Summary 2009 WY 96

Summary of Decision issued August 11, 2009

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: Lamar Advertising v. Larry Nicholls, LLC

Citation: 2009 WY 96

Docket Number: S-08-0188

Appeal from the District Court of Sweetwater County, the Honorable Jere A. Ryckman, Judge.

Representing Appellant Lamar: Timothy M. Stubson and Orintha E. Karns of Brown, Drew & Massey, LLP, Casper, Wyoming.

Representing Appellee Nicholls, LLC: Frank R. Chapman of Chapman Valdez, Casper, Wyoming.

Facts/Discussion: Lamar appealed from the district court’s order granting summary judgment in favor of Nicholls, LLC. The district court ruled that a lease allowing Lamar to maintain a billboard on the Nicholls, LLC property was void as an unreasonable restraint on alienation.
The district court applied the three factors from the reasonableness test from Hartnett v. Jones. The three factors included: the purpose for which the restraint was imposed; the duration of the restraint and the method of determining the price. Lamar’s lease was a servitude that had the potential effect of restraining alienation by limiting the value of use of the property. It amounted to an indirect restraint on alienation. The rational justification test set out in § 3.5 of the Restatements (Third) Property: Servitudes should have been applied to determine whether the lease was invalid. The lease could have been canceled without penalty if the lessor gave notice thirty days prior to the end of the lease term that it did not wish to renew the lease. Lamar’s testimony provided valid business reasons for the lease terms. The explanation established a rational justification for the servitude. In addition, the lease included a provision that allowed Nicholls, LLC to terminate the leasehold if it obtained a permit to construct a building on the site. The district court’s conclusion that the lease unreasonably diminished the value of the property because Nicholls, LLC was not free to improve it by building a structure was apparently based solely upon Nicholls, LLC representation that a Rock Springs city ordinance prohibited it from obtaining a building permit while the sign was located on the property. However, the record did not contain the ordinance or any testimony that an application for a building permit had been denied.

Conclusion: The Court applied the correct legal standard and concluded the servitude did not pose an improper restrain on alienation and the lease was valid.

Reversed.

J. Kite delivered the decision.

Link: http://tinyurl.com/nzly7n .

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