Opinion ID: 516961
Heading Depth: 2
Heading Rank: 1

Heading: Minimum Royalties

Text: 16 G & W's first assignment of error is that it is entitled to judgment as a matter of law because the payment of minimum royalties to its lessors satisfies its contractual obligation to diligently mine the properties. This claim, however, mischaracterizes the issue that was sent back for retrial following the first appeal. This court specifically found that G & W was not entitled to judgment as a matter of law based on the payments of minimum royalties. 17 Gulf & Western's argument that it is entitled to judgment as a matter of law [because a duty of diligent mining cannot be inferred under a contract which has an integration clause and which calls for minimum royalties] is undermined, however, when the express language of the Virginia leases is considered. All of the leases require the lessee to develop the mines in a diligent, workmanlike manner in accordance with the standards of good mining practice. Coal Resources introduced evidence through witness Zegeer that Gulf & Western neither diligently developed the mines nor observed good mining practice in failing either to install deep mines or build a new coal washing facility. Accordingly, Gulf & Western is not entitled to judgment as a matter of law on the breach of contract claim. 18 Coal Resources, Inc., 756 F.2d at 450. Thus, the prior panel held that although Virginia law does not imply a duty of diligent development where minimum royalties are paid, the leases involved herein provided for both a minimum royalty and diligent development of the mines. Id. Therefore, the payment of minimum royalties does not satisfy the duty of diligent development. Id. 19 In remanding the breach of contract issue for a new trial, the previous panel stated: 20 Although [G & W] is not entitled to judgment as a matter of law, ... we are uncertain whether Gulf & Western's alleged failure to discharge its obligation of reasonably diligent development caused injury of a kind that the Assumption of Obligations provision in the Acquisition Agreement was intended to prevent. 21 Coal Resources, Inc., 756 F.2d at 450. The issue for the second trial, then, was not whether minimum royalty payment satisfied G & W's duty under the leases but, rather, whether the Assumption of Obligations clause, requiring G & W to assume, inter alia, the lessee's duty of diligent development, was intended to provide that CRI would receive payments under the multiple, or was intended solely to protect CRI from losses it would suffer if G & W's failure to diligently mine resulted in the termination of the leases. Id. at 450-51. The issue was specifically left for determination by the jury. Id. 22 The determination that G & W is not entitled to judgment as a matter of law by this court on the first appeal is now the law of the case. Issues decided at an early stage of litigation, either explicitly or by necessary inference from the disposition, constitute the law of the case. Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc., 761 F.2d 649, 657 (Fed.Cir.), cert. denied, 474 U.S. 902, 106 S.Ct. 230, 88 L.Ed.2d 229 (1985). See also Amen v. City of Dearborn, 718 F.2d 789 (6th Cir.1983), cert. denied, 465 U.S. 1101, 104 S.Ct. 1596, 80 L.Ed.2d 127 (1984); Petition of United States Steel Corp., 479 F.2d 489 (6th Cir.), cert. denied, 414 U.S. 859, 94 S.Ct. 71, 38 L.Ed.2d 110 (1973). 23 The [law of the case] doctrine precludes our reconsideration of the [previously decided issue] unless one of three exceptional circumstances exists: the evidence in a subsequent trial was substantially different; controlling authority has since made a contrary decision of law applicable to such issues; or the decision was clearly erroneous, and would work a substantial injustice. 24 Kori Corp., 761 F.2d at 657. 25 As the issue of whether G & W is entitled to judgment as a matter of law has previously been decided in this litigation, we need not address it further. Since none of the exceptional circumstances noted in Kori Corp. are present which would permit us to review the issue again, we decline to do so.