Opinion ID: 2514410
Heading Depth: 2
Heading Rank: 2

Heading: the district court acted within its discretion in refusing to consider d & k's untimely-raised substantial compliance defense

Text: ¶ 24 We will now discuss whether the district court acted within its discretion under the law of the case doctrine when it refused to consider D & K's untimely-raised substantial compliance defense. We will then discuss the three exceptions to the law of the case doctrine, which, if applicable, would require the district court to reconsider the forfeiture issue and address the substantial compliance defense. ¶ 25 We affirm the district court's refusal to reopen the issue of forfeiture for two reasons. First, because the district court previously decided the issue of forfeiture, the law of the case doctrine gave the district court discretion to refuse to reopen the issue. Second, none of the exceptions apply to excuse D & K's failure to raise substantial compliance in a timely manner.
¶ 26 The law of the case doctrine encompasses several different principles related to the binding effect of a decision on subsequent proceedings in the same case. [18] Simply stated, under the law of the case doctrine, a decision made on an issue during one stage of a case is binding in successive stages of the same litigation. [19] Thus, the doctrine allows a court to decline to revisit issues within the same case once the court has ruled on them. In this way, the law of the case doctrine acts much like the doctrine of res judicata  furthering the goals of judicial economy and finality  but within a single case. [20]
¶ 27 Depending on the procedural posture of a case at the time the law of the case doctrine is invoked, the district court may or may not have discretion to reconsider a prior decision it has made. While a case remains pending before the district court prior to any appeal, the parties are bound by the court's prior decision, but the court remains free to reconsider that decision. [21] It may do so sua sponte or at the suggestion of one of the parties. And this discretionary power of reconsideration includes the right of the district court to decline to reopen a matter it has already decided. [22] As long as the case has not been appealed and remanded, reconsideration of an issue before a final judgment is within the sound discretion of the district court. ¶ 28 A different branch of the law of the case doctrine  often called the mandate rule  dictates that a prior decision of a district court becomes mandatory after an appeal and remand. The mandate rule, unlike the law of the case before a remand, binds both the district court and the parties to honor the mandate of the appellate court. [23] The mandate is also binding on the appellate court should the case return on appeal after remand. [24]
¶ 29 The district court, invoking the law of the case doctrine, refused to reconsider the issue of forfeiture because it had already decided that issue by granting summary judgment in favor of IHC. We agree that the refusal was properly within the district court's discretion. ¶ 30 In denying D & K's motion, the district court enumerated D & K's numerous opportunities to argue substantial compliance as a defense to forfeiture. The parties first litigated the forfeiture issue prior to the appeal in D & K I. At that time, IHC moved for a declaratory judgment on the forfeiture issue, asserting that IHC was entitled to declaratory judgment on the claim of forfeiture and that all of D & K's affirmative defenses failed as a matter of law. D & K, therefore, had both the opportunity and the obligation to raise any defenses in opposition to IHC's claim of forfeiture or risk being barred from presenting them in this or any future proceeding by the law of the case doctrine. ¶ 31 The district court noted that D & K was given additional chances to argue substantial compliance as a defense to IHC's forfeiture claim. If, as it claims, D & K had properly preserved the defense of substantial compliance by pleading unconscionability in its Answer, D & K would have been free to brief the issue to this court on appeal, but it failed to do so. When this court reversed the district court's grant of summary judgment, IHC's forfeiture claim was again before the district court on IHC's Motion for Summary Judgment. Again D & K failed to raise substantial compliance on remand. The district court granted summary judgment in favor of IHC on its forfeiture claim. ¶ 32 While the district court may have had discretion to reconsider the issue of forfeiture, the law of the case doctrine justified its refusal to reopen the issue to consider D & K's newly developed substantial compliance argument. D & K argues that we should reverse the ruling of the district court because it erroneously held that it had no discretion to reconsider. Given discretion, D & K argues, the district court might have reopened the issue. But D & K's argument directly contradicts the record. The district court concluded that it had no discretion and, at the same time, indicated that it would decline to reopen the issue if it had discretion. The district court, having been briefed on D & K's substantial compliance argument, stated that it d[id] not find that D & K ha[d] presented the Court with facts that would support a substantial compliance defense. The district court thus held that it would decline to hear the substantial compliance argument, or, in the alternative, that D & K could not prevail on the merits as a matter of law even if it considered the substantial compliance defense. Therefore, it is unnecessary for this court to decide whether the mandate rule bound the district court to follow its earlier decision. The law of the case doctrine clearly granted the district court discretion as to whether to reopen the previously decided forfeiture issue, and it properly declined to do so. ¶ 33 There are, however, exceptions to the law of the case doctrine, which, if applicable, require a district court to revisit an issue it has already decided. We now discuss these exceptions.
