Texas Department of Transportation v. FamFive Holdings, LLC

In The
Court of Appeals
Seventh District of Texas at Amarillo

No. 07-25-00113-CV

TEXAS DEPARTMENT OF TRANSPORTATION, APPELLANT

V.

FAMFIVE HOLDINGS, LLC, APPELLEE

On Appeal from the 72nd District Court
Lubbock County, Texas
Trial Court No. DC-2023-CV-1645, Honorable John C. Grace, Presiding

September 16, 2025
MEMORANDUM OPINION
Before PARKER and DOSS and YARBROUGH, JJ.

In this interlocutory appeal, the Texas Department of Transportation (TxDOT)

appeals from the trial court’s order denying TxDOT’s plea to the jurisdiction related to an

inverse condemnation claim brought by FamFive Holdings, LLC.1 We reverse the trial

court’s order and dismiss FamFive’s claim.

1 See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (authorizing interlocutory appeal from denial

of governmental unit’s plea to the jurisdiction).
BACKGROUND

In 2019, FamFive purchased property on the northeast corner of Farm to Market

Road 41 (“FM 41”) and U.S. 87. FamFive operated a convenience store named Bernard’s

on this property. In October of 2021, TxDOT began roadway construction to build an

overpass on U.S. 87 at the FM 41 intersection. During this construction project, motorists

traveling east on FM 41 could not access Bernard’s across U.S. 87. During construction,

traffic was diverted at the U.S. 87 and FM 41 intersection as well as three miles east of

Bernard’s on FM 41, but the construction did not close or limit Bernard’s points of ingress

and egress. It did, however, significantly increase the time and distance necessary for

most of Bernard’s patrons to reach the store. Access across U.S. 87 was not restored

until August of 2024. During the road work, Bernard’s experienced a substantial reduction

in revenues compared to its revenues prior to commencement of the construction project.

FamFive filed suit against TxDOT for inverse condemnation. It claimed that its lost

profits were directly caused by the material and substantial impairment of access to

Bernard’s caused by TxDOT’s construction project. In response, TxDOT filed a plea to

the jurisdiction contending that FamFive could not establish a waiver of sovereign

immunity for its inverse condemnation claim because the construction project did not limit

patrons’ access to Bernard’s. At the hearing on TxDOT’s plea, Philip Thrash, the owner

of FamFive, testified regarding the extent to which traffic was diverted due to the road

work and to the profits lost by FamFive as a result. At the close of the hearing, the trial

court denied TxDOT’s plea. TxDOT filed the instant interlocutory appeal.

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By its sole issue, TxDOT contends that its sovereign immunity is not waived for

FamFive’s inverse condemnation claim because its construction project did not materially

and substantially impair access to Bernard’s. Consequently, the trial court erred in

denying its plea to the jurisdiction.

STANDARD OF REVIEW

“Sovereign immunity, unless waived, shields the state from lawsuits for damages.”

Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468, 476 (Tex. 2012). Sovereign

immunity defeats a trial court’s subject matter jurisdiction and thus is properly asserted in

a plea to the jurisdiction. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225–

26 (Tex. 2004). The trial court must determine at its earliest opportunity whether it has

the constitutional or statutory authority to decide the case before allowing the litigation to

proceed. Id. at 226. Whether a court has subject matter jurisdiction is a question of law,

which we review de novo. Id.

When a plea to the jurisdiction challenges the existence of jurisdictional facts, we

consider relevant evidence submitted by the parties when necessary to resolve the

jurisdictional issues raised. Id. at 227. If the evidence creates a fact question regarding

the jurisdictional issue, the trial court cannot grant the plea; however, if the evidence is

undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules

on the plea as a matter of law. Id. at 227–28. In reviewing evidence relevant to the

jurisdictional issue, we take as true all evidence favorable to the nonmovant and indulge

every reasonable inference in favor of the nonmovant. Id. at 228. This standard generally

mirrors that of a traditional summary judgment. Id.

