintiff
would be required to try his entire case to show an entitlement to damages in
excess of the court’s jurisdictional limits.

Bland, 34 S.W.3d at 554; see also Miranda, 133 S.W.3d at 226.

¶19 At this stage of the proceedings, the court accepts the Plaintiff’s allegations

as pled. See C Ten 3 LLC ex rel. v. Tarbox, 2025 Tex. Bus. 1, at ¶46, 2025 WL 224542, at

*13–14 (Jan. 3, 2025) (highlighting the Texas Supreme Court has repeatedly recognized

the principles in Bland and Miranda over the last 140 years). In C Ten, the court reiterated
that Texas courts, “generally will not look behind such pleadings absent evidence that the

amount pleaded is fraudulent.” See id. at ¶47. The court now applies these principles to

the claims and allegations at issue.

¶20 At the hearing on this matter, AHV argued the insurance-proceeds limitation

of the Settlement Agreement limits Pradera SFR’s potential recovery to either the

$2,000,000 limit of the USIC policy, or, given USIC’s previous denial of coverage,

nothing. Whether the limitation in Section 3 of the Settlement Agreement is enforceable,

and whether that provision may be rescinded or reformed based on fraudulent inducement

or mistake, presents a merits question that cannot be resolved through a plea to the

jurisdiction in this case.

¶21 Additionally, Pradera SFR’s pleadings assert a claim arising under the

Development Agreement based on AHV’s alleged failure to maintain the required

commercial liability coverage and additional-insured coverage throughout the term of the

Development Agreement.

¶22 Accordingly, absent proof of fraud or a sham pleading, the allegations

contained in the pleadings control the court’s jurisdictional anaysis. See C Ten, 2025 Tex.

Bus. 1, at ¶46, 2025 WL 224542, at *13; see also Miranda, 133 S.W.3d at 224 (noting that

the trial court may not look behind the pleaded allegations in assessing the amount in

controversy for jurisdictional purposes); Bland, 34 S.W.3d at 554 (explaining that the

pleaded amount in controversy governs unless the defendant establishes sham pleading).

The court construes the pleadings “liberally in favor of the plaintiff[] and look[s] to the

pleader[’s] intent.” Miranda, 133 S.W.3d at 226. As the Texas Supreme Court has
repeatedly recognized, “[t]he plaintiff is not required to marshal all her evidence and

conclusively prove her claim to satisfy this jurisdictional hurdle.” See Alamo Heights

Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 805 (Tex. 2018); see also C Ten, 2025 Tex. Bus.

1, at ¶53, 2025 WL 224542, at *15.

¶23 As noted above, AHV previously moved to dismiss Pradera SFR’s 2024

federal action filed in the Western District of Texas for lack of subject-matter jurisdiction.

The federal court ultimately dismissed that action without prejudice and expressly declined

to exercise jurisdiction over Pradera SFR’s state-law claims. As the district court

explained:

Even if Plaintiff's indemnification claims constituted "enforcement" of the
Settlement Agreement subject to the Court's retained (and discretionary)
jurisdiction, nothing in Plaintiff's motion explains why it would be unable to
pursue its indemnification claims in state court. Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 375 (1994) ("[T]he court may, in its discretion,
make the parties' compliance with the terms of the settlement agreement (or
retention of jurisdiction over the agreement) part of its order."). In short,
Plaintiff has not established that the Court's order declining to exercise
jurisdiction over Plaintiff's indemnification claims has "worked an
injustice.”

Pradera SFR Resp. p. 4 of 114 (quoting Text Order, 4/21/25, Plea App. Q at pp. 211-212 of

212). The dismissal of the action in federal court does not establish that this court lacks

jurisdiction over the claims presently asserted.

¶24 The court is not persuaded by AHV’s characterization of this action as an

improper attempt at forum shopping following the dismissal of the federal action. AHV

contends that Pradera SFR’s pleadings constitute a sham pleading intended to manufacture
jurisdiction in the Business Court. AHV argues Pradera SFR improperly conflates AHV’s

First Mercury policies with the USIC policy and improperly attempts to revive previously

released claims under the Settlement Agreement. Whether Pradera SFR can ultimately

prevail on the claims asserted is a separate question from whether the pleaded allegations

are sufficient to invoke this court’s jurisdiction.

CONCLUSION

¶25 Accordingly, based on the pleadings before the court, the court denies

Defendant’s plea to the jurisdiction.

IT IS SO ORDERED.

Marialyn Barnard
Judge of the Texas Business Court,
Fourth Division

SIGNED ON: May 12, 2026
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Case Contacts

Name BarNumber Email TimestampSubmitted Status

Elin Isenhower eisenhower@winstead.com 5/12/2026 1:08:41 PM SENT

Claudia Frost cfrost.flg@fletcherheld.com 5/12/2026 1:08:41 PM SENT

James GRuiz jruiz@winstead.com 5/12/2026 1:08:41 PM SENT

Matthew Brandt mbrandt@winstead.com 5/12/2026 1:08:41 PM SENT

Emma Pennington epennington@winstead.com 5/12/2026 1:08:41 PM SENT