Nextel Wip Lease Corp. v. Saunders

• Decision Date: 12 September 2008
• Docket Number: Record No. 071655.,Record No. 071653.
• Parties: NEXTEL WIP LEASE CORPORATION v. Roscoe Neal SAUNDERS, Executor of the Estate of Cora Bell Meador Saunders, et al. TowerCo LLC v. Roscoe Neal Saunders, Executor of the Estate of Cora Bell Meador Saunders, et al.
• Court: Virginia Supreme Court

666 S.E.2d 317

276 Va. 509

NEXTEL WIP LEASE CORPORATION v. Roscoe Neal SAUNDERS, Executor of the Estate of Cora Bell Meador Saunders, et al.

TowerCo LLC v. Roscoe Neal Saunders, Executor of the Estate of Cora Bell Meador Saunders, et al.

Record No. 071653.

Record No. 071655.

Supreme Court of Virginia.

September 12, 2008.

Anand V. Ramana (M. Melissa Glassman; McGuire Woods, McLean, on briefs), for appellant Nextel WIP Lease Corporation.

Kelly L. Faglioni (Edward P. Noonan; Hunton & Williams, Richmond, on briefs), for appellant TowerCo LLC.

Robert T. Wandrei (James C. McIvor, Bedford, on brief), for appellees.

Present: HASSELL, C.J., KEENAN, KOONTZ, KINSER, LEMONS, and

AGEE,^* JJ., and CARRICO, S.J.

OPINION BY Senior Justice HARRY L. CARRICO.

The issue in these appeals is whether the lease of a parcel of land atop a mountain in Bedford County permits the erection of one telecommunications tower or two such towers. In a declaratory judgment proceeding, the circuit court held that the lease permitted only one tower. We agree with the circuit court and will affirm its judgment.

The parcel of land, measuring approximately 50' by 50', is part of a larger tract owned by Roscoe Neal Saunders and Ralph Edward Saunders, Executors of the Estate of Cora Bell Meador Saunders (the Saunders). In an Option and Ground Lease Agreement dated July 13, 2004 (the lease agreement), the Saunders, as lessors, leased the parcel to Nextel WIP Lease Corporation (Nextel), as lessee, for a term of five years, with five successive five-year options to renew for a monthly rental of $670.00.

Nextel constructed an 80' high telecommunications tower on the property and then on June 30, 2005, assigned the lease to TowerCo, LLC (TowerCo), as the lease agreement permitted. In March 2006, an application was filed with the Bedford County Department of Planning for an amended special use permit to allow TowerCo to increase the height of the 80' tower to 100 feet. Another application was filed for a special use permit to allow the construction of a second 80' tower on the leased premises. On April 24, 2006, the County's Board of Supervisors denied the application to increase the height of the existing tower because a zoning regulation forbade any height above 80 feet. However, the Board approved the construction of a second 80' tower on the leased premises.

Construction was begun on the new tower, and on September 12, 2006, Nextel and TowerCo were confronted with a motion for declaratory judgment filed by the Saunders in the circuit court. The motion alleged that the "lease provided for the construction of one communication tower on the lease[d] premises" but "the lessee and its assignees have commenced construction of a second tower on the lease[d] premises contrary to the provisions of the lease agreement and has [sic] refused to forego construction upon confrontation by the plaintiffs." The Saunders prayed that the circuit court "determine the number of towers permitted pursuant to the aforementioned Lease Agreement dated July 13, 2004."

Nextel and TowerCo filed answers to the motion for declaratory judgment and also filed motions for summary judgment. Nextel alleged in its motion that it was entitled to summary judgment because there were no material facts in dispute and "the Lease at issue is unambiguous, and it clearly allows Nextel and its assignees to build a second telecommunications tower on the Premises." In its motion, TowerCo alleged that it was entitled to summary judgment "because the only issue to be resolved is a question of law—interpretation of three clear and unambiguous provisions of the Lease Agreement" expressing the parties' intent "that more than one tower may be constructed on the Leased Premises."

The three paragraphs referenced by TowerCo provide in pertinent part as follows:

10. Use. The premises may be used by Lessee for the transmission and receipt of wireless communication signals in any and all frequencies and the construction and maintenance of towers, antennas, or buildings, and related facilities and activities ("Intended Use"). Lessor agrees to cooperate with Lessee in obtaining, at Lessee's expense, all licenses and permits required for Lessee's use of the Premises (the "Governmental Approvals"). Lessee may construct additional improvements, demolish and reconstruct improvements, or restore replace and reconfigure improvements at any time during the Initial Term or any Renewal Term of this Lease. [Emphasis added.]

