Justice Emily Miskel
The Dallas Court of Appeals has reversed a trial court judgment in favor of a failed mall’s landlord in a lease dispute with one of the mall’s tenants.
ATC Indoor DAS LLC v. MM CCM 48M Leasing, LLC and MM CCM 48M, LLC (No. 05-24-00769-CV; January 29, 2026) arose from the fallout of a failed shopping mall in Collin County. ATC, which installs and maintains distributed antenna systems (DAS) that improve wireless communications in large structures, entered (through its predecessor entity) into a host lease with the mall’s owner, Collin Creek Mall, L.P. The lease allowed ATC to enter into license agreements with AT&T and Verizon, who paid ATC rent in exchange for better coverage within the Mall. ATC was required to remit 25% of this revenue to the landlord. Both license agreements provided for immediate termination if ATC ceased to be the tenant under the lease.
By 2018, the mall was in dire financial straits. 48M bought the mall and assumed the lease, agreeing to perform under the covenants, and provide quiet enjoyment to ATC. A few months later, 48M Leasing sent ATC a letter as successor in interest to the original landlord terminating the lease. The 48M letter informed ATC that the Mall had closed and that ATC must remove its equipment within 30 days. ATC promptly removed its equipment, stopped receiving rent from Verizon and AT&T, and sent 48M the landlord’s final cut of the 25% licensing-fee revenue. 48M cashed the check.
ATC sued 48M and 48 Leasing for breach of contract and attorney’s fees. 48M asserted “impossibility or impracticability” and waiver as affirmative defenses, arguing that at the time the original lease was executed it was not foreseeable that the mall would cease to have patrons. ATC amended its petition, contending that the affirmative defenses were barred by quasi-estoppel and waiver. Each party filed a summary judgment motion, ATC on its breach of contract claim and quasi-estoppel defense, and 48M on its impracticability affirmative defense. 48M Leasing moved for no-evidence summary judgment on the basis that it was not a landlord or successor under the lease, and therefore was not a proper party before the court. The trial court granted the 48M defendants’ motions for summary judgment and signed a final judgment. ATC appealed.
In an opinion by Justice Miskel, the court of appeals reversed. First, the court took up 48M’s affirmative defense of impracticability and ATC’s quasi-estoppel theory. ATC argued that 48M could not assert impracticability because it assumed and performed the lease obligations for some time before it took “the inconsistent litigation position that performance under the Lease was impracticable.” It pointed out that 48M assumed the lease and promised to perform and cashed its rent checks. But after ATC filed suit, 48M changed its tune, arguing that it was “impossible” to perform even prior to the date 48M acquired the property in 2018. 48M characterized the mall as a “distressed property” whose “only value” was its location and “dirt” for development. As the court summarized, “[48M’s] litigation position is that the Mall was not commercially viable even before [it] nevertheless acquired the Mall with full knowledge of these conditions, accepted the Assignment and expressly agreed to perform all Lease obligations, and then performed without objection for several months.” 48M tried to mischaracterize ATC’s quasi-estoppel theory as a waiver, but the court didn’t bite. Instead, the court found that ATC had proved as a matter of law that 48M was quasi-estopped from asserting its affirmative defense of impracticability. “Under the undisputed facts here,” the court held, “it would be unconscionable to permit 48M to now take an inconsistent position to avoid the obligations it accepted.” Nevertheless, the court denied ATC’s traditional summary judgment motion because there was a genuine issue of material fact issue on whether 48M Leasing was a proper party to the action.
The court then turned to the trial court’s grant of 48M’s motion for summary judgment on its impracticability defense and denial of ATC’s cross motion for summary judgment on its breach of contract claim. First, the court observed that Texas law is clear that shifting market conditions alone do not qualify as impracticability. 48M made an assumption that the customer base for the mall would remain stable for the duration of the lease. Despite that knowledge, it bought a mall that was clearly in decline, losing money, and in default on its mortgage. According to an unsworn declaration from 48M’s expert, regional malls were failing all over the country because of the rise of online retail, anchor-tenant bankruptcies, and redesign of retail spaces. The expert opined that the decline of regional malls was unforeseeable, “and that the elimination of the Mall’s customer base constituted a supervening event outside the parties’ control, and that the existence of Mall customers was a basic assumption underlying the Lease.” The court rejected this argument, observing that neither the mall’s loss of customers or 48M’s resulting financial losses excused performance under Texas law. The court held that 48M’s impracticability defense failed as a matter of law. If people could get out of leases just because business tanked before the end of the lease term, leases wouldn’t be worth the paper they were printed on. Only “objectively impracticable” conditions can support the defense. The court likewise held that ATC conclusively established its breach of contract claim, and that the trial court erred in denying its motion for summary judgment.
The final issue was whether 48M Leasing was a proper party. ATC’s summary judgment response incorporated the termination letter, which was signed by 48M Leasing and contained instructions for the removal of the equipment. 48M contended that a “verified denial” (which was absent from the record) and 48M’s admission in interrogatory responses that it, not 48M Leasing, was the “proper landlord.” The court ruled that ATC raised a genuine fact issue. Additionally, 48M’s own summary judgment motion included a 2019 federal tax return showing 48M Leasing’s net real estate loss “as landlord” for “tenant and mall operations.” ATC satisfied its Rule 166a(i) burden, and the trial court erred in granting 48M Leasing’s no-evidence motion for summary judgment.
The court reversed the trial court’s judgment, and rendered judgment in ATC’s favor on its breach of contract claim. The court remanded ATC’s claim for attorney’s fees, as well as its claims against 48M Leasing.
TCJL Legal Intern Satchel Williams researched and prepared the first draft of this article.
