Outfront Media, LLC v. Randall Powell

• Court: Court of Appeals for the Sixth Circuit
• Decided: September 22, 2021
• Docket: 20-5563
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 21a0439n.06

Case Nos. 20-5562/5563

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED OUTFRONT MEDIA, LLC, ) Sep 22, 2021 ) DEBORAH S. HUNT, Clerk Plaintiff-Appellee, ) ) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE EASTERN TERRI LEMASTER; PERFORMANCE MEDIA, ) DISTRICT OF KENTUCKY LLC, ) Defendants/Third-Party Plaintiffs- ) Appellants, ) ) OPINION RANDALL POWELL; BRENDA POWELL, ) Third-Party Defendants-Appellees. ) )

BEFORE: BOGGS, CLAY, and KETHLEDGE, Circuit Judges.

CLAY, Circuit Judge. Defendants-Appellants Terri LeMaster and Performance Media,

LLC, appeal the district court’s grant of summary judgment to Plaintiff-Appellee Outfront Media,

LLC, on its conversion claim. They also appeal the dismissal of their counterclaim for tortious

interference against Outfront, the Kentucky Transportation Cabinet (“KYTC”), and Greg Thomas,

in his official capacity as KYTC Secretary, as well as their third-party claims against Third-Party

Defendants Brenda and Randall Powell. For the reasons stated below, we AFFIRM the district

court’s judgment. Case Nos. 20-5562/5563, Outfront Media, LLC v. LeMaster, et al.

BACKGROUND

Outfront Media, LLC, owns and operates outdoor advertising devices throughout the

United States. Performance Media, LLC, works in advertising sales, and Terri LeMaster is the

company’s sole owner. Between 1969 and 1973, Outfront Media’s predecessor-in-interest,1

National Advertising Company, entered into five leases with Mrs. Leonard (“Blanche”) Powell,

the owner of a farm located along Interstate 75 near Mount Vernon, Kentucky, to build and

maintain five billboards on her property. National Advertising constructed the billboards, and, on

September 9, 1983, it entered into new leases with Blanche Powell. The 1983 leases each had an

initial term of ten years, a second term of ten years at National Advertising’s option, and one-year

renewal terms unless either party provided written notice of termination at least 60 days prior to

each lease’s anniversary date.

Under the 1983 leases, National Advertising paid $400 a year to Blanche Powell when the

billboards were in an “advertising position.” (R. 100-3, 1983 Leases at PageID # 1472.) In the

event that “the highway view of the Lessee’s displays is obstructed or obscured, or the advertising

value of the displays is impaired or diminished, or the use or installation of such displays is

prevented or restricted by law,” National Advertising could terminate the leases with fifteen days’

written notice. (Id. at PageID # 1473.) If any of the aforementioned conditions “temporarily

exist,” then National Advertising could, “at its option, instead of terminating this lease, be entitled

to an abatement of rent payable” during that period, as well as a refund of rent paid in advance.

1 The relevant chain of title for the billboards is as follows: (1) National Advertising Company entered into the 1969-1973 and 1983 leases with Blanche Powell; (2) Outdoor Systems, Inc., acquired National Advertising in August 1997 and took ownership of National Advertising’s interests in the leases and billboards; (3) in February 2000, Outdoor Systems was renamed Infinity Outdoor, Inc.; (4) in August 2001, Infinity Outdoor changed its name to Viacom Outdoor, Inc.; (5) in December 2005, Viacom Outdoor changed its name to CBS Outdoor, Inc.; (6) CBS Outdoor converted to a limited liability company in June 2013; and (7) in November 2014, CBS Outdoor, LLC, became Outfront Media, LLC.

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(Id.) And “[a]ll structures, displays and materials placed upon the said property by the Lessee are

Lessee’s trade fixtures and equipment, and shall be and remain the Lessee’s property.” (Id.)

Between July and September 1998, National Advertising’s successor-in-interest, Outdoor

Systems, Inc., renegotiated three of the five 1983 leases and left the other two 1983 leases in place.

The 1998 leases had the same lease term structure as the 1983 leases, and termination was allowed

by written notice of either party at least 90 days before the end of the lease term. Outdoor Systems

agreed to pay Blanche Powell $675 per year for two of the leases and $900 per year for the third

lease. Like the 1983 leases, the 1998 leases allowed Outdoor Systems to terminate the lease with

fifteen days’ written notice if the billboards were “entirely or partially obscured or destroyed” or

Outdoor Systems was “prevented by government authority from constructing or maintaining such

signs.” (Id. at PageID # 1475.) If any of these conditions existed temporarily, then Outdoor

Systems could abate the rent during the existence of the condition and have any rent paid in

advance of the period returned. Under the 1998 leases, any “materials and displays” placed on the

property by Outdoor Systems were “trade fixtures” and property of Outdoor Systems, and

“Lessee’s display(s) shall not be considered abandoned at any time and shall not become the

property of Lessor except by express conveyance in writing.” (Id.)

