State of Texas, Acting by and Through the Texas Facilities Commission, for and on Behalf of the Texas Health and Human Services Commission; The Texas Facilities Commission; Mike Novak, in His Official Capacity as Executive Director of the Texas Facilities Commission; The Texas Health and Human Services Commission; And Rolland Niles in His Official Capacity as Deputy Executive Commissioner for the System Support Services Division of the Texas Health and Human Services Commission v. 8317 Cross Park, LLC

September 22, 2025

NO. 15-25-00012-CV
_______________________________________

IN THE COURT OF APPEALS
FOR THE FIFTHTEENTH DISTRICT OF TEXAS
________________________________________

State of Texas, acting by and through the Texas Facilities Commission, for and
on behalf of the Texas Health and Human Services Commission; The Texas
Facilities Commission; Mike Novak, in his Official Capacity as Executive
Director of the Texas Facilities Commission; The Texas Health and Human
Services Commission; and Rolland Niles in his Official Capacity as Deputy
Executive Commissioner for the System Support Services Division of the Texas
Health and Human Services Commission ,
Appellants,
v.

8317 Cross Park, LLC,
Appellee.

On Interlocutory Appeal from the 98 District Court
of Travis County, Texas

[Proposed] Supplemental Brief of Appellee

R. Kemp Kasling CARDWELL, HART & BENNETT, LLP
State Bar No. 11104800 J. Bruce Bennett
Law Offices of R. Kemp Kasling State Bar No. 02145500
5806 Mesa Drive, Suite 300 807 Brazos, Suite 1001
Austin, Texas 78731 Austin, Texas 78701
Telephone: (512) 472-6800 Telephone: 512-322-0011
Facsimile: (512) 472-6823 Facsimile: 512-322-0808
Email: kkasling@kaslinglaw.com jbb.chblaw@me.com

ATTORNEYS FOR APPELLEE 8317 CROSS PARK, LLC
Table of Contents

Page

Table of Contents ...................................................................................................... 2

Table of Authorities................................................................................................... 3
Argument ................................................................................................................... 4
I. HHSC’s request for exceptional items does not support the Government.......... 4
II. Chapter 114 is not limited to contracts with one state agency ............................ 5
III. The Texas Facilities Commission regulations applied to Novak’s purported
termination. ......................................................................................................... 7
Conclusion and Prayer............................................................................................... 8
Certificate of Compliance .......................................................................................... 9
Certificate of Service ................................................................................................ 9

2
Table of Authorities

Page(s)

Cases
Progressive Cnty. Mut. Ins. Co. v. Caltzonsing,
658 S.W.3d 384 (Tex. App.—Corpus Christi-Edinburg 2022, no pet.) ..............................7
Statutes
Tex. Civ. Prac. & Rem. Code
§§ 114.001(2), 114.003 .....................................................................................................6
§§ 114.002–.003 .............................................................................................................. 6
§ 114.003 ......................................................................................................................... 6
Tex. Gov’t Code § 311.012(b)...............................................................................................6
Other Authorities
41 Tex. Reg. 7709 ............................................................................................................ …7
Antonin Scalia & Bryan A. Garner, Reading Law (2012) ..................................................... 6
Regulations
1 Tex. Admin. Code §§ 115.20–22 ....................................................................................... 8

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To the Honorable Fifteenth Court of Appeals:

Appellee 8317 Cross Park Austin Associates respectfully submits this supplemental

brief addressing an inaccuracy in the Government’s reply and addressing two arguments from

the Government’s reply that did not appear in its opening brief. None of the Government’s

new arguments undermines the district court’s order denying the Government’s plea to the

jurisdiction.

Argument

I. HHSC’s request for exceptional items does not support the Government.

As 8317 Cross Park recounted in the background section of its brief, HHSC’s judicially

noticeable FY2024–25 biennial baseline appropriations request sought for less money under

“Rent – Building” than HHSC projected it needed for the biennium. Appellee Br. 11. HHSC

included the remainder in an exceptional item request. Id. 11–12.

It’s the significance of that exceptional item request that the Government’s reply

inaccurately describes. In the district court, the Government presented no evidence showing

that anyone at HHSC (or anywhere else) considered whether HHSC lacked funds to pay rent,

let alone evidence that HHSC actually lacked funds or believed it lacked funds. See Appellee

Br. 53–55. In its reply, the Government relies upon HHSC’s early estimates in its exceptional

item request as some evidence that “there are multiple variables that impact the certification

for funding and the analysis can be complex.” Reply Br. 7–8. The Government, however,

cannot point to any evidence that HHSC lacked sufficient funds or ever considered whether it

had sufficient funds—regardless of the variables.

