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JLG Concrete Products Co. v. City of Grenada

October 27, 1998

JLG CONCRETE PRODUCTS COMPANY, INC. APPELLANT
v.
CITY OF GRENADA, MISSISSIPPI APPELLEE



The opinion of the court was delivered by: Southwick, J., For The Court.

DATE OF JUDGMENT: 7/18/96

TRIAL JUDGE: HON. MELVIN MCCLURE

COURT FROM WHICH APPEALED: GRENADA COUNTY CHANCERY COURT

NATURE OF THE CASE: CIVIL - LEASE CANCELLATION

TRIAL COURT DISPOSITION: VOIDED LEASE, DENIED DAMAGES

BEFORE THOMAS, P.J., KING, AND SOUTHWICK, JJ.

¶1. The City of Grenada sought a declaratory judgment that JLG Concrete had no current lease entitling it to occupy 40 acres of City property. After a trial, the chancellor declared that no renewal of a 1957 lease granted by the City had ever been properly authorized and that JLG had no rights to the tract. JLG appeals asserting that a valid renewal had been obtained from the City in 1982. The City cross-appeals asserting that the chancellor improperly denied its timely amendment to add a claim for damages to the property. We find no error and affirm.

STATEMENT OF FACTS

¶2. On February 23, 1957, the City leased a 30-acre tract to Boyd Construction Company. The lease had a 25-year term. It also granted Boyd "the first right and option to renew said lease for two consecutive periods of twenty-five (25) years each upon the completion of the primary term, each additional period to be negotiated" by the parties. At least 30 days notice was to be given of the lessee's intent to renew. The property was part of a World War II airbase in Grenada that in 1948 was granted to the City and became its airport. Boyd by the 1957 lease was to maintain a water well at the site, from which Boyd had the right to unlimited water, and to maintain the access road that led to its tract as well as to the airport itself. An addendum to the lease five weeks later stated that Boyd was to use the property for the manufacture of concrete products.

¶3. In 1974 additional tracts were added to those originally leased, making a total of 36 acres. Each lease or addenda was approved by contemporaneous action of the Grenada City Council. The Council's minutes reflect each approval, though the 1974 addenda itself was not put in the minutes. The rent beginning in 1957 was $400 per year. After 1974 the annual rent was $900. For reasons and on a date not revealed by the record, the rent became $1500 by 1979.

¶4. In 1979 Boyd assigned its interest under the lease to Grenada Concrete Products, a company that subsequently changed its name to JLG Concrete Products Company, Inc.. "JLG" is John L. Grantham, the son-in-law of Boyd's owner. The assignee continued to operate a concrete business at the site until 1983. In 1985 JLG assigned to Fluker Enterprises a portion of its leasehold interest comprising 25 acres. JLG retained a deed of trust. Fluker sought bankruptcy protection in 1988 and conveyed the property back to JLG by a deed in lieu of foreclosure.

¶5. A pre-stress manufacture facility has been idle since 1989. A separate ready-mix plant closed in 1991, was sold and then moved off the property by the purchaser. No rent was paid on the lease from 1983 until 1989. The City Clerk contacted JLG in 1989 and demanded annual back-rent at $1500 per year. JLG questioned the amount, as the source of that $1500 figure was unknown. The rent for 1984 through 1989 was ultimately paid. Rent for the years of this litigation has been rejected by the City. The parties agree that the property has not been used for a substantial number of years.

¶6. The City sought to introduce evidence regarding the substantial damage to the property over the years, including a "mountain" of concrete from washing out ready-mix trucks, buried concrete and rebar rods, and delapidated structures. Whether the property is worthless, is worse than worthless because of clean-up costs, or is extraordinarily valuable is neither directly apparent from the record nor relevant to our decision. However, two parties have been in litigation over the property since 1993, which at least creates an inference about value.

ΒΆ7. What occurred in the early 1980's regarding a possible renewal of the 25-year lease is the central factual and legal focus of this appeal. Apparently no concern about the need for or existence of a renewal lease animated the City until the absence of rent payments was noticed by the City Clerk in 1989. In 1979 JLG upon being assigned the leasehold by Boyd attempted to get an early renewal from the City. Audio tapes of a council meeting in 1979 were introduced into the record that revealed a Discussion of the issue, concern that the rent was too low, and ultimately no action being taken. In 1980 JLG contacted the Airport Commission for a lease renewal, but was referred to the City as the proper leasing authority. A review of the minutes of the city council following the one previously mentioned 1979 meeting through 1989 revealed no ...


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