TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-24-00448-CV
Empower School, LLC, Appellant
v.
Covenant Management Systems, LP, Appellee
FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-20-002332, THE HONORABLE MARIA CANTÚ HEXSEL, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant Empower School leased a commercial space to appellee Covenant
Management Systems, LP. After Empower failed to make certain renovations to the space’s
pool area, as set out in Section 3(c) of the lease agreement, Covenant refused to accept the
premises and filed suit, seeking a declaratory judgment that the lease had not commenced and
that it was not obligated to accept the premises in their unsuitable state. A jury determined that
Section 3(c) was a condition precedent to the commencement of the lease and that Empower
failed to fulfill the condition precedent. The trial court signed a final judgment incorporating the
jury’s verdict, granting Covenant’s declaratory-judgment claim, and awarding Covenant
damages and attorney’s fees. By three issues, Empower contends that the trial court’s judgment
is erroneous because: (1) Section 3(c) was a covenant, not a condition precedent; (2) two of the
court’s declarations were not proper subjects for a declaratory-judgment claim; and (3) Covenant was not entitled to damages under the Uniform Declaratory Judgment Act (UDJA). Because we
conclude that Section 3(c) is not a condition precedent, we reverse and remand in part and
reverse and render in part.
I. BACKGROUND
Empower provides therapeutic and educational services to children on the autism
spectrum. In 2015, Empower acquired commercial property in Round Rock, Texas, and began
providing services there. However, to supplement its bottom line, Empower began leasing
portions of the 19,331 square foot building, including the swimming pool, to other entities.
Initially, Empower leased the swimming-pool portion of the property to a swimming school. In
2018, Empower decided to lease the entire property, including the swimming pool, to other
entities at a higher rate, as it began searching for other, more affordable spaces out of which
to operate.
Empower hired Asterra Properties as property brokers to locate tenants for the
building. Through this process, Empower and Covenant eventually began negotiating a
twelve-year lease for the entire property. Covenant provides administrative services to Austin
Regional Clinic (ARC), which in turn provides medical services to patients. Covenant sought to
rent the property on ARC’s behalf for use as a specialty clinic. During lease negotiations,
Covenant sought either to exclude the pool area from the lease agreement or have the swimming
pool removed and filled in prior to the commencement of the lease. The Asterra Properties
broker assured Covenant’s broker via email that “[t]he landlord will demise the pool from the
clinic space.” On August 9, 2018, Covenant signed a letter of intent reflecting that Empower
would “convert pool area to useable space and install HVAC.”
2
On October 26, 2018, Covenant and Empower executed a lease agreement for the
entire property, including the swimming pool. Covenant paid Empower $96,291.09 as a deposit.
As part of the lease, the parties agreed as follows:
SECTION 3. (a) Term Defined. The Term of this Lease
TERM begins on the Commencement Date . . . . At
Landlord’s or Tenant’s Request, and no later
than ten (10) days following the
Commencement Date, Landlord and Tenant
shall execute a Commencement Date
Memorandum in the form attached hereto as
Exhibit G.
(c) Condition of the Premises. By executing
the Lease, Tenant shall be deemed to have
accepted the Premises in their AS-IS
condition as of the date of the execution
except for specific Landlord work
requirements related to the Pool Area as
described herein. Landlord is required to
completely fill, remove and fill, or use
another commercially approved method to
eliminate the pool and renovate the Pool
Area to at least a shell condition consistent
with the standards of the rest of the building,
including a slab foundation level with the
existing pool deck.
The lease agreement further specified that the term of the lease would commence “on the date
established by Exhibit ‘G’ (‘Commencement Date’).” Exhibit G, 1 the Commencement Date
Memorandum, provided, in relevant part:
Unless Landlord exercises its option to defer commencement as set
forth fully below, the Commencement Date of the Lease shall be
1 In Section 25(m) of the lease agreement, the parties agreed that the attached exhibits were incorporated by reference.
3
the date upon which Landlord and Tenant mutually agree that
Tenant accepts the Premises, but not more than Three Hundred
Sixty-Five (365) days after the day the Lease is executed.
