Outfront Media, LLC v. LeMaster

Decision Date24 June 2019
Docket Number7:17-CV-66-REW-EBA
Citation399 F.Supp.3d 671
Parties OUTFRONT MEDIA, LLC, et al., Plaintiffs, v. Terri LEMASTER, et al., Defendants. Terri LeMaster, and Performance Media, LLC, Counterclaim and Third-Party Plaintiffs, v. Outfront Media, LLC, et al., Counterclaim Defendants, and Randall Powell, and Brenda Powell, Third-Party Defendants.
CourtU.S. District Court — Eastern District of Kentucky

Allison Lea Brown, Christopher Wilson Brooker, Wyatt, Tarrant & Combs, LLP, Louisville, KY, for Plaintiffs and Counterclaim Defendants.

H. Louis Sirkin, C. Gregory Schmidt, Santen & Hughes, Cincinnati, OH, Jerry Patton, Prestonsburg, KY, Andre F. Regard, Regard Law Group, PLLC, Lexington, KY, for Defendants and Counterclaim and Third-Party Plaintiffs.

Paul Kevin Moore, Frankfort, KY, Kyle Walker Ray, Lexington, KY, for Defendants.

Jeffrey A. Darling, Nichols Walter PLLC, Lexington, KY, for Third-Party Defendants.

OPINION & ORDER

Robert E. Wier, United States District Judge Outfront Media, LLC and Terri LeMaster1 filed cross motions for summary judgment. DE 100 (Plaintiff's Motion); 101 (Defendant's Motion). Each responded. DE 120 (Plaintiff's Response); 121 (Defendant's Response). Each replied. DE 123 (Plaintiff's Reply); 126 (Defendant's Reply). For the following reasons and under the applicable standards, the Court GRANTS IN PART Plaintiff's motion, DE 100, and GRANTS IN PART Defendant's motion, DE 101.

This case, involving a dispute about control of five billboards in Rockcastle County, is more one of title than tort. The record establishes that, in 2016, Outfront had five abated but valid leases that impressed the Powell land. LeMaster, ignorant of the leases, purported to buy the billboards from the Powells, with the plan to remove the static billboards and accrue credit toward a permit for an electronic billboard under a Kentucky highway billboard regulatory scheme. She took concrete steps to effectuate the plan, felling the billboards and seeking state credit. Outfront, itself seeking the credits, discovered those steps, resulting in this litigation.

The Court, after full consideration of the record, finds Outfront the proper billboard owner (and thus, entitled to the electronic credits). LeMaster converted the billboards, and Outfront is entitled to a remedy, some of which the Court gives and some it reserves for a jury. The Court rejects the tortious interference claim. Obviously, LeMaster's inverse claim to relief, depending on a prevalent claim to the billboards, fails.

I. BACKGROUND

LeMaster and Outfront each want to build an electronic billboard. As relevant here, to secure the required permitting, the Kentucky Transportation Cabinet ("KYTC")—the Commonwealth's billboard regulator—requires applicants to remove existing static billboards. Specifically, an administrative rule requires that a party remove six qualifying static billboards in exchange for a permit to erect one electronic billboard. 603 KAR 10:021 § 2(1); KRS 177.890 (requiring KYTC to promulgate administrative regulations to comply with the Highway Beautification Act under 32 U.S.C § 131). The parties do not dispute that the (already-removed) billboards at issue here qualify for the permit exchange. Indeed, KYTC already determined that it will award four credits, toward the required six, for the billboards' removal. See DE 100-18. However, the parties dispute whether those credits should go to LeMaster or Outfront. The answer turns on who owned the billboards when they were removed.

In July 2016, LeMaster reached out to KYTC to determine whether removing the at-issue billboards would qualify for credits. DE 101-7 (KYTC Emails). KYTC advised that it could not discuss the billboards in detail without permission from the billboard owner. Id. at 12 (7/20/2016 Email). LeMaster submitted a permission letter and transfer of ownership forms, purporting to shift billboard title from the Powells to LeMaster, and KYTC subsequently indicated that it would grant credits2 upon billboard removal. See DE 100-18 (7/22/2016 Letter). Several months later, Outfront contacted KYTC for like purposes, but Outfront discovered that the billboards had already been removed. See DE 100-13 (Watkins Depo.). Outfront initiated this suit after LeMaster refused to surrender the state credits. DE 1 (Compl.). KYTC is a party for purposes of credit disposition.

