Remington Sherman Automotive, LLC v. FMG North Texas, LLC, Successor in Interest of FMO Real Estate, LLC

Court of Appeals of Texas·Decided December 27, 2023·No. 05-22-01366-CV·Published

Opinion

AFFIRMED IN PART; REVERSED AND RENDERED IN PART; and Opinion Filed December 27, 2023

In the

Court of Appeals

Fifth District of Texas at Dallas No. 05-22-01366-CV

REMINGTON SHERMAN AUTOMOTIVE, LLC, Appellant V.

FMG NORTH TEXAS, LLC, SUCCESSOR IN INTEREST OF FMO REAL ESTATE, LLC, Appellee

On Appeal from the 59th Judicial District Court Grayson County, Texas

Trial Court Cause No. CV-19-1015

MEMORANDUM OPINION

Before Justices Carlyle, Smith, and Kennedy Opinion by Justice Carlyle Remington Sherman Automotive, LLC appeals from a final judgment entered

in favor of FMG North Texas, LLC. We affirm in part and reverse and render in part in this memorandum opinion. See TEX. R. APP. P. 47.4.

This dispute arises out of an advertising billboard located on property adjacent to U.S. Highway 75 in Sherman. Dwight Ramey—proprietor of Ramey Chevrolet— leased the land on which the billboard is located to “The Lamar Companies” in 2010. “The Lamar Companies” is an assumed name used by various sub-entities of Lamar

Advertising Co., including Lamar Advantage Outdoor Company, LP (LAO), which held the rights to the lease.

The lease granted the Lamar Companies the right to place an “outdoor advertising structure” on the premises and provided that

[a]ll structures, equipment and materials placed upon the premises by [The Lamar Companies] shall remain the property of [The Lamar Companies] and may be removed by [them] at any time prior to or within a reasonable time after expiration of the term hereof or any extension. At the termination of this lease, [The Lamar Companies]

agree[] to restore the surface of the leased premises to its original condition.

A rider to the lease further provided that

[a]ny provision to the contrary in this lease notwithstanding, [the parties] agree that [Ramey] may terminate this lease upon Sixty (60)

days written notice and the return of any unearned rentals. [The Lamar Companies] will have Ninety (90) days from the receipt of such notice to remove their structure from the premises. Rent[] shall be due until the structure is removed and the [site] vacated by [The Lamar Companies].

The Lamar Companies installed the billboard on the premises, and the lease continued for approximately eight years without incident. During that time, LAO transferred its rights in the lease and billboard as part of a 2012 Asset Exchange Agreement between certain Lamar entities and certain “Fairway Outdoor Advertising” entities. FMG North Texas, LLC then acquired the rights in December 2018 as part of an Asset Contribution Agreement with other Fairway entities.

Remington purchased the Ramey Chevrolet dealership in 2018, along with the real property on which the billboard is located. On May 9, 2018, Remington notified

Fairway—which managed the billboard—that it was terminating the lease. The letter explained, however, that Remington was willing to discuss an arrangement whereby it would acquire ownership of the billboard structure and lease it back to Fairway.

The parties met two days later to discuss the possibility of a new lease, but each party insisted on owning the billboard structure going forward. Unable to reach an agreement, Fairway sent a crew to remove the billboard on August 9, 2018. After Fairway’s crew arrived, Remington’s attorney asked Fairway to leave the billboard intact so the parties could continue negotiating. Remington’s counsel confirmed in a letter the following day that Remington agreed “for a period of not less than thirty days from the date of this letter your failure to remove or engage in efforts to remove the sign in response to the Notice provided on May 9, 2018, shall not constitute an abandonment of the sign or a waiver of your right to remove the sign pursuant to reasonably diligent efforts after the expiration of thirty days.” The letter continued that the purpose of the agreement was “to facilitate continued negotiations . . . and to ensure that by failing to take steps now you are not deemed to have waived your right to the sign or have abandoned the sign.”

The parties dispute the extent to which their negotiations continued in earnest after that point. Regardless, failing to reach an agreement, FMG’s representatives went to Remington’s dealership on May 14, 2019 and informed the manager there that FMG intended to remove the billboard structure. After confirming there was sufficient clearance to perform the removal, FMG notified Remington’s counsel that

it intended to remove the billboard on May 24, 2019. When FMG’s crew showed up on that date, Remington refused to allow access and surrounded the billboard with cars to prevent its removal. Remington later poured additional concrete around the billboard and began using it to advertise its own business.

After Remington refused to allow FMG access to the billboard, FMG filed this lawsuit seeking the billboard’s return along with damages, alleging claims for conversion and breach of contract. The parties filed cross-motions for summary judgment as to liability on the conversion claim, and the trial court granted FMG’s motion and denied Remington’s. FMG then abandoned its breach-of-contract claim, and the trial court conducted a bench trial to determine FMG’s conversion remedies. In its final judgment, the trial court ordered Remington to cooperate in allowing FMG to recover the billboard and awarded FMG $159,899.76 in loss-of-use damages. Remington appeals.

THE BILLBOARD IS A TRADE FIXTURE Remington first argues the trial court erred by denying its motion for summary judgment on FMG’s conversion claim because the billboard structure does not qualify as a “trade fixture” subject to such a claim. We review a trial court’s order granting a motion for summary judgment de novo, generally taking as true all evidence favoring the nonmovant and indulging every reasonable inference in the nonmovant’s favor. Concho Res., Inc. v. Ellison, 627 S.W.3d 226, 233 (Tex. 2021). “When, as here, the parties file cross-motions for summary judgment and the trial

court grants one and denies the other, we ‘consider both sides’ summary-judgment evidence, determine all questions presented, and render the judgment the trial court should have rendered.’” Id. (quoting Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118, 124 (Tex. 2010)).

To prove its claim for conversion, FMG had to establish: (1) it “owned, had legal possession of, or was entitled to possession of” the billboard structure; (2) Remington “unlawfully and without authorization, assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with” FMG’s rights; (3) FMG “made a demand for the property”; and (4) Remington “refused to return the property.” Guillory v. Dietrich, 598 S.W.3d 284, 292 (Tex. App.—Dallas 2020, pet. denied). Remington argues that the billboard does not qualify as a removable “trade fixture” to which FMG could claim ownership rights for purposes of the first element of its conversion claim. Instead, Remington contends, the billboard is a permanent fixture and thus an improvement to Remington’s real property for which FMG has no property rights.

The term “trade fixture” refers to any article “annexed to the realty by [a]

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Remington Sherman Automotive, LLC v. FMG North Texas, LLC, Successor in Interest of FMO Real Estate, LLC, (Tex. Ct. App. 2023).

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