* Pursuant to 5TH CIR. R. 47.5, the court has determined that this

opinion should not be published and is not precedent except under the limited

circumstances set forth in 5TH CIR. R. 47.5.4.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 01-41104

Summary Calendar

_______________________

SCENIC GALVESTON, INC.,

Plaintiff--Counter-Defendant--Appellee,

versus

INFINITY OUTDOOR, INC.,

formerly known as Outdoor Systems, Inc.,

Defendant--Counter-Plaintiff--Appellant.

_________________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

00-CV-751

_________________________________________________________________

April 8, 2002

Before JONES, SMITH, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:*

Scenic Galveston, Inc., brought this declaratory judgment

action seeking a determination that Infinity Outdoor, Inc., had

terminated a lease agreement governing the erection and maintenance

of billboards. Having determined that Infinity Outdoor

unambiguously exercised its option to terminate the lease, the
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district court granted summary judgment for Scenic Galveston. We

affirm.

I

Scenic Galveston, Inc., is a Texas non-profit corporation

dedicated to curbing the proliferation of billboards. In 1998,

Scenic Galveston purchased property along Interstate 45 in

Galveston County that was subject to a 40-year lease agreement

regarding billboards. Scenic Galveston acquired all rights as

lessor. Infinity Outdoor, Inc. (“Infinity”), a Delaware

corporation whose principal place of business is Arizona, is the

successor in interest to the original lessee. 

The lease agreement provided that the lessee could erect

and maintain billboards at eight sites. In return, the lessee

agreed to pay $495 a month as rent. For the purposes of this

lawsuit, the most significant provision of the agreement is the

lessee’s option to terminate the lease agreement if the lessee were

“prevented by authorities having jurisdiction . . . from

constructing or maintaining its advertising structures.” 

Soon after acquiring the property, Scenic Galveston began

notifying the Texas Department of Transportation that some of the

billboards were not in compliance with state regulations. In the

summer of 2000, the Texas Department of Transportation ordered that

at least two of Infinity’s billboards be removed. The real estate

manager of Infinity Outdoor then wrote to Scenic Galveston on

August 24, 2000: “The court has ruled that the signs must come down
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and not be replaced. Therefore, we are hereby terminating our

lease with you and no future rent payments will be made.”

(Emphasis added.) Infinity points out that, although the quoted

passage refers to “signs,” the letter specifically discusses only

one of the six billboards that Infinity was operating at the time.

Moreover, in spite of their declaration that they would no longer

pay rent, Infinity wrote a check on September 1, 2000, for $412.50,

which reflects a one-sixth reduction of the usual rental payment of

$495. Scenic Galveston deposited this check, along with another

prorated rent check for $412.50 in early October.

On October 4, 2000, an attorney for Scenic Galveston

wrote to Infinity and acknowledged Infinity’s letter of August

24th. Scenic Galveston’s letter, after referring to the

termination provision in the lease agreement, states that “Scenic

Galveston accepts the termination of the lease by Infinity Outdoor.

Please remove any remaining billboards from the subject property

within 30 days of your receipt of this letter.” Scenic Galveston

then refunded the two payments made after August 24.

Infinity refused to remove the billboards. Infinity

insisted that they did not want to terminate the entire lease and

that “the only lease canceled was for the sign required to be taken

down.” Infinity now admits, however, that the terms of the lease

agreement do not allow any kind of partial termination of the

agreement.
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Scenic Galveston filed a declaratory judgment action,

which Infinity removed to federal court. The district court

entered summary judgment for Scenic Galveston.

II

We review the district court’s grant of summary judgment

de novo. Horton v. City of Houston, 179 F.3d 188, 191 (5th Cir.

1999); Fed. R. Civ. P. 56(c).

The question is whether Infinity’s letter of August 24

was sufficient to exercise its option to terminate the lease.

Texas courts have recognized that

A reservation in a contract, of a right in behalf of one

of the parties to rescind, is a valid stipulation. Upon

the exercise of the option, the rights of the parties

under the contract terminate; the other party cannot

insist on further performance and is bound to restore

whatever consideration he may have received under the

contract. 

Rigsby v. Boone County State Bank of Lebanon, Ind., 241 S.W. 207,

210 (Tex. Civ. App. -- Amarillo 1922, no writ). “An option to

cancel or rescind a contract must be exercised in strict compliance

with its terms.” Stretcher v. Gregg, 542 S.W.2d 954, 957 (Tex.

Civ. App. -- Texarkana, 1976).

The terms of this contractual provision are clear and

undisputed. First, the right of termination is conditional: The

lessee has the right to terminate when a government official

prevents the lessee from building or maintaining a billboard. The

parties agree that this condition was met. Second, the lease

agreement does not contemplate a partial termination; if the lessee
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exercises this option, he would void the entire agreement. Third,

the lease agreement does not place any restrictions on how the

lessee must give notice of cancellation. 

The only question, to repeat, is whether Infinity

actually exercised this option to terminate. Looking to the

objective manifestations of intent, we agree with the district

court that the August 24th letter -- which declared, “we are hereby

terminating our lease with you” -- constitutes a valid exercise of

the option. When this letter was sent, the rights and obligations

of both parties terminated, and Scenic Galveston had the right to

demand that the billboards be removed from its property.

Infinity’s later statements that they had actually intended a

partial termination of the lease are not relevant. See Derr

Construction Co. v. City of Houston, 846 S.W.2d 854, 861 (Tex. App.

-- Houston [14th Dist.] 1992, no writ)(emphasizing that “objective,

not subjective, intent controls”); Republic Nat. Bank of Dallas v.

National Bankers Life Ins. Co., 427 S.W.2d 76, 80 (Tex. Civ. App.

-- Dallas 1968, writ ref’d n.r.e.)(“[T]he question is not what the

parties meant to say but the meaning of what they did say.”).

Infinity attempts to frame the issue as the “repudiation”

or “anticipatory breach” of the lease agreement. Infinity thus

contends that the contract was not repudiated because some of the

evidence -- especially the payment of partial rent -- does not show

a “fixed intention to abandon, renounce, and refuse to perform” its
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obligations under the contract. Group Life & Health Ins. Co. v.

Turner, 620 S.W.2d 670, 672-73 (Tex. Civ. App. -- Dallas 1981, no

writ). However, repudiation requires that the party who refuses to

perform does so “without just excuse.” Id. at 673. Infinity was

not breaching the lease agreement without cause; instead, they were

merely exercising their contractual right -- pursuant to the lease

agreement -- to cancel the agreement.

Infinity also contends that their offer and Scenic

Galveston’s acceptance of the two prorated rent payments

constitutes a modification of the parties’ long-term lease

agreement. However, because a change in the amount of rent

constitutes a material modification of the agreement, the statute

of frauds requires that such an alteration of the agreement be

evidenced by a writing. See Foster v. Mutual Savings Ass’n, 602

S.W.2d 98, 100 (Tex. Civ. App. -- Fort Worth 1980, no writ), cited

in Horner v. Bourland, 724 F.2d 1142, 1148 (5th Cir. 1984). No

writing exists in this case.

III

For the foregoing reasons, we conclude that Infinity

exercised its right to terminate the lease agreement. The summary

judgment for Scenic Galveston is therefore AFFIRMED.