Decades ago, Outfront's predecessors3 erected billboards in Rockcastle County, Kentucky pursuant to leases with landowner Blanche Powell. DE 100-2 (1969 Lease & 1972 Lease). These initial leases were recorded with the Rockcastle County Clerk. Id. Years later, in 1983, Outfront and Blanche entered new leases, executing an independent lease for each of the five billboards. DE 100-3 (1983 Leases). Outfront recorded each 1983 lease with the Rockcastle County Clerk. Id. In 1998, Outfront "renegotiated three of the five 1983 Leases, leaving two of the 1983 leases in place ‘as is.’ " DE 100 at 2; DE 120-1 ¶ 7. The 1998 leases were not recorded. DE 100-5 at 5-10; DE 100-4 (1998 Leases). Outfront explains this progression and renegotiation of each lease. DE 100 at 2-3; DE 100-13 & 120-1. LeMaster questions whether Outfront is a party to the leases and whether the leases were still enforceable in 2016, not the historical fact of the leases. Outfront does not explain why only three of the leases were renegotiated and does not attempt to establish which specific lease governed which specific billboard. However, such precise cataloging is unnecessary absent protest from LeMaster that the "leases in effect in 2016," DE 100-5, are not the apt paperwork for the four billboards supporting the KYTC awarded credits. In the Court's view, LeMaster tried to purchase rights to all 5 billboards, and the leases (from 1983 on two and 1998 on three) blanket those billboards. KYTC withheld credit on one, but LeMaster purported to buy them all, and she removed them all. Thus, all five lease documents pertain in the case.

In 2010, Blanche Powell died, and title to her farm, as well as the billboard lease obligations, passed to her son and daughter, Randall and Brenda Powell. DE 100-12 (Brenda Powell Depo.). The Powells took via Blanche Powell's will, which went through probate. Another sibling was the Executrix. DE 100-12 at 22. No one contests that the leases attached to the land and remained in effect against the Powell heirs. Well before 2010, however, Outfront started withholding payments under the rent abatement provisions of the leases, citing obstruction from vegetation overgrowth and failure to secure an advertiser. DE 100-6, 7, 8, 10 & 11 (Letters to Blanche Powell). From June 2002 on, Outfront abated payments on all five billboards. LeMaster scrutinizes Outfront's conduct during this time for evidence that Outfront no longer owned the billboards in 2016, when she removed them. Specifically, she contends the "billboard leases were subsequently abandoned due to prolonged abatement of rent payments, failure to maintain the signs causing dilapidation, failing to correspond with the lessors, and failing to permit the billboards." DE 101 at 5. Outfront responds with evidence of its conduct consistent with lease continuance. See, e.g. , DE 100-14 (Call Report).

The Powell heir-LeMaster transaction has some mystery and dispute to it, and the versions differ. The Powells knew there had been leases and that payments had been abated since 2002. See DE 100-12 at 22; DE 100-24 at 29. They denied knowing any leases remained in effect, and they had no contact with Outfront since taking the land as Blanche Powell's heirs. See id. LeMaster did no due diligence in the Rockcastle County Clerk's Office. She assumed the Powells would not sell without title, and she assumed KYTC (which had no ownership record as to the aged billboards) would flag the matter if a contrary owner emerged. She may or may not have actually paid the Powells anything—the bill of sale references no consideration. LeMaster did take down the billboards. The disputed parts of the deal do not impact the Court's ruling.

After discovering the billboard removal, Outfront asked KYTC to delay issuing LeMaster the related credits. DE 100-19 (Open Records Request & E-Mail to KYTC). Outfront then sent LeMaster a demand for the credits, offering to forgo litigation if LeMaster would "transfer[ ] the electronic device credits associated with the billboards ... from her name to Outfront," subject to KYTC approval. Suit followed.

II. STANDARD

A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A reviewing court must construe the evidence and draw all reasonable inferences from the underlying facts in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 106 S. Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) ; Lindsay v. Yates , 578 F.3d 407, 414 (6th Cir. 2009). Additionally, the court may not "weigh the evidence and determine the truth of the matter" at the summary judgment stage. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 106 S. Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

The burden of establishing the absence of a genuine dispute of material fact initially rests with the moving party. Celotex Corp. v. Catrett , 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L.Ed.2d 265 (1986) (requiring the moving party to set forth "the basis for its motion, and identify[ ] those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate an absence of a genuine issue of material fact"); Lindsay , 578 F.3d at 414 ("The party moving for summary judgment bears the initial burden of showing that there is no material issue in dispute."). If the moving party meets its burden, the burden then shifts to the nonmoving party to produce "specific...

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