14. Lessor's Representations and Warranties. Lessor represents and warrants that (i) Lessee's Intended Use of the Premises as a site for the transmission and receipt of wireless communication signals; for the construction and maintenance of towers, antennas or buildings; and related facilities is not prohibited by any covenants, restrictions, reciprocal easements, servitudes, subdivision rules or regulations. [Emphasis added.]

17. Improvements; Utilities; Access. (a) Lessee shall have the right, at Lessee's sole cost and expense, to erect and maintain on the Premises improvements, personal property and facilities, including without limitation, one (1) tower, a structural tower base, radio transmitting and receiving antennas, communications equipment, an equipment cabinet or shelter and related facilities. [Emphasis added.]

The circuit court heard oral argument on the motions for summary judgment and denied them, holding that the lease agreement was ambiguous and that parol evidence would be admissible to determine the parties' intent when the lease was negotiated. At the conclusion of an ore tenus hearing held for the taking of parol evidence, the circuit court ruled in its final order that "said Lease Agreement permits the construction of one communication tower, and only one communication tower, on the leased premises." We awarded Nextel and TowerCo each an appeal.

We first must clarify the record. During oral argument before this Court, counsel for TowerCo made an argument based upon our decision in Scott v. Walker, 274 Va. 209, 645 S.E.2d 278 (2007), decided after the present case was decided in the circuit court. There, we held that a restrictive covenant providing that no lot in a subdivision "shall be used except for residential purposes" was ambiguous and did not prevent the lot's owners from leasing their single-family dwelling by the day or by the week. We stated as follows:

It is . . . the general rule that while courts of equity will enforce restrictive covenants where the intention of the parties is clear and the restrictions are reasonable, they are not favored, and the burden is on him who would enforce such covenants to establish that the activity objected to is within their terms. They are to be construed most strictly against the grantor and substantial doubt or ambiguity is to be resolved in favor of the free use of property and against restrictions.

274 Va. at 212-13, 645 S.E.2d at 280 (quoting Schwarzschild v. Welborne, 186 Va. 1052, 1058, 45 S.E.2d 152, 155 (1947)).

We also said there is an exception, as follows:

[I]f it is apparent from a reading of the whole instrument that the restrictions carry a certain meaning by definite and necessary implication, then the thing denied may be said to be clearly forbidden, as if the language had been in positive terms of express inhibition.

Scott, 274 Va. at 213, 645 S.E.2d at 280-81 (quoting Bauer v. Harn, 223 Va. 31, 39, 286 S.E.2d 192, 196 (1982) (internal quotation marks omitted)).

In oral argument before us, TowerCo claimed that the circuit court held that paragraph 17(a) of the lease agreement, containing the "one (1) tower" language, was ambiguous. Therefore, counsel argued, the circuit court should have construed the paragraph in favor of the free use of the property and against any restriction as a matter of law, thus barring the court from admitting parol evidence or drawing necessary implications. When asked whether this argument had been made in the circuit court, counsel for TowerCo answered affirmatively and named three places in the record where the argument would appear. We have yet to find any argument based upon a purported holding by the circuit court that paragraph 17(a) was ambiguous. We will not, therefore, consider TowerCo's argument. Rule 5:25.

However, while the circuit court did not hold paragraph 17(a) ambiguous, it did, as noted above, hold the lease agreement ambiguous, and that ambiguity alone will serve as the focus of our analysis. Whether contractual provisions are ambiguous is a question of law and not of fact, and we do not on appeal accord the circuit court's resolution any deference since we are afforded the same opportunity to consider the provisions. Video Zone, Inc. v. KF & F Properties, L.C., 267 Va. 621, 625, 594 S.E.2d 921, 923 (2004). Thus, we conduct a de novo review. Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663, 667 (2002).

Contractual provisions are ambiguous if they may be understood in more than one way or if they may be construed to refer to two or more things at the same time. Berry v. Klinger, 225 Va. 201, 207, 300 S.E.2d 792, 796 (1983). The ambiguity, if it exists, must appear on the face of the instrument itself. Salzi v. Virginia Farm Bureau Mut. Ins. Co., 263 Va. 52, 55, 556 S.E.2d 758, 760 (2002). In determining whether the provisions are ambiguous, we give the words employed their usual, ordinary, and popular meaning. Pocahontas Mining, L.L.C. v. Jewell Ridge Coal Corp., 263 Va. 169, 173, 556 S.E.2d 769, 772 (2002). And contractual provisions are not ambiguous merely because the parties disagree about their meaning. Dominion Savings Bank, FSB v. Costello, 257 Va. 413, 416, 512 S.E.2d 564, 566 (1999).

In addition to Scott v. Walker, Nextel and TowerCo rely heavily upon Parrish v. Robertson, 195 Va. 794, 80 S.E.2d 407 (1954), Oakwood Smokeless Coal Corp. v. Meadows, 184 Va. 168, 34 S.E.2d 392 (1945), and Stonegap Colliery...