Landlord shall have an option to defer the commencement date for
a period of One Hundred Eighty (180) days by giving Tenant
written notice of Landlord’s intent to defer not less than nine
(9) months after execution of the Lease.
Thus, by any interpretation of the lease agreement, there could, and likely would be, a substantial
gap of time between the execution of the lease agreement and the date on which the
lease commenced.
Therefore, during this time, Empower sought to minimize losses by continuing to
lease the pool area to a third party and continuing to operate its business out of the property
while it continued searching for a different building to move into. On July 15, 2019, Empower
exercised its option under the lease agreement to defer the commencement date by 180 days.
Around this same time, Empower began reaching out to contractors about filling in the pool area.
However, it continued to postpone filling in the pool area to generate additional rental income. It
was not until April 13, 2020, that Empower’s contractor applied for a permit with the city of
Round Rock to fill in the swimming pool. And it was not until April 21 that Empower signed a
lease to move its operations to a different building. Nevertheless, on April 23, Empower notified
Covenant that the property would be ready and the lease would commence on April 26.
The parties proffer different consequences associated with the date
April 23, 2020; Empower urges that this was the date by which the lease would begin, regardless
4
of whether it completed the pool renovations, 2 whereas Covenant argues that this was the date by
which Empower was required to complete the pool renovations, or else Covenant’s obligations
under the lease would not arise. But under either interpretation, the pool renovations were not
complete on that date. According to Empower, the renovations were finished on April 25, 2020,
and according to Covenant, even those renovations did not bring the pool area “to at least a shell
condition consistent with the standards of the rest of the building,” as was required by
Section 3(c).
Thus, Covenant refused to accept the premises and instead, on April 27, it filed
suit, seeking a declaratory judgment that, inter alia, (1) Section 3(c) of the lease, which required
Empower to complete the pool renovations, was a condition precedent to commencement of the
lease, (2) Empower had not timely and adequately completed the pool renovations, (3) Covenant
was not obliged to accept the premises and the lease had not commenced, and (4) Empower was
obligated to return the $96,291.09 that Covenant had paid as a deposit. Empower answered and
counterclaimed for breach of contract and fraud. 3
On July 5, 2023, Empower filed a motion pursuant to Rule 248, requesting that
the court find that Section 3(c) was not a condition precedent to Covenant’s performance.
See Tex. R. Civ. P. 248 (“When a jury has been demanded, questions of law, motions, exceptions
to pleadings, and other unresolved pending matters shall, as far as practicable, be heard and
determined by the court before the trial commences . . . .”). The court denied this request, found
“that the section is ambiguous,” and left the issue of whether the section was a covenant or a
2 According to Empower’s witnesses below, Empower misinterpreted the
commencement-date provision of the lease and believed that the lease would commence on April 26 rather than April 23.
3 Empower later abandoned its fraud claim.
5
condition precedent for the jury to decide. Empower later filed a motion to reconsider this
decision, which the trial court denied.
On July 11, 2023, a four-day jury trial commenced. At the conclusion, the jury
returned a verdict finding that: (1) the parties mutually intended Section 3(c) to be a condition
precedent to commencement of the lease term, and (2) Empower did not “satisfy Section 3(c) per
the deadlines set forth in Exhibit G.” Based on its instructions, which required the jury to find in
Empower’s favor on either the first or second question to reach the third question, the jury did
not resolve whether Covenant complied with the lease agreement.
The trial court rendered judgment on the jury’s verdict and included the
following declarations:
a) that the Lease was scheduled to commence on
October 26, 2019;
b) that, based on Empower’s letter dated July 15, 2019,
Empower deferred commencement of the lease until
April 23, 2020;
c) that a condition precedent to Covenant’s acceptance of the
Premises and the commencement of the Lease was
Empower satisfying the requirements of Section 3(c) of the
Lease entitled “Condition of the Premises[”;]
d) that Empower failed to deliver the Premises to Covenant in
the agreed upon condition on or before April 23, 2020;
e) that Empower failed to timely satisfy conditions precedent
to the commencement of the Lease;
f) that the Lease has not commenced;
g) that Covenant is not obligated to accept the Premises;
h) that Covenant is not liable to Empower for any past due or
future amounts allegedly owed under the Lease;
6
i) that Covenant has otherwise complied with the provisions
of the Lease;
j) that Covenant is not in default on its obligations under
the Lease;
k) that the Lease is abrogated, null and void;
l) that Empower shall return the amounts paid by Covenant
under the Lease totaling $96,291.09;
m) that Covenant is the prevailing party and is entitled to its
reasonable and necessary attorneys’ fees and costs . . . ;
n) that Covenant is entitled to such other further relief to
which it may be justly entitled to receive under Chapter 37
of the Texas Civil Practice & Remedies Code.
