Atwood v. Lamar Obie Co., LLC (Portland Wall-Sign Lease, Good Faith and Fair Dealing)

Full write-up

A commercial landlord's hard-won jury verdict over a Portland billboard lease survived appellate review on November 12, 2026, when the Oregon Court of Appeals affirmed a $1,237,191.92 judgment against Lamar Obie Company, LLC. The case turned not on the words of the lease itself, but on the implied duty of good faith and fair dealing that Oregon law reads into every contract, and on what happens when a tenant's assignee walks away with a regulatory permit the landlord needed to keep using his own wall.

The plaintiffs, Jim A. Atwood, individually and as trustee of the Jim A. Atwood Trust, together with his wholly owned J.A. Atwood Corporation, own a building on West Burnside in Portland with a large exterior wall that has displayed commercial advertising for decades. Rather than selling ad space directly, the Atwood interests leased the wall to advertising brokers, who in turn sold space to advertisers and split the revenue, an arrangement that moved from Onsite Advertising Services, LLC in 2009 to OnDisplay Advertising, LLC by assignment in 2010.

The trouble began in 2012, when Oregon designated the relevant stretch of West Burnside a state highway, subjecting the wall sign to Oregon Department of Transportation permitting requirements effective June 30, 2015. OnDisplay needed Atwood's written consent to apply for the ODOT permit, and Atwood gave it on the condition that the permit letter state it should issue in the name of OnDisplay, J.A. Atwood, and J.A. Atwood Corporation, so that he would own the permit once the lease with whoever held it eventually ended. ODOT nonetheless issued the permit solely in OnDisplay's name. When OnDisplay then sold its lease and assets to Lamar, ODOT transferred the permit to Lamar alone, again without naming the plaintiffs and without notifying them, and Atwood did not learn of any of this until years later.

When Atwood terminated the lease with Lamar in 2019, Lamar refused to sell or transfer the permit to the plaintiffs. Instead, Lamar surrendered it to ODOT for a relocation credit that Lamar itself could not use, a maneuver that had the practical effect of extinguishing the plaintiffs' ability to display commercial advertising on their own wall at all. At trial, the jury found Lamar's conduct breached the implied covenant of good faith and fair dealing and awarded the plaintiffs more than $1.2 million, including future lost revenue. Lamar appealed on nine grounds, arguing the plaintiffs' permit expectations were not objectively reasonable as a matter of law, that the future-damages claim was impermissibly speculative, and that the jury instructions on liability and damages were erroneous.

The Court of Appeals, in an opinion by Presiding Judge Darleen Ortega, rejected every argument properly before it, holding that a jury could reasonably find the parties shared an objectively reasonable expectation, rooted in the permit letter's own language and the parties' course of dealing, that whoever ultimately held the lease would not strip the landlord of the permit needed to keep the wall in commercial use. The panel also found the future-damages evidence sufficiently grounded to go to the jury and found no instructional error.

The decision is a reminder that when a leased or licensed use of commercial property depends on a government permit, landlords should not assume informal consent letters will survive an assignment without an enforceable transfer mechanism tied to the permit itself, not just the lease; buyers of a leasehold interest, in turn, should audit permits tied to the premises before closing, since a permit issued or transferred in the buyer's name alone can create liability to the landlord even where the buyer did not cause the original naming error.

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