Abest Holdings v. Fort Worth Mar-G, Ltd.

ABEST HOLDINGS, LLC, Appellant v. FORT WORTH MAR-G, LTD, Appellee

No. 10-18-00161-CV

STATE OF TEXAS IN THE TENTH COURT OF APPEALS

June 2, 2021

From the 249th District Court Johnson County, Texas

Trial Court No. DC-C201700263

MEMORANDUM OPINION

For thirty years or more, Fort Worth Mar-G, Ltd. (FWMG) operated a commercial billboard on a certain parcel of land. During that time, the ownership of the parcel of land was transferred among various individuals and entities until the parcel was eventually purchased by Abest Holdings, LLC (Abest). After Abest acquired the parcel, a dispute arose over the billboard, resulting in FWMG suing Abest. Following a bench trial, the trial court rendered judgment in favor of FWMG. Abest is appealing the trial court's judgment in four issues.

BACKGROUND

In 2003, Floyd Watkins, the then owner of the parcel of land, FWMG, and Bil-Mag, Inc. (Bil-Mag), entered into an agreement entitled "Commercial Billboard Venture Agreement" (the Billboard Agreement) as part of a settlement of prior litigation between Watkins and FWMG regarding the billboard. The Billboard Agreement provides in relevant part:

1. Purpose. The Parties form this Agreement to govern the leasing of a commercial billboard located, according to utility records, at 2400 I-35W South, approximately 9 miles south of Burleson, Texas in Johnson County, Texas, which billboard is owned by Fort Worth Mar-G, Ltd., constructed upon land owned by Floyd W. Watkins and leased for that purpose to Fort Worth Mar-G, Ltd., and is usable for advertising purposes pursuant to a State of Texas issued permit owned and held by Bil-Mag, Inc. It is the intent of the parties that each shall receive a 1/3 share of all net advertising rentals received by them from the billboard, as defined more specifically hereinbelow.

2. Contributions.

A. Fort Worth Mar-G, Ltd. will provide the billboard structure, and will be responsible for locating and maintaining an advertiser therefore, as well as accounting to the other parties hereto for revenue and expenses.

B. Floyd W. Watkins will provide the land upon which the billboard is located, being a portion of the land described in Exhibit "A" attached hereto, more particularly described as that small tract of land in the southeast corner of the property as set out on page 2 of the attached exhibit.

C. Bil-Mag, Inc. will provide the Outdoor Advertising Sign Permit concerning the billboard location.

3. Responsibilities of Each Party.

A. Fort Worth Mar-G, Ltd. agrees to maintain the billboard in good condition, and to use best efforts to secure advertising atthe maximum rentals possible. Fort Worth Mar-G, Ltd. further agrees to . . . properly account to each party as is more specifically set forth herein. . . .

B. Floyd W. Watkins agrees to lease the land upon which the billboard is situated, with his payments to be received under this Agreement to served [sic] as all rentals therefor. . . .

C. Bil-Mag, Inc. agrees to take all steps, and bear all expenses, to ensure that the license concerning the subject billboard is at all times in full force and effect.

The parties hereto further agree that the real property provided by lease by Floyd W. Watkins hereunder is to be used solely for the operation and maintenance of the billboard the subject of this Agreement. The other parties hereto, or their agents or employees, shall have the right to enter the property at reasonable times to post, paint, illuminate and maintain the structure and the advertising thereon.

. . . .

5. Term. This Agreement shall be for a term of (99) ninety-nine years, commencing on the date of execution hereof. This Agreement shall terminate and the obligations of each of the parties hereunder shall be deemed completed on the happening of any of the following events: (a) the mutual written asset [sic] of each of the parties hereto, or their successors in interest; (b) the billboard is no longer usable for commercial purposes or the parties are prevented by a present or future law, regulation or ordinance from maintaining a billboard on the premises, or (c) the billboard structure is destroyed through no fault of the parties and the parties determine not to repair it.

. . . .

8. . . .

The parties hereto specifically covenant and agree that this Agreement shall be binding upon and inure to the benefit of the parties, their heirs, successors, assigns and personal representatives.

The Billboard Agreement was not recorded in the real property records.

On December 9, 2005, Watkins sold his interest in the parcel of land to Frank's Casing Crew and Rental Tools, Inc. (FCC). As part of the conveyance, Watkins and FCC entered into an agreement entitled "Indemnity Agreement" (the Indemnity Agreement) that acknowledged the conveyance to FCC and recited that Watkins retained all rights, obligations, benefits, costs, and expenses relating to the billboard and the Billboard Agreement. The Indemnity Agreement further allowed the parties to the Billboard Agreement access to the billboard for maintenance and contained a provision in favor of FCC against Watkins for any claims arising out of the Billboard Agreement or the billboard's existence, construction, maintenance, repair, or damage. The Indemnity Agreement was likewise not recorded in the real property records.

