1 Coventry Court, LLC v. the Downs of Hillcrest Residential Association, Inc.

Supreme Court of Texas
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No. 24-1047
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1 Coventry Court, LLC,
Petitioner,

v.

The Downs of Hillcrest Residential Association, Inc.,
Respondent

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On Petition for Review from the
Court of Appeals for the Fifth District of Texas
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PER CURIAM

Opposing parties in litigation often agree to resolve their disputes
in binding settlement agreements that relinquish all claims and waive
any rights to appeal. Sometimes, one party later gets cold feet and tries
to appeal anyway. In these situations, the appellate court will dismiss
the appeal, consistent with the longstanding principle that “[t]he right
to appellate review may be waived by agreement.” In re Marriage of
Long, 946 S.W.2d 97, 99 (Tex. App.—Texarkana 1997, no writ) (citing
Johnson v. Halley, 27 S.W. 750, 751 (Tex. App. 1894, writ ref’d) (per
curiam)); see Seiter v. Marschall, 147 S.W. 226, 227 (Tex. 1912).
But what if the appellant claims that the putative waiver of
appellate rights is invalid? We have frequently remarked that when
presented with this situation, a court of appeals should not summarily
dismiss the appeal but should instead “ascertain the facts . . . in order
to determine whether its jurisdiction of the appeal to the extent of the
entire cause of action was terminated.” Seiter, 147 S.W. at 227; see, e.g.,
City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013) (“[A]ll courts
bear the affirmative obligation ‘to ascertain that subject matter
jurisdiction exists regardless of whether the parties have questioned it.’”
(quoting In re United Servs. Auto. Ass’n, 307 S.W.3d 299, 306 (Tex.
2010))). That directive comports with our longstanding recognition that
courts have inherent jurisdiction to assess their jurisdiction.
Eichelberger v. Eichelberger, 582 S.W.2d 395, 398 (Tex. 1979); Smirl v.
Globe Labs., 188 S.W.2d 676, 677-78 (Tex. 1945).
In the case now before us, the court of appeals failed to heed those
principles. It dismissed this appeal despite the appellant’s insistence
that it never validly agreed to waive appellate rights, and that the trial
court’s putative consent judgment is void because it was rendered
without consent. We therefore reverse the decision below and remand
to the court of appeals to consider the merits of this appeal in the first
instance.
I
Petitioner 1 Coventry Court, LLC, is a business entity that owns
real property subject to a homeowner’s association, Respondent The
Downs of Hillcrest Residential Association, Inc. Several years ago,

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Coventry and the Association found themselves in a dispute related to a
fence, and this litigation ensued.
In April 2022, the day trial was set to begin, the parties executed
a written document, which the Association labels a binding settlement
agreement, but Coventry insists is merely a nonbinding “agreement to
agree.” Partly a printed email and partly handwritten, the document
was signed by both parties (and a third party not relevant here). The
document included a provision stating that the parties would “execute a
full and final settlement agreement and release of all claims and
defenses asserted in the lawsuit.”
The next month, the Association informed the trial court that “the
parties [had] reached a settlement agreement” and were “working on
finalizing a formal agreement to be executed between the parties.” It
requested that the court “retain this case on the Court’s docket until
such time as the formal settlement agreement is fully executed and
formal dismissal documents are filed with the Court.” That same day,
the Association sent Coventry a draft settlement agreement that the
Association claimed “mirror[ed] the terms” of the April agreement. But
Coventry refused to sign. According to the Association, Coventry
“attempt[ed] to reassert previously rejected terms and add terms to the
agreement that were outside the scope of the issues to be resolved in the
executed [April agreement].” Coventry countered that the Association’s
proposed agreement lacked certain material terms and contained “at
least five (5) differences and/or inconsistencies” from its own proposed
agreement.

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The next month, in June 2022, the trial court held a hearing
regarding dismissal of the case for want of prosecution. When asked
about the parties’ settlement status, Coventry’s attorney stated: “My
understanding is that the parties reached a tentative Settlement
Agreement pending the results of a survey to be performed.” Coventry
requested thirty days “to nail down the settlement agreements, have the
survey completed, and have the matter concluded.” The Association
agreed that thirty days was “an appropriate request” but argued that
“[t]he parties all signed what [the Association] believe[s] is a fully
enforceable Settlement Agreement at the courthouse” in April. The
court requested that the parties file a copy of the April agreement
appended to a proposed final judgment for the court to review and
determine whether the April agreement was an enforceable settlement
agreement.
In response to the trial court’s request, the Association filed a
proposed judgment that attached and incorporated the April agreement.
The proposed judgment included an order that “[t]he parties execute a
full and final settlement agreement and release of all claims and
defenses asserted in the lawsuit.” The Association simultaneously
moved to render final judgment or, alternatively, to enforce the April
agreement by court order. Coventry objected, again asking the trial
court for thirty days to “work out the final settlement” so the court could
thereafter dismiss the suit as moot.
The trial court ultimately signed the Association’s proposed
judgment, requiring the parties to “execute a full and final settlement
agreement and release of all claims and defenses asserted in the

