What is the litigation takeaway from Lamar Advantage Outdoor Co., L.P. v. LaCore Enterprises, LLC, et al.?

In complex property divisions, practitioners must perform exhaustive due diligence for 'poison pill' clauses like rights of first refusal or purchase options; a failure to provide mandated notice to third-party lessees during a post-divorce sale or transfer can lead to litigation that clouds the title and strips the community asset of its value.

What is the summary of Lamar Advantage Outdoor Co., L.P. v. LaCore Enterprises, LLC, et al.?

A billboard lessee (Lamar) sued a property owner and a third-party purchaser for breach of contract and conversion after the owner sold the property without providing a contractually mandated 'desire to sell' notice. This notice was a condition precedent to the lessee's 30-day window to exercise an option for a perpetual easement. The Dallas Court of Appeals analyzed the lease's plain language and determined that because the lessor failed to provide the required notice, the lessee's exercise window never expired. The court reversed the trial court's summary judgment, holding that genuine issues of material fact regarding the breach and the lessee's right to possession precluded judgment as a matter of law.

Does a tenant waive an option to purchase an easement if the landlord fails to provide the contractually required notice of a pending sale?

Under Texas law, a tenant’s failure to exercise a purchase option within a specified timeframe does not constitute a waiver if the landlord failed to provide the contractually required notice of the intent to sell. If a lease agreement makes the tenant's option period contingent upon receiving notice from the lessor, the clock to exercise that option does not begin to run until the lessor strictly complies with that notice requirement.

When is a declaratory judgment counterclaim considered redundant to a breach of contract claim for the purpose of awarding attorney's fees?

A declaratory judgment counterclaim is generally considered redundant if it presents no new controversies and merely mirrors the issues already raised in the underlying breach of contract claim. Under the Texas Uniform Declaratory Judgments Act (Civil Practice and Remedies Code Chapter 37), a party may not use a 'mirror-image' counterclaim solely as a vehicle to recover attorney's fees for resolving disputes already before the court.

Can a party seek specific performance to enforce an option to purchase a perpetual easement under Texas law?

Specific performance is an available and appropriate remedy for the breach of a contract to convey an interest in real property, which includes the grant of a perpetual easement. When a lessee validly exercises an option to purchase an easement and the owner refuses to execute the conveyance, Texas courts may order specific performance to enforce the contractual right.

Can a commercial tenant maintain a cause of action for conversion of a billboard in Texas?

Yes, a commercial tenant may maintain a cause of action for conversion if a property owner takes unauthorized dominion and control over a billboard, which is typically classified as personal property. In Texas, evidence that a landlord fenced off a billboard and used it for their own purposes can create a material fact issue sufficient to defeat a motion for summary judgment on a conversion claim.

What is the evidentiary standard required for a nonmovant to defeat a no-evidence motion for summary judgment in Texas?

To defeat a no-evidence motion for summary judgment in Texas, the nonmovant must produce 'more than a scintilla' of probative evidence to raise a genuine issue of material fact on the challenged elements. If the evidence would allow reasonable and fair-minded people to differ in their conclusions regarding a breach of contract or conversion, the motion must be denied.

What is the standard for a Texas appellate court to reverse a summary judgment on a breach of contract claim involving disputed lease terms?

A Texas appellate court reviews a trial court’s grant of summary judgment de novo, viewing all evidence in the light most favorable to the nonmovant. If the record reveals a genuine issue of material fact regarding whether a lease was still in effect or whether a party breached a notice provision, the appellate court must reverse the summary judgment and remand the case for further proceedings.

Lamar Advantage Outdoor Co., L.P. v. LaCore Enterprises, LLC, et al.

Lamar Advantage Outdoor Co., L.P. v. LaCore Enterprises, LLC, et al., 05-23-00210-CV, March 11, 2025.

On appeal from 199th Judicial District Court, Collin County, Texas.

Synopsis

The Dallas Court of Appeals reversed a summary judgment, holding that a property owner’s failure to provide a contractually mandated notice of a "desire to sell" preserved a lessee’s right to exercise a perpetual easement purchase option even after the property was conveyed to a third party. The court determined that genuine issues of material fact regarding breach of contract and conversion precluded summary judgment because the lack of notice prevented the lessee from timely exercising its rights prior to the sale.

Relevance to Family Law

In the context of complex property divisions, specifically those involving closely held businesses or commercial real estate, this ruling serves as a warning regarding "poison pill" options and rights of first refusal. When a divorce decree mandates the sale of a community asset, or when one spouse is awarded a business entity with underlying real estate, the failure to strictly adhere to notice requirements in third-party leases can lead to post-decree litigation that unvravels the division. If a spouse conveys property in violation of a "desire to sell" notice provision, the community estate—or the spouse receiving the asset—may face conversion claims and specific performance demands from third-party lessees that effectively cloud the title or strip the asset of its value.