The 1983 and 1998 leases were binding on the parties’ “heirs, successors, and assigns.”

(R. 100-4, 1998 Leases at PageID # 1475; see also R. 100-3, 1983 Leases at PageID # 1473.)

And Blanche Powell was required to notify the lessee “of any change of ownership” in the farm

and “give the new owner formal written notice of the existence of this lease.” (R. 100-3, 1983

Leases at PageID # 1473; see also R. 100-4, 1998 Leases at PageID # 1475.)

The billboards were periodically inspected, and the 1993 and 1995 inspections indicated

that the poles of the billboards were not in good condition. The 1995 inspection specifically

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revealed that the poles had cracks; the walkways and the braces of the poles were not in good

condition; the walkways were missing rails; and safety equipment needed to be installed.

On February 8, 2001, Infinity Outdoor, Outdoor Systems’ successor-in-interest, wrote to

Blanche Powell, informing her that Infinity was unable to sell advertising on three billboards

located on her property that were blocked by vegetation and requesting that she have the trees cut

back so that the billboards could be visible. The letter noted that lease payments had already been

abated on two of the leases due to tree problems, and that, if the vegetation was not removed, then

Infinity would have to similarly abate lease payments on the three additional leases. On May 30,

2001, Infinity informed Blanche Powell that the lease for the “Holiday Inn Express board” was

“being changed to Hold Pay status” because trees had grown in front of it along Interstate 75. (R.

100-7, Letter to Blanche Powell at PageID # 1495.) On July 2, 2001, Infinity informed Blanche

Powell that it was similarly abating rent on the leases for the “Meijer” and the “O’Charley’s”

boards. (R. 100-8, Letter to Blanche Powell at PageID # 1497.) Infinity urged her to contact her

state legislators to inform them “that they are preventing you from receiving expected revenues by

not allowing trimming of right of way trees along I-75.”2 (Id.)

On December 31, 2001, now renamed Viacom Outdoor, the company wrote to Blanche

Powell that it was able to sell advertising space on one of the billboards, and it paid her the prorated

rent amount for the seven months left on the lease term. Viacom said it would notify her as to

whether the company would be able to continue lease payments in August 2002 and sell space on

the other four billboards. Viacom also encouraged her to reach out to her state legislators and

indicated that it was planning to lobby the state legislature in 2002 for a bill that would permit tree

trimming. On June 7, 2002, Viacom informed Blanche Powell that the company had not been able

2 Under Kentucky regulations at the time, “it was prohibited to cut vegetation on state right-of-way for the purpose of making a billboard visible.” (R. 100-9, Preece Dep. at PageID # 1506.)

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to acquire a sales contract for the following lease term and that rent for that lease, along with the

four other leases, would be abated.

On November 30, 2001, Viacom placed four of the billboards on a “target list to remove.”

(R. 100-14, Outfront’s Continuous Call Reports at PageID # 1705–10.) In August 2004, now

renamed CBS Outdoor, the company requested that electricity be permanently disconnected from

the billboards. On September 3, 2008, CBS Outdoor’s real estate representative sent letters to its

general manager “requesting termination” of the billboards, and, on January 7, 2009, CBS Outdoor

sought a quote to terminate and remove the billboards. (Id.) No further steps towards removing

the billboards were recorded, and the company did not end up removing the billboards. David

Watkins, Outfront Media’s Real Estate Manager, periodically inspected the billboards to see if

there was any visibility from I-75. In 2010, Blanche Powell passed away, and her children, Randall

and Brenda Powell, inherited her farm and the billboard leases. Randall tried unsuccessfully to

notify CBS Outdoor of the change in ownership.

In November 2015, KYTC promulgated a new regulation, which provided that owners of

off-premise advertising devices could exchange removal of six devices for receipt of one “new

off-premise electronic advertising device permit.” 603 Ky. Admin. Reg. 10:021 § 2(1). At that

time, LeMaster wanted Performance Media to begin selling advertising on digital billboards, and

she sought credits towards a permit for an electronic advertising device. On July 16, 2016, after

seeing the billboards while driving on I-75, LeMaster visited the Powells’ home and discussed

removing the billboards in exchange for KYTC credits with Brenda Powell, who was under the

impression that LeMaster was with KYTC.

