Court Opinion

ID: 9449076
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:55:21.985699+00
Date Added: 2024-06-11T17:31:41.095299
License: Public Domain

*890WILBUR K. MILLER, Circuit Judge.
This case is before us for the second time. On the first appeal, brought by Washington Sportservice, we reversed the judgment of the District Court and remanded for further proceedings consistent with our opinion.1 Then, as we directed it to do, the District Court made a finding on the factual issue which had not been resolved the first time. What to do next became a problem because the trial judge was not sure he understood the further directions of our opinion, and the parties differed as to the scope of the remand and as to what issues were open for adjudication by the District Court, Although he expressed doubt as to the correctness of his course,2 the trial judge decided to regard the remand as so general in nature that it left him free to pronounce judgment as he saw fit on all issues originally presented. Accordingly, he did so,3 and then entered judgment for Uline, as had been done before.
Sportservice appeals, arguing that the District Court misinterpreted our former opinion. It contends that the remand was for the determination of one factual issue and that the District Court’s determination thereof should have controlled its decision, as all other issues had been decided explicitly or implicitly by this court’s opinion and were not open for adjudication after remand. Our question now is whether the judgment appealed from is consistent with our opinion on the first appeal. In considering that question, we think it desirable first to summarize the issues initially submitted to and decided by the District Court and the issues which were presented to this court on the appeal from the first judgment. This will require a brief statement of the proceedings in both courts.
By contract dated November 14, 1941, M. J. Uline Company conveyed to Jacobs Brothers for a term of years the refreshment concession in its indoor sports arena. In 1945, desiring to install extensive new facilities, Jacobs Brothers began negotiations for a longer term. Through an exchange of letters, the parties agreed that the term which was to end June 15, 1947, would be extended one year for each one thousand dollars expended by the lessee in improvements. Pursuant to the agreement, Jacobs Brothers spent nearly $40,000 on the project. On or about September 20, 1946, with Uline’s consent, the lease as amended was assigned to Washington Sportservice, which has since operated thereunder.
Uline notified Sportservice that it desired to terminate as of May 19, 1955. When Sportservice challenged its right to do so, Uline filed this suit July 27, 1955, asking the District Court to declare, inter alia, (a) the amended contract unenforceable as indefinite, as lacking in mutuality, and as based upon an inadequate consideration; (b) as an alternative, that the amended contract was good for one year only under § 45-819, D.C.Code (1951) 4 and that thereafter Sportservice held under a tenancy by sufferance which could be terminated at any time by either party, upon notice.
At the conclusion of the proceedings, the District Court made, among others, the following findings of fact:
“5. Correspondence passed between the parties in July and August of 1945 which altered the agreement *891of November 14, 1941, in order to provide that the defendant would construct and install a new counter in the arena and, further, that the defendant would, as set out in its letter of July 31, 1945,
“ ‘proceed with such other and improvements and installations of equipment and uniforms as you (the plaintiff) may desire * * * with the understanding that our agreement is renewed and automatically extends itself for such yearly periods as are required to amortize at the rate of $1000 a year the amounts expended by us (the defendant) for such improvements and installations. To amplify, if we (the defendant) expend $2000 our agreement would be considered extended until June 15, 1949, and the same extension procedure is to apply to any similar expenditures that we may make from time to time with data, of course, being submitted to you as you may direct.’
“6. This modification of the lease agreement of November 14, 1941, is set forth in defendant’s letter of July 31, 1945, which was accepted by the plaintiff on August 2, 1945. But on August 11, 1945, the parties signed a memorandum on the face of the letter of August 2, 1945, stating ‘this letter is cancelled out by M. J. Uline and L. M. Jacobs.’ ”
“11. The contract was terminated between the parties on June 15, 1951 * *
Among the court’s conclusions of law are these:
“2. The contract of November 14, 1941, as amended in July and August of 1945, is a lease of real property and the tenancy created is an estate from year to year.
“3. Plaintiff terminated the estate from year to year on June 15, 1951, and the tenancy thereafter became an estate by sufferance.”
“6. The concession contract of November 14, 1941, as amended, is unenforceable and has been since June 15, 1951. It is indefinite and lacks mutuality from that date.”
Consequently, judgment was entered in favor of Uline, providing that “The contract of lease and the modifications there-0f * * * is hereby adjudged to have been unenforceable after June 15, 1951.”
It is apparent from its conclusions of law that the District Court adjudged the amended contract unenforceable after June 15, 1951, because it had concluded the amended contract, had created an estate from year to year which Uline had a right to, and did, terminate as of that date; that is to say, there was thereafter no agreement at all and Sportservice held only by sufferance.
From this judgment Sportservice took the first appeal. It contended that, contrary to the holding of the District Court, it held “an estate for years, not susceptible of unilateral termination where it was not in breach of any term or condition, and as to which no reservation for termination was had in its inception.” (Emphasis added.) Uline asserted that, as held by the District Court, the amended contract lacked mutuality, was indefinite, and provided for an estate from year to year which later became a tenancy by sufferance. In the course of its brief, Uline said:
“All parties agreed that the contract of 1941 was a leasehold agreement. The Court below concurred and found that the initial agreement was an estate for years which by its terms expired on June 15, 1947.
“The crux of the litigation is the legal effect of the amendments of July and August, 1945 * * *.
“It is appellee’s contention that the letter of July 31, 1945, and particularly that portion which permitted XJline to terminate the term of the lease upon the performance by it *892of a prescribed condition created an estate by sufferance.5 * * * ” (Emphasis added.)
Thus the parties presented to this court these questions: 1. Did the amended contract lack mutuality? 2. Was it so indefinite as to be unenforceable? 3. Did it create a tenancy from year to year, which could be, and was, unilaterally terminated by Uline so that thereafter Sportservice held merely by sufferance? 4. Or did the amended agreement create a tenancy for a term of years which, in the absence of a breach by Sportservice, could not be terminated by Uline unless it contained an express agreement for such unilateral cancellation?
