Opinion issued December 19, 2017

In The

Court of Appeals 

For The 

First District of Texas 

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NO. 01-17-00101-CV

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PIZZA HUT OF AMERICA, L.L.C., Appellant

V.

HOUSTON COMMUNITY COLLEGE SYSTEM, Appellee

On Appeal from the County Civil Court at Law No. 4

Harris County, Texas

Trial Court Case No. 1043516

MEMORANDUM OPINION

In this condemnation proceeding, appellant Pizza Hut of America, L.L.C. 

(“Pizza Hut”), challenges the trial court’s judgment dismissing its claims for lack 

of standing. Pizza Hut was a tenant of the Woodridge Plaza Shopping Center 

(“Woodridge Plaza”) at the time that appellee Houston Community College 
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System (“HCCS”) condemned the property. As part of the condemnation 

proceedings, a condemnation award of $427,100 was designated to be paid to all of 

Woodridge Plaza’s tenants, and Pizza Hut sought $7,100 as its pro rata share from 

that amount. The trial court concluded, based on language in Pizza Hut’s lease for 

the Woodridge Plaza location, that Pizza Hut had suffered no impairment of its use 

of the premises as a result of the condemnation proceedings and, thus, Pizza Hut 

lacked standing and was not entitled to any portion of the condemnation award. In 

its sole issue on appeal, Pizza Hut contends that it has standing to participate in the 

condemnation proceedings and to seek a portion of those funds awarded to the 

Woodridge Plaza tenants.

We affirm.

Background

In February 2014, HCCS filed its petition for condemnation against 

Compass Investors Group, L.L.C. (“Compass”) to acquire Woodridge Plaza for 

educational purposes and the case was referred to special commissioners. In 

October 2014, the special commissioners awarded Compass $12,500,000 for its 

ownership interest in Woodridge Plaza. HCCS then filed a second condemnation 

petition naming the tenants of Woodridge Plaza as defendants. After two hearings, 

the special commissioners awarded $427,100 to all of the Woodridge Plaza 

tenants. The special commissioners specifically apportioned $7,100 of the total 
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funds to Pizza Hut because it was a tenant at the time of the special 

commissioners’ hearings. HCCS then deposited the $427,100 into the registry of 

the court. All parties contested the special commissioners’ award, and the trial 

court consolidated causes of action against Compass and the tenants for further 

judicial proceedings.

In October 2015, HCCS gained possession of Woodridge Plaza and 

continued operating it based on the operating leases the tenants had with Compass, 

including Pizza Hut’s lease with Compass. That lease for Pizza Hut’s restaurant 

space was a standard form lease provided by Pizza Hut. It contained a section 

pertaining to remedies in the event of a condemnation. The lease stated:

Condemnation means any impairment of Tenant’s use of the 

Premises or the Common Area, or both, by act or omission of 

government authority, including without limitation, a change in 

applicable law, exercise of the power of eminent domain, or exercise 

of other government authority such as alteration of a public street 

directly serving the Premises or the Common Area, or both. . . .

The Condemnation Award shall belong to the Landlord, 

however, Tenant shall be entitled to the Unamortized Cost of Tenant 

Improvements, plus Tenant’s relocation expenses as determined by 

the condemning entity or court of law. Unamortized Cost of Tenant 

Improvements means that portion of all costs of developing and 

constructing Tenant Improvement which, if amortized on a straight 

line basis over the Term, has not been recovered by Tenant as of the 

date of the Condemnation. . . .

Under HCCS’s operation as the premises owner, Pizza Hut continued 

operating its business at the Woodridge Plaza location—using its established 

equipment and improvements—at a profit and without interruption of physical 
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impairment by the condemnation. In April 2016, while the condemnation 

proceedings were still pending, Pizza Hut sold all ninety of its Houston locations, 

including the Woodridge Plaza location. The sale price included improvements to 

the Woodridge Plaza location but not the leasehold interest. Pizza Hut retained the 

leasehold interest due to the pending condemnation proceedings. 

In December 2016, HCCS filed a plea to the jurisdiction challenging Pizza 

Hut’s standing as a party to the condemnation proceedings. The trial court granted 

HCCS’s motion and dismissed Pizza Hut as a party from the proceeding without 

prejudice. The remaining parties subsequently settled and the trial court granted a

joint motion to dismiss with prejudice. This appeal between Pizza Hut and HCCS 

followed.

Standing

In its sole issue, Pizza Hut argues that, as an owner of a leasehold interest at 

the time of the taking, it had standing to participate in the condemnation 

proceeding.

A. Standard of Review and Applicable Law

Standing is implicit in the concept of subject-matter jurisdiction, and 

subject-matter jurisdiction is essential to the authority of a court to decide a case. 

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). Thus, 

standing is never presumed, cannot be waived, and can be raised for the first time 
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on appeal. Id. at 443–45. We review standing under the same standard by which 

we review subject-matter jurisdiction generally. Id. at 446. Whether the trial court 

has subject-matter jurisdiction is a question of law that we review de novo. Tex. 

Dep’t of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 166 (Tex. 2013);

Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex 2004).

A trial court decides a plea to the jurisdiction by reviewing the pleadings and 

any evidence relevant to the jurisdictional inquiry. See Bland Indep. Sch. Dist. v. 

