Muffin War Ends as Dough Is Awarded

The great muffin war has ended.

Orange County Superior Court arbitrator Robert A. Von Esch Jr. ruled in favor of Nancy Feil, an entrepreneur who had set out to conquer the muffin market at Fashion Island shopping mall in Newport Beach.

The loser, said Feil’s attorney, Richard J. Grabowski, was her landlord, Irvine Ranch Farmer’s Market. In a ruling announced Thursday, Von Esch awarded Feil about $50,000 after she complained that the market offered her exclusive rights to sell her freshly baked muffins, then sold another muffin brand advertised as “freshly baked.” Von Esch agreed that the market “unfairly competed” against her.

“I would never have leased this space if I had known that they were going to compete with me,” Feil said. “I’m really happy that this is over.”

Attorney Douglas Powrie, who represented the ranch market operators, said his client never intended to blatantly compete against Feil.

“In our minds, the whole thing could have been avoided with discussion at the outset,” he said.

Von Esch’s ruling is binding for both sides.

Feil and her husband, Don, rented a 170-square-foot space, which she described as “a market within a market,” and opened for business in April, 1986. The couple had just enough room for an oven and a long counter where the baked goods were sold. She said she thought she had the exclusive right to sell muffins and cookies under the name, Neal’s Cookies, at the Atrium Court of Fashion Island at Newport Center.

Business soared, then plummeted, she said, after the market began selling different muffins.

Feil sued the Irvine Ranch Market, accusing the landlord of violating terms of the lease. In the meantime, the Feils divorced, and she became full owner of the mini-bakery. She sought money damages and a court order barring sales of competing items by the market, winning that action in September.

Market officials had argued that she broke the terms of the lease by failing to notify them in a timely manner that she was the new owner.

After she filed her lawsuit, things only got worse, she said. In a move Von Esch called “retaliatory,” the market began selling its muffins from a table 10 feet from her counter and prohibited her use of the only telephone.

Von Esch allowed the market to continue selling muffins, but it must drop the “freshly baked” ads, and the muffins must weigh less than 2.5 ounces. The market must also allow Feil to use the telephone.

Of the $50,000, Von Esch ordered that $28,278 go to Feil for loss of muffin profits, $1,578 to her for loss of cookie profits, and $19,260 to her attorney.