Exeter Denton Land v. Ariat Int'l, 2026 Tex. Bus. 71 (8th Div.) (mem. op.)

2026 Tex. Bus. 71
T HE B USINESS C OURT OF T EXAS
EIGHTH DIVISION
EXETER DENTON LAND, L.P.,
Plaintiff/Counter-Defendant,
v.
ARIAT INTERNATIONAL, INC.,
Defendant/Counter-Plaintiff.
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Cause No. 25-BC08B-0019
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MEMORANDUM OPINION AND ORDER ON EXETER DENTON LAND, L.P.’S
TRADITIONAL MOTION FOR SUMMARY JUDGMENT ON ARIAT
INTERNATIONAL, INC.’S COUNTERCLAIMS
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INTRODUCTION
¶ 1. 	Before the Court is Plaintiff Exeter Denton Land, L.P.’s (“Exeter”)
Traditional Motion for Summary Judgment on Defendant Ariat International, Inc.’s
(“Ariat”) 	Counterclaims, 	filed 	August 	3, 	2026. 	The 	Motion 	seeks 	summary
judgment against all of Ariat’s counterclaims on three independent theories: an “as-
is” clause, the economic loss rule, and a contractual limitation on damages. The
underlying dispute centers on whether movement in a warehouse floor justified
E-filed in the Office of the Clerk
for the Business Court of Texas
10/2/2026 3:06 PM
Accepted by: Beverly Crumley
Case Number: 25-BC08B-0019

MEMORANDUM OPINION AND ORDER, PAGE 2
Ariat’s departure from the premises and, if so, which losses Ariat is permitted to
recover under the Lease and Texas law.
¶ 2. 	Having considered the briefing, evidence, arguments of counsel on
September 15, 2026, and applicable law, the Court concludes the Motion should be
GRANTED IN PART and DENIED IN PART as described below. No counterclaim is
dismissed in its entirety, but several components of Ariat’s requested damages are
excluded. The Court does not determine at this time whether Exeter breached the
Lease or whether Ariat was entitled to stop paying rent.
BACKGROUND
A. 	Exeter leases commercial property to Ariat.
¶ 3. 	On May 20, 2023, Exeter and Ariat executed a lease (the “Lease”) by
which Exeter agreed to rent 609,127 square feet of a commercial property known as
Westpark (the “Premises”) to Ariat, a footwear and apparel business, to serve as a
distribution center.1 The initial term was 50 months.2 The Lease provides that the
Premises would be used as a “[g]eneral warehouse, storage and distribution” facility
with appurtenant offices.3
¶ 4. 	The Lease recites that Ariat accepted the Premises “AS IS, without
relying on any representation, covenant or warranty by [Exeter] other than as
1 Def.’s Countercl. ¶ 18.
2 Id.; Pl.’s Mot. Ex. A-1 (Lease) § 1(c) (Pl.’s App. 38).
3 Lease § 1(i) (Pl.’s App. 39).

MEMORANDUM OPINION AND ORDER, PAGE 3
expressly set forth in this Lease.”4 Elsewhere in the Lease, Exeter made express
commitments to Ariat that: (1) Exeter would maintain the building footings and
foundations in good condition and repair, at Exeter’s sole expense;5 (2) the Premises
would, on the Commencement Date, comply with all applicable “Laws,” as defined
in the Lease, relating to general warehouse, distribution, or storage use;6 and (3)
Ariat would have quiet and peaceful possession of the Premises.7 The Lease assigns
Ariat responsibility, at its sole expense, for the interior, nonstructural portions of the
Premises, 	including 	floors, 	“[e]xcept 	as 	provided 	in 	subsection 	(a) 	above 	or
elsewhere in this Lease.”8
¶ 5. 	On July 20, 2023, the parties executed an amendment to the Lease (the
“First Amendment”) establishing a pricing schedule.9 In it, Ariat confirmed that, as
of the Effective Date, Exeter had performed all of its obligations and that Ariat had
no claims for offset against Exeter.10 The First Amendment confirmed that the
remainder of the Lease stayed in full force and effect.11
¶ 6. 	On November 6, 2023, the parties executed a Commencement Date
Memorandum (the “Memorandum”) establishing a Commencement Date for the
4 Id. § 2(a) (Pl.’s App. 39–40) (cleaned up).
5 Id. § 9(a) (Pl.’s App. 48).
6 Id. § 10(f) (Pl.’s App. 50).
7 Id. § 17 (Pl.’s App. 53).
8 Id. § 9(b) (Pl.’s App. 49).
9 Def.’s Countercl. ¶ 23.
10 Pl.’s Mot. Ex. A-2 (First Amendment) § 3 (Pl.’s App. 95).
11 Def.’s Countercl. ¶ 23; First Amendment § 5 (Pl.’s App. 95).

MEMORANDUM OPINION AND ORDER, PAGE 4
Lease of September 1, 2023 and an expiration date of October 31, 2027.12 Ariat
acknowledged in the Memorandum that it had no existing defenses or offsets against
enforcement of the Lease, that it had accepted possession of the Premises, and that
Exeter 	had 	“substantially 	completed” 	all 	required 	improvements.13 	The
Memorandum also recognized that tenant improvements remained ongoing. By its
own terms, nothing in the Memorandum was intended to modify the Lease.14
B. 	Ariat reports defects in the flooring.
¶ 7. 	In early 2024, Ariat observed moisture accumulation on the floor of the
Premises and movement in the concrete slabs. In March, a floor consultant retained
by Ariat reported that the slab had “curled.”15 By May, Ariat employees had observed
significant heaving and shifting in the slab.16 Ariat was concerned that an unlevel
and unstable floor would impair its automated material-handling equipment and
distribution operations.17
¶ 8. 	Ariat reported the condition to Exeter. According to Ariat, Exeter
responded that the moisture and slab movement were a function of ambient
temperature and humidity at the Premises.18
12 Def.’s Countercl. ¶ 24; Pl.’s Mot. Ex. A-3 (Memorandum) § 2 (Pl.’s App. 100).
13 Memorandum §§ 5–7 (Pl.’s App. 100–01).
14 Def.’s Countercl. ¶ 24; Memorandum § 7 (Pl.’s App. 101).
15 Pl.’s Mot. Ex. B (Bramer Report) ¶ 18 (Pl.’s App. 119).
16 Def.’s Resp. ¶ 17.
17 Def.’s Countercl. ¶ 25.
18 Id. ¶ 26.

MEMORANDUM OPINION AND ORDER, PAGE 5
C. 	Expert investigation follows.
¶ 9. 	Ariat retained Reed Engineering to investigate the floor and soil
beneath it.19 Through boring sampling and other testing, Reed reported that the
remaining swell potential beneath the slab ranged from one to six-and-one-half
inches, compared to a design criterion of one inch.20 Those calculations described
potential movement if a moisture source was introduced, not movement certain to
occur. 	Exeter’s own consultant also reported swell potential exceeding the design
criteria and recommended remediation.21
¶ 10. 	The parties’ experts disagree about what follows from those findings.
Exeter’s expert opines that the interior floor slab is a “floating slab” bearing on near-
surface soils and is not part of the building’s drilled-pier foundation, and he disputes
the movement anticipated in the area Ariat intended to automate.22 Ariat’s experts
insist that continued movement made the facility unsuitable for its intended use.23
D. 	Ariat announces constructive eviction and vacates the Premises.
¶ 11. 	Ariat alleges that Exeter did not take its concerns seriously and never
offered a workable solution.24 In December 2024, Ariat signed a lease for a
19 Id. ¶ 27.
20 Id.; Def.’s Resp. Ex. L (Reed Geotechnical Investigation) (Def.’s App. 335–37).
21 Def.’s Resp. Ex. S (Read Concrete Slab Evaluation) (De f.’s App. 686).
22 Id. (Def.’s App. 681, 689–90).
23 See Reed Geotechnical Investigation (Def.’s App. 321).
24 Def.’s Countercl. ¶¶ 26, 28.