¶ 34 There are three exceptional circumstances in which the law of the case doctrine does not apply: (1) when there has been an intervening change of controlling authority; (2) when new evidence has become available; or (3) when the court is convinced that its prior decision was clearly erroneous and would work a manifest injustice. [25] D & K argues that even if the law of the case doctrine applies, the district court should have reopened the issue of forfeiture under one of the three exceptional circumstances.
¶ 35 None of the exceptions required the district court to reopen the issue of forfeiture in this case. The first two exceptions did not apply because D & K did not point to any new facts or law which might have excused it from arguing substantial compliance when the forfeiture claim was decided. First, D & K has not pointed to any intervening change in law. We agree with the district court that [t]he defense [D & K] wants to now argue is not new or novel, and indeed the main cases it relies upon in its present motion were all issued before [D & K] opposed [IHC's] initial Motion for Partial Judgment on the Pleadings. Nor has D & K briefed this court on any intervening change of law. Second, D & K has not pointed to any new evidence that it did not have an opportunity to present when the forfeiture claim was decided. In fact, at the 54(b) hearing on the forfeiture claim, counsel for D & K told the court that there were no undecided issues or facts left to be determined. ¶ 36 Finally, D & K is unable to show that the prior decision was clearly erroneous or would work a manifest injustice. In Jensen v. Sawyers, we held, manifest injustice [is] synonymous with plain error and ... the same analytical model applies to each. The plain error test has three parts: the demonstration of error; a qualitative showing that the error was plain, manifest, or obvious to the trial court; and evidence that the error affected the substantial rights of a party. [26] Under this rule, D & K is required to show that the error was or should have been obvious to the district court at the time the first decision was made. While D & K has pointed to voluminous information in the record related to the costs it will incur if forced to relocate, it has failed to show that the district court should have ruled in its favor based on the law and evidence before it at the time of the decision. D & K's opposition to summary judgment on the issue of forfeiture did not raise the substantial compliance defense for the district court to consider. If D & K's own counsel, who had the responsibility to research and argue defenses on behalf of D & K, failed to recognize substantial compliance as a plausible defense, it is difficult to say that the error should have been plain, manifest, or obvious to the district court. Further, it is unlikely that the substantial compliance defense would have persuaded the district court even if it had been raised when the forfeiture claim was decided. The district court indicated as much when it denied D & K's Motion for Reconsideration: [A]s the parties have now briefed the matter of substantial compliance in the papers before the Court on [D & K's] motion for reconsideration, and having considered all the arguments, facts, and cases cited by the parties in those papers, the Court does not find that [D & K] has presented the Court with facts that would support a substantial compliance defense. We agree and hold that none of the exceptions to the law of the case doctrine apply. ¶ 37 We affirm the district court's decision and conclude that it did not abuse its discretion in refusing to reopen the issue of forfeiture. Having affirmed that D & K has forfeited the Lease and that neither waiver nor substantial compliance provide a defense, we now turn to the issue of whether IHC may recover attorney fees according to the Lease.