In a declaratory judgment action, summary judgment is
appropriate where “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact” and that a party is entitled to judgment as a matter
of law. N.C. Gen. Stat. § 1A-1, Rule 56 (2001);
see Meachan v.
Board of Education, 47 N.C. App. 271, 275, 267 S.E.2d 349, 351(1980).
On appeal, Lamar Company contends that the trial court
improperly awarded summary judgment in favor of Clark Harris
because the law liberally allows for the removal of trade fixtures
such as billboard signs by a tenant whose lease has expired. Under
the particular facts in this case, we agree that the trial court
erred in granting summary judgment to Clark Harris.
We addressed an issue similar to the one in this case in
National Advertising Co. v. N.C. Dept. of Transportation, 124 N.C.
App. 620, 478 S.E.2d 248 (1996). In that case, following the
termination of a sign-lease agreement with the plaintiff, the North
Carolina Department of Transportation on 29 March 1994 instructed
the plaintiff to remove its sign. When the plaintiff failed to
remove the sign by August 1994, the Department of Transportation
moved the sign, prompting the plaintiff to bring an inverse
condemnation action. The undisputed facts in that case showed that
the
plaintiff was not hindered or prevented from removing its sign
within the period between the Department of Transportation's notice
to plaintiff to remove its sign and the Department of
Transportation's subsequent removal of the sign. Thus, this Court
reversed the trial court's ruling that the Department of
Transportation must pay the plaintiff just compensation for its
sign, stating:
[M]ore than 90 days prior to the actual
removal of the sign in August 1994, the
[Department of Transportation] notified [the
plaintiff] that it must remove its sign. We
conclude that . . . the [Department of
Transportation] effectively terminated anypurported lease that [the plaintiff] may have
had with the [Department of Transportation] by
virtue of the [Department of Transportation's]
purchase of the property.
Thus, at the time the sign was removed, [the
plaintiff] did not have a leasehold interest
in the land on which its sign was located and
was not entitled to exhibit its sign there.
[The plaintiff] was given a reasonable time to
remove the sign. By not doing so, it
effectively abandoned its sign.
See 51C
C.J.S.
Landlord and Tenant § 317(b) (1968).
124 N.C. App. at 624-25, 478 S.E.2d at 251.
In his appeal, Harris contends that
National Advertising:
stands for the principle that where a
billboard is not removed by a tenant within a
reasonable time after the termination of a
lease, the structure is in effect abandoned
and the right of removal is lost. North
Carolina follows the minority view that a
tenant may remove its trade fixture within a
reasonable time after the lease termination.
While we agree with this general statement of law, our decision to
reverse summary judgment in this case is guided by our conjunctive
consideration of this Court's opinion in
Oil Co. v. Riggs, 13 N.C.
App. 547, 186 S.E.2d 691 (1972). In that case, this Court
discussed the right of a tenant or lessee to remove trade fixtures
following the expiration of the leasehold.
Riggs noted that trade
fixtures are distinct from the land and are treated as belonging to
the tenant.
Id. at 552, 186 S.E.2d at 694-95. Even trade fixtures
attached to the land belong to the tenant and may be removed during
the lease term, and sometimes even following the lease expiration.
Id. at 552, 186 S.E.2d at 695. Quoting at length from
Railroad v.
Deal, 90 N.C. 110 (1884), this Court in
Riggs recognized that some
authorities presume that a tenant's failure to remove its attachedtrade fixtures within the lease term effectively relinquishes or
abandons any such right of removal:
“in favor of the landlord, but such
presumption cannot arise, where the facts and
circumstances, and the nature of the property,
and the uses to which it is devoted, combine
to rebut such a presumption. If the tenant
yields possession and leaves the structure
standing, this fact may be
evidence . . . of
abandonment of it[.]”
Riggs, 13 N.C. App. at 553, 186 S.E.2d at 695 (quoting
Deal, 90
N.C. at 113) (emphasis added).
Reading
National Advertising and
Riggs together, we conclude
that the question of whether a tenant has abandoned a trade fixture
by failing to remove it prior to the expiration of the lease term
or thereafter requires a close examination of the particular facts
and circumstances at issue, in order to determine whether the
tenant failed to remove the trade fixture within a
reasonable time.
A tenant's failure to remove the trade fixture upon the expiration
of the lease term may be
evidence of abandonment, but is not in
itself conclusive. For instance, in
National Advertising the
Department of Transportation wrote to the plaintiff three times
between March and July 1999 warning that it would remove the sign
if the plaintiff failed to do so. This Court recognized that the
plaintiff was required to remove its sign within a reasonable time
after the expiration of the lease agreement, and concluded that the
plaintiff “had ample opportunity to do so but
refused.” 124 N.C.
