CROSSOVER: Defeating the ‘Dismissal with Prejudice’: How the Right to Replead Protects Constitutional Property Claims in Family Crossover Litigation

Rancho De Los Arboles LLC and Ellen Eakin v. Town of Cross Roads, TX, 02-25-00208-CV, January 30, 2026.

On appeal from the 467th District Court, Denton County, Texas.

Synopsis

The Second Court of Appeals addressed whether a trial court may dismiss a lawsuit with prejudice based on governmental immunity without first affording the plaintiffs an opportunity to amend their pleadings. While affirming the dismissal of certain claims, the court held that because the jurisdictional defects were not shown to be incurable, the trial court committed reversible error by dismissing the entire suit with prejudice instead of allowing the plaintiffs to replead.

Relevance to Family Law

In complex family law litigation—particularly those involving high-net-worth estates with “crossover” commercial components like short-term rentals (STRs) or business properties—practitioners frequently encounter municipal interference or zoning disputes that impact the valuation and characterization of community assets. This case underscores a vital procedural safeguard: a trial court cannot summarily terminate constitutional property claims with prejudice via a plea to the jurisdiction if the claimant could potentially cure the pleading defect. For the family lawyer, this provides a shield against the “death penalty” of dismissal when challenging governmental actions that threaten a client’s real estate portfolio during the pendency of a divorce.

Case Summary

Fact Summary

Rancho De Los Arboles LLC and Ellen Eakin (collectively, “Rancho”) operated a property in the Town of Cross Roads as a short-term rental (STR) starting in 2011. Although the property was in a district zoned for single-family residential use, Rancho paid hotel occupancy taxes to both the State and Denton County. In 2022, the Town notified Rancho that its zoning ordinances prohibited STRs in residential zones, classifying them either as unauthorized “bed and breakfasts” or nonresidential “hotels.” Following notices of violation from the municipal court, Rancho filed suit seeking declaratory and injunctive relief, asserting that the Town’s enforcement violated various sections of the Texas Constitution (including property rights and due course of law) and that the Town’s actions were ultra vires. The Town responded with a plea to the jurisdiction, asserting governmental immunity and challenging the existence of jurisdictional facts. The trial court granted the Town’s plea and dismissed all of Rancho’s claims with prejudice.

Issues Decided

The primary issue was whether the trial court erred in dismissing Rancho’s constitutional and ultra vires claims with prejudice without first allowing an opportunity to replead. Specifically, the court examined whether the pleadings affirmatively negated jurisdiction or merely failed to state sufficient facts to establish a waiver of immunity.

Rules Applied

The court relied on the established framework for pleas to the jurisdiction under Texas Department of Parks & Wildlife v. Miranda. Under Texas law, if a plaintiff’s pleadings do not contain sufficient facts to affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the plaintiff should be afforded the opportunity to amend. A dismissal “with prejudice” is only appropriate when the pleadings or the record affirmatively negate the existence of jurisdiction as a matter of law. Furthermore, the court applied the “ultra vires” exception to sovereign immunity, which requires a plaintiff to allege that a government official acted without legal authority or failed to perform a purely ministerial act.

Application

The Court of Appeals analyzed the interplay between the Town’s immunity and Rancho’s constitutional claims. The court noted that while the Town generally enjoys immunity for its governmental functions—including zoning enforcement—that immunity does not shield it from valid claims for unconstitutional takings or ultra vires acts. However, Rancho’s initial pleadings were procedurally thin regarding the specific elements of a “takings” claim and failed to name specific government officials in their individual capacities to maintain an ultra vires action.

The court’s narrative focused on the prematurity of the trial court’s “with prejudice” designation. Because Rancho had not been afforded a formal opportunity to amend their petition after the court determined the pleadings were deficient, and because the record did not prove that Rancho could never state a valid claim, the trial court overstepped. The court reasoned that even if the current allegations were insufficient to overcome immunity, the law favors the right to amend unless it is clear the jurisdictional hurdle is insurmountable.

Holding

The Court of Appeals held that the trial court properly dismissed some causes of action where jurisdiction was affirmatively negated by the law, but it erred in dismissing the remainder of the suit with prejudice.

Each holding serves to reinforce the “right to replead” doctrine. First, the court affirmed that certain claims could not survive as a matter of law based on the current record. However, the court reversed the dismissal as to the remaining constitutional and ultra vires claims, holding that the plaintiffs must be given a fair opportunity to cure the jurisdictional defects through an amended petition. The case was remanded for further proceedings consistent with this requirement.

Practical Application

For family law litigators, this case is a reminder that when a client’s property rights are being litigated in a “crossover” civil matter, the plea to the jurisdiction is not an automatic end to the case. If a municipality moves to dismiss a challenge to a zoning ordinance that affects a marital asset’s value, counsel must be prepared to argue that any pleading deficiency is “curable.” This prevents the loss of valuable property claims before they can be properly adjudicated or settled within the context of the larger estate division.

Checklists

Defeating a Dismissal With Prejudice

• Identify the Defect: Determine if the plea to the jurisdiction is based on a “pleading deficiency” (not enough facts) or an “incurable jurisdictional bar” (the law prohibits the claim entirely).
• Request Leave to Amend: Always include a formal request for leave to amend in any response to a plea to the jurisdiction.
• Argue the “Miranda” Standard: Explicitly cite Texas Department of Parks & Wildlife v. Miranda to remind the court that if the pleadings don’t affirmatively negate jurisdiction, the plaintiff gets a second bite at the apple.
• Preserve the Error: If the trial court grants the dismissal with prejudice without allowing an amendment, immediately object to the “with prejudice” language to preserve the issue for appeal.

Pleading Crossover Constitutional Claims

• Name the Right Parties: For ultra vires claims, ensure individual officials are named in their official capacities, not just the municipality.
• Specify the “Taking”: Detail the specific investment-backed expectations and the economic impact of the ordinance on the marital property.
• Distinguish Governmental vs. Proprietary: In some cases, argue that the municipality’s actions are proprietary rather than governmental to bypass immunity entirely.

Citation

Rancho De Los Arboles LLC and Ellen Eakin v. Town of Cross Roads, TX, No. 02-25-00208-CV (Tex. App.—Fort Worth Jan. 30, 2026, no pet. h.).

Full Opinion

The full opinion of the Court of Appeals can be found here: Full Opinion Link

Family Law Crossover

This ruling can be weaponized in a Texas divorce or custody case where a municipal entity (or even a state agency) is interfering with property that is subject to a just and right division. If one spouse is intentionally or negligently failing to defend a property’s “commercial” or STR status against a city’s zoning enforcement, the other spouse can intervene or use the “right to replead” to keep the asset’s viability alive. Furthermore, if a receiver is appointed to sell marital property and a city attempts to shut down the property’s use, the receiver can leverage this holding to ensure that any jurisdictional challenge by the city doesn’t result in a permanent loss of property rights without a full opportunity to cure pleading defects. It effectively prevents a “quick kill” of property-related claims that are often central to the valuation of a marital estate.

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