Creative Displays, Inc. v. South Carolina Highway Department

Lewis, Chief Justice

(dissenting) :

The order of the lower court correctly disposes of all issues in this appeal; and, with certain minor changes, I would adopt it as the judgment of this Court. It expresses my views and will be reported.

The order of the lower court as directed to be reported follows:

The plaintiff in this action seeks compensation for an outdoor advertising sign which was located on property over which the defendant acquired a right-of-way easement. The case was tried without a jury by agreement of the parties on April 27, 1977. Most ot the facts in the case were stipulated; included was an agreement that the amount of damages which plaintiff would be entitled to recover if successful would be Twenty Thousand ($20,000.00) Dollars.

The plaintiff is engaged in the outdoor advertising business with outdoor billboards or signs in various locations. The billboard in question was located on the real estate formerly owned by Mrs. J. M. Conway, Jr., on the eastern side of North Pleasantburg Drive in Greenville County. It was a large double faced sign mounted on six steel beams which were anchored into the ground for a depth of ap*76proximately eight feet in concrete. In order to remove the sign it had to be dismantled and the steel beams had to be cut with a torch.

The sign location was leased from Mrs. Conway by Miller Outdoor Advertising, Inc. on August 15, 1969 and a printed form lease was executed. Plaintiff acquired the assets of Miller several years ago. The lease term was five years with provisions for annual extensions for up to five additional years. The lease provided that the structures placed on the premises by the Lessee would remain the property of the Lessee. The lease also contained the following typed language : “If property is sold or developed, advertising structures will be removed within thirty (30) days from written notice.”

The owner subsequently sold the land and the plaintiff continued to pay rental payments to the new owners, but no new form lease was executed. On July 29, 1974 the owners of the property conveyed a right-of-way to defendant over the property on which the outdoor sign of plaintiff was located. The defendant thereafter notified the plaintiff to remove its sign. Plaintiff refused to remove the sign and it was subsequently dismantled by the defendant, removed and placed in storage. The property on which the sign was located was acquired by defendant for highway construction purposes and the project was funded in part by Federal funds.

The plaintiff contends that it is entitled to be compensated for the value of the sign. The defendant denies that plaintiff is entitled 'to payment but offers plaintiff the right to pick up the dismantled sign. Plaintiff bases its claim to compensation on the terms of the Federal Uniform Relocation Assistance and Real Property Acquisition Act, Public Law 91-646 (January 1971), 42 U. S. C. A. Sections 4601, et seq., and agreements and representations between the defendant and the Federal Highway Administration. The defendant contends that the billboard was not a fixture and is, therefore, not compensable.

*77The stated -purpose of the Federal Uniform Relocation Assistance and Real Property Acquisition Act is to provide a uniform policy on real-property acquisition practices in all cases involving the use of Federal funds. 42 U. S. C. A. Section 4651. The Act refers to acquisitions by Federal agencies. However 42 U. S. C. A. Section 4628 provides that State agencies act as agents for Federal agencies in Federally funded projects.

42 U. S. C. A. Section 4652 provides as follows:

(a) Notwithstanding any other provision of law, if the head of a Federal agency acquires any interest in real property in any State, he shall acquire at least an equal interest in all buildings, structures, or other improvements located upon the real property so acquired and which he requires to be removed from such real property or which he determines will be adversely affected by the use to which such real property will be put.

(b) (1) For the purpose of determining the just compensation to be paid for any building, structure, or other improvement required to be acquired by’Subsection (a) of this section, such building, structure, or other improvement shall be deemed to be a part of the real property to be acquired notwithstanding the right or obligation of a tenant, as against the owner of any other interest in the real property, to remove such building, structure, or improvement at the expiration of his term, and the fair market value which such building, structure, or improvement contributes to the fair market value of the real property to be acquired, or the fair market value of such buildings, structure, or improvement for removal from the real property, whichever is the greater, shall be paid to the tenant therefor. (2) Payment under this subsection shall not result in duplication of any payments otherwise authorized by law. No such payment shall be made unless the owner of the land involved disclaims all interest in the improvements of the tenant. In consideration for any such payment, the tenant shall assign, transfer, and release to the United States all his right, title, and *78interest in and to such improvements. Nothing in this subsection shall be construced to deprive the tenant of any rights to reject payment under this subsection and to obtain payment for such property interest in accorlance with applicable law, other than this subsection.

42 U. S. C. A. Section 4655 provides that a Federal agency shall not approve a grant to any program unless the State agency involved gives its assurance that in acquiring real property it will be guided, to the greatest extent practicable under State law, by the land acquisition policies of Sections 4651 and 4652. The defendant, by letter to the Federal Highway Administration dated June 23, 1972, gave the assurances required by 42 U. S. C. A. Section 4655.