MEMORANDUM OPINION AND ORDER, PAGE 6
replacement facility in Fort Worth, referred to in the damages materials as PR Crow
or ACE.25
¶ 12. 	On February 26, 2025, Ariat sent a Notice of Constructive Eviction,
asserting an incurable default under the Lease.26 Ariat announced it would vacate
the Premises by June 30, 2025.27
¶ 13. 	On April 7, Exeter responded by denying that the Premises were
unsuitable for Ariat’s use and that it would seek all available relief if Ariat vacated
and stopped paying rent.28 Ariat nevertheless vacated on June 30, 2025.29
¶ 14. 	On July 7, Exeter sent a Notice of Tenant Default, advising that it
would hold Ariat’s security deposit against unpaid rent, operating expenses, and
other sums due under the Lease.30
¶ 15. 	On July 22, Ariat responded that it was not in default because the
constructive eviction relieved it of those obligations, and demanded return of its
$256,340 security deposit.31 The deposit has not been returned.
25 Bramer Report ¶ 25 (Pl.’s App. 123).
26 Def.’s Countercl. ¶ 29; Pl.’s Mot. Ex. A-4 (Notice of Constructive Eviction) (Pl.’s App. 105–06).
27 Def.’s Countercl. ¶ 30; Notice of Constructive Eviction (Pl.’s App. 106).
28 Def.’s Countercl. ¶ 31.
29 Id. ¶ 32.
30 Id. ¶ 33.
31 Id. ¶ 34.

MEMORANDUM OPINION AND ORDER, PAGE 7
E. 	Exeter initiates litigation.
¶ 16. 	Exeter filed this case on July 11, 2025, alleging that Ariat breached the
Lease by failing to pay monthly rent, operating expenses, and other sums. Ariat
answered and asserted counterclaims for constructive eviction, breach of contract,
breach of the implied warranty of suitability, and breach of the warranty of quiet
enjoyment.
¶ 17. 	Ariat’s damages expert, Erica Bramer, calculates a range of damages
from $53.29 million to $61.37 million spread across five categories: (1) costs of
improvements, upgrades, and installation; (2) costs to assess and investigate
structural defects; (3) costs to remove, store, and transport assets; (4) incremental
costs to fulfill customer orders; and (5) incremental costs of the replacement PR
Crow (ACE) lease. Ariat separately seeks its security deposit.
¶ 18. 	Exeter moves for summary judgment on all four counterclaims. Its
affirmative claims for unpaid rent and other amounts due under the Lease are not the
subject of this Motion.
SUMMARY-JUDGMENT STANDARD
¶ 19. 	Summary judgment is governed by Texas Rule of Civil Procedure 166a.
A movant “bears the burden to show that no genuine issue of material fact exists and

MEMORANDUM OPINION AND ORDER, PAGE 8
that it is entitled to judgment as a matter of law.”32 The nature of that burden varies
by posture. A plaintiff must conclusively establish all essential elements of its
claim.33 A defendant must either conclusively negate at least one element of the
plaintiff’s claim or prove all elements of an affirmative defense.34
¶ 20. In evaluating whether a fact issue exists, a court takes as true all
evidence favorable to the nonmovant, indulges every reasonable inference in the
nonmovant’s favor, and resolves any doubts against the movant.35 The court may not
weigh the evidence or resolve credibility determinations at this stage; its role is
limited to deciding whether a genuine fact issue exists for trial. 36
¶ 21. 	Questions of contract interpretation are especially well suited for
summary judgment.37 In construing a contract, the Court’s objective is to ascertain
and give effect to the parties’ intent as expressed in the agreement itself. 38 To do so,
32 ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865 (Tex. 2018).
33 See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986).
34 Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016).
35 ConocoPhillips, 547 S.W.3d at 865.
36 Huckabee v. Time Warner Ent. Co. L.P., 19 S.W.3d 413, 422–23 (Tex. 2000); see also Ortega v. Pean, No.
01-18-00249-CV, 2019 WL 1560859, at *10 (Tex. App.—Houston [1st Dist.] Apr. 11, 2019, pet. denied)
(“[I]f a summary judgment motion involves the credibility of affiants, or the weight to be given to evidence,
the motion should not be granted.” (internal quotation marks omitted)).
37 See Hallmark v. Port/Cooper-T. Smith Stevedoring Co., 907 S.W.2d 586, 590 (Tex. App.—Corpus Christi-
Edinburg 1995, no writ); Tellepsen Builders, L.P. v. Kendall/Heaton Assocs., Inc., 325 S.W.3d 692, 696 (Tex.
App.—Houston [1st Dist.] 2010, pet. denied).
38 Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011); J.M. Davidson,
Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

MEMORANDUM OPINION AND ORDER, PAGE 9
the Court considers the contract as a whole, harmonizing and giving effect to all
provisions so that none are rendered meaningless.39
¶ 22. This analysis begins—and, if possible, ends—with the contract’s plain
language.40 If the language is susceptible to a definite or certain legal interpretation,
it is unambiguous and must be enforced as written.41 If, on the other hand, the
contract 	is 	susceptible 	to 	more 	than 	one 	reasonable 	interpretation, 	it 	is
ambiguous.42 Only in that circumstance may the court consider extraneous evidence
“to determine the true meaning of the instrument.”43
EXETER’S OBJECTIONS TO ARIAT’S SUMMARY-JUDGMENT EVIDENCE
¶ 23. The Court starts by addressing Exeter’s objections to Ariat’s summary-
judgment evidence, which are directed to portions of the Declaration of Pankaj
Gupta (Ariat’s Exhibit 1) and to Exhibits C, D, E, F, G, H, I, J, L, U, and Z. The
objections are SUSTAINED IN PART and OVERRULED IN PART.
A. 	Personal knowledge and conclusory statements.
¶ 24. Exeter objects that portions of Gupta’s declaration lack personal
knowledge and are factually and legally conclusory.
39 Italian Cowboy, 341 S.W.3d at 333.
40 Id. (citing Progressive Cnty Mut. Ins. Co. v. Kelley, 284 S.W.3d 805, 807 (Tex. 2009).
41 J.M. Davidson, 128 S.W.3d at 229; Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).
42 Italian Cowboy, 341 S.W.3d at 333 (citing J.M. Davidson, 128 S.W.3d at 229).
43 Id. at 333–34 (quoting David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450–51 (Tex. 2008)).