The Powells set up a meeting with LeMaster on July 18, 2016, this time with Randall

Powell in attendance, during which the Powells purported to transfer ownership of the billboards

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to LeMaster. At this time, the Powells knew that Outfront had abated the lease payments for the

billboards.3 LeMaster submitted the signed forms to KYTC, and, on July 22, 2016, KYTC

approved LeMaster’s request to remove the billboards. Upon confirmation that they were removed,

KYTC issued LeMaster four credits.4

In February 2017, David Watkins of Outfront Media sent a request for credits to KYTC for

removal of the billboards. KYTC informed Watkins that the billboards had already been removed

and that the credits had been claimed. After filing an Open Records Act request, Watkins learned

that LeMaster and Performance Media received the credits for these billboards. Watkins then

requested that KYTC put an immediate hold on the credits obtained by LeMaster and Performance

Media.

Outfront’s counsel sent a demand letter to LeMaster, explaining that Outfront, not the

Powells, owned the billboards in question; Outfront had abated rent because the billboards became

obscured; and at no point did Outfront terminate the leases. Outfront’s counsel also informed

LeMaster that the company intended to sue LeMaster and Performance Media for transfer of the

credits and damages, but Outfront would not proceed with litigation if LeMaster transferred the

credits to Outfront, which she refused to do. After Outfront’s lawsuit was filed, KYTC denied

LeMaster’s application for an electronic advertising device permit because KYTC did not want to

do anything further with the credits until Outfront’s lawsuit was resolved.

Outfront filed the instant lawsuit against LeMaster, Performance Media, KYTC, and Greg

Thomas, in his official capacity as KYTC Secretary, invoking diversity jurisdiction. Outfront

3 During the second meeting, Randall Powell told LeMaster that the leases had been abated and that he had not been contacted by the lessee. 4 LeMaster only received credits for four billboards because KYTC could not confirm the existence of a fifth, separate billboard.

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asserted claims for conversion and tortious interference with contract, and it sought transfer of the

credits as well as consequential and punitive damages. In LeMaster and Performance Media’s

amended answer, they included a counterclaim against Outfront, KYTC, and Greg Thomas for

tortious interference with prospective economic advantage and sought punitive damages for

transferring the credits at issue to Outfront. LeMaster and Performance Media also filed a third-

party complaint against Randall and Brenda Powell for negligent misrepresentation and breach of

contract, and they sought indemnity from the Powells for any damages arising from Outfront’s

suit.

Outfront, as well as LeMaster and Performance Media, filed motions for summary

judgment on their claims. Outfront argued that: (1) LeMaster and Performance Media had

converted Outfront’s property—which it did not abandon by abating the rent or leaving the

billboards in disrepair—and LeMaster had intended to interfere with Outfront’s possession of the

billboards, did not transfer the credits when asked to do so, and caused Outfront to lose their

property; (2) LeMaster had committed tortious interference because Outfront had five active leases

for the billboards, which LeMaster knew or should have known about, and LeMaster caused the

breach by inducing the Powells to transfer ownership of the leases and allow her to remove the

billboards; (3) Outfront was entitled to damages based on its net profits from what Outfront had

made on its existing electronic billboards; and (4) LeMaster’s tortious interference counterclaim

failed because Outfront’s communications with KYTC are protected by the judicial-statements

privilege, and LeMaster could not make a sufficient showing as to the elements of a tortious

interference claim.

LeMaster and Performance Media argued that: (1) Outfront had abandoned the billboards

by abating rent, failing to maintain the billboards, failing to correspond with the Powells regarding

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the lease abatements, and failing to get proper permits for the billboards; (2) LeMaster was a bona

fide or good-faith purchaser for the value of the leases; (3) Outfront had not acted in a

commercially reasonable manner based on the aforementioned conduct; (4) Outfront’s conversion

and tortious interference claims failed because it had abandoned the leases and failed to act in a

commercially reasonable manner; and (5) they were entitled to summary judgment on the tortious

interference claim because LeMaster had a valid contract for the billboards, and Outfront had

interfered with that contract by requesting that KYTC place a hold on the credits.

The district court granted in part and denied in part Outfront’s, as well as LeMaster and

Performance Media’s, motions for summary judgment. Finding that Outfront retained legal title to

the billboards, the district court determined that Kentucky regulations on abandonment of

billboards and permits do not affect ownership rights. The court found that the leases provided a

broad authorization of abatement, and that the Powells could have terminated the leases. The

district court also rejected LeMaster’s argument that Outfront had an implied duty to develop and

operate the billboards because the Powells could terminate the leases and because the leases

protected against enforcement of implied terms. And the court determined that enforcing

Outfront’s leases did not violate public policy simply because the relevant Kentucky regulations

incentivized removing old, nonconforming billboards owned by entities like Outfront.

