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MFGPC, Inc. v. Mrs. Fields Franchising, LLC

United States District Court, D. Utah

January 8, 2019

MFGPC, INC., a California corporation, Counterclaim and Crossclaim/Third-Party Plaintiff,
v.
MRS. FIELDS FRANCHISING, LLC, a Delaware limited liability company, Counterclaim-Defendant, and MRS. FIELDS FAMOUS BRANDS, a Delaware limited liability company, d.b.a. Famous Brands International, Crossclaim/Third-Party Defendant.

          DUSTIN B. PEAD MAGISTRATE JUDGE

          MEMORANDUM DECISION AND ORDER GRANTING IN PART MFGPC'S MOTION TO AMEND AND ORDERING SUPPLEMENTAL BRIEFING

          JILL N. PARRISH, JUDGE

         Before the court is the Motion for Leave to File Amended Complaint and Revise Case Caption filed by defendant and counterclaim and crossclaim/third-party plaintiff MFGPC, Inc. (“MFGPC”). Plaintiff and counterclaim defendant Mrs. Fields Franchising, LLC (“Mrs. Fields”) and crossclaim/third-party defendant Mrs. Fields Famous Brands (“Famous Brands”) oppose the motion. The court grants the motion in part, granting leave to amend the claims, but reserving judgment on the addition of “Doe Defendants” and the proposed revisions to the case caption.

         BACKGROUND

         In 2003, MFGPC and Mrs. Fields entered into a Trademark Licensing Agreement (the “Agreement”).[1] MFGPC received a license to manufacture and sell prepackaged popcorn bearing the “Mrs. Fields” trademark. In exchange, Mrs. Fields received royalties. The parties performed under the Agreement for over a decade. In the eleventh year, Mrs. Fields purported to terminate the Agreement, citing MFGPC's failure to pay the “Guaranteed Royalty.” But MFGPC had paid the Guaranteed Royalty in full, so MFGPC informed Mrs. Fields that the termination was ineffective. Mrs. Fields never responded and instead filed suit.

         Mrs. Fields' lawsuit sought a declaration that it had properly terminated the Agreement. In response, MFGPC filed counterclaims against Mrs. Fields as well as “crossclaims” against Mrs. Fields Famous Brands (“Famous Brands”) and Mrs. Fields Confections (“Confections”) for breach of contract, account stated, and breach of the implied covenant of good faith and fair dealing.[2]MFGPC alleged that Mrs. Fields' attempted termination was without basis and therefore constituted a repudiation of the Agreement.

         Mrs. Fields moved to dismiss the counterclaim, and the court granted the motion, holding that MFGPC had failed to state a claim for breach of contract. Mrs. Fields then moved to voluntarily dismiss its complaint for declaratory judgment as moot. The court granted the motion and dismissed Mrs. Fields' complaint.

         MFGPC appealed, arguing, among other things, that the court erred when it dismissed MFGPC's counterclaim and crossclaim/third-party claim for breach of contract. The Tenth Circuit agreed, reversing the dismissal of the breach of contract counterclaim and crossclaim/third-party claim and remanding the case for further proceedings. Because Mrs. Fields' Complaint had been voluntarily dismissed, only MFGPC's counterclaim and crossclaim/third-party claim for breach of contract against Mrs. Fields and Famous Brands remained viable on remand.

         On remand, both parties moved for summary judgment. On August 20, 2018, the court granted summary judgment in favor of MFGPC, holding that MFGPC had established the first three elements of its breach of contract counterclaim: (1) the parties' relationship was governed by a valid contract; (2) MFGPC substantially performed under the Agreement; and (3) Mrs. Fields improperly repudiated the Agreement, thereby committing an actionable breach. Because MFGPC had not moved for summary judgment on the issue of a remedy, the court left that issue for another day.

         At the time of the court's order, MFGPC had a pending motion for leave to amend. In the order granting summary judgment, the court directed MFGPC to notify the court within seven days if it still sought leave to amend. On September 20, 2018, MFGPC filed the present motion seeking leave to amend and to correct the case caption. The court struck MFGPC's former motion for leave to amend as moot. The court now addresses the present motion to amend.

         ANALYSIS

         I. Leave to Amend

         MFGPC filed its first counterclaim and crossclaim complaint on February 24, 2015. MFGPC amended those claims on May 14, 2015. After the appeal to the Tenth Circuit and subsequent remand, Mrs. Fields answered the First Amended Counterclaim and Crossclaim Complaint on February 13, 2018. MFGPC filed a motion for leave to file an amended complaint on March 8, 2018. MFGPC filed its present motion to amend on September 20, 2018, one month after the court's order granting summary judgment in favor of MFGPC. MFGPC moves the court for leave to amend the counterclaim and crossclaim complaint to add claims for equitable relief and to add 100 “Doe Defendants.”

         Because the named counterclaim and crossclaim defendants have answered and more than 21 days have passed since the filing of the answer, MFGPC may amend only with permission of the court pursuant to Fed.R.Civ.P. 15(a)(2). “The grant of leave to amend the pleadings pursuant to Fed.R.Civ.P. 15(a) is within the discretion of the trial court.” Castleglen, Inc. v. Resolution Tr. Corp., 984 F.2d 1571, 1584-85 (10th Cir. 1993) (internal citation omitted). “The court should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). “Refusing leave to amend is generally only justified upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Bylin v. Billings, 568 F.3d 1224, 1229 (10th Cir. 2009) (citation omitted). As none of the ...


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