FCC sold its interest in the land on August 14, 2013 to Mosing Ventures, L.L.C. (Mosing), and Mosing sold its interest in the land to Abest on August 8, 2016. The deed executed by Mosing to Abest contained several exceptions to the conveyance and warranty by the grantor, Mosing, including the "[r]ights of third parties in and to the billboard shown in the Southeast corner of the subject property."

FWMG thereafter sued Abest for breaching the Billboard Agreement by refusing to grant FWMG access to the billboard or to allow FWMG the right to enter the property to post, paint, illuminate, and maintain the billboard. FWMG further sought a declaratory judgment against Abest that (1) FWMG owns the billboard, (2) Abest is a successor in interest to the Billboard Agreement and Indemnity Agreement and, as such, is bound by their terms, and (3) FWMG has a ninety-nine-year lease on the property and Abest is obligated to allow FWMG access to the property to post, paint, illuminate, andmaintain the billboard. Alternatively, FWMG claimed an easement by estoppel to access the billboard. Finally, FWMG sought a permanent injunction enjoining Abest from asserting any ownership in or any control over the billboard and from denying FWMG access to the property to perform necessary maintenance and repairs to the billboard.

Abest filed an answer denying FWMG's allegations and asserting a counterclaim against FWMG for trespass to try title. Abest further sought a declaratory judgment against FWMG that (1) the billboard is a fixture to the property, (2) the Billboard Agreement did not create a lease of the property, and (3) Abest did not have actual or constructive knowledge of the Billboard Agreement or Indemnity Agreement before its purchase of the property.

After a bench trial, the trial court entered a final judgment as follows:

• it declared FWMG the owner of the billboard;

• it declared that Abest is a successor in interest to Watkins under the Billboard Agreement and a successor in interest to FCC under the Indemnity Agreement and, as such, is bound by the terms of those agreements;

• it declared that FWMG has a leasehold interest in the real property on which the billboard is located pursuant to the Billboard Agreement, which includes the right of ingress and egress across the property at reasonable times for the purpose of posting, painting, illuminating, and maintaining the billboard;

• it assessed actual damages of $2,388.75 and attorney's fees of $53,706.92 in favor of FWMG against Abest; and

• it issued a permanent injunction against Abest, prohibiting alterations or removal of the billboard and allowing FWMG access to the billboard for maintenance.

The trial court also entered the following findings of fact and conclusions of law:

FINDINGS OF FACT

. . . .

2. . . . FWMG is the owner of the Billboard (the "Billboard") located at the southeast corner of the property commonly known as 2324 South Burleson Boulevard (I-35W), Burleson, Texas 76028 (the "Property"); specifically described as follows:

[Metes and bounds description of the Property].

3. . . . Abest has no ownership interest in the Billboard.

4. . . . Abest is the owner of the Property.

5. . . . [The Billboard Agreement] between FWMG, Abest's predecessor in interest to the Property Floyd W. Watkins, and Bil-Mag, Inc. is a valid, enforceable contract which grants FWMG an exclusive possessory leasehold interest in the portion of the Property on which the Billboard is located.

6. . . . [T]he Billboard Agreement grants FWMG the right of ingress and egress across the Property to post, paint, illuminate, and maintain the structure of the Billboard and advertising thereon.

7. . . . [T]he Billboard Agreement is binding upon all successors in interest to the Property, including but not limited to Abest.

8. . . . [The Indemnity Agreement] between Floyd W. Watkins and Frank's Casing Crew and Rental Tools, Inc. is a valid, enforceable contract.

9. . . . [T]he Indemnity Agreement is binding upon all successors in interest to the Property, including but not limited to Abest.

10. . . . Abest had actual notice of FWMG's rights in and to the Billboard and the Property.

11. . . . Abest had constructive notice of FWMG's rights in and to the Billboard and the Property.

12. . . . Abest failed to conduct a reasonable inquiry regarding third-party rights in and to the Billboard and the Property.

13. . . . Abest failed to comply with the Billboard Agreement by denying FWMG access to the Billboard.

14. . . . FWMG sustained actual damages in the amount of $2,388.75 from lost advertising rental payments as a result of Abest's failure to comply with the Billboard Agreement.

15. . . . Abest's predecessors in interest to the

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