Jermar Props., LLC v. Lamar Advertising Co.
Annotate this CaseIn 1999, James Stadheim entered into a lease with Flack Signs that gave Flack Signs the right to erect advertising signs on Stadheim’s property. The lease provided for a ten-year term. In 2002, Guy Carlson acquired the property, and Lamar Advertising Co. acquired Flack Signs. Carlson began giving mortgages on the property Dacotah Bank. In 2009, Carlson, believing the lease had terminated, entered into a second lease with Lamar that provided a term of fifteen years. In 2012, Carlson defaulted on the mortgages to Dacotah Bank and entered into an agreement for non-judicial voluntary foreclosure. Jermar Properties, LLC purchased the property from Dacotah Bank. Lamar refused to remove its signs at Jermar’s request, claiming it still had a leasehold interest. Jermar brought this quiet title action against Lamar to determine whether Jermar held title to the property free of Lamar’s purported leasehold interest. The circuit court granted judgment for Jermar, finding that the 2009 lease was a novation of the 1999 lease, and therefore, Lamar did not continue to have a leasehold interest by virtue of the 1999 lease that was senior to the mortgage given to Dacotah Bank. The Supreme Court affirmed, holding that the circuit court did not err when it found that a novation occurred.
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