Texas Business Court Decision – May 15, 2026
No. 25-BC08B-0015 Camino Real Developers, LLC v. RivenRock, LLC (Eighth Division, Judge Stagner) 25-bc08b-0015-camino-real-developers-v-rivenrock-2026-tex-bus-28.pdf
Contracts/LLCs.
Background:
Camino Real, LLC was formed in 2017 to develop a luxury RV park in Caldwell County. Its Company Agreement created two categories of ownership: a 50% percent capital-provider interest – originally held by JLR Mansions, LLC – obligated to fund all capital contributions and debt service, and two 25% non-capital-provider interests held by the founders, Dan Addante and Jack Dyer. Section 4.2(b) of the Company Agreement provided that if the capital provider failed to fund Camino, the remaining members could admit a capital provider and proportionally dilute the existing holder’s interest. The Agreement also expressly stated that every transfer of a membership interest would be subject to all of terms, conditions, restrictions, and obligations of the agreement.
RivenRock acquired JLR Mansions 50% interest in 2019, with full notice of the Company Agreement. In June, 2025, RivenRock announced it would stop funding the company, asserting it was not bound by the agreement and refusing to make a capital call. Camino defaulted on its mortgage. Faced with capital needs in excess of $6.3 million, Camino admitted a new capital provider (Kyle 150, LLC) and diluted RivenRock’s interest. This action followed to confirm the validity of the dilution.
Held:
(1) the court rejects RivenRock’s res judicata defense based on prior Caldwell County litigation in which the trial court found RivenRock was not bound by the Company Agreement because that declaration was reversed by the Third Court of Appeals in April, 2025. The court further holds that res judicata would not apply because the present claims arise from materially different operative facts – the 2025 capital call and resulting dilution – that postdated the prior litigation and involve a legally distinct theory: not whether RivenRock is personally liable for breach of the Agreement, but whether the interest it acquired remains subject to the Agreement’s dilution provisions on transfer; nor does collateral estoppel apply because the issues are different.
(2) LLC membership is a creature of contract, inseparable from the the company agreement that defines it. A transferee acquires no greater rights than the transferor held, and JLR Mansions could not transfer its 50% interest free of its built-in dilution exposure, just as a property owner could not convey mortgage land free of the lien. Under Texas law, RivenRock cannot claim the benefits of ownership of its interest and disclaim the obligations that come with it. The court also rejects RivenRock’s argument that a 2023 statutory amendment to the Texas Business Code (Section 101.052(g)) – which provides that assignees are bound by company agreements regardless of whether they signed them – implied the opposite rule previously applied; the statute is confirmatory rather than a departure from prior law and is, in any event, unnecessary given the Company Agreement’s transfer provisions. Finally, the court rejects RivenRock’s assertion that it owns an undivided 50% of Camino’s assets; under Texas law, a membership interest in an LLC is personal property and does not confer on the member any direct ownership of the entity’s assets; the members own interests in the entity and not fractional interests in its assets.
(3) the court then enters 8 declarations confirming that the Company Agreement governs RivenRock’s interest, that the capital-provider interest carries dilution exposure upon transfer, that the 2025 admission of Kyle 150 and resulting dilution were authorized by Section 4.2(b) of the Company Agreement, and that RivenRock holds a membership interest and not an undivided ownership interest in Camino’s assets.
Summary judgment is granted in favor of Camino.