The district court then determined that summary judgment to Outfront was proper on the

conversion claim because Outfront easily established the remaining elements. The district court

rejected LeMaster’s bona fide purchaser defense because, as a matter of law, a purchaser’s good

faith is irrelevant when a seller lacks title. The district court denied summary judgment to Outfront

and granted to LeMaster on the tortious interference claim because it found no triable issue

regarding whether LeMaster had actual knowledge of the lease agreements between Outfront and

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the Powells. Finally, the court denied summary judgment to LeMaster and Performance Media and

granted to Outfront on their counterclaim because Outfront’s assertion of its rights under the lease

was not wrongful given that it had valid rights to the billboards. The district court concluded that

Outfront was entitled to the credits, but that the issue of consequential damages must go to a jury.

Outfront filed a motion to voluntarily dismiss its claim for damages against LeMaster and

Performance Media, which the district court granted. The court also dismissed LeMaster and

Performance Media’s third-party claims against the Powells. The court dismissed Performance

Media as a party to the action for failing to retain counsel and prosecute the claims, despite being

the real party in interest. The district court declined to exercise supplemental jurisdiction over

LeMaster’s third-party claims, given that the original claims, which were before the court under

diversity jurisdiction, had been dismissed, and the third-party claims had not been active during

the litigation. LeMaster and Performance Media subsequently moved for relief from judgment

under Rules 59 and 60, which the district court denied. This timely appeal followed.

DISCUSSION

Standard of Review

“We review a district court’s grant of summary judgment de novo.” McClellan v. Midwest

Mach., Inc., 900 F.3d 297, 302 (6th Cir. 2018). Summary judgment will be granted “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 material fact is one “that might affect the outcome of

the suit,” and a genuine dispute exists “if the evidence is such that a reasonable jury could return

a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“At the summary judgment stage, the moving party bears the initial burden of identifying those

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parts of the record which demonstrate the absence of any genuine issue of material fact.” White v.

Baxter Healthcare Corp., 533 F.3d 381, 389–90 (6th Cir. 2008).

Once the moving party has met its burden, the burden shifts to the non-moving party to

demonstrate “specific facts showing that there is a genuine issue for trial,” although the evidence

need not be “in a form that would be admissible at trial.” Celotex Corp. v. Catrett, 477 U.S. 317,

324 (1986) (internal quotation marks omitted). All reasonable inferences are drawn in favor of the

non-moving party. Mutchler v. Dunlap Mem’l Hosp., 485 F.3d 854, 857 (6th Cir. 2007). When

parties file cross motions for summary judgment, “the court must evaluate each party’s motion on

its own merits, taking care in each instance to draw all reasonable inferences against the party

whose motion is under consideration.” B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 592

(6th Cir. 2001) (quoting Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)).

Analysis

The dispositive issue on appeal is whether the district court erred in finding that Outfront

had legal title to the billboards; if not, summary judgment to Outfront on its conversion claim

would be improper.5 The intentional tort of conversion is defined as “the wrongful exercise of

dominion and control over the property of another.” Jones v. Marquis Terminal Inc., 454 S.W.3d

849, 853 (Ky. Ct. App. 2014). Under Kentucky law, the elements of conversion are:

(1) the plaintiff had legal title to the converted property; (2) the plaintiff had possession of the property or the right to possess it at the time of the conversion; (3) the defendant exercised dominion over the property in a manner which denied the plaintiff's rights to use and enjoy the property and which was to the defendant's own use and beneficial enjoyment; (4) the defendant intended to interfere with the plaintiff's possession; (5) the plaintiff made some demand for the property’s return which the defendant refused; (6) the defendant’s act was the legal cause of the

5 Relatedly, LeMaster contests the ownership of the billboards by Outfront’s predecessor, Outdoor Systems; however, this argument is not properly before this Court because LeMaster did not substantiate this argument at summary judgment, instead waiting until her Rule 59 motion to do so. See Evanston Ins. Co. v. Cogswell Prop., LLC, 683 F.3d 684, 692 (6th Cir. 2012) (“Arguments raised for the first time in a motion for reconsideration are untimely and forfeited on appeal.”).

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plaintiff’s loss of the property; and (7) the plaintiff suffered damage by the loss of the property.

C&H Mfg., LLC v. Harlan Cnty. Indus. Dev. Auth., Inc., 600 S.W.3d 740, 745 (Ky. Ct. App. 2020)

(emphasis omitted). On appeal, LeMaster focuses her arguments on the element of legal title.

