Are you liable for damages if a landlord cancels your billboard lease and you put up a billboard nearby which prevents the landlord from putting up a billboard? No, based on U.P.C Inc dba Garco Industrial Park v R.O.A. General, Inc. dba Reagan Outdoor Advertising (“Reagan”). Here are the facts.
- In 1975 Reagan signed a 20 year lease to put a billboard on land which was acquired by Garco Industrial Park (“Garco”).
- Negotiations to renew the lease failed and on February 23, 1995 Garco wrote Reagan that “it had elected to pursue other options” and demanded that Reagan remove its sign by July 8, 1995.
- Reagan removed the sign at grade, entered into a new lease with an adjacent landlord and placed a new sign within 500 feet of Garco’s property. The new sign prevented Garco from erecting a billboard because Utah law requires a 500 foot spacing between outdoor advertising signs.
- Garco sued Reagan alleging trespass for failing to remove the sign foundation, unlawful detainer, intentional interference with potential economic relations and unfair practices.
- A trial court and appeals court rejected Garco’s suit. The court found Reagan did not commit trespass by failing to remove the sign’s foundation because the lease did not require removal of the foundation. The court also found that Reagan did not intentionally interfere with potential economic relations because it was motivated by a desire to maximize its own profits and competitive position by erecting the new sign rather than being motivated solely by a desire to injure Garco. The Court said, “Reagan did exactly what Garco sought to do: contracted to erect a sign. Reagan simply acted before Garco. Thus Garco is unable to show that Reagan’s predominant purpose behind erecting the sign were it did was the result of ill will toward Garco.”
Billboard Insider’s take: Nothing should stop you from attempting to maximizing your profits by constructing a billboard near a terminated lease. You are fine so long as you are pursuing a profit opportunity and not simply trying to injure another party. And avoid language which requires you to remove a billboard structure’s foundation. It saves you money when a lease terminates.
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