MEMORANDUM OPINION AND ORDER, PAGE 10
¶ 25. To constitute competent summary-judgment evidence, a declaration
must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the declarant is competent to testify to the matters stated.44
The declaration must also disclose the basis on which the declarant has personal
knowledge.45 	Identifying 	where 	that 	knowledge 	comes 	from 	satisfies 	this
requirement, rather than undercutting it.46
¶ 26. Gupta states that he has personal knowledge of the facts recited in his
declaration and that he serves as Ariat’s Chief Financial Officer and Chief Operating
Officer.47 	He 	also 	describes 	his 	participation 	in 	the 	lease 	negotiations 	and
discussions with Exeter about the floor conditions and proposed repairs. Together,
those statements sufficiently explain how he knows about Ariat’s plans to expand its
operations, the pre-Lease negotiations, the Lease terms, Ariat’s work at the
Premises, 	the 	alleged 	defect, 	the 	parties’ 	communications, 	the 	engineering
consultations, 	Ariat’s 	departure, 	and 	Exeter’s 	response.48 	Exeter’s 	personal-
knowledge objections to paragraphs 10, 11, 15, 16, 21, 22, 26, and 31 are therefore
OVERRULED.
44 See Kerlin v. Arias, 274 S.W.3d 666, 668 (Tex. 2008) (applying rule to affidavits); T EX . R. E VID . 602; TEX .
C IV. P RAC . & REM. C ODE § 132.001(a) (stating that unsworn declaration may be used in lieu of affidavit).
45 See Kerlin, 274 S.W.3d at 668.
46 See In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 224 (Tex. 2004).
47 Def.’s Resp. Ex. 1 (Gupta Decl.) ¶¶ 1–3 & p. 7 (De f.’s App. 37, 43).
48 See Cooper v. Circle Ten Council Boy Scouts of Am., 254 S.W.3d 689, 698 (Tex. App.—Dallas 2008, no pet.)
(finding that affiant’s statement that he was an executive and CEO, and therefore had knowledge of
organization’s operations, was sufficient to satisfy personal-knowledge requirement).

MEMORANDUM OPINION AND ORDER, PAGE 11
¶ 27. Gupta’s engineering assertions in paragraphs 25 and 30 are more
problematic. While it is permissible for Gupta to describe his understanding of
Reed’s report and what Exeter communicated about proposed repairs, his position
and participation do not supply a foundation for an independent technical prediction
that the floor was highly likely to continue shifting, or for the categorical assertion
that none of the proposed solutions had ever been successfully applied to a facility
of this size. The personal-knowledge objections are SUSTAINED to those assertions
when offered as proof of those technical propositions.
¶ 28. Exeter’s objection to paragraph 33 is likewise SUSTAINED. It is not
enough for a fact to be within a declarant’s “best knowledge.”49 Such a statement
does not positively and unqualifiedly represent the facts to be true and within the
declarant’s personal knowledge.50 Gupta cannot attest that, “[t]o the best of Ariat’s
knowledge,” the building was still under repair as of August 2026, nor offer an
opinion resting on that qualified statement. Everything in paragraph 33 following
the first sentence is STRICKEN.
¶ 29. Exeter 	separately 	objects 	that 	the 	same 	challenged 	testimony 	is
conclusory. A statement that announces a conclusion without supporting facts is not
49 See Price v. Am. Nat. Ins. Co., 113 S.W.3d 424, 429–30 (Tex. App.—Houston [1st Dist.] 2003, no pet.).
50 See Humphreys v. Caldwell, 888 S.W.2d 469, 470 (Tex. 1994).

MEMORANDUM OPINION AND ORDER, PAGE 12
competent summary-judgment evidence.51 Those objections to paragraphs 10, 11,
15, 16, 21, 22, 26, and 31 are OVERRULED. Those statements are tied to facts
elsewhere in the declaration or to documents that the declaration identifies. Exeter’s
disagreement with the inferences that Ariat draws from those facts is not a basis to
strike the testimony. The Court need not address the conclusory objections to
testimony already excluded, including the excluded portion of paragraph 33.
B. 	Parol evidence.
¶ 30. Exeter next objects to Exhibits C, D, E, F, G, H, I, and Z insofar as Ariat
uses them to interpret the Lease or establish an intent different from its terms. Those
materials include negotiations, draft exchanges, and deposition testimony regarding
the contemplated operations and building specifications.
¶ 31. 	Extrinsic evidence cannot be used to create an ambiguity or vary the
terms of an unambiguous contract.52 It may, however, be used to explain the
surrounding circumstances in which the parties chose their particular words.53 The
critical distinction is between explaining those words and attempting to change the
51 See Schumacher v. Trois, 705 S.W.3d 854, 870 (Tex. App.—San Antonio 2024, pet. denied) (“A conclusory
statement is one that does not provide the underlying facts to support the conclusion.”); Cooper, 254 S.W.3d
at 699 (explaining that statement in affidavit was supported by underlying facts in affidavit and was therefore
not legally conclusory); Rodriguez v. Citibank, N.A., No. 04-12-00777-CV, 2013 WL 4682194, at *3 (Tex.
App.—San Antonio Aug. 30, 2013, no pet.) (explaining that statements that are logical conclusions based on
facts within an affidavit and documents attached to the affidavit are not conclusory).
52 David J. Sacks, P.C., 266 S.W.3d at 450.
53 Hou. Expl. Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex. 2011).

MEMORANDUM OPINION AND ORDER, PAGE 13
bargain.54 Evidence of a party’s unexpressed intent, or a witness’s opinion about who
bears a legal obligation, cannot substitute for the Lease’s plain language.55
¶ 32. Exeter’s threshold argument is that Ariat never pleaded ambiguity.
That is not dispositive. A court may conclude that a contract is ambiguous “even in
the absence of such a pleading by either party.”56
¶ 33. Regardless, the Court does not find the Use provision ambiguous on this
record. It permits in straightforward terms “[g]eneral warehouse, storage and
distribution with appurtenant offices.”57 The provision is no less clear because it
does not list the exact equipment Ariat might use in its warehouse. And permission
to use the building for distribution does not amount to a promise that Ariat’s
particular automation system will work there. The parties’ discussions about
automation may help explain what Ariat planned to do at the Premises and what
Exeter knew about those plans, but those discussions cannot supply a performance
guarantee the parties did not include in the Lease or change the repair obligations
they agreed to.
54 See First Bank v. Brumitt, 519 S.W.3d 95, 110 (Tex. 2017) (“Extrinsic evidence cannot be used to show that
the parties probably meant, or could have meant, something other than what their agreement stated.”).
55 URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755, 765–69 (Tex. 2018); David J. Sacks, P.C., 266 S.W.3d at 450–
51.
56 Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993).
57 See Lease § 1(i) (Pl.’s App. 39).