A. Illegal Purpose of the Leases

LeMaster first contends that Outfront’s legal title to the billboards is invalid because the

billboards had an illegal purpose, having been in violation of the Billboard Act since 2003 when

none of the billboards displayed any current advertising material.6 The Supreme Court of Kentucky

has stated that “a court may refuse to enforce a contract on grounds of illegality where the contract

has a direct objective or purpose that violates the federal or a state Constitution, a statute, an

ordinance, or the common law.” Yeagar v. McLellan, 177 S.W.3d 807, 809 (Ky. 2005). We have

said that a purpose may be illegal if it violates administrative regulations promulgated pursuant to

legislation. See Martello v. Santana, 713 F.3d 309, 313 (6th Cir. 2013). In Martello, we found that

an attorney’s fee-sharing agreement, in which the attorney shared legal fees with a law graduate

who was not admitted to the bar, was void because it violated the provision in the Kentucky Rules

of Professional Conduct that prohibits sharing legal fees with non-lawyers. Id. at 313–14.

Similarly, in Bassett v. National Collegiate Athletic Association, we concluded that an agreement

between a former University of Kentucky football coach and the Athletic Director to refrain from

reporting misconduct was void for violating public policy because “contracts that require an

employee to breach his fiduciary duty to his employer are illegal and void under Kentucky law.”

528 F.3d 426, 438 (6th Cir. 2008) (internal quotation marks and citation omitted).

6 LeMaster’s argument regarding the billboards having been illegal when they were first installed is forfeited on appeal because LeMaster failed to raise the argument before the district court at summary judgment. See Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008) (“[A]n argument not raised before the district court is waived on appeal to this Court.”).

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Kentucky regulations of static advertising devices provide that “[t]he erection or existence

of a static advertising device shall be prohibited in a protected area if the device . . . [i]s abandoned

or discontinued.” 603 Ky. Admin. Reg. 10:010 § 1(4)(b).7 An advertising device is abandoned or

discontinued if, for a year or more, it has (1) “[n]ot displayed advertising matter;” (2) “[d]isplayed

obsolete advertising matter;” (3) “[n]eeded substantial repairs due to lack of maintenance;” or (4)

“[o]nly advertised for the sale, rent, or lease of the advertising device.” 603 Ky. Admin. Reg.

10:002 § 1(1).8 However, the regulations allow owners of “currently nonconforming” or “illegal”

off-premise advertising devices to exchange these devices for credits towards a permit for an

electronic advertising device. 603 Ky. Admin. Reg. 10:021 § 2(1), (3).

Under the regulations, the billboards were administratively abandoned and prohibited by

law in 2003 because they either lacked advertising or displayed obsolete advertising and because

they needed substantial repairs. See 603 Ky. Admin. Reg. 10:002 § 1(1). But the leases themselves

did not have an illegal purpose because it was not the direct objective or purpose of Blanche Powell

or Outfront’s predecessors in entering these leases to maintain billboards that were illegal under

Kentucky regulations. Cf. Bassett, 528 F.3d at 438 (“Bassett’s admitted knowledge of self-

reporting obligations of himself and Ivy, coupled with his admission that he violated NCAA rules,

necessarily renders any agreement to circumvent those obligations, in order to suppress discovery

of Bassett's improprieties, void.”). No provision of the leases required either party to violate any

7 This section was repealed and moved to 603 Ky. Admin. Reg. 10:040E. 8 The regulations allow a nonconforming static advertising device to exist without a permit if it is: (1) “[n]ot abandoned or discontinued;” (2) “[s]ubjected to only routine maintenance;” (3) “[i]n compliance with state law and administrative regulations as well as local zoning, sign, or building restrictions at the erection;” and (4) “[s]ubstantially the same as it was on the effective date of the state law or administrative regulation that made the device nonconforming.” 603 Ky. Admin. Reg. 10:010 § 4(1). A nonconforming advertising device is an “an off-premise advertising device that at one (1) time was lawfully erected but does not comply with a . . . [c]urrent state law or administrative regulation . . . .” 603 Ky. Admin. Reg. 10:002 § 1(23). Outfront agrees that the billboards were nonconforming as of 1976.

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of the Kentucky billboard regulations—the leases even allowed for termination if “the use or

installation of such displays is prevented or restricted by law or by the Lessee’s inability to obtain

any necessary permits or licenses.” (R. 100-5, Leases in Effect in 2016 at PageID # 1483.)

