Everlast World's Boxing Headquarters Corp. v. Trident Brands Inc.

Background

In an earlier opinion, the court held that Trident Brands Inc. and Manchester Capital Inc. were liable to Everlast World’s Boxing Headquarters Corp. Trident had agreed to pay royalties to Everlast in exchange for a license to use Everlast’s trademark on certain fitness-related products, and Manchester had guaranteed Trident’s obligations. The agreement required quarterly royalty payments subject to a minimum payment that increased annually. The court had reserved the amount of damages because the precise amount appeared disputed.

Damages

Everlast moved under Rule 56 of the Federal Rules of Civil Procedure for summary judgment on damages. The court held that Everlast was entitled to $425,000 for unpaid minimum royalty payments for the fourth quarter of 2016 and all four quarters of 2017. The defendants argued that Everlast improperly relied on a declaration from counsel who lacked personal knowledge. The court rejected that argument because Everlast relied on the defendants’ binding admissions, made in response to requests for admission, that they had not paid the minimum guaranteed royalties for those periods.

The court also held that the licensing agreement required the defendants to pay interest on the unpaid amount. The agreement permitted interest at 1.5% per month when the licensee failed to pay sums due.

Attorney’s Fees and Costs

The agreement also allowed Everlast to recover reasonable and properly incurred costs and expenses, including legal fees, incurred in collecting the unpaid amount. Everlast requested $93,635 in attorney’s fees and $800 in costs. The court awarded the $800 in costs.

The court found the attorney’s-fee request too high for two reasons. Some billing entries were too vague to determine whether the work was reasonable or related to the case. In addition, the request included fees for work on Everlast’s claim against SNPI-NV, which the court had dismissed because SNPI-NV was not a party to the contract. The court concluded that fees for trying unsuccessfully to bring claims against a stranger to the contract were not recoverable under the agreement. It therefore reduced the attorney’s-fee request by 25%, awarding $70,226.25.

Ruling

Judge Furman granted Everlast’s motion for summary judgment. The order awarded $425,000 in damages plus interest, $800 in costs, and $70,226.25 in attorney’s fees. It directed Everlast to submit a proposed judgment calculating interest through October 15, 2020, by October 13, 2020, and allowed the defendants to object by October 14, 2020. The Clerk of Court was directed to terminate the motion docket entry.