MEMORANDUM OPINION AND ORDER, PAGE 14
¶ 34. The objections are therefore SUSTAINED insofar as the exhibits are
offered to add to, contradict, or vary the Lease, and OVERRULED insofar as they
concern otherwise relevant matters such as the operations communicated to Exeter,
notice, or the parties’ subsequent conduct.
C. 	Authentication and Hearsay.
¶ 35. Exeter’s remaining objections concern the floor-flatness surveys in
Exhibit J and the Reed Engineering reports in Exhibits L and U. Exeter contends
those materials are hearsay and have not been sufficiently authenticated. Exhibit J
consists of a June 5, 2024 internal Ariat email forwarding the surveys; Exhibit L
includes a later email transmitting Reed’s draft geotechnical report.
¶ 36. Authentication 	and 	hearsay 	are 	separate 	inquiries. 	A 	declaration
identifying a document as a true copy may establish what the document is without
establishing that its contents are admissible for the truth of the matter asserted.
Likewise, 	the 	absence 	of 	a 	business-records 	declaration 	does 	not 	rule 	out
authentication by other means. A proper business-records foundation can establish
both self-authentication and an exception to the hearsay rule.58
58 TEX . R. E VID . 803(6) (business-records exception), 902(10) (self-authenticated evidence); Savoy v. Nat’l
Collegiate Student Loan Tr. 2005-3, 557 S.W.3d 825, 831–32 (Tex. App.—Houston [1st Dist.] 2018, no pet.)
(providing that documents created by third party can constitute business records of another business); Kyle
v. Countrywide Home Loans, Inc., 232 S.W.3d 355, 360–61 (Tex. App.—Dallas 2007, pet. denied) (explaining
that only substantial compliance with Rule 902(10) is required).

MEMORANDUM OPINION AND ORDER, PAGE 15
¶ 37. 	Paragraph 5.A of the Gupta Declaration supplies the business-records
predicate for Exhibits G, K, L, and M, reciting that those exhibits were prepared by
or on behalf of Ariat and kept in the ordinary course of its business, that it was
Ariat’s regular practice to make or receive such records, that the records were made
at or near the time of the events recorded, and that the exhibits are originals or exact
duplicates.59 Gupta also describes Ariat’s retention of Reed and its use of the
investigation 	in 	addressing 	the 	warehouse 	conditions. 	Taken 	together, 	those
statements support admission of Exhibit L as a record received and relied upon in
Ariat’s business. The objection to Exhibit L is OVERRULED
¶ 38. Exhibit J is more complicated. Although Gupta’s identification of the
exhibit and the transmitting email sufficiently authenticate it, the surveys are not
among the records identified in paragraph 5.A, and Ariat supplies no other hearsay
exception for their use as proof of floor flatness and levelness. Ariat, however, cites
Exhibit J for a single proposition—that Reed commenced floor flatness and levelness
testing in 2024. That use does not depend on the truth of the measurements the
surveys report, and the objection is OVERRULED as to it. To the extent the surveys
are offered as proof of the flatness and levelness values they record, the hearsay
objection is SUSTAINED.60
59 Gupta Decl. ¶ 5.A (De f.’s App. 38).
60 The measurements reported in the surveys appear elsewhere in the record through the parties’ engineering
reports and deposition testimony.

MEMORANDUM OPINION AND ORDER, PAGE 16
¶ 39. Ariat has represented that Exhibit U was included inadvertently and is
not being offered at this time.61 Exhibit U is therefore STRICKEN by agreement.
ANALYSIS
¶ 40. Turning to the merits, Exeter argues that the Lease’s “as-is” provision
and the economic-loss rule defeat all four of Ariat’s counterclaims. It also contends
that the Lease bars recovery of the damages Ariat seeks. The Court begins with the
principles governing commercial leases in Texas, then addresses each of Exeter’s
grounds for summary judgment.
A. 	Texas commercial landlord-tenant law.
¶ 41. 	Several principles of Texas commercial landlord-tenant law guide the
Court’s analysis, particularly the protections implied by law and the parties’ ability
to modify those protections by agreement.
¶ 42. First, absent express language to the contrary, every lease of land
includes an implied covenant of quiet and peaceful enjoyment.62 Breach of this
covenant can support a claim for constructive eviction. The elements of constructive
eviction—which are also the elements of a claim for breach of the warranty of quiet
enjoyment—are:
(1) the landlord’s intention that the tenant shall no longer enjoy the
premises; (2) a material act by the landlord that substantially interferes
61 Def.’s Resp. 14 & n.1.
62 L-M-S Inc. v. Blackwell, 233 S.W.2d 286, 289 (Tex. 1950).

MEMORANDUM OPINION AND ORDER, PAGE 17
with the tenant’s intended use and enjoyment of the premises; (3) an
act that permanently deprives the tenant of the use and enjoyment of
the premises; and (4) abandonment of the premises by the tenant within
a reasonable time after the commission of the act.63
¶ 43. A tenant who as been constructively evicted is relieved of its obligation
to pay rent and may recover losses that are a foreseeable consequence of the eviction,
subject to any enforceable limits in the lease.64 The implied covenant of quiet
enjoyment may be waived or disclaimed by the tenant, but the lease must expressly
provide for that result.65 The parties may also include an express covenant of quiet
enjoyment, in which event the Court must give effect to the terms they chose. 66
¶ 44. Second, Texas law implies in commercial leases a warranty that the
premises are suitable for their intended purposes.67 To establish a breach of the
implied warranty of suitability, a tenant must prove that “a latent defect in the
facilities existed at the inception of the lease, that the facilities were vital to the use
of the premises for the intended purposes, and that the lessor failed to repair the
defect.”68 If, however, a tenant expressly agrees to repair certain defects itself, the
63 Bagby 3015, LLC v. Bagby House, LLC, 674 S.W.3d 609, 620 (Tex. App.—Houston [1st Dist.] 2023, no
pet.).
64 Lazell v. Stone, 123 S.W.3d 6, 12 (Tex. App.—Houston [1st Dist.] 2003, pet. denied).
65 See L-M-S, 233 S.W.2d at 289 (implied covenant of quiet enjoyment exists unless there is express language
to the contrary in the lease); Dall. Power & Light Co. v. Cleghorn, 623 S.W.2d 310, 311 (Tex. 1981) (“There is
no implied covenant when the agreement expressly negates the covenant.”).
66 Goldman v. Alkek, 850 S.W.2d 568, 572 (Tex. App.—Corpus Christi-Edinburg 1993, no writ).
67 Italian Cowboy, 341 S.W.3d at 340.
68 Id.

MEMORANDUM OPINION AND ORDER, PAGE 18
lease controls as to those defects.69 Whether the warranty has been breached is
ordinarily a question of fact.70
¶ 45. Finally, 	the implied 	warranty 	of 	suitability 	may 	be waived 	in 	a
commercial 	lease.71 	Two 	provisions 	can 	accomplish 	that, 	though 	they 	work
differently. An express disclaimer waives the warranty itself.72 An as-is clause, on
the other hand, operates on causation instead; a tenant who accepts the premises as-
is agrees to rely on its own appraisal of their condition, so the landlord’s conduct
cannot be shown to have caused the tenant’s injury.73 The effect of either provision
depends on its language and scope.74 An as-is clause limited to physical conditions,
for example, does not reach a defect of a different character.75 And where the
landlord expressly retains responsibility for repairing a component of the property,
the as-is clause must be read together with that undertaking to determine whether
the warranty remains available for defects in that component.76
69 Id.
70 Id. at 341.
71 Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (Tex. 2007); Rohrmoos Venture v. UTSW DVA
Healthcare, LLP, 578 S.W.3d 469, 482 (Tex. 2019).
72 Gym-N-I Playgrounds, 220 S.W.3d at 912–14.
73 Id. at 914; see also Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex. 1995)
(“He has agreed to take the full risk of determining the value of the purchase. . . . In making this choice, he
removes the possibility that the seller’s conduct will cause him damage.”).
74 See Marinecorp Int’l, Ltd. v. Chopper Grp., LLC, No. 01-14-00707-CV, 2016 WL 1382168, at *5–7 (Tex.
App.—Houston [1st Dist.] Apr. 7, 2016, pet. denied).
75 See Gym-N-I Playgrounds, 220 S.W.3d at 911 n.9.
76 Marinecorp Int’l, 2016 WL 1382168, at *6.

