                        IN THE SUPREME COURT OF MISSISSIPPI

                                     NO. 2003-CA-01246-SCT
                                     CONSOLIDATED WITH
                                     NO. 2003-CA-01248-SCT

ELLER MEDIA COMPANY

v.

MISSISSIPPI TRANSPORTATION COMMISSION


DATE OF JUDGMENT:                                             5/21/2003
TRIAL JUDGE:                                                  HON. MILLS E. BARBEE
COURT FROM WHICH APPEALED:                                    DESOTO COUNTY SPECIAL COURT
                                                              OF EMINENT DOMAIN
ATTORNEYS FOR APPELLANT:                                      MARK D. HERBERT
                                                              LISA ANDERSON REPPETO
ATTORNEYS FOR APPELLEE:                                       BARRY STUART ZIRULNIK
                                                              HOLLAMAN MARTIN RANEY
SPECIAL ASSISTANT ATTORNEY GENERAL:                           BILLY DON HALL
NATURE OF THE CASE:                                           CIVIL - EMINENT DOMAIN
DISPOSITION:                                                  AFFIRMED - 07/29/2004
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


        BEFORE WALLER, P.J., CARLSON AND DICKINSON, JJ.

        DICKINSON, JUSTICE, FOR THE COURT:


¶1.     Eller Media Company was granted compensation for loss, through eminent domain, of its billboards

and its leasehold interest in two parcels of real property in DeSoto County it leased from Entergy Service,

Inc. (Entergy), and The Prudential Insurance Company (Prudential), respectively. Eller claims that the

compensation awarded by the DeSoto County Special Court of Eminent Domain was inadequate and that
summary judgment for the Mississippi Transportation Commission (MTC) should not have been granted.

We disagree and affirm.

                       FACTUAL AND PROCEDURAL BACKGROUND

¶2.       This dispute is more easily understood and resolved by first establishing a time line of relevant

events:

September 1, 1994         Eller, through its predecessor-in-interest, Tanner Outdoor, entered into a lease
                          agreement with Entergy, for the purpose of erecting two outdoor advertising sign
                          structures upon the leased premises.

November 1, 1997          Eller, through its predecessor-in-interest, Tanner, entered into a lease agreement
                          with Prudential, for the purpose of erecting one outdoor advertising sign structure
                          upon the leased premises.

March 7, 2000             (DATE OF PRUDENTIAL COMPLAINT) MTC filed its Complaint,
                          seeking to acquire through eminent domain, real property owned by Prudential, as
                          well as the leasehold interest and a sign structure owned by Eller.

March 8, 2000             (DATE OF ENTERGY COMPLAINT) MTC filed a Complaint, seeking
                          to acquire through eminent domain, real property owned by Entergy, as well as the
                          leasehold interest and two sign structures owned by Eller.

July 10, 2000 The Special Court of Eminent Domain entered orders in both the Prudential and Entergy
              matters granting MTC right of immediate title and possession upon the deposit of 85% of
              the value of the property condemned, as determined by a court appointed appraiser.

August 1, 2000            (DATE OF POSSESSION) MTC deposited the required funds and took title
                          to, and possession of, both the Entergy and Prudential property, including Eller’s
                          leasehold interest and sign structures.

August 27, 2001           MTC filed a Motion for Partial Summary Judgment in the Prudential matter
                          seeking to adjudicate that the only remaining issue is the determination of the cost
                          new, less depreciation, of the sign structures.

October 12, 2001          MTC filed a nearly identical Motion for Partial Summary Judgment in the Entergy
                          matter.

March 1, 2002             The Special Court of Eminent Domain entered orders granting MTC’s Motion in
                          both the Prudential and Entergy matters. Specifically, the court held that “the only


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                         remaining issue is the determination of the value of a new billboard, less
                         depreciation, that was acquired as a result of these proceedings.”

March 28, 20031          The parties stipulated that the value of each billboard at issue, using the cost
                         approach, was $57,700.00.

