Opinion
No. 12–P–1239.
2013-05-15
NETWORK SYSTEM ARCHITECTS CORPORATION v. Michael DIMITRUK & another.
By the Court (GRAINGER, BROWN & RUBIN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Following entry of a default as to liability, a hearing was held before a judge of the Superior Court for purposes of assessing damages. With respect to the issue of lost profits, the judge determined that no damages had been caused by the defendants' unlawful conduct.
It is well settled that “[u]pon default under Mass.R.Civ.P. 55(b), 365 Mass. 822 (1974), the factual allegations of a complaint are accepted as true for purposes of establishing liability.” Multi Technology, Inc. v. Mitchell Mgmt. Sys., Inc., 25 Mass.App.Ct. 333, 334–335 (1988), citing Productora e Importadora de Papel, S.A. de C.V. v. Fleming, 376 Mass. 826, 833–835 (1978). Plaintiff Network System Architects Corporation (NSA) alleges that the judge erred in making some findings of fact after the hearing on damages that contradict the facts alleged in the complaint.This argument, ultimately, is immaterial. The judge concluded that no damages were proximately caused by the use of information taken by defendant Dimitruk from NSA. Specifically, she found that there was no credible evidence that the use of the information was even a substantial contributing factor with respect to the decision of any customer to give business to defendant Accunet that it would have otherwise given to NSA. The judge found that it was “clear from the evidence presented that as to virtually all of these customers that are an issue here, the customer indicated that it made the move because of the relationship with Mr. Dimitruk, or the customer already had a relationship with Accunet, so that it was entirely predictable and natural that when Mr. Dimitruk moved to Accunet, the customer also would do the same.... I find that the customers who moved from NSA to Accunet would have done so regardless of Mr. Dimitruk's use of information from NSA, and therefore that his use of that information was not a proximate cause of ... Accunet obtaining any business that otherwise would have gone to NSA.”
Thus, even if the factual findings to which NSA points were foreclosed by the allegations of the complaint, and even if acceptance of the allegations of the complaint instead of those findings would have led to a conclusion that some of the information on the computer was protected as a trade secret that the judge found was not, the judge's finding that none of NSA's lost profits was attributable to use of any information from NSA is fatal to its claim.
NSA's broader argument, that proximate causation ought not to have been considered at all during the hearing on assessment of damages, was not raised below. Indeed, NSA's opening argument to the judge below stated that it was required to demonstrate both proximate cause and damages and would do so. Consequently, we will not consider it. See Commissioner of Rev. v. Comcast Corp., 453 Mass. 293, 312 (2009). Finally there is no merit to NSA's argument that the judgment below violates public policy. Contrary to NSA's characterization, the defendants were not allowed to relitigate liability determined by the default judgment during the assessment of damages hearing based on late-provided evidence. Rather, the judge properly considered the question of causation and the defendants properly provided NSA with sales data before the assessment of damages hearing, allowing the plaintiff to calculate alleged lost profits.
Were this argument not waived, we would find it without merit. The very purpose of an assessment of damages hearing is to determine what damages were proximately caused by unlawful conduct.
Judgment affirmed.