MEMORANDUM OPINION AND ORDER, PAGE 19
B. 	The as-is provision does not bar Ariat’s counterclaims.
¶ 46. Section 2(a) of the Lease contains the as-is provision at issue: “Tenant
accepts the Premises, Building and Common Areas ʻAS IS’, without relying on any
representation, covenant or warranty by Landlord other than as expressly set forth in
this Lease.”77
¶ 47. The closing phrase controls the analysis. By its own terms, the clause
preserves every representation, covenant, and warranty that Exeter made elsewhere
in the Lease. Several bear directly on Ariat’s use of the Premises: Exeter’s promise
to maintain the footings and foundation in good condition and repair; Exeter’s
covenant 	that 	the 	Premises 	would 	comply 	with 	applicable 	“Laws” 	on 	the
Commencement Date; and Exeter’s covenant of quiet and peaceful possession. Read
in the context of those provisions, the as-is clause cannot categorically bar Ariat’s
contract counterclaim. To hold otherwise would be to read the exception out of the
sentence and render Exeter’s express obligations meaningless.
¶ 48. The 	same 	reasoning 	applies 	to 	Ariat’s 	quiet-enjoyment 	and
constructive-eviction theories. Although a covenant of quiet enjoyment is ordinarily
implied in a commercial lease, this Lease includes an express covenant in Section
77 Lease § 2(a) (Pl.’s App. 39–40) (emphasis added).

MEMORANDUM OPINION AND ORDER, PAGE 20
17.78 That covenant is precisely what Section 2(a) preserves. And because a breach
of the covenant may also support constructive eviction, the as-is provision does not
defeat that theory either.
¶ 49. The implied-warranty-of-suitability claim requires a more nuanced
analysis. By definition, an implied warranty is not an express promise preserved by
Section 2(a)’s exception. The question, then, is whether the as-is language, read
together with the Lease’s allocation of responsibilities, disclaims that warranty as
to the conditions or defects at issue.
¶ 50. Exeter relies on Gym-N-I for the proposition that Ariat’s agreement to
accept the Premises as-is waived the implied warranty of suitability. But Gym-N-I
did not hold that an as-is provision, standing alone, accomplishes that result. The
lease there expressly disclaimed warranties of commercial suitability and excluded
all implied warranties.79 In enforcing that language, the Supreme Court reserved the
question presented by a clause—like the one here—without an express disclaimer:
“whether an ʻas is’ clause lacking express disclaimer language would effectively
waive the implied warranty of suitability.”80 	Exeter’s reliance on 	Gym-N-I
therefore does not resolve the effect of Section 2(a).
78 Lease § 17 (Pl.’s App. 53).
79 Gym-N-I Playgrounds, 220 S.W.3d at 907 n.1.
80 Id. at 910 n.7.

MEMORANDUM OPINION AND ORDER, PAGE 21
¶ 51. 	More instructive is the Gym-N-I Court’s treatment of two earlier
decisions involving leases more analogous to this one: Parts Industries Corp. v.
A.V.A. Services, Inc.81 and Gober v. Wright.82 The Court identified two relevant
features that distinguished those cases from Gym-N-I: neither lease contained an
express disclaimer of the implied warranty of suitability, and both assigned the
landlord responsibility for repairing the defect at issue. In each case, that defect
concerned a roof the landlord had agreed to maintain.83 Both courts held that the
implied warranty remained applicable to the roof because the landlord had retained
responsibility for its repair.84 And in Parts Industries, the court specifically held that
the tenant’s acceptance of the premises as-is did not change that result.85
¶ 52. This Lease more closely resembles those in Parts Industries and Gober.
Section 2(a) does not include a blanket exclusion of implied warranties and
expressly preserves the covenants stated elsewhere in the Lease. Section 9(a), in
turn, assigns Exeter continuing responsibility to maintain the building’s footings
and foundations in good condition and repair. The issue is thus not whether the
words “as is” can ever waive the implied warranty of suitability, but whether they
81 Parts Indus. Corp. v. A.V.A. Servs., Inc., 104 S.W.3d 671, 680 (Tex. App.—Corpus Christi 2003, no pet.).
82 Gober v. Wright, 838 S.W.2d 794, 798 (Tex. App.—Houston [1st Dist.] 1992, writ denied), abrogated on
other grounds by State Farm Fire & Cas. Co. v. Morua, 979 S.W.2d 616 (Tex. 1998).
83 Gym-N-I Playgrounds, 220 S.W.3d at 911 (discussing Parts Indus. and Gober).
84 Parts Indus., 104 S.W.3d at 680–81; Gober, 838 S.W.2d at 798.
85 Parts Indus., 104 S.W.3d at 680–81.

MEMORANDUM OPINION AND ORDER, PAGE 22
do so here as to a condition within Exeter’s retained responsibilities. Read together,
Sections 2(a) and 9(a) do not establish such a waiver. Exeter has not shown that
Ariat agreed to bear the risk of those defects in light of Exeter’s express undertaking
to maintain those components.86
¶ 53. Whether 	the 	conditions 	that 	Ariat 	identifies 	actually 	fall 	within
Exeter’s repair obligations remains a separate question. Section 9(b) assigns Ariat
the interior, nonstructural portions of the Premises, expressly including floors,
except as provided in Section 9(a) or elsewhere in the Lease. Exeter’s expert
describes the interior slab as a floating slab bearing on near-surface soils, separate
from the drilled-pier foundation, while the alleged deficiency lies in the ground-
modification zone beneath it. Which party bore responsibility for that zone, and for
the slab it supports, is a disputed question this record does not settle. The Court rules
only that the as-is clause does not resolve it.
¶ 54. Nor do the First Amendment and the Memorandum establish an
independent basis for judgment on all four counterclaims. Each speaks as of its own
effective date—July 20, 2023 and November 6, 2023—and addresses Ariat’s then-
existing claims, defenses, or offsets. Neither purport to release Exeter from later
failures to perform continuing obligations, and the conditions at issue were first
86 See Marinecorp Int’l, 2016 WL 1382168, at *5–7 (examining the scope of the acceptance provisions and
the obligations retained by the landlords).