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LAW ON INVERSE CONDEMNATION

The Texas Constitution provides that “[n]o person’s property shall be taken,

damaged, or destroyed for or applied to public use without adequate compensation being

made . . . .” TEX. CONST. art. I, § 17. Inverse condemnation allows for a claim against the

government for the recovery of the value of property when, even though the government

did not formally exercise the power of eminent domain or initiate condemnation

proceedings, the property has been taken in fact. Hearts Bluff, 381 S.W.3d at 476. A

valid inverse condemnation suit is an exception to sovereign immunity’s general

protection from lawsuits for monetary damages. GAR Assocs. III, L.P. v. State, 224

S.W.3d 395, 401 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (citing Steele v. City of

Houston, 603 S.W.2d 786, 791 (Tex. 1980)). A trial court determines whether a taking

has occurred as a question of law. Hearts Bluff, 381 S.W.3d at 477.

To prevail on an inverse condemnation claim, a property owner must establish that

(1) a governmental unit intentionally performed an act (2) that resulted in the taking,

damaging, or destruction of the owner’s property (3) for public use. Tex. Dep’t of Transp.

v. Self, 690 S.W.3d 12, 26 (Tex. 2024). Whether property has been damaged under the

constitution is a question of law. Bass v. City of Dallas, 34 S.W.3d 1, 5 (Tex. App.—

Amarillo 2000, no pet.). To prove that property has been damaged, “access rights must

have been materially and substantially impaired.” Id. To show a material and substantial

interference with access, the property owner must show (1) a total but temporary

restriction of access, (2) a partial but permanent restriction of access, or (3) a temporary

limited restriction of access caused by illegal or negligent activity. State v. Momin Props.,

409 S.W.3d 1, 6 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (citing City of Austin
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v. Avenue Corp., 704 S.W.2d 11, 13 (Tex. 1986)). It is not a compensable taking when

a property owner has reasonable access to his property during or after construction of the

improvement. Burris v. Metro. Transit Auth., 266 S.W.3d 16, 22 (Tex. App.—Houston

[1st Dist.] 2008, no pet.) (citing Du Puy v. City of Waco, 396 S.W.2d 103, 109 (Tex. 1965)).

Loss in the form of a diminished property value due to an adjacent road closure is not a

compensable taking when the property owner retains reasonable access to a remaining

adjacent road. Momin Props., 409 S.W.3d at 7 (citing Archenhold Auto. Supply Co. v.

City of Waco, 396 S.W.2d 111, 114 (Tex. 1965), and Burris, 266 S.W.3d at 22–23).

Access to a property is not materially and substantially impaired if an access point on a

public street remains unaffected, even if another access point is entirely closed. City of

San Antonio v. TPLP Office Park Props., 218 S.W.3d 60, 66 (Tex. 2007) (per curiam).

Diminution in the value of property due to diversion of traffic or circuity of travel

does not amount to a material and substantial impairment of access. State v.

Petropoulos, 346 S.W.3d 525, 532 (Tex. 2011); State v. Dawmar Partners, Ltd., 267

S.W.3d 875, 880 (Tex. 2008); TPLP Office Park Props., 218 S.W.3d at 66–67; State v.

Schmidt, 867 S.W.2d 769, 774 (Tex. 1993); Momin Props., 409 S.W.3d at 7; Bass, 34

S.W.3d at 6; see TEX. PROP. CODE ANN. § 21.042(d) (in assessing damages in a

condemnation proceeding, the special commissioners “may not consider an injury . . .

that the property owner experiences in common with the general community, including

circuity of travel and diversion of traffic”). “[A]n abutting property owner does not have a

vested interest in the traffic that passes in front of his property; . . . he cannot recover for

loss of trade resulting from a highway relocation; and . . . he is not entitled to damages

because of the construction of controlled access highways in such manner as to deny

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direct access to the new major highway.” Du Puy, 396 S.W.2d at 109. Highways are

primarily for the benefit of the traveling public and are only incidentally for the benefit of

those who are engaged in business along its way. Schmidt, 867 S.W.3d at 773 (citing

State Highway Comm’n v. Humphreys, 58 S.W.2d 144, 145 (Tex. Civ. App.—San Antonio

1933, writ ref’d)). Businesses along highways assume the risk that new roads may be

built that will largely divert the traveling public from their business. Id. Thus, a property

owner cannot recover for damages when traffic is merely required to travel a more

circuitous route to reach the property in question. Momin Props., 409 S.W.3d at 7.