April 1, 2003 MTC filed a Motion for Summary Judgment in both actions, requesting the court to set the
              amount of just compensation at $57,700.00 per sign structure (cost of a new sign, less
              depreciation).

May 21, 2003 The Special Court of Eminent Domain granted both summary judgments.

                                              DISCUSSION

¶3.     Under M.R.C.P. 56, summary judgment should be granted where “the pleadings, depositions,

answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no

genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” When

reviewing a trial court’s decision “to grant summary judgment, this Court will conduct a de novo review.”

Lamar Corp. v. State Highway Comm’n, 684 So. 2d 601, 604 (Miss. 1996) (citations omitted). In

determining whether the trial court appropriately granted summary judgment this Court reviews all evidence

“in a light most favorable to the non-moving party.” Id. “[T]he burden of demonstrating that no genuine

issue of fact exists is on the moving party. That is, the non-movant should be given the benefit of every

reasonable doubt.” Short v. Columbus Rubber & Gasket Co., 535 So. 2d 61, 64 (Miss. 1988).

¶4.     This appeal of summary judgment presents us with the following issues:

        (1) Whether the trial court erred in granting partial summary judgment;

        (2) Whether the trial court erred in its interpretation of the leases; and

        (3) Whether the trial court erred in granting summary judgment.


        1
        The reason for the year delay was an intervening application for interlocutory appeal to this
Court, which was denied.

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These issues are inextricably intertwined and, therefore, will be discussed together.

        Eminent Domain.

¶5.     Article 3, Section 17 of the Mississippi Constitution provides that “[p]rivate property shall not be

taken or damaged for public use, except on due compensation being first made to the owner or owners

thereof, in a manner to be prescribed by law; . . .”

¶6.     Section 43-37-11 of the Mississippi Code Annotated addresses the constitutionally required “due

compensation” for “structures,” as follows:

                (1) Where any interest in real property is acquired, an equal interest in all buildings,
        structures, or other improvements located upon the real property so acquired and which
        are required to be removed from such real property or which are determined to be
        adversely affected by the use to which such real property will be put shall be acquired.
                (2) For the purpose of determining the just compensation to be paid
        for any building, structure or other improvement required to be acquired as
        above set forth, 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 or improvement at the expiration of his term. 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 building, structure or improvement for removal from the real property,
        whichever is the greater, shall be paid to the tenant therefor.

Miss. Code Ann. § 43-37-11(1),(2) (Rev. 2000) (emphasis added).

¶7.     Eller analyzes the statute as follows: When real property is acquired through eminent domain, an

adversely affected sign structure located on the real property must also be acquired. The sign structure

cannot be valued in the abstract because it is “deemed” to be a part of the real property, notwithstanding

anything to the contrary in any lease between the parties. That said, Eller maintains that compensation

under the statute for the structure is the greater of: (a) the value which it contributes to the fair market value




                                                        4
of the land; or (b) the fair market value of the structure itself. In effect, says Eller, the fair market value of

the sign is to be determined as if it were owned by the landowner rather than the tenant.

¶8.       MTC contends that Miss. Code Ann. § 43-37-11 does not apply at all, because the leases

terminated by their own terms, and because Eller contracted away its right to receive any compensation,

other than the value of the structures. Therefore, says MTC, Eller is not entitled to compensation except

for the cost new, less depreciation, of the billboard sign structures.

          The Leases.

¶9.       Both lease agreements in issue addressed eminent domain. Paragraph 14 of the Prudential Lease

states:

          In the event that all or a part of the Leased Premises is taken or condemned for public or
          quasi-public use under any statute or by the right of eminent domain or, in lieu thereof, all
          or a part of the Leased Premises is sold to a public or quasi-public body under threat of
          condemnation, this Lease shall terminate as to the part of the Leased Premises so
          taken, condemned or sold on the date possession is transferred to the condemning
          authority. All Rent for such part shall be paid up to date of transfer of possession to the
          condemning authority, and all compensation awarded or paid for the taking or
          sale in lieu thereof shall belong to and be the sole property of Lessor and
          Lessee shall have no claim against lessor for the value of any unexpired portion of the lease
          Term; provided, however, that Lessee shall be entitled to any award expressly
          made to Lessee.

