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Click here for the full text of this decision FACTS:In 1971, Motiva Enterprises LLC, through Shell Oil Co., entered into a long-term ground lease with the McCrabbs for the purpose of operating a gas station and convenience store. Art. 14 of the lease, in relevant part, provides: “If all of the Demised Premises shall be condemned or taken by lawful authority or if such portion of the premises be so condemned or taken making it unreasonable or imprudent to use the remaining portion for its intended use, this lease shall terminate as of the date when possession is required to be given in such condemnation. “The rent shall be adjusted to such date and all further rights and liabilities of the parties under this lease shall terminate, except that Tenant shall be entitled to receive out of the proceeds of such condemnation the amount attributed to any of the following: buildings or other improvements installed on the Demised Premises by Tenant; any damages to Tenant’s personal property resulting from said condemnation; removal or relocation costs of Tenant’s anticipated business proceeds lost to Tenant; or any special damages of Tenant.” On behalf of the Texas Transportation Commission, the state filed a petition to condemn and acquire 7,677 square feet of the 27,086 square foot tract of land, owned by the McCrabbs and leased to Motiva, for the expansion of the Katy Freeway. The special commissioners appointed by the trial court in the condemnation proceeding found the value of the condemned property to be $1,705,000, and the state deposited that amount into the registry of the court on Nov. 7, 2005, thus establishing the date of the taking in this case. Motiva determined that the remaining portion of the property was not suitable for continued use as a gas station and chose to terminate the lease. Motiva and the McCrabbs both filed objections to the award of the special commissioners, thus converting the case into a judicial proceeding under Texas Property Code �21.018. The McCrabbs filed a cross-claim for declaratory judgment, seeking a determination from the trial court that the lease between the parties terminated by its own terms on Nov. 7, 2005 and that Motiva was not entitled to any additional compensation for its leasehold interest. Motiva filed a general denial and cross-claim against the McCrabbs, seeking a declaration of its entitlement to compensation for its leasehold interest in the property under Art. 14 of the lease. The parties then filed cross-motions for summary judgment. The trial court denied Motiva’s motion for summary judgment and rendered a final judgment in favor of the McCrabbs. It concluded that Motiva owned the improvements to the land and was entitled to recover the $1,401,000 of the compensation allocated for those improvements, the McCrabbs were entitled to recover the remaining $304,000 allocated for the land, and Motiva was not entitled to any compensation for its “leasehold advantage” under the terms of the lease. On appeal, Motiva contended that the trial court erred in determining that Motiva did not have the right to recover for its lost leasehold interest in the property, i.e., the market value of its leasehold interest in the property under the ground lease. HOLDING:Affirmed. Under Texas law, the court stated, parties have a right to contract for termination of a lease in the event of condemnation. A lessee is entitled, as a matter of law, to share in a condemnation award when part of its leasehold interest is lost by condemnation. Unless a lease provides that it terminates upon condemnation, the tenant will recover compensation for the unexpired term. But, if a lease provides that it terminates upon condemnation, the lessee has no interest in the condemnation award. Thus, the court found that Motiva had a right to part of the condemnation award unless it waived that right in the lease or elsewhere. The lease at issue, the court stated, did not define the term “special damages.” In construing a written contract, the court stated, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. Motiva contended that its damages related to the condemnation were special damages. In determining whether damages are “community” or “special,” the court stated, it is the nature of the injury and whether it affects the remainder in some special, unique way. But the court disallowed Motiva’s special damages argument, finding that the lease agreement specifically provided that the lease itself would “terminate as of the date when possession is required to be given” in condemnation. Because the lease automatically terminated upon condemnation, Motiva had no compensable interest in regard to the termination of the lease. Motiva’s construction of the term “special damages” in reference to its reserved rights upon termination of the lease conflicted with the specific language in the lease providing that it actually terminated upon condemnation. Because the lease itself actually terminated upon condemnation, Motiva, as a matter of law, was not entitled to recover any damages for its lost leasehold. Accordingly, the court held that the trial court did not err in rendering judgment that Motiva was not entitled to any compensation for its leasehold interest under the terms of the lease. OPINION:Jennings, J.; Nuchia, Jennings and Higley, J.J.

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