Opinion ID: 482453
Heading Depth: 2
Heading Rank: 3

Heading: Granting of Third Motion: Award of Holdover Rent

Text: 36 Gatlinburg leased ninety display figures from Lynch in 1962. The lease explicitly stated that rent would be 10% of the gross receipts, and gross receipts were defined as all proceeds from any exhibits, or displays located, owned and/or operated by [Gatlinburg] in said premises derived from the operation of said museum. As for holdover rent, the lease stated that if Gatlinburg did not return the figures at the expiration of the lease term, then the leased figures shall continue to be held and used under and in accordance with the conditions and on payment of the rentals [specified] in this Agreement.... (Emphasis added.) Thus, holdover rent was to be equivalent to regular rent. The lease expired by its terms on September 30, 1982. 37 According to Gatlinburg, the museum experienced a decline in attendance during the mid-1970's, and in response it purchased several more contemporary figures (including an Elvis Presley figure as well as a grouping of the Kennedy family) from a source other than Lynch or Historic. Gatlinburg claims that attendance then rose demonstrably. 38 As noted above, when Gatlinburg and the other museums instituted their antitrust suits, Gatlinburg stopped paying rent to Lynch, and Lynch prevailed in its counterclaim for past rents due. The district court ordered Gatlinburg to pay those rents, using 10% of all gross receipts as defined in the lease as the measure. Order and Final Judgment, Sept. 3, 1982. (The back-rent decision.) Gatlinburg moved to amend the judgment, arguing in part that it should be permitted to deduct from the calculated rent such sums as may be fairly attributable to the new [non-Lynch] figures added to the Gatlinburg museum.... The district court denied this motion. Order, Oct. 28, 1982. When appellants brought their first appeal to this court, Gatlinburg attacked some portions of the damages award but did not challenge the back-rent decision. See National Souvenir Center, supra, 728 F.2d 503. 39 At the expiration of the lease, Gatlinburg did not return the figures to Lynch. In December, 1983, Lynch requested the district court to order Gatlinburg to pay holdover rent at the rate of 10% of gross receipts, as defined in the lease. Gatlinburg conceded some liability, but argued again that there should be an adjustment to account for sums attributable to non-Lynch figures. The district court held in favor of Lynch, stating that the issue raised by Gatlinburg had been raised and decided before Gatlinburg's first appeal, and that the law of the case doctrine applied to preclude Gatlinburg from re-litigating the issue on remand. Gatlinburg argues now that the district court erred in applying law of the case to this dispute. 40 Under law of the case doctrine, a legal decision made at one stage of litigation, unchallenged in a subsequent appeal when the opportunity to do so existed, becomes the law of the case for future stages of the same litigation, and the parties are deemed to have waived the right to challenge that decision at a later time. Laffey v. Northwest Airlines, Inc., 740 F.2d 1071, 1089-93, 1102-03 (D.C.Cir.1984); see also 18 Wright, Miller & Cooper, Federal Practice and Procedure Sec. 4478 (1981); 1B Moore's Federal Practice p 0.404 (2d ed. 1984). The doctrine encompasses a court's explicit decisions, as well as those issues decided by necessary implication. Carpa, Inc. v. Ward Foods, Inc., 567 F.2d 1316, 1320 (5th Cir.1978); see also 18 Wright, Miller & Cooper, supra, Sec. 4478. The purpose of the doctrine is to maintain consistency and avoid reconsideration of matters once decided during the course of a single continuing lawsuit. 18 Wright, Miller & Cooper, supra, Sec. 4478. 41 Given the facts presented in this case, we find that the district court did not err in applying the doctrine. In its back-rent decision, the district court ordered Gatlinburg to pay back-rent without deduction for rents generated by non-Lynch figures, and denied Gatlinburg's motion to amend in which it requested the court to make such deductions. Underlying this order and the rejection of Gatlinburg's motion to amend was the necessary, implicit decision that the term gross receipts as it appeared in the lease meant exactly what the lease said it meant--all proceeds derived from any exhibits or displays, whether or not they were leased from Lynch. Gatlinburg did not raise or challenge the back-rent decision in its first appeal to this court, when it had the opportunity to do so and when it did attack other portions of the damages award. Thus, the district court's decision became the law of the case. 42 Gatlinburg's subsequent challenge to the district court's calculation of holdover rent presented the exact same legal issue that had been decided in the back-rent decision--whether gross receipts meant all receipts from all displays and exhibits. The holdover rent provision of the lease stated that holdover rent would be the same as regular rent. The back-rent decision conclusively established that regular rent was 10% of all receipts. It thus implicitly also determined that holdover rent was 10% of all receipts. Under these circumstances, we find no fault with the district court's determination that the law of the case doctrine applied to preclude Gatlinburg from resurrecting the already settled issue of how to calculate rent under the Gatlinburg lease. 43 We note here that appellees have asked this court to impose sanctions on Gatlinburg, under Fed.R.App.P. 38, for raising this issue in the instant appeal, arguing that the only purpose of this belated assertion of the argument is to delay payment. Appellees have offered no material support for their contention that Gatlinburg's purpose was delay, and the record contains no evidence of bad faith on Gatlinburg's part. We decline to impose sanctions. 44