It also ordered Empower to pay Covenant $96,291.09 in damages, $611,491.45 in attorney’s
fees, and $135,000 in conditional appellate attorney’s fees. Empower filed a motion for new
trial, arguing again that Section 3(c) is unambiguously a covenant and requesting that the
judgment be modified to reflect this. The motion was overruled by operation of law, and this
appeal followed.
II. SECTION 3(c)
By its first issue, Empower contends that the trial court erred by rendering
judgment that Section 3(c) was a condition precedent to Covenant’s performance, instead of
construing the provision as a covenant as a matter of law.
A. Contract Ambiguity
The interpretation of an unambiguous contract is a question of law for the court,
not the jury, to decide. Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471,
480 (Tex. 2019). Thus, “a trial court errs when it submits an unambiguous contract to the jury
7
rather than construing it as a matter of law.” Id. “The error is harmless, however, if the jury
found as the trial court should have found.” Id.
Whether a contract is ambiguous is also a question of law that we review de novo.
Piranha Partners v. Neuhoff, 596 S.W.3d 740, 743 (Tex. 2020). “[T]he term ‘ambiguity’ in
Texas contract law connotes a greater degree of linguistic indeterminacy than it does in common
parlance.” Endeavor Energy Res., L.P. v. Energen Res. Corp., 615 S.W.3d 144, 152 (Tex.
2020). Lack of clarity alone does not create an ambiguity in a contract. Barrow-Shaver Res.
Co., 590 S.W.3d at 481. “That the parties interpret an agreement differently does not make it
ambiguous; ambiguity exists only if both parties’ interpretations,” or an extant interpretation
proffered by neither party, “are reasonable.” Piranha Partners, 596 S.W.3d at 743–44.
“[E]vidence of surrounding circumstances may ‘aid the understanding of an unambiguous
contract’s language,’ ‘inform the meaning’ of the language actually used, and ‘provide context
that elucidates the meaning of the words employed.’” Id. at 749. However, surrounding
circumstances cannot be used to create an ambiguity in a contract where none exists. Id.
B. Conditions Precedent
“A condition precedent is an event that must happen or be performed before a
right can accrue to enforce an obligation.” Solar Applications Eng’g, Inc. v. T.A. Operating
Corp., 327 S.W.3d 104, 108 (Tex. 2010) (quoting Centex Corp. v. Dalton, 840 S.W.2d 952, 956
(Tex. 1992)). “In order to determine whether a condition precedent exists, the intention of the
parties must be ascertained; and that can be done only by looking at the entire contract.” Solar
Applications Eng’g, Inc., 327 S.W.3d at 109 (quoting Criswell v. European Crossroads
Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990)). “In order to make performance
8
specifically conditional, a term such as ‘if’, ‘provided that’, ‘on condition that’, or some similar
phrase of conditional language must normally be included.” Criswell, 792 S.W.2d at 948.
“While there is no requirement that such phrases be utilized, their absence is probative of the
parties[’] intention that a promise be made, rather than a condition imposed.” Id.
“Because of their harshness in operation, conditions are not favorites of the law.”
Id. Thus, “[i]n construing a contract, forfeiture by finding a condition precedent is to be avoided
when another reasonable reading of the contract is possible.” Id. “When the intent of the parties
is doubtful or when a condition would impose an absurd or impossible result, the agreement will
be interpreted as creating a covenant rather than a condition.” Id.
