Leasepartners Corp. v. Robert L. Brooks Trust Dated November 12, 1975
| Decision Date | 15 July 1997 |
| Citation | 942 P.2d 182,113 Nev. 747 |
| Parties | LEASEPARTNERS CORPORATION, a California Corporation, and Ad Art Signs, Inc., Appellants, v. The ROBERT L. BROOKS TRUST DATED |
| Court | Nevada Supreme Court |
Kummer, Kaempfer, Bonner & Renshaw and Anthony A. Zmaila, Las Vegas, for Appellant LeasePartners.
Freeman, Roskelley & Ritchie, Las Vegas, for Appellant Ad Art Signs, Inc.
Lionel Sawyer & Collins, Las Vegas, for Respondent.
Appellant LeasePartners Corporation (LeasePartners) financed a long-term equipment lease for Danzig Corporation (Danzig Corp.), the tenant of the Royal Hotel and Casino (Royal Hotel). The Royal Hotel was owned by respondent Robert L. Brooks Trust (the Brooks Trust). After the Danzig Corp. defaulted on its lease with the Brooks Trust, its hotel lease was terminated and neither Danzig Corp. nor the Brooks Trust made any payments to LeasePartners for the signs. LeasePartners filed a complaint against the Brooks Trust, Danzig Corp., and Danzig Corp.'s president, Harold Danzig (Harold), for delivery, misrepresentation, and unjust enrichment. The complaint against the Brooks Trust is the only action at issue in this appeal.
The Brooks Trust moved for and was granted summary judgment against LeasePartners on the grounds that the signs were fixtures and that the Brooks Trust was not unjustly enriched. We conclude that the district court erred in granting summary judgment, and we now reverse that ruling.
The Brooks Trust owns the Royal Hotel in Las Vegas. On August 6, 1989, the Brooks Trust leased the Royal Hotel to Danzig Corp. for a term of twenty-five years with an option for an additional twenty years. Harold determined that the old signage in front of the hotel needed to be replaced because he felt "[i]t wasn't bright enough."
On May 14, 1990, Danzig Corp. and Ad Art Signs, Inc. (Ad Art) entered into an equipment lease which provided for the construction, lease, installation, and maintenance of the new signage. The signage was designed, engineered, and manufactured by Ad Art in Stockton, California. Testimony was presented by Ad Art employees that the signage was custom built to match the design and layout of the Royal Hotel and was custom fit for the Royal Hotel. However, testimony was also presented that portions of the signage could be used elsewhere. For example, testimony indicated that the electronic message center, which accounted for over fifty percent of the cost of the sign, could be removed and used in other signs. Additionally, the chairman of the board of Ad Art testified by affidavit that all of the signage could be removed without damage to the building, that with the exception of the word "Royal," most of the signage was reusable, and that the signage was modular and could be recreated in different lengths in different locations.
Ad Art removed the old signage from the property over a three-day period and threw it away. Ad Art knew that the Brooks Trust owned the Royal Hotel but did not ask it for permission to dispose of the signs because the Brooks Trust was not its customer. Installing the new signage took approximately two and one-half months. The value of the new signage was in excess of $800,000.
LeasePartners claims that:
Brooks Trust did not object in any manner to the construction and installation of the New Hotel Signage. Brooks Trust remained silent in circumstances which would lead any reasonable person knowledgeable of commercial practice to believe that a contractor or financier would claim a security interest in the New Hotel Signage.
Mrs. Brooks, the co-trustee of the Brooks Trust, testified that she never discussed the remodeling of the old signage with Harold or granted permission to remove the old signage. Although Harold signed a variance application for the new signage, Mrs. Brooks testified that she was not aware of the application. Earlier, in January 1990, Mrs. Brooks had signed an architectural supervision application for one sign utilizing an electronic message board.
The new signs were installed between April and June of 1990. Under the terms of the May 14, 1990 equipment lease, Ad Art leased the signage to Danzig Corp. for ten years. Additionally, the lease included the following provisions:
6. TITLE TO EQUIPMENT. Ownership of the equipment shall at all time remain in Lessor [Ad Art]. The equipment is and shall remain personal property whether or not affixed to realty....
....
25. GENERAL PROVISIONS: ... This agreement is, and is intended to be a lease and Lessee does not acquire hereby any right, title or interest whatsoever, legal or equitable, in or to any of the equipment, or to the proceeds of the sale of any equipment, except its interest as Lessee hereunder.