The defendant does not contend that the Act does not apply. However, it is the defendant’s position that its assurance to the Federal Highway Administration does not require the defendant to compensate the plaintiff for the sign. The defendant points out that its assurance was to “be guided to the greatest extent practicable under State law”. The defendant further argues that the sign was personal property and not compensable under State law. The plaintiff does not admit that the sign is personal property but contends that such a determination is not controlling under the applicable provisions of the Act. It is further contended by defendant that the lease interest of the plaintiff can be terminated at any time within thirty days written notice and that such notice was duly given.

The defendant did give thirty days written notice to the plaintiff to cancel the lease and remove the sign. However, Section 42 U. S. C. A. 4652(b) (1) provides:

. . . such . . . structure . . . shall be deemed to be a part of the real property to be acquired notwithstanding the right or obligation of a tenant ... to remove such . . . structure . . . at the expiration of his term, . . .

It is clear from the stated purposes of the Act that Congress intended the real property acquisition policies sections *79to bring about uniform nationwide procedures for the taking of property by the Federal government or State agencies receiving Federal assistance. Will-Tex Plastics Mfg. Inc. v. Department of HUD, 346 F. Supp. 654 (E. D. Pa. 1972) ; Whitman v. State Highway Commission of Missouri, 400 F. Supp. 1050 (W. D. Mo. 1975).

The case of Whitman v. State Highway Commission of Missouri, supra, addresses the issues raised in this case. It is a thorough and well reasoned opinion in support of the plaintiff’s position.

There were numerous signs involved in the Whitman case and some had written leases and others did not. The defendant, in that case, contended that the plaintiff was not a tenant within the meaning of the Act with respect to certain signs. The Court rejected this argument and stated in a footnote as follows:

The Commission has contended that these structures are not compensable under Section 302(b)(1) because they were not on the property pursuant to valid leases for a set term of years. This contention is without merit. Section 302(b)(1) does not require that structures on property acquired be present pursuant to a valid lease, but rather merely requires that such structures be present pursuant to some sort of landlord-tenant relationship between the original property owners and the owner of the structure. Regardless of the specific type of tenancy created by any of the agreements between plaintiffs and the original property owners with respect to plaintiffs’ structures, plaintiffs had erected and were maintaining these structures with the consent of the original property owners, and were paying to the property owners a fee for this privilege. As such, plaintiffs were tenants within the meaning of Section 302(b) (1).

The plaintiff had its sign on the property under a valid landlord-tenant arrangement and was paying rental pursuant to this arrangement.

*80The court therefore finds that the defendant’s First Affirmative Defense is without merit and that the cancellation of the lease by the defendant would not bar plaintiff’s right of recovery.

The Second Affirmative Defense alleges that the sign was not a fixture and, hence, not compensable. Section 302(a) of the Act, 42 U. S. C. A. 4652(a), reads as follows:

Notwithstanding any other provision of law, if the head of a Federal agency acquires any interest in real property in any State, he shall acquire at least an equal interest in all buildings, structures, or other improvements located upon the real property so acquired and which he requires to be removed from such real property or which he determines will be adversely affected by the use to which such real property will be put.

The Act makes no distinction as to whether an item is a fixture or not a fixture in order to be compensable. It refers to “building, structures, or other improvements.” The Act further makes it clear that the “right or obligation” to remove the structure does not affect the tenant’s right to be compensated for the structure. The court finds that the sign or billboard in question is the type “structure” or “improvement” referred to in the Act. As stated by the court in the Whitman case (supra):

It would appear that an outdoor advertising structure would be particularly that type structure or improvement susceptible to removal from the property by the tenant a,t the end of his term.

The court finds that plaintiff’s sign in this case is the type structure or improvement covered under the Act.

Defendant argues that if South Carolina law did not require payment for such sign prior to the Act, then it would not be compensable at this time in view of the wording of the assurances required and given. It is the position of the defendant that the language “to the greatest extent practicable under State law” would mean no more than what *81was then required under State law. This is not the interpretation of this Court. To attach such a meaning to this provision would render it totally useless and ineffective. The court in Whitman v. State Highway Commission of Missouri, supra, concluded that if the State law did not prohibit such policies, then the State is required to comply. In Beaird-Poulan, Inc. v. Department of Highways, State of Louisiana, 497 F. (2d) 54 (5th Cir. 1974), the court stated:

It is beyond doubt that in the existing state of the law Louisiana was not required to pay relocation costs. As we view the issue, however, this did not necessarily mean that, in the words of the federal relocation statute, it was unable to do so.

No authority has been cited which would indicate that the defendant could not comply with the provisions of the Act. The court finds that compliance with the Act is required.

The court finds that the plaintiff is entitled to be compensated by the defendant for the sign in the agreed upon amount of Twenty Thousand and no/100 ($20,000.00) Dollars.

For the foregoing reasons I dissent..