(emphasis added).

¶10.      Paragraph 7 of the Entergy Lease states:

                 (A) If all or a substantial part of the Premises shall be taken by right of eminent
          domain, this Lease shall terminate and the rent and all other charges which are
          TENANT’s responsibility shall be abated during the unexpired portion of this Lease,
          effective as of the date when the physical taking of the Premises occurs. . .
          .
                 (B) TENANT shall not be entitled to any part of the payment or award
          for any such taking; provided, however, that TENANT may file a claim for any
          taking of its Outdoor Advertising Signs, trade fixtures or removable personal


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        property owned by TENANT or moving expenses or damages for cessation or
        interruption of TENANT’s business.

(emphasis added).

        Partial Summary Judgment.

¶11.    Based on the language of these provisions, and the statutory language providing for compensation

for structures, MTC filed motions for partial summary judgment, asserting that the only remaining issue was

the determination of the cost new, less depreciation, of the Eller sign structures.

¶12.    The Special Court of Eminent Domain entered orders granting both motions for partial summary

judgment. Eller filed motions to reconsider in both matters, and submitted the affidavit of its designated

expert appraiser, Dr. Rodolfo Aquilar, who opined: “It is my expert opinion that the sign structure at issue

. . . should be appraised using the cost, income and sales comparison approaches notwithstanding the

eminent domain clauses in the applicable lease agreements.”

¶13.    The trial court denied the motions for reconsideration and affirmed its earlier ruling granting partial

summary judgment. This ruling by the trial court is the crux of Eller’s appeal.

¶14.    Eller does not dispute MTC’s taking of its sign structures or its leasehold interest. Rather, Eller

claims the trial court’s partial summary judgment improperly restricted the allowed valuation method to the

“cost” approach.2 Eller claims it should have been permitted to present additional evidence using the

“market data/sales comparison” approach, and the “income” approach to valuation. In support of its

argument, Eller cites Crocker v. Miss. State Highway Comm’n, 534 So. 2d 549 (Miss. 1988), where

this Court stated:




        2
        The “cost approach” to property valuation is a determination of the cost to replace the
property, less applicable depreciation.

                                                      6
        We regard it as settled dogma within the appraisal profession that fair market value is
        established by reference to what has come to be known as the appraisal process. That
        process mandates careful consideration of not just one but three separate and distinct
        approaches to value; the income approach, the cost approach and the market data or sales
        comparison approach (citations omitted) . . . Indeed, any expression of value solely by
        reference to but one of the three standard of approaches to value should generally be taken
        with a grain of salt.

Id. at 553. Eller also cites Frierson v. Delta Outdoor, Inc., 794 So. 2d 220 (Miss. 2001), in support

of its argument that it should not have been limited to the cost approach valuation method. In Frierson,

this Court recognized there are “many different approaches to establishing value including, but not limited

to use of comparative sales, cost, income streams, and a combination of these and various other methods.”

Id. at 226. We find that Eller’s reliance on Crocker and Frierson is misplaced.

¶15.    Crocker involved valuation of commercial property taken from the owner. Writing for the court,

Justice Robertson, in obiter dictum, properly pointed out that, in such cases, all three methods of valuation

should be considered. Crocker, 534 So. 2d at 553. Certainly, when appraising an owner’s interest in

commercial property, all three methods of valuation could be relevant and useful and, at a minimum, should

be considered. It is clear, however, from a full reading of Crocker, that this Court did not hold – nor did

it intend to hold – that all three methods of valuation must be considered in every appraisal. The folly in

such a proposition is easily appreciated when one considers the appraisal of a residence or a single

cemetery plot, wherein valuation using the income approach would be not only useless and irrelevant, but

impossible.

