HUTTO — A $4 million breach-of-contract lawsuit filed against the city by the developer of a proposed sports complex that was dismissed in 2022 is back in play after a decision by the state Supreme Court.
On Friday, the high court vacated a ruling by the Texas Seventh District Court of Appeals that dismissed the lawsuit against Hutto filed by developer Legacy Hutto LLC.
The case is going back to a state district court for review, according to the ruling.
In 2019, a 250-acre site now known as Cottonwood Properties was under contract with developer Legacy and was earmarked for an $800 million mixed-use sports tourism complex to be anchored by Perfect Game USA, a baseball scouting organization.
According to a 2020 release from the city, Hutto canceled the contract because its newly hired law firm found “legal flaws” in the contract relating to whether Legacy filed an ethics disclosure Form 1295 as required by state transparency laws, and because a former city official signed the contract without City Council’s approval.
Legacy sued the city for $4 million alleging breach of contract. In July 2022 the Legacy lawsuit was dismissed by a Williamson County judge; the decision later was upheld by the appellate court. The high court’s ruling Friday is based on the recently passed House Bill 1817 affecting Form 1295.
According to an HB 1817 analysis by the Texas Senate Research Center, when a lower-court judge ruled there was no breach because Form 1295 had not been verified, it set a precedent that needed correction.
“With this ruling, the potential now exists for any government contract without a Form 1295 on file to be found void. HB 1817 seeks to prevent this from occurring by updating the disclosure of interested parties statute to allow for a cure period of 10 business days if a Form 1295 is found to not be on file,” the analysis summarized.
The bill, sponsored by state Rep. Giovanni Capriglione, R-Southlake and GOP state Sen. Kelly Hancock, was signed into law by Gov. Greg Abbott on June 9, 2023.
The Supreme Court said the bill modifies the law that applies to the Legacy Hutto LLC versus city of Hutto lawsuit.
Both parties filed petitions for review with the Texas Supreme Court, which made its ruling after the House bill was signed into law.
“The district court should address the new statutory requirements in the first instance,” read the high court’s opinion. “We grant the petitions for review, vacate the court of appeals’ judgment, and remand the case to the district court for further proceedings in light of changes in the law.”
