US-CT-APP-7, FRANCHISE-GUIDE ¶10,699, P.P. & K., Inc. v. Judith K. McCumber, et al., (June 21, 1995)

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U.S. Court of Appeals, Seventh Circuit. No. 94-2721. Dated June 21, 1995. On petition for a writ of mandamus to enforce the mandate.

Injunctive Relief--Vacation of Franchise Premises--Enforcement of Prior Order.--A terminated convenience store franchisee was ordered to vacate its former premises pursuant to a prior decision (Business Franchise Guide ¶10,614) that the franchisor should have been granted a preliminary injunction requiring the franchisee to cease operations at the terminated franchise and turn over the premises to the franchisor. The district court had neglected to enforce the appellate court order, instead reopening proceedings on the appropriateness of injunctive relief. Such a course of action clearly was unauthorized. However, the effectiveness of the injunction was stayed 30 days to determine whether the franchisor had lost its rights under the master lease and, therefore, the property should revert back to the control of its owner, who happened to be the franchisee. Back reference: ¶855.

Before Reavley, ^* Easterbrook and Manion, Cir. JJ.

Per Curiam: P.P. & K., Inc., filed this diversity action in search of an injunction that would enforce restrictive clauses in a franchise agreement and lease. The district court denied its requests for relief, and we reversed in an opinion issued on February 6, 1995. We concluded that P.P. & K. is entitled to a preliminary injunction enforcing one of the requirements in its lease with McCumber: that she operate a Convenient Food Mart at the leased location. Because her franchise had expired, however, we held that she was no longer entitled to the benefits of the sublease.

Four and a half months have gone by, and the district court has yet to carry out our instructions. Instead the judge has begun to receive evidence and arguments pertinent to contentions by which McCumber hopes to avoid the effect of our decision. This is not, however, an appropriate step for a district judge. Our decision is conclusive. We instructed the judge to issue a preliminary injunction, and he must do so. Arguments not made in this court do not authorize a district judge to proceed in a way at variance with the mandate. See, e.g., Barrow v. Falck, 11 F.3d 729 (7th Cir. 1993). Thus McCumber’s arguments that equitable considerations estop P.P. & K. to enforce the use clause, or that P.P. & K. should have followed procedures in the Illinois Forcible Entry and Detainer Act, are not now open to consideration. To the extent they are not simply attempts to revive arguments that we have already rejected, they have been waived as grounds for avoiding a preliminary injunction.

Our order denying rehearing observed that "the district court is free to exercise the usual discretion in conducting subsequent proceedings." This phrase had two functions. First, it is a reminder that we deal only with preliminary relief, and as is usual in these cases further proceedings may lead the district court to conclude that permanent injunctive relief is not warranted. That possibility does not, however, authorize the judge to forego entry of preliminary injunctive relief. Second, the language was a recognition that McCumber has purchased the title to the building. Thus McCumber as owner leases space to P.P.&.K., which subleases to McCumber. Our order of February 6 holds that McCumber is no longer entitled to occupy the building as sublessee; but it may be that she is entitled to occupancy as owner. That depends on whether the master lease is valid. McCumber has purported to terminate P.P. & K.’s rights under the master lease. If this termination is effective, then McCumber remains entitled to occupy the building. Our order of February does not resolve this question.

The district court must immediately issue an injunction terminating McCumber’s right of occupancy under the sublease. The district court may stay the effectiveness of that injunction for a period not to exceed 30 days. If during that time the court concludes that P.P. & K. has lost its rights under the master lease, then the district court may vacate the preliminary injunction as moot, because P.P. & K. would no longer be entitled to enforce any clause in the sublease. But if by the end of 30 days the court has not reached a decision, or if by then the court has decided that McCumber’s purported termination is ineffectual, then P.P. & K. is entitled to the benefit of its bargain--and in particular is entitled to replace McCumber with a person operating a franchised Convenient Food Mart at the location in question.

A writ of mandamus will issue, with the limitations we have described.