¶16.    Unlike the landowner in Crocker which owned the commercial real estate, Eller is the owner of

a sign structure which was placed on leased property. The market approach would be wholly useless,

since the market value of the billboards could certainly not exceed the value of a new sign, less

depreciation. For market value to exceed replacement cost, there must be some marketable feature which

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causes the increased value. For instance, in the case of a billboard, that feature could be location.3

However, Eller’s leases both terminated pursuant to contractual provisions agreed to by Eller. Therefore,

since Eller lost its locations pursuant to its own agreement, any value added by location would be irrelevant

and inadmissible in this case. These termination restrictions on the lease agreement were bargained for and

reflected in the price paid by Eller.

¶17.    In Frierson, Delta Outdoor, Inc., signed a five-year lease of property owned by Ethel Frierson,

for the purpose of erecting billboards. Frierson then decided to erect her own billboards, and she reneged

on the lease with Delta. Speaking for the Court, Justice Diaz stated that Delta could not establish damages

based solely on its own estimate of “the extent to which [it] was injured.” Id. at 226.    These facts, and

our holding in Frierson, hardly apply here.

¶18.    MTC contends that Eller is restricted to the cost approach because the lease terminated by its own

terms. Therefore, Eller did not have a leasehold interest in the land. In support of its argument, MTC cites

City of Muskegon v. Lipman Inv. Corp., 239 N.W.2d 375 (Mich. Ct. App. 1976), State v. Card,

413 N.W.2d 577 (Minn. Ct. App. 1987), and Foster & Kleiser v. Baltimore County, 470 A.2d

1322 (Md. Ct. Spec. App. 1984).

¶19.    City of Muskegon is analogous to the case sub judice. There, the lease contained a termination

provision in the event of eminent domain. 239 N.W.2d at 378. The lease also stated: “Nothing herein

shall be construed to prevent Lessee from pursuing its separate remedy against the involved condemnor



        3
         A billboard in a very good location would certainly have a higher market value than the same
billboard in a poor location. We do not mean to imply that Eller asserted that the location of the signs
increased the market value of its signs. Indeed, in this appeal, Eller offers no evidence of any kind of
any such marketable feature which would cause a market valuation to be relevant. We raise this issue
only to demonstrate the futility in adopting Eller’s position.

                                                     8
for the value of Lessee’s interest, loss or damage.” Id. As in the case sub judice, there was no ambiguity

regarding the termination of the lease by condemnation. However, the lessee argued that it reserved a

separate remedy against the condemnor and therefore reserved its right to share in the condemnation

award. Id. The court concluded:

        When read together with the provision terminating the lease upon condemnation and
        waiving the lessee’s right to participate in the award, the lessee’s ‘separate remedy’ can
        only refer to a claim apart from that derived from the leasehold interest in the condemned
        premises. The separate remedy of the lessee could be a claim for the
        decreased value of the severed trade fixtures.

Id. (emphasis added).

¶20.    In Card, the lease terminated by its own terms upon the sale of the land. Card, 413 N.W.2d at

580. The state purchased the property, and the billboard company argued it was entitled to just

compensation of its billboard sign structures. Id. The court stated: “A lessee may contract away its rights

to damages in the event the property is acquired by eminent domain.” Id. at 579. Furthermore, “Leases

may also contain broader provisions for termination upon the happening of a particular event.” Id. The

court concluded the company was entitled to relocation costs; however, “its right to receive compensation

in eminent domain ceased when the state directly purchased the property.” Id. In Card, the billboard

company’s lease terminated when the property was sold. In the case sub judice, Eller contracted away

some of its rights to compensation in the event of eminent domain.