Additionally, KYTC anticipated that owners would retain possession of nonconforming

and illegal billboards by allowing owners to exchange such billboards for credits towards an

electronic billboard permit. See 603 Ky. Admin. Reg 10:021 § 2(3), (6) (“An off-premise

advertising device to be exchanged shall be . . . [c]urrently nonconforming . . . or [i]llegal. . . . The

owner of an exchanged advertising device shall receive credit by the department for each

advertising device removed after the effective date of this administrative regulation.”). And the

regulations do not require that billboards deemed to be administratively abandoned be removed or

for their ownership to be transferred to the lessor, opting instead for forfeiture, potential legal

action, and fines. See 603 Ky. Admin. Reg. 10:010 §§ 8–9. This provides further support for the

fact that KYTC anticipated that entities like Outfront would retain ownership of “illegal”

billboards and that such ownership does not seriously offend the Kentucky regulations on

billboards. Accordingly, the billboard leases are not void for advancing an illegal purpose.

B. Unenforceability of the Leases After Outfront Stopped Using the Billboards

LeMaster then raises several arguments related to why the leases became unenforceable

once Outfront stopped using the billboards to display advertising materials. The first of these

arguments is that, because the billboard leases were for the stated purpose of displaying advertising

material, once they were no longer used for that purpose, the leases became unenforceable.

LeMaster relies on two Kentucky Court of Appeals cases to support this argument: Hite v. Carmon,

486 S.W.2d 715 (Ky. Ct. App. 1972), and Lavit v. Mattingly, No. 2014-CA-001676-MR, 2016 WL

4256911 (Ky. Ct. App. Aug. 12, 2016).

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In Hite, the contract at issue involved a lease between Mary Hite and Sun Oil Company, in

which Sun Oil leased two acres of Hite’s real property to be used for its oil business and Sun Oil

could renew the lease term annually at its option. 486 S.W.2d at 716. After the company stopped

using the property for the oil business and assigned the lease to employees who used it for

residential purposes, Hite sought to terminate the lease because the property was not being used

for its stated purpose and the assignments occurred without notice to Hite. Id. The court found that

Hite could terminate the lease under these circumstances because “[t]he law does not favor

perpetual leases,” and the lease was intended to be limited to use of the property in connection

with the oil business. Id. at 717. On the other hand, in Lavit, the court upheld a lease it interpreted

as allowing for multiple renewals of the lease by the tenant so long as the premises continued to

be used as a law office. 2016 WL 4256911, at *5.

In the present case, the billboard leases allowed Outfront to occupy the allotted portion of

the Powells’ farm “for the purposes of erecting and maintaining advertising displays.” (R. 100-5,

Leases in Effect in 2016 at PageID # 1482.) However, while the leases allowed for yearly

renewals at Outfront’s option, unlike in Hite and Lavit, both Outfront and the Powells had the

ability to terminate the lease. Additionally, the billboard leases accounted for what would happen

if the purpose of the agreements––to display advertising materials––were frustrated, by allowing

Outfront to terminate the lease or abate rent. Outfront followed the protocol laid out in the lease

and abated rent during the time that the billboards were obstructed. And, unlike Hite, in the present

case, Outfront did not attempt to use the billboards for an unauthorized purpose. See 486 S.W.2d

at 716. In fact, KYTC regulations prohibited Outfront from making the necessary repairs and

removing obstructive vegetation to be able to use the displays as intended. See Whiteco Metrocom

Corp. v. Commonwealth, 14 S.W.3d 24, 27 (Ky. Ct. App. 1999) (noting that Kentucky law

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“permits nothing other than routine maintenance” of nonconforming billboards). Accordingly, the

leases did not become unenforceable based on Outfront’s inability to sell advertising on the

billboards.

LeMaster next argues that the leases were not enforceable because it became impossible or

impracticable to use the billboards for advertising displays given that the billboards were illegal

under Kentucky regulations and the billboards had severely deteriorated. But, regardless of

whether the Kentucky regulations made Outfront’s inability to put up advertising displays

impossible or impracticable, the lease agreements accounted for Outfront’s inability to put up

advertising displays on its billboards by allowing Outfront to terminate the lease or to abate rent,

if, for example, the use of the displays became illegal or the displays were obstructed. Given the

regulations preventing the repair and removal of obstructions for nonconforming billboards,

Outfront decided to abate the rent for the billboards pursuant to the lease agreements. And, again,

the Kentucky regulations contemplate that entities like Outfront owning nonconforming or illegal

billboards can exchange their removal for credits towards an electronic advertising device, so that

Outfront could still enforce its ownership of the billboards pursuant to the lease agreements. See

603 Ky. Admin. Reg 10:021§ 2(3), (6). As a result, the leases were not unenforceable based on

impossibility or impracticability.

LeMaster’s final argument as to why the leases are unenforceable is that Outfront breached

the agreements when it failed to pay rent for more than thirteen years; therefore, it cannot enforce

the lease agreements now. Although the lease agreements explicitly provide for the abatement of

rent under certain circumstances—and Outfront followed the proper protocol for seeking

abatement of the rent—LeMaster contends that abatement of the rent was only allowed under the

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lease agreements for “temporary” conditions and that a thirteen-year tree obstruction was a

“condition of indefinite duration.” (Appellants’ Br. 24.)

