A farmer held a lease, set to expire in January 2011, with a right of first refusal to continue leasing the land. In 2009 and the fall of 2010, the farmer planted about 900 acres of alfalfa. In November 2010, his landlords told him that they had agreed to lease the land to another party for $275 per acre, subject to his right of first refusal. The farmer declined to rent the land at that price and offered to sell the alfalfa plants to the new tenant. After that offer was rejected, the farmer cut that year’s alfalfa crop, destroyed the remaining portions of the alfalfa plants, and vacated the land.
The landlords sued the farmer for intentional interference of contractual relations, unauthorized destruction of a crop, conversion, and breach of contract. The farmer counterclaimed. The superior court granted partial summary judgment to each side. After a jury trial on damages, the landlords appealed and the farmer cross-appealed.
The critical issue on appeal was whether the alfalfa was a fixture belonging to the landlord or personal property belonging to the farmer. The parties agreed that the farmer owned the alfalfa crops he cut and harvested during his lease, but disputed whether he owned the roots (or “stands”) of the plant, which would produce crops for a period of years. The court determined that the contract was ambiguous, and therefore looked to the presumed intent that arose from the parties’ actions. The court reasoned that because the farmer planted the alfalfa knowing that its useful life would extend beyond the last year of his fixed-term tenancy, he must have intended for it to remain with the land. The alfalfa stands were therefore fixtures and the farmer was liable for their destruction.
Posted by: Josh Bendor