¶21.    In Foster & Kleiser, the court rejected the billboard company’s argument that it was entitled to

compensation for the sign structures because the signs remained on the property after the county acquired

an interest in the property. Foster & Kleiser, 470 A.2d at 1326. Maryland’s compensation statute is




                                                    9
very similar to Miss. Code Ann. § 43-37-11. See 470 A.2d at 1323. However, the company was not

entitled to compensation for the billboard structure because the lease terminated.

¶22.    Even though Foster & Kleiser and Card both deat with the purchase of property and not

condemnation, both contained termination provisions which were invoked and the courts concluded that

no compensation was due. In the case sub judice, both leases contained termination provisions in the event

of eminent domain; and therefore, the leases terminated by their own terms. As in City of Muskegon,

Eller agreed it was not entitled to any of the condemnation award of the lessor and therefore, the only

compensation to which Eller is entitled is the value of the sign structure; that is, the cost new, less

depreciation.

¶23.    Eller had no leasehold interest because its leases terminated.4 Eller had three billboards which were

taken, and for which just compensation is due. That compensation can only be calculated using the cost

analysis, which will provide Eller with the new cost of its signs, less depreciation.

¶24.    For these reasons, we find that the trial court properly granted the partial summary judgment.

        Summary Judgment.

¶25.    Having prevailed on its motion for partial summary judgment, MTC filed a Motion for Summary

Judgment in the Prudential matter, pointing out that the parties had entered into and filed a stipulation that

the cost new, less depreciation, for the billboard on the property was $57,700.00, and that it was entitled

to judgment as a matter of law. MTC filed a similar motion in the Entergy matter. The trial court granted




        4
         Eller did have a leasehold interest from the date of valuation (filing of the Complaints), which
occurred in early March, 2000, until the date of possession (date of payment), which occurred on
August 1, 2000. However, as discussed infra, Eller suffered no loss because it continued to use the
property during this period of time.

                                                     10
both MTC’s motions for summary judgment, awarding Eller $57,700.00, for each of the three billboards.

We find that the trial judge was correct in granting the motions for summary judgment.

¶26.    Having determined the issue of valuation of the billboards, we now turn to the issue of whether

MTC condemned any compensable tenancy belonging to Eller.

        Tenancy.

¶27.    The Energy Lease provided that: “The term of this Lease (the “Term”) shall be for 5 years, to

commence October 1, 1994 (hereinafter called the “Commencement Date”). The Term of this Lease shall

end on August 31, 1999, (the “Expiration Date”) and TENANT shall have no right to possession of any

portion of the Premises after the Expiration Date.” Paragraph 15 of the Energy Lease stated that if Eller

remains in possession of the premises after the expiration of the lease, Eller becomes a month-to-month

tenant and such tenancy may be terminated upon thirty (30) days prior written notice. This language is

clear, unambiguous and enforceable. Eller was a month-to-month tenant under the Energy lease, and had

a leasehold interest at the time MTC filed its complaint, which continued until the expiration of the 30-day

notice period.

¶28.    The Prudential Lease provided that: “The term of the lease shall commence November 1, 1997 and

expire October 31, 2007.” Pursuant to this provision, Eller did have a leasehold interest under the

Prudential Lease at the time MTC filed the complaint on March 7, 2000. This leasehold interest continued

until the physical taking which occurred on August 1, 2000. Eller claims it is entitled to compensation for

this period of time. We will briefly address this issue.

        Value of the Tenancy.

¶29.    Eller is correct that it is entitled to just compensation for the value of its leaseholds which were

taken by condemnation. However, Eller remained in possession of the properties during the periods of time


                                                     11
in question. Thus, Eller lost nothing. Having lost nothing, Eller’s argument that it should, nevertheless, be

compensated, is unpersuasive.

                                            CONCLUSION

¶30.    For these reasons, we affirm the trial court’s judgments.

¶31.    AFFIRMED.

    SMITH, C.J., WALLER AND COBB, P.JJ., EASLEY, CARLSON AND
RANDOLPH, JJ., CONCUR. DIAZ AND GRAVES, JJ., NOT PARTICIPATING.




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