Blue, 34 S.W.3d 547, 555 (Tex. 2000); see also A.P.I. Pipe & Supply, LLC, 397 

S.W.3d at 166 (“Evidence can be introduced and considered at the plea to the 

jurisdiction stage if needed to determine jurisdiction.”). We review a trial court’s 

ruling on a plea to the jurisdiction de novo, construing the pleadings liberally in 

favor of the plaintiff while considering the pleader’s intent. Miranda, 133 S.W.3d 

at 226–28. 

When a party cannot establish a viable takings claim, the trial court “lacks 

jurisdiction and should grant a plea to the jurisdiction.” A.P.I. Pipe & Supply, LLC, 

397 S.W.3d at 166; see also Tex. Ass’n of Bus., 852 S.W.2d at 446 (“The general 

test for standing in Texas requires that there (a) shall be a real controversy between 

the parties, which (b) will be actually determined by the judicial declaration 

sought.” (internal quotation omitted)). “Further, ‘[i]t is fundamental that, to recover 

under the constitutional takings clause, one must first demonstrate an ownership 
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interest in the property taken.’” A.P.I. Pipe & Supply, LLC, 397 S.W.3d at 166 

(quoting Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 644 (Tex. 

2004)). A lessee generally has standing in condemnation proceedings and is 

entitled to share in a condemnation award when part of its leasehold interest is lost 

by condemnation. Texaco Ref. & Mktg., Inc. v. Crown Plaza Grp., 845 S.W.2d 

340, 342 (Tex. App.—Houston [1st Dist.] 1992, no writ). However, a tenant may 

waive this right in the lease or elsewhere. See, e.g., Motiva Enters., LLC, v. 

McCrabb, 248 S.W.3d 211, 214 (Tex. App.—Houston [1st Dist.] 2007, pet. 

denied) (holding that where parties contracted for lease to terminate in event of 

condemnation of leased premises, lessee of condemned property had no 

compensable leasehold interest following automatic termination of its lease); Fort 

Worth Concrete Co. v. State, 416 S.W.2d 518, 521 (Tex. Civ. App.—Fort Worth 

1967, writ ref’d n.r.e.) (“A tenant whose lease provides for its termination upon the 

taking of the leased premises for a public use, is entitled to no compensation when 

it is condemned.”).

B. Analysis

Pizza Hut argues on appeal that it has standing in the condemnation 

proceedings with HCCS because, as a lessee, it is entitled to share in the 

condemnation award. However, to have standing, Pizza Hut must establish more 

than its mere identity as a leaseholder—it must show that it has a viable takings 
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claim. See A.P.I. Pipe & Supply, LLC, 397 S.W.3d at 166. Here, that involves 

construing Pizza Hut’s lease that sets forth specific terms concerning its interest in 

the event of a condemnation. See Motiva Enters., LLC, 248 S.W.3d at 214 

(recognizing that parties have right to contract for different remedies in event of 

condemnation such as, in that case, termination of lease in event of condemnation).

In construing a written lease, we must “ascertain the true intentions of the 

parties as expressed in the instrument.” Valence Operating Co. v. Dorsett, 164 

S.W.3d 656, 662 (Tex. 2005). The terms of the lease must be “given their plain, 

ordinary, and generally accepted meanings unless the [lease] itself shows them to 

be used in a technical or different sense.” Id. 

The lease states that “[c]ondemnation means any impairment of Tenant’s use 

of the Premises or the Common Area, or both, by act or omission of government 

authority” and that, although any “Condemnation Award shall belong to the 

Landlord,” Pizza Hut as the tenant is entitled to “the Unamortized Cost of Tenant 

Improvements, plus Tenant’s relocation expenses as determined by the 

condemning entity or court of law.” Thus, without a showing of impairment—

specifically, costs of tenant improvements and relocation expenses—Pizza Hut 

cannot show a viable takings claim or any harm resulting from the condemnation 

that would be resolved by its continuing as a party to the condemnation 

proceedings. See A.P.I. Pipe & Supply, LLC, 397 S.W.3d at 166 (discussing 
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standing principles in constitutional takings cases); see also Tex. Ass’n of Bus., 852 

S.W.2d at 446 (discussing general standing principles).

Pizza Hut acknowledges that the condemnation did not impair its physical 

access to or use of the Woodridge Plaza location; rather, it argues that the 

uncertainty created by the condemnation constituted an impairment. Pizza Hut 

asserts that it did not know how long it would be able to continue operating in the 

building after HCCS became the owner. However, the uncontested jurisdictional 

evidence indicates that during the time HCCS had control over Woodridge Plaza, 

Pizza Hut was able to continue operating in that location at a profit until it sold its 

franchise for that location to a third-party buyer in April 2016, when it was paid for 

the costs of all improvements to the store by the new owner. There was likewise no 

evidence that Pizza Hut incurred any relocation costs related to the condemnation. 

We conclude that Pizza Hut has failed to demonstrate, under the terms of its 

lease, a viable interest in HCCS’s condemnation of Woodridge Plaza. Accordingly, 

the trial court properly dismissed it from the case. See A.P.I. Pipe & Supply, LLC, 

397 S.W.3d at 166; see also Tex. Ass’n of Bus., 852 S.W.2d at 446.
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Conclusion

We affirm the judgment of the trial court.

Evelyn V. Keyes

Justice

Panel consists of Chief Justice Radack and Justices Keyes and Caughey.