MEMORANDUM OPINION AND ORDER, PAGE 23
reported months afterward. Exeter therefore has not established that these date-
specific statements released all claims based on future (non)performance.
¶ 55. Accordingly, the Court DENIES summary judgment on this ground.
C. 	Ariat’s claims are not barred by the economic-loss rule.
¶ 56. Exeter separately argues that Ariat’s claims for constructive eviction,
breach of the warranty of quiet enjoyment, and breach of the implied warranty of
suitability arise solely from the Lease and are therefore barred by the economic-loss
rule. The Court disagrees.
¶ 57. The economic-loss rule governs the boundary between contract and tort
liability. As a general rule, w hen an alleged duty arises solely from the parties’
agreement and the injury consists of the lost contractual benefit, the remedy is said
to lie in contract.87 This rule, however, does not automatically bar all tort claims
whenever the parties have a contractual relationship.88 The relevant inquiry is
whether “the duty allegedly breached is independent of the contractual undertaking
and the harm suffered is not merely the economic loss of a contractual benefit.”89
¶ 58. The suitability counterclaim demonstrates why Exeter’s argument
reaches too far. Texas law implies the warranty into every commercial lease, binding
87 See Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991); Bell v. Bay Area RV Parks, L.L.C., 722
S.W.3d 176, 213 (Tex. App.—Houston [1st Dist.] 2025, no pet.).
88 Chapman Custom Homes, Inc. v. Dall. Plumbing Co., 445 S.W.3d 716, 718 (Tex. 2014).
89 Id.

MEMORANDUM OPINION AND ORDER, PAGE 24
even landlords who made no express promise about condition at all.90 Consistent
with this, the Texas Supreme Court has said that the warranty “exists separately and
apart from any obligation the landlord may have under the lease.”91 The appellate
court in Marinecorp applied the same understanding when it rejected the argument
that a tenant’s warranty claims were merely contract claims in disguise, though it
did so in addressing liability under the Deceptive Trade Practices Act.92 These
decisions confirm that a suitability claim is not subject to dismissal merely because
the tenant also seeks to enforce an express covenant addressing the same condition.
¶ 59. Constructive eviction likewise survives. Texas courts of appeals have
long allowed tenants to recover when a landlord’s substantial interference with their
use of the premises forces them to leave.93 And while the Texas Supreme Court itself
has reserved the broader questions of whether to recognize constructive eviction as
an affirmative claim and how that claim relates to wrongful eviction and breach of
quiet enjoyment,94 the Court need not resolve those questions here. Exeter’s
90 Davidow v. Inwood N. Pro. Grp.—Phase I, 747 S.W.2d 373, 377 (Tex. 1988).
91 Rohrmoos Venture, 578 S.W.3d at 482.
92 See Marinecorp Int’l, 2016 WL 1382168, at *7.
93 See, e.g., Lazell, 123 S.W.3d at 11–13 (affirming tenant’s damage award for claims for constructive eviction,
breach of lease, breach of express warranty, and breach of the implied warranty of suitability); Downtown
Realty, Inc. v. 509 Tremont Bldg., Inc., 748 S.W.2d 309, 312–13 (Tex. App.—Houston [14th Dist.] 1988, no
writ) (affirming trial court’s verdict in favor of tenant for breach -of-contract and constructive-evictions
claims).
94 Westwood Motorcars, LLC v. Virtuolotry, LLC, 689 S.W.3d 879, 882 n.1 (Tex. 2024) (“Our Court has not
expressly recognized constructive eviction as an affirmative claim for relief, nor have we addressed this
claim’s relationship, if any, with claims for wrongful eviction or breach of the covenant of quiet enjoyment. .
. . Because it is not necessary to do so, we express no opinion on these issues today.”).

MEMORANDUM OPINION AND ORDER, PAGE 25
asserted ground—that the claims arise from a lease and seek economic losses—does
not preclude recovery as a matter of law. Every constructive-eviction claim arises
from a lease; if that alone sufficed, the claim could never survive.
¶ 60. Exeter comes closer on quiet enjoyment. Ariat pleads that counterclaim
under Section 17, an express covenant, so its claim sounds in contract. But that
characterization limits the remedy; it does not defeat the claim. It does mean,
however, that this counterclaim will not support tort remedies, including exemplary
damages. And because the elements of that claim and constructive eviction overlap,
Ariat may not recover twice for the same injury.95
¶ 61. 	Exeter’s request for summary judgment dismissing the counterclaims
under the economic-loss rule is DENIED, subject to the qualifications just stated.
D. 	Section 24 bars some of Ariat’s claimed losses, but not its entire damages
model.
1. 	Section 24 excludes specified losses regardless of the theory of recovery.
¶ 62. Exeter’s final argument concerns the damages Ariat seeks. Exeter
contends that the Lease’s limitation-of-liability clause bars “the entirety of Ariat’s
damage model.” Section 24 states: “In no event shall Landlord be liable to Tenant
95 Lazell, 123 S.W.3d at 12 n.1 (holding that the elements of breach of the warranty of quiet enjoyment are the
same as constructive eviction).

MEMORANDUM OPINION AND ORDER, PAGE 26
for any loss of business or profits of Tenant or for consequential, punitive or special
damages of any kind.”
¶ 63. Limitation-of-liability 	clauses 	are 	generally 	enforceable 	in 	Texas,
consistent with the state’s policy favoring freedom of contract.96 Ariat does not
challenge Section 24 as illegal or contrary to public policy. It argues only that the
clause does not reach its losses. The dispute is therefore over the clause’s scope. By
its terms, Section 24 excludes specified kinds of losses without regard to the claim
under which they are sought.
¶ 64. Section 24 operates in two ways. First, it excludes all damages for loss
of business or loss of profits, whether characterized as direct or consequential.
Second, it excludes all forms of consequential, punitive, and special damages. At the
same time, Section 24 stops short of excluding all damages. Exeter emphasizes the
ending phrase “of any kind,” but that language merely modifies the listed categories
that precede it; it does not confer blanket immunity from damages.97 Indeed, Section
24 itself provides for reimbursement of qualifying repair expenses, confirming that
96 Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, 572 S.W.3d 213, 230 (Tex. 2019); SAVA
gumarska in kemijska industria d.d. v. Advanced Polymer Scis., Inc., 128 S.W.3d 304, 317 (Tex. App.—Dallas
2004, no pet.) (“In general, parties to a contract are free to limit or modify the remedies available for breach
of their agreement.”).
97 Even if the Court found the phrase created ambiguity (it does not), the doctrine of ejusdem generis would
still be limiting. See City of Beaumont v. Int’l Ass’n of Firefighters, Loc. Union No. 399, 241 S.W.3d 208, 213
(Tex. App.—Beaumont 2007, no pet.) (“[W]hen words of a general nature are used in connection with the
designation of particular objects or classes of persons or things, the meaning of the general words will be
restricted to the particular designation.”).

MEMORANDUM OPINION AND ORDER, PAGE 27
direct damages remain available as long as they fall outside the enumerated
exclusions.
¶ 65. The distinction between direct and consequential damages is well
documented. Direct (general) damages “are the necessary and usual result of the
defendant’s wrongful act; they flow naturally and necessarily from the wrong.”98 In
this way, they compensate a plaintiff for a “loss that is conclusively presumed to
have been foreseen by the defendant from his wrongful act.”99 Consequential
(special) damages, by comparison, are a natural and foreseeable result of a party’s
wrongful act but do not necessarily flow from it.100 They instead arise from the
injured party’s particular circumstances.101 Thus, a loss does not become direct
simply because it was foreseeable, was actually incurred, or would not have occurred
but for the breach.102 To classify Ariat’s losses, the Court must consider what each
item represents and how it relates to the parties’ bargain.
¶ 66. Ariat argues at the outset that this inquiry should await trial and is not
appropriate for summary-judgment. The Court disagrees. The meaning of an
98 Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 816 (Tex. 1997).
99 Id.
100 Id.; DaimlerChrysler Motors Co., LLC v. Manuel, 362 S.W.3d 160, 180 (Tex. App.—Fort Worth 2012, no
pet.).
101 Arthur Andersen, 945 S.W.2d at 816.
102 See id. (explaining that foreseeability is a requirement for recovery of both direct and consequential
damages); J & D Towing, LLC v. Am. Alt. Ins. Corp., 478 S.W.3d 649, 655 (Tex. 2016) (explaining that
consequential damages also compensate for losses incurred and that the appropriate test for recovery of direct
damages is whether the loss is the necessary and usual result of the breach).