The Government relies on the exceptional item request to suggest that HHSC received

less funding than it needed for rent. See Reply Br. 6–14, 24. However, HHSC made that

request in early September 2022, nearly a year before Novak’s purported termination of the

4
8317 Cross Park Lease and Niles’ incomplete certification. See Appellee Br. App’x Tab 6.

Thus, HHSC advised in the request that, “[a]s additional information becomes available, the

agency will be able to more accurately assess its needs.” Id.

By mid-2023, it was clear that HHSC had enough money. For example, HHSC’s

exceptional item request “assumed [a] 9.9% year-over-year increase in the Consumer Price

Index for the 2024- 25 biennium.” Reply Br. 10. But by the time the Legislature enacted the

GAA, the CPI had fallen precipitously. See id. 11. Leaving no doubt HHSC knew it had enough

funds, Niles certified $93.7 million in annual lease expenses for the upcoming biennium, tens

of millions less than appropriated. See Re- ply Br. 30; Appellee Br. 55. There is no evidence

that Niles’ certified amount did not include inflation. Contra Reply Br. 30–31. But, even if it

did not, he surely knew there was sufficient rent money. Even at a grossly exaggerated annual

inflation rate of 10%, $93.7 million would be $103 million in year one and $113 million in

year two—totaling more than $20 million less than was appropriated for rent across the

biennium.

The most significant fact is that no one has ever certified that funds were unavailable

to pay rent due under the 8317 Cross Park Lease, there’s no evidence anyone thought funds

were unavailable to pay rent due under the 8317 Cross Park Lease, and all evidence in the

record suggests those funds were available and that Niles and Novak knew the funds were

available.

II. Chapter 114 is not limited to contracts with one state agency.

As 8317 Cross Park pointed out, the 8317 Cross Park Lease easily fits within the plain

text and fair meaning of Texas Civil Practice & Remedies Code Chapter 114’s waiver of

sovereign immunity. Appellee Br. 19–46. The Government’s reply simply restates its

arguments from its opening brief. But the reply also makes a new argument that Chapter 114

turns on the number of state entities that are contractual counterparties. The Government

5
argues that Chapter 114 does not apply because “[t]he contract at issue falls within Chapter

2167 of the Government Code, which expressly involves two state agencies and the State of

Texas as lessee; in contrast, Chapter 114 requires a contract for a single state agency.” Reply

Br. 16–18 (emphases added).

The Government’s new argument is without merit. Chapter 114 speaks of “a state

agency” and “the state agency.” E.g., Tex. Civ. Prac. & Rem. Code §§ 114.001(2), 114.003.

In Texas statutes, “[t]he singular includes the plural.” Tex. Gov’t Code § 311.012(b). Indeed,

that rule is a fundamental canon of interpretation because it “is simply a matter of common

sense and everyday linguistic experience.” Antonin Scalia & Bryan A. Garner, Reading Law

130 (2012). So “state agency” includes “state agencies.” Chapter 114’s fair meaning thus does

not limit its waiver to single-agency contracts.

The Government’s new argument also fails because Chapter 114’s plain text shows that

the act of a single state agency triggers Chapter 114’s waiver no matter how many other

agencies also trigger the waiver. See Appellee Br. 24–25. “A state agency . . . that enters a

contract subject to this chapter waives sovereign immunity to suit for the purpose of

adjudicating a claim for breach of an express provision of the contract.” Tex. Civ. Prac. &

Rem. Code § 114.003 (emphasis added). Chapter 114’s trigger is the act of a state agency

entering a specified contract, not the contract itself. Thus, so long as at least one state agency

performs that act, sovereign immunity is waived to adjudicate “a claim for breach of a written

contract for engineering, architectural, or construction services . . . brought by a party to the

written contract.” Id. §§ 114.002–.003. This is exactly what happened here. See Appellee Br.

25–35.

Nothing in Chapter 114 supports the Government’s proposed limit on the waiver’s

scope.

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III. The Texas Facilities Commission regulations applied to Novak’s purported
termination.

8317 Cross Park demonstrated that Novak’s purported termination of the 8317 Cross

Park Lease was outside his authority because, among other things, Novak’s actions violated

the Texas Facilities Commission’s regulations that bind him. See Appellee Br. 56–58.