C. Section 3(c)
Because our analysis rests heavily on the distinction between covenants and
conditions precedent, it is important to delve further into the differences between the two. First,
“[t]he distinction between conditions and covenants lies in the appropriate remedy for their
breach.” Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex. 1989). “Breach of a condition
results in automatic termination of the leasehold estate upon the happening of stipulated events.”
Id. On the other hand, “[b]reach of a covenant does not automatically terminate the estate, but
instead subjects the breaching party to liability for monetary damages, or in extraordinary
circumstances, the remedy of a conditional decree of cancellation.” Id. Thus, “[f]ailure to
satisfy a condition precedent generally results in no liability, but failure to perform a contractual
obligation may create liability.” McMahan v. Greenwood, 108 S.W.3d 467, 484 (Tex. App.—
Houston [14th Dist.] 2003, pet. denied) (citing Centex Corp. 840 S.W.2d at 956).
9
Section 3(c) provided that Covenant accepted the premises “AS-IS” except for the
pool area, which Empower was obligated to renovate. Exhibit G provided that unless Empower
exercised its option to defer commencement, the commencement date would be either the date
upon which Empower and Covenant “mutually agree[d] that [Covenant] accept[ed] the
Premises” or not more than 365 days after the execution of the lease—October 26, 2019. But
Empower did exercise its option to defer commencement. Thus, per the plain language of the
lease agreement, the commencement date was extended to either 180 days after Empower and
Covenant mutually agreed that Covenant accepted the property or to 180 days after
October 26, 2019, (meaning April 23, 2020), for a total of 545 days.
Empower argues that this enlarged 545-day deadline is the date on which the
lease would commence absent the parties’ mutual agreement. But Covenant asserts that
Section 3(c) “ties the required renovations of the Pool Area to ‘acceptance’ of the property” and
that “under Exhibit G, ‘acceptance’ of the property is the trigger for ‘Commencement’ of the
lease ‘Term.’” Covenant further asserts that it was not required “to ‘accept’ the property unless
Empower . . . completed the specified renovations to the Pool Area no later than the
‘Commencement Date,’ and the lease ‘Term’ d[id] not ‘commence’ until such ‘acceptance.’”
Stated otherwise, Covenant contends that Empower was required to complete the pool
renovations by the 545-day deadline or the lease did not commence.
The problem with this assertion is that it is atextual. While mutual agreement was
one manner in which the lease provided that it would commence, the parties also specified that,
even in the face of either party’s refusal to agree on Covenant accepting the premises, the lease
would commence “not more than Three Hundred Sixty-Five (365) days after the day the Lease is
executed” plus 180 days if Empower opted to defer commencement. Neither Section 3(c) nor
10
Exhibit G contain any language conditioning commencement of the lease on Empower’s
renovation of the pool area, and the absence of this language indicates that the parties intended
this provision to be a promise, rather than a condition precedent. See Criswell, 792 S.W.2d at
948. Covenant points to the language in Section 3(c) that provides Covenant is “deemed to have
accepted the Premises in their AS-IS condition . . . except for the specific . . . work requirements
related to the Pool Area.” (Emphasis added). We note that this language is not and does not
purport to be conditional. It simply provides that Covenant did not entirely accept the property
as-is and that Empower was required to “completely fill, remove and fill, or use another
commercially approved method to eliminate the pool and renovate the Pool Area to at least a
shell condition.”
But even assuming the “except for” language could be interpreted as conditional,
“the conditional language must connect the condition precedent to the conditioned obligation.”
Arbor Windsor Ct., Ltd. v. Weekley Homes, LP, 463 S.W.3d 131, 137 (Tex. App.—Houston
[14th Dist.] 2015, pet. denied). Here, while Covenant’s deemed acceptance of the premises did
not extend to the pool area, Covenant’s acceptance of the premises was not made a condition
precedent to commencement of the lease, as the lease specified it would commence with or
without Covenant’s assent on April 23, 2020. See Criswell, 792 S.W.2d at 948–49 (where
“alternate and independent means” existed for engineer to receive payment, failure to satisfy
other means of receiving payment held not to be condition precedent); C&C Rd. Constr., Inc.
v. SAAB Site Contractors, L.P., 574 S.W.3d 576, 588–89 (Tex. App.—El Paso 2019, no pet.)