Kentucky law provides that written terms in a contract should be “enforced strictly,”

assuming the language is unambiguous, and words in a contract should be read pursuant to their

“ordinary meaning.” Stowe v. Realco LLC, 551 S.W.3d 462, 465–66 (Ky. Ct. App. 2018) (internal

quotation marks and citations omitted). In interpreting contracts, courts should seek to “give effect,

if possible, to the mutual intention of the parties,” and words in the contract should be “construed

in the sense they are employed by the parties.” N. Star Co. v. Howard, 341 S.W.2d 251, 255 (Ky.

Ct. App. 1960). “The interpretation of a contract is a question of law.” Stowe, 551 S.W.3d at 465.

Here, the leases do not provide a separate definition of the word “temporary” as used in

the termination and abatement provision. (R. 100-5, Leases in Effect in 2016 at PageID # 1483.)

The ordinary meaning of the word “temporary” means a condition lasting for a limited duration

and not permanently. Considering the word in the context of this provision, the district court

correctly construed the term to allow Outfront discretion in abating the rent pursuant to one of the

triggering conditions. The lease agreements permitted Outfront to terminate the leases based on

the existence of one of several conditions, including obstruction of the displays, diminished

advertising value, legal restrictions, inability to obtain advertising contracts, or a diversion of

traffic. And the lease specifically provided Outfront the option to abate rent when any of the above

conditions temporarily existed for the duration of the condition’s existence. Given this language

and the lack of a specific limitation on the time period during which abatement of rent could last,

this provision demonstrates an intent by the parties to allow Outfront to end or pause obligations

under the lease pursuant to conditions outside of its control.

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Thirteen years may seem a long period of time, but a thirteen-year tree obstruction is

temporary insofar as the trees could have been removed at any time during that period by human

intervention, the state government, or even natural disasters. Had Kentucky amended its

regulations to allow for more than routine maintenance of nonconforming billboards, Outfront

could have removed the vegetation obstructing the displays, and Outfront had been lobbying the

Kentucky Legislature to amend their regulations. Given its hope that the regulations would be

amended, the company properly abated rent until such time as the vegetation could be removed.

And if the Powells believed that abatement was improper because the obstruction was a permanent

condition, they could have terminated the lease prior to the next renewal date. Outfront did not

breach the leases by abating the rent pursuant to the temporary condition of vegetation obstruction.

C. Abandonment of the Billboards

LeMaster contends that Outfront abandoned its ownership of the billboards by allowing

them to fall into disrepair.9 Kentucky courts define abandonment of property as “the

relinquishment of property with the intention of not reclaiming it or reassuming its ownership or

enjoyment.” Kelley v. Nationwide Auto Restoration, LLC, 246 S.W.3d 470, 473 (Ky. Ct. App.

2007). The elements of abandonment are (1) “a voluntary relinquishment of possession” and (2)

“intent to repudiate ownership.” Greer v. Arroz, 330 S.W.3d 763, 765 (Ky. Ct. App. 2011). In

determining whether an owner has abandoned property, Kentucky courts look to “the conduct of

the parties, independently of what they may claim was their mental attitude with respect thereto.”

Cameron v. Lebow, 338 S.W.2d 399, 406 (Ky. Ct. App. 1960) (internal quotation marks omitted),

9 LeMaster contends that photos of the billboards at the time they were taken down demonstrate that the obstructions in front of the billboards had been removed sometime between 2002 and 2016. However, the district court properly rejected the photos as not creating a genuine dispute of material fact regarding the visibility of the displays, given that the photos were taken from a side road and LeMaster failed to identify where and when the photos were taken.

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overruled on other grounds as recognized in Carrs Fork Corp. v. Kodak Mining Co., 809 S.W.2d

699 (Ky. 1991). An “intent to repudiate ownership may be inferred when the facts justify it, and

the lapse of a long period of time following relinquishment of possession constitutes significant

evidence of the intention to abandon property.” Kelley, 246 S.W.3d at 473. An owner who has

abandoned property cannot pursue a conversion claim for it, C&H Mfg., 600 S.W.3d at 746,

because “the completed act of abandonment itself terminates the leasehold interest.” Cameron,

338 S.W.2d at 406.

The Kentucky Court of Appeals “has previously recognized a presumption of abandonment

when a commercial tenant turns over its lease to another commercial tenant in the same business

and leaves behind equipment or personal property.” C&H Mfg., 600 S.W.3d at 746. In C&H

