399 F.Supp.3d 671
E.D. Ky.2019Background
- Outfront Media holds five long-term billboard leases (two 1983, three 1998) running with Blanche Powell’s land; leases were recorded (some) and contained automatic renewal, abatement, and trade-fixture clauses reserving sign ownership to the lessee.
- Blanche Powell died in 2010; her heirs (Randall and Brenda Powell) inherited the land; Outfront had abated rent on the signs since ~2002 due to visibility/advertising problems but continued some lease-related activity.
- In 2016 LeMaster acquired a bill of sale/transfer from the Powells (she did not search county records), sought KYTC credits for removing static billboards to erect an electronic sign, then removed all five signs.
- KYTC awarded credits for four of the removed signs but required proof of ownership; Outfront sued claiming conversion and tortious interference and sought the electronic credits; LeMaster counterclaimed.
- The court found the leases remained in force (no effective termination or abandonment) and that the leases treated the billboards as lessee-owned trade fixtures; therefore Outfront owned the signs when LeMaster removed them.
- Court held LeMaster converted Outfront’s property and is not protected as a bona fide purchaser; tortious-interference claims failed because LeMaster lacked actual knowledge of the operative contracts and the intentional-interference element.
Issues
| Issue | Plaintiff's Argument (Outfront) | Defendant's Argument (LeMaster) | Held |
|---|---|---|---|
| Were leases still operative in 2016? | Leases remained binding and ran with the land; Outfront valid lessee. | Leases were abandoned/unenforceable due to prolonged abatement, dilapidation, and lack of enforcement. | Leases were operative; no abandonment, no implied forfeiture, and lessor did not terminate. |
| Who owned billboards at removal? | Outfront owned signs as trade fixtures under leases. | Powells sold signs to LeMaster; she lawfully removed them. | Outfront owned the signs; LeMaster’s transfer from Powells ineffective against existing leases. |
| Conversion and bona fide purchaser defense | Outfront: LeMaster converted Outfront’s property; seeks summary judgment. | LeMaster: bona fide purchaser without notice, acted in good faith. | Summary judgment for Outfront on conversion; bona fide purchaser defense fails as good faith does not defeat conversion and LeMaster had constructive notice. |
| Tortious interference with contract | Outfront: LeMaster knowingly induced breach of leases. | LeMaster: lacked knowledge of binding leases; Powells believed leases unenforceable. | Claim dismissed: plaintiff cannot show LeMaster had actual knowledge required for intentional interference. |
Key Cases Cited
- Jasper v. Blair, 492 S.W.3d 579 (Ky. Ct. App.) (defines conversion elements)
- Baciomiculo, LLC v. Nick Bohanon, LLC, 498 S.W.3d 790 (Ky. Ct. App.) (innocent purchaser’s good faith irrelevant where seller lacks title)
- State St. Bank & Tr. Co. v. Heck's, Inc., 963 S.W.2d 626 (Ky.) (recorded interests impart constructive notice)
- Soaper v. King, 180 S.W. 46 (Ky.) (discussion of abandonment and implied covenants in mineral leases)
- Am. Wholesale Corp. v. F. & S. Oil & Gas Co., 46 S.W.2d 498 (Ky.) (distinguishing abandonment from forfeiture for breach of implied covenants)