Arch Medical Associates, Inc. v. Bartlett Health Enterprises, Inc.

589 N.E.2d 1251, 32 Mass. App. Ct. 404
CourtMassachusetts Appeals Court
DecidedApril 15, 1992
DocketNo. 90-P-772
StatusPublished
Cited by30 cases

This text of 589 N.E.2d 1251 (Arch Medical Associates, Inc. v. Bartlett Health Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arch Medical Associates, Inc. v. Bartlett Health Enterprises, Inc., 589 N.E.2d 1251, 32 Mass. App. Ct. 404 (Mass. Ct. App. 1992).

Opinion

Armstrong, J.

The defendants were found to be in contempt of a preliminary injunction against operating a “Nutri/System” outlet at a particular address in Norwell, the problem being, according to the plaintiffs, who operate a Nutri/System weight loss center in Braintree, that the Norwell [405]*405location is situated within a ten-mile exclusive franchise zone granted them in their contract with Nutri/System, Inc., the franchisor. The injunction took effect June 7, 1989, when the plaintiffs posted a required bond and the defendants were served with copies by a deputy sheriff. On June 14, 1989, a judge of the Superior Court other than the one who had granted the injunction ordered it stayed pending review by a single justice of this court. The latter denied relief, the denial being entered on the Superior Court docket August 24, 1989. The plaintiffs then filed a complaint for contempt of the injunction, alleging, apparently (neither the principal complaint nor the contempt complaint has been included in the appendix), that the defendants continued to do business from the Norwell location.

There was a hearing on the contempt complaint on October 3, 1989, at which the defendants acknowledged their violation, according to the judge’s findings. From affidavits the individual defendants filed at the hearing, we gather that their position was that the presence of their Norwell Nutri/ System outlet impinged little on the plaintiffs’ actual market, which continued to grow despite the defendants’ Norwell facility, and that the closing of their Norwell location would leave an opening for market penetration by a major Nutri/ System competitor, “Jenny Craig.” The judge entered findings and a judgment of contempt, imposing damages of $250 per day, for fifty days, that being the time (according to the judge’s calculation) that the injunction had been in effect up to the date of the hearing on October 3, and $500 per day for each day thereafter that the defendants should remain in violation. She also awarded attorneys’ fees and costs of $16,069.02, as outlined in an affidavit furnished by the plaintiffs’ counsel.3

[406]*406The defendants raise two points in their appeal: first, that they were denied due process in that the judge predicated her award of damages on an affidavit furnished by the plaintiffs’ counsel after the October 3 hearing, without giving the defendants an opportunity for a hearing on the issue of damages; second, that the damages amounts were not reasonably attributable to the defendants’ violation of the injunction (i.e., their continued operation of the Norwell facility). Here the defendants apparently allude to certain materials included in their appendix (although not shown to have been before the judge) indicating that during the summer of 1989 Jenny Craig was making inroads in the South Shore market, and that Boston-area Nutri/System franchises had been set back by a two-part special on Boston’s highest-viewership television channel casting doubt upon Nutri/System’s weight-loss claims.

The difficulty we have in evaluating both of these contentions is that we have absolutely no idea what transpired at the October 3 hearing on the contempt complaint. No transcript of the hearing has been furnished, and the defendants have not availed themselves of any alternative method of reconstructing the evidentiary record (see Mass. R.A.P. 8[c] and [d], 378 Mass. 932, 933-934 [1979]). Without a record of the testimony or representations at the hearing, we have no basis for concluding that the evidence did not support the judge’s findings of damages. Kunen v. First Agric. Natl. Bank, 6 Mass. App. Ct. 684, 689 (1978). The burden is on the appellant in the first instance to furnish a record that supports his claims on appeal. Id. Errors that are not disclosed by the record afford no basis for reversal.

We can only look at what we are given: this is the judge’s findings and three affidavits, two furnished by the defendants the day of the trial, the other furnished by the plaintiffs’ [407]*407counsel a week later.4 The judge’s findings indicate that the Norwell facility was serving 141 clients and that the plaintiffs’ Braintree facility, with 476 clients the previous year and gross revenues of $562,576, was deriving gross revenue of $1,182 per client per year. Extrapolating, she inferred the 141 clients of the Norwell facility would, if they were customers at Braintree, augment the plaintiffs’ annual gross by $166,662. This is gross, the defendants argue; compensatory damages must be based on lost profits, which would take account of expenses, as to which the findings are silent. But additional customers, in an up-and-running facility, may represent largely profit; the judge may well have had a basis in the evidence at the October 3 hearing for assuming that 141 additional customers would not necessitate sigñificant additional expense. In any event, the figure the judge employed in calculating the compensatory damages was $250 per day; it was plainly far less than the additional daily gross that 141 additional customers would provide ($166,662 4- 365 = $457) on the assumptions indicated. On its face the figure of $250 seems conservative.

There is no fatal inconsistency between the judge’s award of $250 per day for past violations and $500 per day for future violations. Lost profits are notoriously difficult to prove with precision, see Frank D. Wayne Assocs., Inc. v. Lussier, 16 Mass. App. Ct. 986, 988 (1983), and a judge may rationally employ conservative principles in estimating damages for past violations, where the purpose is entirely compensatory, but employ more expansive principles in assessing a periodic fine for ongoing violations, where the purpose is less compensatory and more coercive, to compel obedience to the injunction. Especially in civil contempts where the fine is prospec[408]*408tive in its operation, it can properly be “measured only ‘in some degree’ by the pecuniary harm caused by the contemptuous act.” Allen v. School Comm. of Boston, 400 Mass. 193, 195 (1987), quoting from Department of Pub. Health v. Cumberland Cattle Co., 361 Mass. 817, 832 (1972). In an ordinary contract action, tenuous proofs of lost profits often run afoul of the principle that “the complaining party must establish his claim upon a solid foundation in fact, and cannot recover when any essential element is left to conjecture, surmise or hypothesis.” John Hetherington & Sons v. William Firth Co., 210 Mass. 8, 21-22 (1911). MacDonald v. Hawker, 11 Mass. App. Ct. 869, 877 (1981). Different principles come to the fore in contempt actions, where “[t]he amount of a compensatory fine upon ‘[o]ne who has disobeyed a decree’ need not be measured with undue precision.” Department of Pub. Health v. Cumberland Cattle Co., supra at 832, quoting from Godard v. Babson-Dow Mfg. Co., 319 Mass. 345, 350 (1946).

The large daily fine was ordered by the judge to take effect not from the date of the contempt judgment but from the date of the hearing, October 3. At that time the defendants stood before the court in open violation of the court’s order. They were, or should have been, then on notice that the court could not treat ongoing violations with lofty indifference.

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Bluebook (online)
589 N.E.2d 1251, 32 Mass. App. Ct. 404, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arch-medical-associates-inc-v-bartlett-health-enterprises-inc-massappct-1992.