Case Summary

Fact Summary

In 2006, Lamar Advantage Outdoor Company ("Lamar") entered into a lease for a billboard on property in Melissa, Texas. The lease contained a critical "Paragraph 11," which granted Lamar an option to purchase a perpetual easement for a price of six times the annual rent if the lessor "desires to sell or otherwise transfer any interest in the property." The lease required the lessor to provide written notification of the "desire to sell," after which Lamar had 30 days to exercise the option. Between 2007 and 2013, the property was transferred multiple times between entities controlled by the Harlow family. Lamar received notice of some transfers but did not exercise its option. In 2018, the Harlow defendants sold the property to LaCore Enterprises ("LaCore"), an outside party. Crucially, the Harlows did not provide Lamar with notice of this sale. LaCore took the position that the billboard lease had expired and demanded Lamar vacate. Upon learning of the sale, Lamar immediately attempted to exercise its perpetual easement option and tendered the purchase price. When LaCore refused, Lamar sued for breach of contract and conversion. The trial court granted summary judgment in favor of the Harlows and LaCore, essentially finding that the option had expired or was not timely exercised.

Issues Decided

Whether the trial court erred in granting summary judgment on Lamar's breach of contract claims against the original lessors and the purchaser.
Whether a fact issue existed regarding Lamar’s conversion claim following the purchaser's interference with the billboard and the base of the sign.
Whether the trial court’s award of declaratory judgment and attorney’s fees to the purchaser was proper given the existence of material fact issues.

Rules Applied

Texas Rule of Civil Procedure 166a(c): Traditional summary judgment is only appropriate when the movant establishes that no genuine issue of material fact exists and they are entitled to judgment as a matter of law.
Contractual Conditions Precedent: When a contract requires notice of a "desire to sell" as a trigger for an option, the failure to provide that notice prevents the 30-day exercise window from closing.
Conversion: A claim for conversion requires the plaintiff to prove ownership or a right to possession of property, and that the defendant exercised dominion or control over that property to the exclusion of the plaintiff’s rights.
Declaratory Judgments Act: Attorney’s fees under the DJA are discretionary and generally inappropriate when the declaratory relief is merely a mirror image of the issues already before the court in a breach of contract action.

Application

The Dallas Court of Appeals focused on the plain language of Paragraph 11. The court noted that the obligation to provide notice of a "desire to sell" was a burden placed squarely on the lessor. Because the Harlows sold the property to LaCore without ever sending the required written notification, Lamar’s 30-day clock to exercise the easement option never started, and certainly never expired. The court rejected the appellees' argument that Lamar "waived" the right by not exercising it during previous inter-family transfers, noting that each "desire to sell" constitutes a new potential trigger. The court also found the conversion claim viable. Because there was a fact issue as to whether Lamar had a right to a perpetual easement (and thus a right to keep the sign on the property), LaCore’s actions—locking a fence around the sign and using it for its own advertising—constituted a potential conversion. The legal story here is one of notice: a party cannot benefit from a contractual deadline (the 30-day waiver) if that party’s own breach (the failure to provide notice) prevented the deadline from ever being triggered.

Holding

The Court of Appeals reversed the trial court's summary judgment on the breach of contract and conversion claims. It held that the Harlow defendants failed to prove as a matter of law that they were not required to provide notice, and because they did not provide notice, they could not argue that Lamar’s right to the easement had lapsed. Additionally, the court reversed the declaratory judgment and the associated award of attorney’s fees. Since the underlying ownership rights of the parties were still in dispute due to the fact issues surrounding the easement option, the trial court could not properly declare that Lamar had no right of possession. The case was remanded for a full trial on the merits.

Practical Application

For family law practitioners, this case highlights the necessity of exhaustive due diligence regarding real property encumbrances. When a client is awarded a commercial property or a business that owns land, counsel must:

Identify any "Desire to Sell" or "Right of First Refusal" triggers in leases or partnership agreements.
Ensure that any transfer of interest mandated by a Divorce Decree or a Partition and Exchange Agreement does not inadvertently trigger a third-party's purchase option.
Advise clients that "secret" sales or transfers of property to family members or new LLCs without notifying lessees can create a perpetual cloud on the title that remains actionable years later.

Checklists

Reviewing Real Estate for "Poison Pills"

Review all active leases for "Option to Purchase" or "Perpetual Easement" clauses.
Check for "Notice of Desire to Sell" triggers.
Verify if past transfers (including those between related entities) were preceded by formal written notice to lessees.
Determine if the Decree-mandated transfer itself constitutes a "transfer of interest" under the lease language.

Mitigating Risk in Property Conveyance

Draft the Decree to specifically address who is responsible for providing notice to third-party interest holders.
Obtain waivers from lessees prior to closing any sale of community real estate.
Audit the "use" of the property (e.g., billboards, cell towers, mineral access) to ensure no unrecorded easement options exist.

Citation

Lamar Advantage Outdoor Co., L.P. v. LaCore Enterprises, LLC, et al., No. 05-23-00210-CV (Tex. App.—Dallas Mar. 11, 2025, no pet. h.).

Full Opinion

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Family Law Crossover

The "Crossover" in Lamar is found in the potential for a third party to "vulture" a community asset during or after a divorce. If a husband and wife own a parcel of land with a billboard, and the lease contains a "Lamar-style" easement option, that option is a dormant liability. If the court orders the property sold to a third party to divide the proceeds, but the spouses fail to give the 30-day "desire to sell" notice to the billboard company, the billboard company can sue for specific performance. This would allow the company to buy a "perpetual easement" for a fraction of the land's value (in Lamar, only 6x the annual rent), potentially tanking the sale price of the land and leaving the community estate with a fraction of the expected equity. Litigators must treat these notice provisions as conditions precedent that can halt the execution of a Decree. ~~f2a3763f-cbb8-4db5-b494-77e0e451d79e~~