LAMAR ADVERTISING COMPANY (formerly Outdoor Communications, Inc.) v. BY-PASS PARTNERS (Tenn. Ct. App. July 22, 2009)

This is a dispute over lease agreements. The plaintiff outdoor advertising company leased two parcels of property from the defendant real estate development company for the purpose of erecting billboard signs. The defendant then cancelled the leases. The defendant had contracted to sell the property to another outdoor advertising company, and cancelled the leases with the plaintiff in reliance on a lease provision allowing cancellation in the event that the plaintiff's signs interfered with the defendant's sale or development of the property. The plaintiff filed this lawsuit against the defendant, alleging that the defendant's cancellation was ineffective because this was not the type of interference that was contemplated in the agreement. The defendant counterclaimed, seeking damages allegedly suffered as a result of the plaintiff's failure to remove its billboards. Meanwhile, the third-party outdoor advertising company that was supposed to purchase the property filed a motion to intervene in the lawsuit, alleging that the plaintiff was interfering with its contractual relations with the defendant real estate development company. A trial was held, and no proof of damages was submitted. The defendant real estate development company and the third-party advertising company that sought to intervene asked for a hearing on damages in their post-trial brief. The trial court issued a letter ruling finding that the defendant's termination of the leases was effective. Years later, an order was entered reiterating the finding that the defendant effectively terminated the leases; the order set the matter for a special hearing on damages owed to the defendant real estate development company and the third-party advertising company. The third-party's motion to intervene was never explicitly granted. Shortly thereafter, the trial judge assigned to the case died. A substitute judge was assigned to hear the remainder of the case. In response to a series of motions, the trial court determined that the trial was properly bifurcated, that the third-party advertising company did not transfer its right to damages in a sale of its assets, and that its motion to intervene was never granted by the previous trial judge, and it therefore could not recover damages. The third- party advertising company now appeals. We reverse the trial court's decision that the motion to intervene was never granted, finding that the motion to intervene was implicitly granted in the order following the trial. We affirm the trial court's holding that the bifurcation was proper, that the defendant real estate development company effectively terminated the leases, and that the third-party advertising company that sought to purchase the property retained the right to damages after the sale of its assets. The case is remanded for a hearing on the damages owed to the third-party advertising company, if any.

Opinion may be found at the TBA website:
http://www.tba2.org/tba_files/TCA/2009/lamaradvertising_072209.pdf