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lawsuit.” Coventry moved for a new trial or, alternatively, to correct,
modify, or reform the judgment, arguing that the parties still had not
come to agreement on certain proposed settlement terms. The motion
was overruled by operation of law.
Both parties then proposed final settlement agreements, which
differed from each other in several respects. Each side refused to sign
the other’s proposed settlement agreement. Two weeks after final
judgment, and still without a signed agreement, the Association moved
to hold Coventry in contempt, claiming that Coventry’s refusal to sign
the Association’s version of the settlement agreement disobeyed the trial
court’s judgment. After a show-cause hearing, the trial court held
Coventry in contempt, fined it $15,000, and ordered it to—among other
things—sign the Association’s drafted settlement agreement within five
days. The trial court ordered Coventry’s managers to appear and show
cause as to why they “should not be incarcerated for civil and criminal
contempt of Court” for their disobedience of the court’s judgment and its
requirement to sign a settlement agreement.
Rather than risk those consequences, Coventry’s managers
signed the Association’s settlement agreement in October 2022.
Coventry then timely sought appellate review. 1 But rather than
consider the merits, the court of appeals dismissed Coventry’s appeal,
holding that Coventry relinquished its right to appeal by executing the
final settlement agreement. ___ S.W.3d ___, 2024 WL 3948323, at *1

1 Coventry sought mandamus relief as well, which the court of appeals

denied for reasons not relevant here. See In re 1 Coventry Ct., LLC, No. 05-23-
00456-CV, 2024 WL 2314500, at *1 (Tex. App.—Dallas May 22, 2024, orig.
proceeding).

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(Tex. App.—Dallas Aug. 27, 2024). Relevant here, the court of appeals
reasoned that the October settlement agreement was enforceable
because it satisfied the requirements of a Rule 11 agreement. Id. at *3;
see TEX. R. CIV. P. 11; see also TEX. CIV. PRAC. & REM. CODE § 154.071(a)
(“If the parties reach a settlement and execute a written agreement
disposing of the dispute, the agreement is enforceable in the same
manner as any other written contract.”). Disregarding Coventry’s
insistence that no valid agreement was ever formed, the court
concluded, “we hold Coventry to its agreement and dismiss this appeal.”
2024 WL 3948323, at *4.
Coventry then filed petitions for review and for mandamus relief
in this Court.
II
Under these circumstances, the court of appeals erred by
accepting the settlement agreement at face value and treating its
appellate waiver as conclusive. As we have long recognized, appellate
courts have not only the inherent power to ascertain their own
jurisdiction, Smirl, 188 S.W.2d at 677-78, but also the “obligation” to do
so, Rhule, 417 S.W.3d at 442. So when a party challenges jurisdiction,
the court should, when necessary, “review the entire record to ascertain
if any evidence supports” jurisdiction. Waco Indep. Sch. Dist. v. Gibson,
22 S.W.3d 849, 853 (Tex. 2000) (citing Tex. Ass’n of Bus. v. Tex. Air
Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). In the context presented
here, as another court of appeals has aptly explained, the “threshold
task is to determine if the parties have an enforceable Rule 11

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agreement to waive the right to appeal.” Emerson v. Emerson, 559
S.W.3d 727, 734 (Tex. App.—Houston [14th Dist.] 2018, no pet.).
Here, Coventry plainly contested the validity of the settlement
agreement that purported to waive its appellate rights. See Miga v.
Jensen, 299 S.W.3d 98, 104 (Tex. 2009) (determining that a party did
not waive its right to appeal by complying with the judgment under “the
judgment’s coercive effect”). In the trial court, Coventry objected to the
proposed final judgment on the ground that the parties had not executed
a final settlement agreement and moved for a new trial on the ground
that “the parties did not reach final agreement on . . . all . . . material
terms.” And before the court of appeals, Coventry raised the same
complaints. It argued that the parties had no enforceable agreement
that included all material terms, and that “[b]y granting a final
judgment, the trial court impliedly and incorrectly found an enforceable
contract existed.” See Kennedy v. Hyde, 682 S.W.2d 525, 528 (Tex. 1984)
(“[N]otwithstanding a valid Rule 11 agreement, consent must exist at
the time an agreed judgment is rendered.”); Quintero v. Jim Walter
Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983) (“When a trial court has
knowledge that one of the parties to a suit does not consent to a
judgment, the trial court should refuse to sanction the agreement by
making it the judgment of the court.” (citing Burnaman v. Heaton, 240
S.W.2d 288, 291 (Tex. 1951))). That was enough to alert the court of
appeals that a more searching inquiry was required. See, e.g., In re Est.
of Spiller, No. 04-18-00522-CV, 2019 WL 2360100, at *2 (Tex. App.—
San Antonio June 5, 2019, pet. denied) (addressing appellant’s
argument that the settlement agreement containing a waiver provision

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was not enforceable before dismissing the appeal for waiver); Emerson,
559 S.W.3d at 734 (reviewing the record to determine whether appellant
waived her appellate rights when she argued she did not consent to such
a waiver).
We hold today that the court of appeals erred in refusing to
consider Coventry’s challenge to the settlement agreement’s validity by
concluding that the very same settlement agreement foreclosed its
consideration of that question. To be clear, we do not decide today the
merits of Coventry’s appeal—whether the trial court’s judgment is void,
whether Coventry was coerced to sign a deal it rejected, whether the
April 2022 document constitutes an enforceable settlement agreement,
or whether the parties executed a valid Rule 11 agreement. As we are
a court of review, not of first view, we leave it to the lower court to
consider these questions in the first instance.
III
Pursuant to Texas Rule of Appellate Procedure 59.1, without
hearing oral argument, we grant the petition for review and reverse the
court of appeals’ judgment dismissing Coventry’s appeal. We remand
the cause to the court of appeals for further proceedings consistent with
this opinion. See Quintero, 654 S.W.2d at 444 (“[O]ur reversal of the
judgment of dismissal is without prejudice to the rights of the
[defendant] in its attempt to plead and prove an enforceable settlement
agreement under the release.”); Burnaman, 240 S.W.2d at 292
(reversing a consent judgment “without prejudice to the right of
defendants to plead the agreement in bar of plaintiff’s suit”).

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OPINION DELIVERED: January 9, 2026

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