Manufacturing, the Kentucky Court of Appeals determined that C&H Manufacturing abandoned

its equipment after leaving it at the facility it had previously leased and failing to retrieve or make

a demand for the equipment in the eight to nine years between leaving the lease and filing the

underlying complaint. Id. at 747. Similarly, in Goss v. Bisset, the previous tenant and the current

tenant both ran garage businesses, and the previous tenant left behind equipment following the end

of their lease, for which they never returned. 411 S.W.2d 50, 53 (Ky. Ct. App. 1967). Given that

the lessor had no ownership interest in the equipment, and “[p]ossession passed directly and

immediately from one tenant to the other,” the court determined that the previous tenant intended

to abandon the equipment. Id. at 53–54. And, in Greer, the Kentucky Court of Appeals determined

that former homeowners abandoned their personal property left at the home after failing to make

any demand for the property until four years after the home’s judicial sale. 330 S.W.3d at 765–66.

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In the present case, Outfront did not abandon the billboards, and any conduct that might,

at first glance, seem to show an intent to abandon the billboards was not voluntary on the part of

Outfront. Considering the various lease agreements for the billboards, the three 1998 leases

explicitly provide that the billboards “shall not be considered abandoned at any time and shall not

become the property of [the Powells] except by express conveyance in writing.” (R. 100-5, Leases

in Effect in 2016 at PageID # 1486.) Additionally, the 1983 and 1998 leases remained in effect

until either party provided written notice of termination at least 60 or 90 days, respectively, before

the start of the next lease term, which neither party did. All the leases contemplated obstruction of

the billboards and allowed for Outfront to terminate the rent, or to abate rent payments when such

an obstruction occurred temporarily.

LeMaster’s contention that Outfront abandoned the billboards by failing to sell advertising

on any of the five billboards since 2002 and failing to maintain the billboards ignores the fact that

these consequences were the result of Kentucky regulations, not Outfront’s voluntary conduct.

Prior to 2015, Kentucky law prohibited cutting down vegetation in front of a billboard on a state

right-of-way to make the billboard visible. See Whiteco Metrocom Corp., 14 S.W.3d at 27.

Outfront lobbied the Kentucky Legislature to change the law so that Outfront could remove the

vegetation from in front of the billboards, but it was not successful until 2015 with the

promulgation of 603 Ky. Admin. Reg. 5:155. Until then, Outfront could not sell any advertising

because the view of the billboards remained obstructed, and it could not remove the obstruction

because that exceeded the scope of any routine maintenance on the billboards. See Whiteco

Metrocom Corp., 14 S.W.3d at 27 (noting that routine maintenance of nonconforming advertising

devices included “replacement of nuts and bolts, nailing, riveting or welding, cleaning and

painting, or manipulating to level or plumb the device;” “the routine change of message;” and

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“[t]he lamination or preparation of existing panels or facings at a location other than that of the

advertising device”).

In the aforementioned cases where the Kentucky Court of Appeals has found abandonment

of property, the previous owners left behind the personal property at the close of their lease term

or ownership of the real property, which constituted an act voluntarily relinquishing the personal

property and intending to repudiate their ownership in that personal property. Cf. C&H Mfg., 600

S.W.3d at 746–47. In contrast, in the present case, Outfront maintained valid leases for the area on

which the billboards were built at the time that the Powells purported to transfer ownership of the

billboards to LeMaster, and it neither attempted to remove the billboards at any point nor otherwise

took any action that would indicate either voluntary relinquishment or an intent to repudiate

ownership of the billboards. As a result, the district court correctly found that Outfront did not

abandon the billboards.

Outfront retained legal title to the billboards at the time that the Powells purported to

transfer ownership of the billboards to LeMaster because, as a matter of law, the leases were

enforceable and Outfront did not abandon the billboards. Given that on appeal LeMaster contests

only the district court’s conclusion regarding the legal title element of Outfront’s conversion claim,

we will not disturb the district court’s finding that Outfront sustained its burden on summary

judgment to establish all of the conversion elements as a matter of law.10

10 Because we affirm the district court’s grant of summary judgment to Outfront on the conversion claim, we similarly affirm its denial of summary judgment as to LeMaster on her counterclaim regarding tortious interference with prospective economic advantage. Outfront’s assertion of its rights under the lease agreements was not improper, and LeMaster cannot make out a tortious interference claim without showing that Outfront acted wrongfully. Additionally, LeMaster does not contest the district court’s exercise of discretion to decline supplemental jurisdiction over LeMaster’s third-party complaint against the Powells on appeal. Therefore, we also affirm the district court’s dismissal of the third-party complaint.

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CONCLUSION

For these reasons, we AFFIRM the district court’s judgment.

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