(notice provision of contract held not to be condition precedent to receiving back costs and
expenses where separate provision allowed for collection of back costs and expenses
without notice).
11
Covenant also points to a provision in the lease agreement that provides, “Time is
of the essence in this Lease and each and every term, condition and provision hereof.” While a
time-is-of-the-essence provision may influence whether a deadline in a contract is a condition
precedent, see Argos Res. Inc. v. May Petrol. Inc., 693 S.W.2d 663, 665 (Tex. App.—Dallas
1985, writ ref’d n.r.e.), or whether a contract term is material, TrueStar Petrol. Corp. v. Eagle
Oil & Gas Co., 323 S.W.3d 316, 319 (Tex. App.—Dallas 2010, no pet.), we still look to the
contract as a whole in determining whether a term is a condition precedent, see Solar
Applications Eng’g, Inc., 327 S.W.3d at 109. Otherwise, any contract with a time-is-of-theessence provision would presumably convert its terms into conditions precedent, and we have
declined to hold as a per se rule that such provisions convert contract terms into material
covenants, much less conditions precedent. See MHI P’ship, Ltd. v. Real Est. Inv. Co.,
No. 03-04-00485-CV, 2008 WL 3877717, at *5 (Tex. App.—Austin Aug. 20, 2008, pet. denied)
(mem. op.).
Section 3(c) contains no date by which Empower was required to complete its
repairs. In Section 3(b), which immediately precedes Section 3(c), the parties agreed that if
Covenant “is delayed in its construction of its improvements and such delays continue for more
than 90 days and are [the] direct result of [Empower’s] action or inaction, then [Covenant] may
cancel this Lease.” But the parties did not similarly agree that cancellation of the lease would be
permitted if Empower failed to renovate the pool area in a timely manner. See Rogers,
772 S.W.2d at 79 (“Since the parties obviously knew how to create a condition in paragraph 1,
the dissimilar language in paragraph 2 indicates that the parties intended the latter paragraph to
act as a covenant.”). The lease agreement specified that in the event of other acts of default by
Empower, Covenant would generally be entitled to remedies in the form of a proportionate
12
reduction in rent or specific performance. And the lease agreement further specified that
throughout the lifespan of the lease, Covenant would pay one amount in rent for the non-pool
area of the premises and a different amount for the pool area. Given the lack of conditional
language in Section 3(c) and given that, per the terms of the lease agreement, Covenant’s remedy
was to either move into the building and seek to only pay the rent associated with the non-pool
area of the building or force Empower’s specific performance under Section 3(c), we conclude
that Section 3(c) is unambiguously a covenant, not a condition precedent. 4 See Block 316
Garage, Ltd. v. Wortham & Van Liew, 705 S.W.2d 249, 252 (Tex. App.—Houston [1st Dist.]
1986, writ ref’d n.r.e.) (“Although failing to comply with paragraph 2, section 1 of the lease may
have been a violation of a term of the lease, Block 316’s violation could not forever bar
commencement because Wortham & Van Liew’s remedy is damages.”). Accordingly, because
Section 3(c) is unambiguously a covenant, we conclude that the trial court erred by
rendering judgment that it was a condition precedent to Covenant’s performance. And because
the trial court’s judgment, including the declarations, damages, and fee award, stemmed from the
jury’s finding that Section 3(c) was a condition precedent, we reverse all portions of the trial
court’s judgment.
Of course, this does not necessarily mean that Empower was entitled to ignore
Section 3(c). However, if Covenant wanted its own performance under the lease agreement
4 Because of this conclusion, we need not address Empower’s argument that, even if Section 3(c) is ambiguous as to whether it is a condition precedent, such an ambiguity must be resolved as a matter of law. See Tex. R. App. P. 47.1 (“The court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal.”); cf. Gulf Liquids New River Project, LLC v. Gusby Eng’g, Inc., 356 S.W.3d 54, 65 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (interpreting ambiguous contract provision as covenant as matter of law because without clear language, such provisions are not conditions precedent).