However, this language conflicts with Paragraph 7.3 of the lease between the Brooks Trust and Danzig Corp. which provided that upon termination of the lease all
additions, improvements, fixtures, furnishings and equipment which may be made or installed or placed by either Lessor or Lessee upon the Leased Property during the term of this Lease ... shall be surrendered with the Leased Property as a part thereof.
Ad Art initially agreed to finance the construction, installation, and maintenance of the signage. However, Ad Art and Danzig Corp. agreed to seek an alternative method to finance the deal because, apparently, Ad Art either was not in a position to provide long-term financing from its own resources or did not wish to provide long-term financing. LeasePartners, a California company which finances leases, was contacted to provide long-term financing for the project.
On September 25, 1990, LeasePartners paid for and formally acquired Ad Art's rights pursuant to Ad Art's equipment lease agreement with Danzig Corp. and then entered into a new lease with Danzig Corp. The lease provided a monthly payment schedule and further provided that Danzig Corp. could purchase the signage at the end of the lease term for one dollar. Harold personally guaranteed the lease payments, providing financial statements which showed a net worth in excess of $30,000,000. The lease between Danzig Corp. and LeasePartners provided:
13. Title: Personal Property: The Equipment is, and shall at all times remain, property of Lessor, and Lessee shall have no right, title or interest therein or thereto except as expressly set forth in this Lease.... The Equipment is and shall at all times and [sic] remain personal property notwithstanding that the Equipment or any part thereof may now be or hereafter become in any manner affixed or attached to real property or any improvements thereof.
This language also conflicts with Paragraph 7.3 of the lease agreement between Brooks Trust and Danzig Corp.
On January 17, 1991, almost four months later, a UCC financing statement purporting to assign Ad Art's security interest to LeasePartners was filed in the office of the Secretary of State. However, the collateral was assigned to Swiss Bank Corporation, not LeasePartners, because LeasePartners financed its Danzig Corp. lease through Swiss Bank Corporation. LeasePartners, however, was listed to receive a copy of the filed financing statement.
Danzig Corp. defaulted on the lease with the Brooks Trust by not paying rent for the months of February, March, April, and May of 1991. Due to this default, the Brooks Trust terminated Danzig Corp.'s lease of the Royal Hotel on May 24, 1991. Until Danzig Corp.'s default and the subsequent termination of the lease, LeasePartners did not know that Danzig Corp. was only a tenant at the Royal Hotel and that the Brooks Trust owned the Royal.
Following the default, the Brooks Trust refused to release the signs or pay LeasePartners for them. On July 16, 1991, LeasePartners filed a complaint against Danzig Corp. for breach of contract and claim and delivery and filed a complaint against Harold personally for breach of guaranty and misrepresentation. However, the actions against Harold and Danzig Corp. are not involved in this appeal, and at the time the briefs were filed, these two actions were pending in district court. LeasePartners also filed a complaint against the Brooks Trust for claim and delivery and unjust enrichment, which is the subject of this appeal.
On July 22, 1991, LeasePartners filed an application for an order to show cause why the property should not be taken from Brooks Trust and delivered to LeasePartners. On September 5, 1991, the matter was argued before a district judge who denied the application, concluding as a matter of law that the signs were fixtures and that LeasePartners had no security interest in the signs because it did not file its January 17, 1991 financing statement as a fixture filing. On March 4, 1994, the Brooks Trust filed a motion seeking summary judgment on the grounds that (1) it was not unjustly enriched, and (2) that the signs were fixtures and therefore LeasePartners had no perfected security interest in the signs. On March 21, 1994, LeasePartners filed an opposition to the Brooks Trust's motion for summary judgment and also filed a cross-motion for summary judgment on a claim of unjust enrichment. The district court granted summary judgment in favor of the Brooks Trust and denied LeasePartners' motion in full.
On June 10, 1994, LeasePartners appealed the district court's grant of summary judgment.
Summary judgment is only appropriate when, after a review of the record viewed in a light most favorable to the non-moving party, there remain no issues of material fact. Butler v. Bogdanovich, 101 Nev. 449, 451, 705 P.2d 662, 663 (1985). "In determining whether summary judgment is proper, the nonmoving party is entitled to have the evidence and all reasonable inferences accepted as true." Wiltsie v. Baby Grand Corp., 105 Nev. 291, 292, 774 P.2d 432, 433 (1989).
This court's review of a summary judgment order is de novo. Tore, Ltd. v. Church, 105 Nev....
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