The case involves Clear Channel Outdoor, Inc. (Appellant) appealing a decision regarding the ownership of an advertising sign structure, specifically the "Poplar Sign," located at 4957 Poplar Avenue, Memphis, Tennessee. The trial court ruled that the Lessor, A Quality, Inc. d/b/a Mr. Pride (Appellee), is the owner of the sign structure as per the lease agreement established on February 16, 1993. Clear Channel argues that the lease's language supports their claim of ownership. Key provisions of the lease include:
1. The Lessor leases the sign boards to the Lessee (Clear Channel) as detailed in an attached exhibit.
2. The Lessor may terminate the lease with 15 days' notice if development necessitates the removal or alteration of the sign.
3. The Lessee is responsible for maintaining the sign structure and may place advertisements on it.
4. Equipment installed by the Lessee remains their personal property and must be removed within 30 days after lease expiration.
5. The Lessor has the option to purchase the Lessee's materials at depreciated value upon lease termination, not exceeding $1,000.
6. If the lease is terminated and the Lessor declines to purchase the materials, the Lessee must restore the premises at no cost to the Lessor within 30 days.
7. The Lessee cannot modify the sign structure without the Lessor's written consent.
The Court affirmed the trial court's decision, ruling in favor of the Appellee and remanding the case.
Lessor guarantees ownership and authority over the premises involved in the Lease Agreement. Lessee is responsible for all costs related to the relocation, maintenance, and removal of materials and equipment as specified in Exhibit A, including obtaining necessary permits. The Lease term was from September 15, 1993, to September 14, 2003. On September 12, 2003, Clear Channel filed a Verified Complaint seeking to prevent Mr. Pride from altering the Poplar Sign and to clarify ownership rights under the Lease. Mr. Pride responded with an Answer and a Counter-Complaint, claiming ownership of the Poplar Sign and seeking damages for lost advertising revenue due to Clear Channel’s actions. A Motion for Default Judgment was filed by Mr. Pride due to Clear Channel's delayed response, but Clear Channel later answered the Counter-Complaint, reiterating its claim of ownership. The trial court separated the issues of ownership and damages, leading to a hearing on March 9, 2006. On March 29, 2006, the court ruled that Mr. Pride has sole ownership of the sign structure at 4954 Poplar Avenue, making its decision final under Tenn. R. Civ. P. 54.02. Clear Channel appeals, questioning the trial court's ruling on ownership. Mr. Pride raises issues regarding Clear Channel’s ability to introduce new matters on appeal, the court's consideration of unsupported arguments, and the exclusion of testimony related to the 1993 Lease Agreement. Mr. Pride was granted leave to amend his Answer based on new interpretations of Memphis zoning ordinances. The interpretation of the written agreement is a legal issue, subject to de novo review, with the intention of the parties being the central focus in contract interpretation.
In Winfree v. Educators Credit Union, the court emphasized that contract interpretation should prioritize the parties' expressed intentions, using common meanings of terms. A contract is to be enforced as written in the absence of fraud or mistake, even if its terms appear harsh. Ambiguity in contracts cannot be presumed from differing interpretations by the parties, nor can courts create ambiguities that do not exist. The parties in this case acknowledged the 1993 Lease as authoritative, agreeing to adhere to its terms while allowing certain definitions from Larry Quas’s deposition regarding specific industry terms. Quas clarified that "sign structure" refers to the billboard, including its pole and facing, and detailed the components of equipment and materials associated with the lease. Notably, Naegele Outdoor Advertising Company, Clear Channel's predecessor, is designated as the Lessee, indicating that Clear Channel does not outright own the leased property. The Lease specifies that the property includes "sign boards on the Premises," and the Lessor, Mr. Pride, confirmed ownership and authority to lease the premises.
The "Premises" under the Lease is defined as the area occupied by the existing sign structure at Mr. Pride Car Wash, located at 4954 Poplar Avenue, Memphis, Tennessee. "Sign structure" refers specifically to the steel framework. The Lease establishes that Mr. Pride is the owner of the sign structure, while Clear Channel owns only the equipment and materials on it. These items remain Clear Channel's personal property but are subject to Mr. Pride's right to purchase them upon Lease expiration. The Lease contains no indication of Clear Channel owning the sign structure itself. Based on the entirety of the Lease, Exhibit A, and Mr. Quas's deposition, it is concluded that Mr. Pride rightfully owns the Poplar Sign, leading to the dismissal of Mr. Pride's separate claims. The trial court's Order is affirmed, and the case is remanded for further proceedings. Costs of the appeal are assigned to Clear Channel Outdoor, Inc. Clear Channel's argument regarding the absence of ownership language in relation to the Poplar Sign is deemed weak, as the relevant language pertains only to a different sign located on Summer Avenue.