MEMORANDUM OPINION AND ORDER, PAGE 28
unambiguous damages limitation is a question of law, and courts regularly decide on
summary judgment whether such a provision excludes a particular category of
loss.103 This is not an unusual exercise.
¶ 67. Ariat also argues that evidence of some recoverable loss is enough to
defeat the Motion. This is a non sequitur. While it is true that evidence of some
damages is ordinarily sufficient to overcome a no-evidence challenge, Exeter’s
second ground is not an evidentiary challenge. Exeter does not contend that Ariat
lacks proof of what it spent. It contends that the Lease bars recovery of these losses
whatever the proof shows.
¶ 68. Ariat’s expert, Erica Bramer, groups the claimed losses into five
categories: (1) costs of improvements, upgrades, and installation; (2) costs to assess
and investigate structural defects; (3) costs to remove, store, and transport assets;
(4) incremental costs to fulfill customer orders; and (5) incremental costs of PR
Crow (ACE) lease.104 The Court addresses each category below.
2. 	Exeter has not established that all improvements and installation costs
are excluded.
103 See, e.g., Cont’l Holdings, Ltd. v. Leahy, 132 S.W.3d 471, 475–77 (Tex. App.—Eastland 2003, no pet.)
(affirming summary judgment on limitation-of-liability clause barring direct and indirect lost profits); Fox
Elec. Co. v. Tone Guard Sec., Inc., 861 S.W.2d 79, 80–83 (Tex. App.—Fort Worth 1993, no writ) (affirming
summary judgment on limitation-of-liability clause limiting consequential and incidental damages); Ganda,
Inc. v. All Plastics Molding, Inc., 521 S.W.2d 940, 942–43 (Tex. App.—Waco 1975, writ ref’d n.r.e.) (affirming
summary judgment on limitation-of-liability clause barring special or consequential damages).
104 Bramer Report (Pl.’s App. 150).

MEMORANDUM OPINION AND ORDER, PAGE 29
¶ 69. Ariat seeks $9,881,107 in costs incurred to improve and upgrade the
Premises for use as an automated distribution center.105 This category includes
roughly $5,467,653 in contributions toward tenant improvements, installation and
field-wiring costs, $176,500 in floor-remediation charges, and other electrical and
information-technology amounts. Ariat contends the alleged defects forced it to
vacate the Premises before it could realize the benefit of these expenditures.
¶ 70. Although grouped together, these items do not all present the same
question, and Exeter has not conclusively established that the category as a whole
is excluded. Money spent on improvements contemplated by the Lease may support
a claim for direct damages tied to the value of the leasehold 	Exeter promised to
provide. Section 2(d), on which Exeter relies, does not preclude that possibility. It
merely limits what Exeter agreed to contribute toward the improvements, not what
it may owe for a later breach of the Lease. Those are not one and the same.
¶ 71. 	Whether Ariat can recover any particular expense remains to be
determined. Investments specific to its automation system, for example, may prove
to be consequential, while recovery of its floor-remediation costs depends on who
was responsible under the Lease for the condition being repaired. Any recovery must
also account for benefits Ariat received, property it retained, and any overlap with
105 Id. (Pl.’s App. 126).

MEMORANDUM OPINION AND ORDER, PAGE 30
other claimed damages. This ruling does not approve any particular measure or
amount.
¶ 72. Because Exeter has not conclusively established that Section 24
excludes this category, summary judgment on that basis is DENIED.
3. 	Assessment and investigation costs are not barred, but staff-retention
charges are excluded.
¶ 73. 	Next, Ariat seeks $669,479 for what it describes as costs to assess and
investigate the alleged structural defects. Characterized in that manner, the category
presents a straightforward question. The schedule supporting the category, however,
also includes substantial charges that vary from its caption.
¶ 74. Seven line items, totaling $105,619, reflect what the caption describes:
floor flatness surveys, geotechnical investigation, construction material testing, a
foundation inspection, and structural engineering. The other six line items are Hy -
Tek invoices totaling $563,860.106 Bramer describes those charges as “Labor
Retention of 	Maintenance Crews at Denton Westpark.” Her supporting note
explains that Ariat renewed a six-month commitment to retain Hy-Tek’s skilled
maintenance crews because construction at the facility had been delayed.
106 The invoices are labeled as “INV307107,” “INV307109,” “INV307110,” “INV307285,” “INV307650,”
and “INV308213.” Ex. 5 to Bramer Report (Pl.’s App. 159).

MEMORANDUM OPINION AND ORDER, PAGE 31
¶ 75. Those six charges are not assessment or investigation costs. They
represent the costs of keeping an idle maintenance crew under contract while Ariat’s
automation project was delayed. Even if the defects caused the delay, the resulting
retention expenses arose from Ariat’s separate staffing arrangements with Hy-Tek,
rather 	than 	anything 	related 	to 	the 	landlord-tenant 	agreement. 	The	y 	are
consequential damages excluded by Section 24. Summary judgment is therefore
GRANTED as to those six charges, totaling $563,860.
¶ 76. The balance of the category survives. The reasonable cost of identifying
a condition the landlord was obligated to repair may constitute a direct loss,
particularly where the Lease requires the tenant to notify the landlord of conditions
needing repair. Exeter’s opposing argument is that no Texas court has recognized
investigation costs as a standalone category. But the absence of a decision using that
label does not establish that these particular expenses are consequential. Their
recoverability depends on what work was performed, why it was needed, and
whether it concerned a condition that Exeter was obligated to repair. Those
questions remain open. Summary judgment as to the remaining items is DENIED.
4. 	Section 24 excludes the identified relocation and storage expenses.
¶ 77. 	Ariat 	also 	seeks 	$4,347,800 	for 	uninstalling, 	removing, 	storing,
transporting, and reinstalling equipment, furniture, and machinery. Bramer groups
these expenses under the heading “Costs to Remove, Store, and Transport Assets.”