Confronted with these contentions, this court said at the outset of the first opinion:
“ * * * The question now before us is whether the agreement allows a cancellation at the option of the Uline Company before the expiration of the term and, if so, under what conditions.” (Emphasis added.)
Implicit in this statement of the question, particularly in view of the words we have italicized, is the conclusion of this court that the amended contract did not create a tenancy from year to year, which unquestionably Uline could have cancelled; but that it created a tenancy for a term of years which Uline could cancel before the expiration of the term only if it had a contractual right to do so. That is the reason we stated the question as we did.
This is borne out by the fact that, having noted that one copy of the amendatory letter of July 31, 1945, contained a sentence permitting Uline to terminate the amended agreement, and that another copy of the same letter did not contain that sentence, we said:
“Whether Uline Arena has the right to terminate the refreshment contract on payment of the expenditures by the lessee, less amortization of the installations made by Sportservice, depends, it appears to us, upon whether the termination sentence is in the agreement as finally settled by the parties. No finding of fact was made as to this issue. Consequently we set aside the judgment of the District Court and remand the case for a determination as to the content of the contract under which the Sportservice made the installation. * * * ”
Thus .far, it seems quite clear that this court had rejected the theories that the amended contract was void for indefiniteness, for lack of mutuality or lack of adequate consideration, or that it created an estate from year to year unilaterally terminable upon notice; that instead we had found it to be a lease for a term of years terminable by Uline only if the right to terminate had been reserved in the amendatory letters; that we remanded solely for the District Court to make a factual finding, which it did not make in the first instance, as to whether the termination sentence “is in the agreement as finally settled by the parties.”
Confusion was caused at the second' trial by the last sentence of our opinion, immediately following the excerpt just quoted, which reads thus:
“ * * * With the determination of the issue as to the content of the contract, the District Court on this remand will be free to enter such judgment as it may be advised as to the obligations between the respective parties.”
The trial judge interpreted this sentence as giving him carte blanche to make new findings of fact on all issues, to make new conclusions of law, and to enter the judgment which seemed proper to him, regardless of how he resolved the one factual issue for the decision of which *893we had remanded the case, and regardless of the fact that we had rather plainly-said that he should render the judgment required by his resolution of that factual issue.
So, although the trial judge found as a fact that the termination sentence was not in the agreement as finally settled by the parties, he made other factual findings substantially as before, but reached different conclusions of law. For instance, he concluded that the original contract of November 14, 1941, created an estate for years to end June 15, 1947, but that the amendatory agreement of 1945 “did not create an estate for years because of its indefiniteness and uncertainty” and lack of mutuality; that after June 15, 1947, Sportserviee was a tenant by sufferance.6 Hence the District Court entered a judgment in Uline’s favor.
This rationale misconstrues the intent of our opinion. It will be remembered that at the outset thereof we said the question was whether the amended agreement permitted Uline to cancel before the expiration of the term. Then we said the answer to that legal question depended upon the answer to a factual question which had not been answered by the District Court, viz., was the termination sentence in the final agreement? The only logical inference is that we were thus saying, “If the termination sentence was in the agreement, Uline had the right to cancel; if it was not, Uline had no right to cancel.” So, when we said we “remand the case for a determination as to the content of the contract under which the Sportserviee made the installation,” we were remanding only for the District Court to make a finding as to whether the termination sentence was in the final agreement. It seems to us, therefore, that the remand was for that purpose only; that it was specific, not general.
It is said, however, and the District Court evidently agreed, that the remand was shown to be general by the final sentence in the opinion, which for convenience we quote again:
“ * * * With the determination of the issue as to the content of the contract, the District Court on this remand will be free to enter such judgment as it may be advised as to the obligations between the respective parties.”
If this sentence were construed to order a general remand as to all issues, as Uline contends it should be, it would contradict what had been already expressed in the body of the opinion. But. the first clause of the sentence shows that the District Court was to be free to enter judgment in accordance with its answer to the factual question, whatever that answer might be. The sentence means simply this: Upon remand, the District Court is to determine whether the termination sentence was in the agreement and will be free to adjudicate the rights of the parties either way, according to its determination of that factual issue.
As the District Court on remand found' as a fact that the termination sentence was not in the final agreement, it should have declared that Uline did not have the right it claimed to cancel before the expiration of the term. The judgment, appealed from will therefore be reversed, and the case will be remanded for the entry of a judgment to that effect. Reversed.

. Washington Sportservice, Inc. v. M. J. Uline Co., 107 U.S.App.D.C. 277, 276 F.2d 523 (1960).

. The District Judge said in a colloquy with counsel:
“It’s been up to the Court of Appeals once and it’s got to go back again. I’m not sure that I’m doing just what the Court of Appeals directed me to do, so if they will appeal it and proceed with due diligence, I will continue the injunction [which kept Sportservice in possession] . * * * ”

. We shall later discuss more in detail the issues finally decided by the District Court and the question whether they were open for decision by it.

. That section is as follows:
“An estate expressed to be from year to year shall be good for one year only.”

. Of course, Uline did not mean to say the amendatory letter of July 31, 1945, “created an estate by sufferance,” but that Sportservice held by sufferance after the alleged termination date of the tenancy created by the amendatory letter, ■which Uline contended was a tenancy from year to year.

. As has been said, our first opinion by necessary implication rejected similar conclusions in holding the amended contract was a lease for a term of years, subject to cancellation by Uline only if it bad the contractual right to terminate. Our first opinion is, therefore, the law of the case as to these matters, and on remand the District Court was not free to reach these conclusions.