Texas Business Court Decision – November 3, 2025
No. 25-BC03B-0002 Cadence McShane Construction Company LLC v. Ryan BB-Blockhouse Creek, LLC (Third Division, Judge Sweeten)25-bc03b-0002-cadence-mcshane-construction-co-v-ryan-bb-blockhouse-creek-2025-tex-bus-43.pdf
Jurisdiction. Cadence, the general contractor on a 347-unit apartment contractor, sued Ryan BB-Blockhouse (Ryan), the landowner, for breach of contract and seven other causes of action; Ryan counterclaimed for mismanagement of the project and alleged construction defects. Later, Cadence filed third-party claims against 18 subcontractors who performed work on the project, alleging breach of contract, negligence, and warranty issues. Ryan filed a plea to the Business Court’s jurisdiction over the third-party claims, which ranged in value from $40,070 to more than $13 million; Ryan argued the claims should be assessed separately, did not meet the jurisdictional requirements and were unripe because they were based on potential future injuries.
Held: The lawsuit and the third-party claims meet the definition of an “action arising out of a qualified transaction” under Section 25A.004(d)(1); they are within the Business Court’s jurisdiction and the claims are ripe; the term action encompasses the entire lawsuit, not just individual claims, and all the claims arose from a qualified transaction.
(1) Texas courts have construed “action” to mean the entire lawsuit and not discrete claims; they have also broadly interpreted the term “arising out of;” the court must decide whether the lawsuit, including all properly joined counterclaims and third-party claims, originate or “flow from” a qualified transaction, and they do.
(2) All of the third-party claims are based on a standard subcontractor agreement between Cadence and the subs, which defines the project and references the “Prime Contract” between Cadence and Ryan, requiring the subs’ work to be done in conformance with the prime contract; this case thus concerns one construction project carried out through a network of related contracts, and all of the claims arise out of a qualified transaction, as there is not dispute that claims and counterclaims between Cadence and Ryan meet the amount-in-controversy requirements.
(3) Ryan asserts the third-party claims are not ripe because they rely on contingent future injuries that may never occur and do not establish a justiciable controversy; the court rejects this argument as Cadence’s claims directly related to ongoing construction, with detailed allegations of defects and mismanagement already present in the litigation; the injuries are neither contingent nor remote, and Cadence’s injuries are not conjectural or hypothetical.
Ryan’s plea to jurisdiction is denied.