CourtListener 10679197•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
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
CourtListener 10679197Txctapp1522 set 2025
Testo completo
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
3
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.
6
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
8
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
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