ANALYSIS

Taking FamFive’s allegations as true and viewing the jurisdictional evidence in its

favor, FamFive has failed to establish a material and substantial impairment of access to

its property. Access is impaired when direct ingress and egress to a property has been

limited in some form. See id. at 8 (“[I]f the property retains reasonable access to the

public road system, even if one abutting road is entirely closed, a material and substantial

impairment of access has not occurred because the property retains some reasonable

access to the public streets.” (internal quotation marks omitted)). FamFive has not

pleaded and the record evidence does not reflect that the construction project limited

direct access to Bernard’s in any way. Rather, the allegations and evidence reflect that

the construction project caused a rather substantial diversion of traffic or circuity of travel

for customers to reach Bernard’s.2 However, damages caused by diversion of traffic or

2 At the hearing on TxDOT’s plea to the jurisdiction, FamFive’s only evidence relating to how the

construction project materially and substantially impaired access to Bernard’s identified the additional
distance patrons were required to travel after the project began and the effect of this diversion of traffic on
Bernard’s profits. FamFive neither pleaded nor proved that direct access (ingress/egress) to Bernard’s was
impaired by the construction project.
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circuity of travel are not compensable damages in a claim of inverse condemnation

against a state agency. TEX. PROP. CODE ANN. § 21.042(d); Petropoulos, 346 S.W.3d at

532; Dawmar Partners, Ltd., 267 S.W.3d at 880; TPLP Office Park Props., 218 S.W.3d

at 66–67; Schmidt, 867 S.W.2d at 774; Momin Props., 409 S.W.3d at 7; Bass, 34 S.W.3d

at 6. Because FamFive has not alleged or established that access to Bernard’s was

restricted by the construction project and diversion of traffic or circuity of travel is not

compensable through an inverse condemnation suit, we conclude that the trial court erred

as a matter of law in denying TxDOT’s plea to the jurisdiction. We sustain TxDOT’s sole

issue.

FamFive highlights a record discussion between the trial court and the parties in

which the trial court asks if there is a point at which a more circuitous route could amount

to a material and substantial impairment of access. Case law provides that roadways

may be altered in a manner that will nearly completely divert traffic away from a business

yet, provided reasonable access to the property remains, no compensable taking has

occurred. Petropoulos, 346 S.W.3d at 532; Momin Props., 409 S.W.3d at 7; Du Puy, 396

S.W.2d at 109; State v. Bhalesha, 273 S.W.3d 694, 698–99 (Tex. App.—Houston [14th

Dist.] 2008, no pet.); Holbrook v. State, 355 S.W.2d 235, 238 (Tex. App.—Eastland 1962,

writ ref’d n.r.e.); Pennysavers Oil Co. v. State, 334 S.W.2d 546, 548 (Tex. App.—San

Antonio 1960, writ ref’d); see Tex. Dep’t of Transp. v. C-5 Holdings, LLC, No. 04-21-

00292-CV, 2023 Tex. App. LEXIS 7909, at * 12–13 (Tex. App.—San Antonio Oct. 18,

2023, no pet.) (mem. op.) (where plaintiff had continual access to the property, no taking

occurs even though construction made access “significantly less convenient and much

longer than the [previously available] direct route”). Businesses along highways assume

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the risk that new roads may be built that will largely divert the traveling public from their

business. Schmidt, 867 S.W.3d at 773.

CONCLUSION

Having determined that the trial court erred as a matter of law in denying TxDOT’s

plea to the jurisdiction, we reverse the trial court’s order denying TxDOT’s plea to the

jurisdiction and dismiss FamFive’s inverse condemnation claim for want of jurisdiction.

See TEX. R. APP. P. 43.2(f).

Judy C. Parker
Justice

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