California Out of Home attorney Richard Hamlin of the Hamlin|Cody law firm comments on Billboard Permit rights run with the land.  We are especially interested in his thoughts on tortious interference.  This is an issue for all of you who talk to landlords or who are approached by landlords who have an existing lease with another out of home company.

In California, billboard permits do not “run with the land.” Instead, the permit belongs to the applicant, unless the applicant notifies Caltrans of a transfer. The applicant is usually the operator. In most (but not all) billboard leases, the lease identifies the operator as the owner of the sign and related permits. The contract terms will determine who owns the permit and the sign.

When a non-conforming sign is removed, it generally stays removed (subject to an exception that allows relocation in eminent domain cases). I am unaware of any local jurisdiction that allows replacement of non-conforming signs that have been removed or destroyed. In some cases, modifying a non-conforming sign will change the sign from “legal, non-conforming” to illegal.

Tortious interference with contract requires 1) a valid contract between plaintiff and a third party; and 2) defendant’s knowledge of the contract; and 3) defendant’s intentional act designed to induce a breach or disruption of the contractual relationship; and 4) an actual breach or disruption of the relationship; and 5) resulting damage.

As applied to a billboard lease, if an operator offers more rent, to take effect at the expiration of an existing lease, there is no tortious interference. If an operator persuades a property owner to cancel an existing lease before the term ends, that is tortious interference.

As always, “it depends” is the only correct answer to any legal question. From the summary in your article, it looks like the lease that Lamar acquired did not specify who owned the permit or the signs. It also looks like the lease allowed the property owner to terminate the lease at will.

Another factor is the appellate court’s statement that, “there is nothing in the record to indicate that Victor employed improper means to replace Lamar’s leases.” If Victor had used “improper means” Lamar might have a case for interference with prospective economic advantage, but that’s a different topic.

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