The Mrs. Fields Brand, Inc.
Interbake Foods LLC
Submitted: October 20, 2017
A. Jenkins, Esquire Robert K. Beste III, Esquire Smith,
Katzenstein & Jenkins LLP
S.C. Stover, Esquire Kevin G. Collins, Esquire Barnes &
G. BOUCHARD CHANCELLOR.
letter constitutes the court's decision on both
parties' applications for attorneys' fees and
expenses under Section 22(j) of their Trademark License
Agreement dated March 16, 2012 (the "License
Agreement") as the "prevailing party" at
trial. For the reasons explained below, both of the
applications are denied.
April 13, 2016, The Mrs. Fields Brand, Inc. ("Mrs.
Fields") filed a complaint against Interbake Foods LLC
("Interbake") asserting various claims arising out
of the License Agreement. On November 2, 2016, shortly before
trial, Mrs. Fields filed an amended complaint asserting four
claims (the "Complaint"). Two days later, Interbake
filed an answer and an amended counterclaim asserting three
claims (the "Counterclaim"). The court held a
six-day trial on the parties' respective claims beginning
on November 9, 2016.
26, 2017, the court issued a 107-page post-trial Memorandum
Opinion (the "Opinion") that: (i) ruled in Mrs.
Fields' favor on Count I of the Complaint, in part, and
on Counts I-III of the Counterclaim in their entirety; (ii)
ruled in Interbake's favor on Count I of the Complaint,
in part, and on Counts II-III of the Complaint in their
entirety; (iii) dismissed Count IV of the Complaint without
prejudice for lack of ripeness; and (iv) requested further
briefing on the parties' respective requests for an award
of attorneys' fees and expenses as the prevailing party
under Section 22(j) of the License Agreement.
27, 2017, the court issued an Order of Clarification and
Denial of Motion for Reargument in which the court clarified
that a certain aspect of Count I of the Complaint that
mirrored the relief sought in Count IV of the Complaint was
to be dismissed without prejudice for lack of ripeness. On
August 7, 2017, the court issued an Order and Partial
Judgment documenting the disposition of each of the claims in
the Complaint and the Counterclaim, and retaining
jurisdiction for the purpose of addressing the parties'
respective applications for attorneys' fees and expenses.
September 18, 2017, Interbake filed an application for an
award of attorneys' fees and expenses in the amount of
$2, 699, 924.41, asserting it was the prevailing party at
trial under Section 22(j) of the License Agreement. The next
day, Mrs. Fields filed an application for an award of
attorneys' fees and expenses in the amount of $5, 369,
178.45, asserting it was the prevailing party at trial. On
October 20, 2017, Mrs. Fields and Interbake each filed briefs
in opposition to the other side's application for an
award of attorneys' fees and expenses.
Court of Chancery generally adheres to the American Rule with
respect to attorneys' fees, under which each party is
responsible for paying for the expense of its own
counsel. "A recognized exception to this rule
applies when a contractual agreement exists between the
parties regarding payment of attorneys'
fees." In such cases, the court will
"routinely enforce provisions of a contract allocating
costs of legal actions arising from the breach of a
License Agreement in this case contains such a provision.
Specifically, Section 22(j) of the License Agreement states,
in relevant part, that:
[I]f MRS. FIELDS or [INTERBAKE] are [sic] required to enforce
this Agreement in any judicial proceeding or appeal thereof,
the Party prevailing in such proceeding shall be entitled
to reimbursement of its reasonable costs and expenses,
including reasonable accounting and legal fees, whether
incurred prior to, or in preparation for, or in contemplation
of the filing of any written demand, claim, action, hearing
or proceeding to enforce the obligations of this
the disposition of each party's application for
attorneys' fees and expenses turns on whether it was the
"prevailing" party ...