13
excused based on Empower’s failure to timely and adequately renovate the pool area, it was
incumbent on Covenant to seek a finding from the jury—or conclusively prove—that Empower
materially breached its contractual obligations before any alleged breach on Covenant’s part. 5
See Earth Power A/C & Heat, Inc. v. Page, 604 S.W.3d 519, 525 (Tex. App.—Houston
[14th Dist.] 2020, no pet.) (holding that “judgment cannot rest on a theory that Page’s breach is
excused by Earth Power’s prior material breach” where Page “did not obtain a finding in his
favor on the defense of prior material breach”); cf. Rohrmoos Venture v. UTSW DVA Healthcare,
LLP, 578 S.W.3d 469, 482 (Tex. 2019) (“Rohrmoos cites no authority that has interpreted
Davidow [v. Inwood North Professional Group—Phase I, 747 S.W.2d 373 (Tex. 1988)] to mean
that a tenant cannot terminate a commercial lease for material breach of the contract. This is
because there is none, and we see no reason to hold otherwise.”); Mustang Pipeline Co. v. Driver
Pipeline Co., 134 S.W.3d 195, 198 (Tex. 2004) (jury finding on materiality of breach not
required where jury found party breached contract and materiality was established as matter of
law); Hudson v. Wakefield, 645 S.W.2d 427, 431 (Tex. 1983) (concluding that contract provision
was covenant rather than condition precedent and reversing and remanding for trial court to
5 On this record, we cannot conclude that the jury’s finding that Empower did not satisfy Section 3(c) is implicitly a finding that it materially breached the contract. First, Covenant never pleaded a breach-of-contract claim and it does not suggest on appeal that we may affirm the trial court’s judgment on such a theory. Second, during the hearing on Empower’s Rule 248 hearing, counsel for Covenant informed the court that “what [Empower] want[s] you to rule upon as a matter of law is . . . a breach of contract default claim that we have not pled, that we are not going to seek remedies for before this jury,” and that “if the jury comes back and says no to the condition question, there’s not a second question that says, well, is it just a regular breach then? We don’t have that claim.” Third, the jury instructions defined conditions precedent to performance, in part, as “acts or events that occur after the contract is made and that must occur before there is a right to immediate performance and before there can be a breach of contractual duty.” (Emphasis added). See McMahan v. Greenwood, 108 S.W.3d 467, 484 (Tex. App.— Houston [14th Dist.] 2003, pet. denied) (“Failure to satisfy a condition precedent generally results in no liability, but failure to perform a contractual obligation may create liability.” (citing Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992)).
14
determine whether failure to comply with covenant was material). Because it did not do so, we
cannot affirm the trial court’s judgment on the theory that Empower’s actions constituted a prior
material breach of the parties’ contract. See Page, 604 S.W.3d at 525; cf. Clear Lake City Water
Auth. v. Kirby Lake Dev., Ltd., 123 S.W.3d 735, 755 (Tex. App.—Houston [14th Dist.] 2003,
pet. denied) (appellees’ declaratory-judgment claim was not an alternative ground on which
court of appeals could uphold trial court’s judgment on breach-of-contract claim).
Lastly, Empower argues that the case should be remanded for a determination of
its breach-of-contract claim. Covenant contends that Empower waived any potential remand on
this claim by failing to “object to the conditioning instructions that prevented the jury from
providing answers regarding Empower’s counterclaim.” But Covenant’s argument presumes
that remanding Empower’s counterclaim requires a conclusion that the conditioning language in
the jury charge was erroneous. We do not agree with this presumption. The trial court’s error
was in failing to resolve the interpretation of Section 3(c) as a matter of law, and it had the
opportunity to either prevent or correct its error when it was presented with Empower’s Rule 248
motion, its motion to reconsider, and its motion for new trial. But the trial court denied those
motions, either by explicit ruling or by operation of law. Thus, by its various motions and the
associated rulings, Empower preserved error with respect to the pertinent issue here, see
Browder v. Moree, 659 S.W.3d 421, 423 (Tex. 2022) (per curiam), and because the trial court’s
error resulted in the rendition of an improper judgment, reversal and remand for a new trial on
Empower’s as-yet-unreached breach-of-contract claim is appropriate, see Tex. R. App. P. 44.1;
Ditech Servicing, LLC v. Perez, No. 13-17-00123-CV, 2018 WL 4171358, at *6 (Tex. App.—
Corpus Christi–Edinburg Aug. 31, 2018, pet. denied) (mem. op.). We sustain Empower’s
first issue.