App. at 626, 478 S.E.2d at 251 (emphasis added). “By
refusing to
remove its sign within a reasonable time after termination of the
tenancy, [the plaintiff] effectively abandoned the sign.”
Id.(emphasis added). Thus, despite the fact that the sign was a trade
fixture, there was ample undisputed evidence in
National
Advertising to support the legal presumption that the plaintiff
abandoned its sign.
In contrast, in the case at bar there is no evidence of record
that Lamar Company ever
refused to remove its sign or
intended to
abandon it. The fact that Lamar Company failed to remove it prior
to the termination of the lease on 15 August 1999 may be
evidence
of abandonment, but not conclusively so. Indeed, Johnson's 28 June
1999 letter to Jesse Harris indicated Lamar Company's intent to
remove the signs “on or before September 29th, 1999.” In his
affidavit supporting Lamar Company's summary judgment motion,
Johnson affied that Lamar Company's intent was to remove the signs
if a new lease agreement could not be negotiated with the Harrises.
Johnson further indicated in his affidavit that the occurrence of
Hurricane Floyd in early September 1999 hindered its ability to
remove the signs. In its answer to plaintiff's complaint, Lamar
Company denied Clark Harris' allegation that it never attempted to
remove the signs.
Additionally, there is evidence that there were ongoing
negotiations for a new lease agreement extending well after the
lease expiration on 15 August 1999. Johnson affied that in late
September or early October 1999, he conversed with Jesse Harris
concerning a new lease agreement at double the prior rate; Johnson
then memorialized this conversation in a letter to Jesse Harris
dated 8 October 1999. Although plaintiff states in his brief that“the record shows no evidence of ongoing negotiations between the
parties,” the record includes a letter from attorney Kenneth
Haywood (plaintiff's attorney in this matter) on behalf of Jesse
Harris to Johnson dated 14 October 1999, responding to Johnson's 8
October 1999 letter. Therein, Haywood states that “Mr. [Jesse]
Harris has indicated to me that he [Jesse Harris] asked you [Lloyd
Johnson] to give him your highest offer for rental[.]”
These facts and circumstances indicate at the very least some
confusion concerning the true owner of the property upon which the
signs are located. Although plaintiff affied in support of his
summary judgment motion that he is the sole owner of the property,
the leases list both plaintiff and Jesse Harris as the landowners.
Furthermore, plaintiff's complaint (prepared and signed by Kenneth
Haywood) states that plaintiff “owns real property . . . which is
the subject of this Complaint”; plaintiff is not alleged to be the
sole owner of said property. Additionally, the complaint
acknowledges that both plaintiff and Jesse Harris met with Johnson
on 17 June 1999 to discuss the leases. Defendant Lamar Company's
answer indicates its belief that both plaintiff and Jesse Harris
own the property in question. The confusion over the correct
property owner(s) may have contributed to the delay in removing the
signs.
There is also evidence that there were continuing negotiations
between Lamar Company and Jesse Harris (perhaps as a result of the
ownership confusion) following the expiration of the leases on 15
August 1999 concerning new leases for the signs. Notably, there isalso evidence that, prior to Lamar Company's intended removal date
of 29 September 1999, Hurricane Floyd intervened and may have
hindered Lamar Company's ability to remove the signs.
Unlike
National Advertising, we cannot conclude in the instant
case as a matter of law that there is ample undisputed evidence
that Lamar Company intended to abandon its signs. There was never
any outright refusal by Lamar Company to remove the signs. Rather,
at all times Lamar Company indicated and communicated its intent to
remove the signs. Whether Lamar Company's failure to do so
resulted in its abandonment of the signs requires a determination
whether Lamar Company failed to remove them within a reasonable
time, which depends upon the surrounding facts and circumstances.
[W]hat is [a] “reasonable time” is generally a
mixed question of law and fact, not only where
the evidence is conflicting, but even in some
cases where the facts are not disputed; and
the matter should be decided by [a] jury upon
proper instructions on the particular
circumstances of each case. [Citations
omitted.]
The time, however, may be so short or so long
that the court will declare it to be
reasonable or unreasonable as a matter of law.
Whether the question of reasonable time is one
of fact or law must “from the very nature of
things” depend upon the circumstances of each
particular case[.]
Claus v. Lee, 140 N.C. 552, 554-55, 53 S.E. 433, 434-35 (1906).
The cumulative evidence before us raises a genuine issue of
material fact whether Lamar Company failed to remove the signs
within a reasonable time. Accordingly the trial court's entry of
summary judgment in Clark Harris' favor was improper and is hereby
vacated, and the matter remanded to the trial court. Vacated and remanded.
Judges McCULLOUGH and BIGGS concur.
Report per Rule 30(e).
Footnote: 1