The Government does not dispute that Novak’s purported termination conflicted with

those regulations. They argue only that those regulations “are irrelevant because [they] were

not in existence at the time the 2014 Lease was entered into so these regulations do not apply

to this Lease.” Reply Br. 31. The Government is wrong.

The Government’s new argument is misguided because it applies a rule of contract

interpretation to an issue that does not turn on interpreting a contract. The government relies

on a decision that recites “[t]he general rule . . . that the laws which are in existence at the time

of the making of the contract are impliedly incorporated into the contract.” Progressive Cnty.

Mut. Ins. Co. v. Caltzonsing, 658 S.W.3d 384, 393 (Tex. App.—Corpus Christi-Edinburg

2022, no pet.) (citation omitted; emphases added) (cited at Reply Br. 31). 8317 Cross Park

does not rely on the regulations to support its breach of contract claim or for any other contract

issue. It relies on them to support its ultra vires claim, which does not depend on the lease’s

terms and does not arise from any nonperformance under the lease. See Appellee Br. 56–58;

contra Government’s Mot. Strike 10 (suggesting 8317 Cross Park “argues that Appellants

acted ultra vires in relation to their performance under the Lease.”).

The regulations matter because they plainly govern Novak’s authority to terminate the

8317 Cross Park Lease: They “set out the procedure for the cancellation of a lease due to a

lack of funding”—an administrative function, not a contractual one. 41 Tex. Reg. 7709, 7709

(Sept. 16, 2016) (adopting regulations). Novak engaged in actions that those regulations

govern—“process[ing] . . . any request to cancel a lease due to a lack of funding.” See id.

7
(emphasis added). And the date that controls is the date of the request to cancel a lease based

on lack of funding, see id. at 7710 (“Effective date: October 3, 2016”), not the date of the lease

whose cancellation is requested, see 1 Tex. Admin. Code §§ 115.20–22 (no mention of lease

execution date). Novak had no authority to ignore the regulations. By ignoring them anyway,

his actions were ultra vires.

Conclusion and Prayer

The Court should affirm the district court’s order denying the Government’s plea to the

jurisdiction. Alternatively, if the Court finds that 8317 Cross Park’s allegations are insufficient,

it should remand for repleading.

Respectfully submitted,

R. Kemp Kasling CARDWELL, HART & BENNETT, LLP
State Bar No. 11104800 J. Bruce Bennett
Law Offices of R. Kemp Kasling State Bar No. 02145500
5806 Mesa Drive, Suite 300 807 Brazos, Suite 1001
Austin, Texas 78731 Austin, Texas 78701
Telephone: (512) 472-6800 Telephone: 512-322-0011
Facsimile: (512) 472-6823 Facsimile: 512-322-0808
Email: kkasling@kasling.com jbb.chblaw@me.com

By: /s/ R. Kemp Kasling
R. Kemp Kasling

ATTORNEYS FOR APPELLEE 8317 CROSS PARK, LLC

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CERTIFICATE OF COMPLIANCE WITH RULE 9.4

Pursuant to Tex. R. App. P. 9.4(i)(3), the undersigned certifies this brief
complies with the type-volume limitations of Tex. R. App. P. 9.4(i)(2)(B). The brief
was prepared using Microsoft Word 2019 (Version 16.46), and according to the
program’s word count, the brief contains 2112 words, exclusive of the exempted
portions in Tex. R. App. P. 9.4(i)(1).

By: /s/ R. Kemp Kasling
R. Kemp Kasling

CERTIFICATE OF SERVICE

I hereby certify that a correct copy of the foregoing document was served by
electronic means on this 26 day of August 2025 to the following counsel of record:

JENNIFER COOK
Assistant Attorney General
General Litigation Division
Office of the Attorney General
P.O. Box 12548/Mail Stop 019-1
Austin, Texas 78711-2548
Tel: (512) 475-4098
Fax: (512) 302-0667
jennifer.cook@oag.texas.gov

Attorney for Appellants State of Texas, acting by and through the Texas Facilities
Commission, for and on behalf of the Texas Health and Human Services
Commission; The Texas Facilities Commission; Mike Novak, in his Official
Capacity as Executive Director of the Texas Facilities Commission; The Texas
Health and Human Services Commission; and Rolland Niles in his Official Capacity
as Deputy Executive Commissioner for the System Support Services Division of the
Texas Health and Human Services Commission.

By: /s/ R. Kemp Kasling
R. Kemp Kasling

9