15
III. DECLARATIONS A) AND B)
By its second issue, Empower contends that a) and b) of the trial court’s
declarations are improper findings of fact and do not resolve any justiciable controversies. “The
power to determine an issue of fact, . . . ‘does not concomitantly carry with it the power to render
such a finding of fact as a declaratory judgment.’” Indian Beach Prop. Owners’ Ass’n v. Linden,
222 S.W.3d 682, 699 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (quoting Hill v. Heritage
Res., Inc., 964 S.W.2d 89, 140 (Tex. App.—El Paso 1997, pet. denied)). “If a factual dispute is
the only issue to be resolved, a declaratory judgment is not the proper remedy.” Hill,
964 S.W.2d at 140. Additionally, “[a] declaratory judgment is appropriate only if a justiciable
controversy exists as to the rights and status of the parties and the controversy will be resolved
by the declaration sought.” Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995).
In declaration a), the trial court declared “that the Lease was scheduled to
commence on October 26, 2019,” and in declaration b), the trial court declared “that, based on
Empower’s letter dated July 15, 2019, Empower deferred commencement of the lease until
April 23, 2020.” We agree with Empower that these are not permissible declarations. For
declaration a), the parties did not dispute that the lease was originally scheduled to commence on
October 26, 2019, and this declaration did not resolve any controversy between the parties.
See McNitt v. Lakeline Crossing Phase 2 LP, No. 03-23-00308-CV, 2025 WL 1240786, at *6
(Tex. App.—Austin Apr. 30, 2025, no pet.) (mem. op.) (“[I]f there is undisputed evidence, there
is no justiciable controversy, and the trial court cannot issue a declaratory judgment.”).
Additionally, for declaration b), whether or not Empower deferred commencement of the lease
by sending its July 15, 2019 letter is ultimately fact question. See id. at *7; Indian Beach Prop.
Owners’ Ass’n, 222 S.W.3d at 700. Accordingly, we conclude that declarations a) and b) are not
16
the proper subject-matter for a declaratory judgment. See McNitt, 2025 WL 1240786, at *7;
Indian Beach Prop. Owners’ Ass’n, 222 S.W.3d at 699.
We sustain Empower’s second issue.
IV. CONCLUSION
We reverse all portions of the trial court’s final judgment. “When reversal of a
declaratory judgment is warranted, we render judgment unless remand is necessary for further
proceedings.” Double Diamond, Inc. v. Saturn, 339 S.W.3d 337, 347 (Tex. App.—Dallas 2011,
pet. denied). Thus, we render judgment that Covenant take nothing on its declaratory-judgment
requests that correspond to declarations a)–c) in the trial court’s judgment. As it pertains to the
remaining declarations, because the relief sought is intertwined with Empower’s
breach-of-contract claim, and because inconsistent results may occur if we render judgment on
those declarations, we reverse declarations d) through n) and remand them to the trial court along
with Empower’s unreached breach-of-contract counterclaim for further proceedings. See Turner,
Collie & Braden, Inc. v. Brookhollow, Inc., 642 S.W.2d 160, 166 (Tex. 1982) (“The possibility
of such inconsistent results is intolerable and for this reason the entire judgment must be reversed
and the entire cause remanded for a new trial.”); cf. Clear Lake Auth., 123 S.W.3d at 755 (“The
viability of the trial court’s declaration is wholly dependent upon the existence of the contract
liability the Authority challenges.”). We also reverse the award of attorney’s fees and damages
and remand those claims for further proceedings consistent with this opinion.
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Maggie Ellis, Justice
Before Chief Justice Byrne, Justices Kelly and Ellis
Reversed and Rendered in Part; Reversed and Remanded in Part
Filed: July 3, 2026
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