MEMORANDUM OPINION AND ORDER, PAGE 32
Some entries expressly concern relocation, while others describe work at Westpark
without clearly identifying its purpose.
¶ 78. Texas 	law 	distinguishes 	moving 	expenses 	from 	general 	(direct)
damages that measure the value of a lost leasehold.107 In Briargrove, for example,
the 	court 	classified 	the 	“expense 	of 	removal 	from 	the 	premises” 	as 	special
(consequential) damages.108 Later courts have likewise treated relocation expenses
as outside a tenant’s general damages.109 Such expenses depend on a tenant’s
particular circumstances: what it owns, where it goes, and what it costs to get there.
Section 24 excludes those losses.
¶ 79. Summary judgment is therefore GRANTED as to the identified charges
for packing, transporting, relocating, or storing Ariat’s property, as specified in the
accompanying footnote.110 However, the ruling does not extend to the entire
$4,347,800 category merely because Bramer chose to group the charges together.
Several entries describe work undertaken to clear space for investigation and to work
107 Briargrove Shopping Ctr. Joint Venture v. Vilar, Inc., 647 S.W.2d 329, 336 (Tex. App.—Houston [1st Dist.]
1982, no writ) (holding that relocation or moving expenses are special damages for lease violation).
108 Id.
109 See First Cash, Ltd. v. JQ-Parkdale, LLC, 538 S.W.3d 189, 202, 204 (Tex. App.—Corpus Christi-Edinburg
2018, no pet.) (citing Briargrove and permitting recovery of relocation and buildout costs where the lease
contained no exclusion for consequential damages).
110 Ex. 6 to Bramer Report& nn. 7, 9–17 (Pl.’s App. 160–61). The excluded charges are Hy 	-Tek invoice
INV306198; Malin Systems invoices SY2510027, SY2510036, 0125040786-1, 0125050483-1, and
0125051031-1; Politon invoice 7445; and the Olam Agri Americas equipment-storage, Indoff furniture
teardown and storage, and It’s Logistics shuttle-transfer charges. Malin invoice SY2510105 contains mixed
charges and is not excluded in its entirety.

MEMORANDUM OPINION AND ORDER, PAGE 33
around the alleged floor defects.111 Those items, too, may ultimately prove to be
consequential damages, but Exeter has not yet established that they are. Summary
judgment as to the balance of the category is DENIED.
5. 	The 	additional 	costs 	of 	fulfilling 	customer 	orders 	are 	barred
consequential damages.
¶ 80. Ariat seeks $22,466,010 in additional costs incurred to fill customer
orders from other higher-cost facilities.112
¶ 81. 	At bottom, this is a claim for the operating savings that Ariat expected
to achieve from an automated distribution center that never opened. Whether framed
as increased costs of operation or, more indirectly, as a loss of profits caused by those
increased costs, the loss is a function of Ariat’s distribution network, staffing,
automation schedule, and alternative operating arrangements. Those expenses do
not measure the value of the leasehold 	Exeter promised to provide. Even if the
alleged breach made them necessary, they are consequential losses arising from
Ariat’s particular operations. Section 24 therefore excludes them without requiring
the Court to decide whether they also qualify as lost profits. Summary judgment as
to this $22,466,010 is GRANTED.
6. 	Ariat may seek the value of its existing leasehold, but not the benefit of an
unexecuted expansion and extension.
111 Bramer Report ¶¶ 41–42 & Ex. 6 (Pl.’s App. 131–32, 160–61).
112 Id. (Pl.’s App. 132–36).

MEMORANDUM OPINION AND ORDER, PAGE 34
¶ 82. 	The final category consists of additional base rent and operating
expenses under Ariat’s replacement lease at PR Crow, also called ACE. Bramer
calculates these losses at $15,926,573 through March 2032, or $24,004,456
through March 2037.113
¶ 83. Exeter first argues that these costs are lost profits in disguise and
therefore barred by Section 24. That is not an accurate characterization. The value
of a tenant’s leasehold is distinct from the profits it expects to earn while occupying
the property.114 A claim for the former does not become a claim for the latter simply
because favorable lease terms would have reduced the tenant’s operating costs.
¶ 84. Exeter’s second argument is more persuasive. A displaced tenant’s
direct damages are measured by the difference between the contractually agreed rent
and the market rental value of the leasehold for the unexpired term.115 Here, that
unexpired term ends October 31, 2027. Bramer’s calculations instead assume that
the parties would have executed a second amendment expanding Ariat’s space to the
entire building and extending the term to March 2032. The larger calculation further
assumes a five-year renewal to March 2037—more than nine years past the term
actually bargained for.
113 Id. (Pl.’s App. 136–38).
114 Briargrove, 647 S.W.2d at 336 (explaining that an evicted party can recover both rental differential and
special damages “such as net profits,” thereby recognizing both to be separate and distinct damage
categories).
115 Id. at 336; First Cash, 538 S.W.3d at 201–02.

MEMORANDUM OPINION AND ORDER, PAGE 35
¶ 85. Damages built on those assumptions measure the benefit of a separate,
never-consummated transaction. They do not measure what Ariat actually lost
under the existing Lease. Any loss of that kind is necessarily consequential to a
breach of the Lease and is excluded by Section 24. The post-March 2032 calculation
illustrates the distinction. It assumes identical rent and operating expenses per
square foot at both facilities, so the entire difference comes from the replacement
facility’s greater size. Ariat would pay more simply because it leased more space, not
because comparable space cost more.
¶ 86. Partial summary judgment is therefore GRANTED as to the claimed
losses attributable to the unexecuted expansion and extension, including the further
renewal assumed in Bramer’s model. Ariat may still seek the difference between the
market rental value of its existing leasehold and the agreed rent for the remaining
term ending October 31, 2027.
CONCLUSION
¶ 87. For these reasons, the Court GRANTS IN PART and DENIES IN PART
Exeter’s Traditional Motion for Summary Judgment on Ariat’s Counterclaims.
Summary judgment is GRANTED only as to the damages expressly excluded under
Section 24 in this opinion and is otherwise DENIED.
¶ 88. All four counterclaims remain pending, subject to these damages
limitations. This ruling establishes no liability and awards no damages. Exeter’s

MEMORANDUM OPINION AND ORDER, PAGE 36
affirmative claims and Ariat’s defenses to those claims remain unresolved. This
Order is interlocutory.
IT IS SO ORDERED.
HON. BRIAN STAGNER
Judge of the Texas Business Court,
Eighth Division
SIGNED: October 2, 2026

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Email
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TMcCreight@duanemorris.com
michelle.hartmann@bakermckenzie.com
bwarden@duanemorris.com
karen.wagner@bakermckenzie.com
sam.myers@wilsonelser.com
ariel.bryant@bakermckenzie.com
rschultz@duanemorris.com
EPerez@duanemorris.com
SAlbright@duanemorris.com
BCDivision8B@txcourts.gov
carson.henderson@bakermckenzie.com
brianna.mercer@bakermckenzie.com
ASpicer@duanemorris.com
cabrown@duanemorris.com
TimestampSubmitted
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
Status
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT
SENT

Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Envelope ID: 120710826
Filing Code Description: No Fee Documents
Filing Description: Memorandum Opinion and Order on Exeter Denton
Land, L.P.'s Traditional Motion for Summary Judgment on Ariat
International, Inc.'s Counterclaims
Status as of 10/2/2026 3:13 PM CST
Associated Case Party: Rone Engineering
Name
Tim Soefje
Veronica Negron
Patric Friend
BarNumber
791700
Email
tim.soefje@fmglaw.com
vnegron@fmglaw.com
Patric.Friend@fmglaw.com
TimestampSubmitted
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
10/2/2026 3:06:14 PM
Status
SENT
SENT
SENT
Associated Case Party: Ariat International Inc
Name
Nicholas Kennedy
BarNumber
24087841
Email
nicholas.kennedy@bakermckenzie.com
TimestampSubmitted
10/2/2026 3:06:14 PM
Status
SENT