Datacomm Interface, Inc. v. Computerworld, Inc.

Decision Date18 February 1986
Citation489 N.E.2d 185,396 Mass. 760
PartiesDATACOMM INTERFACE, INC. v. COMPUTERWORLD, INC. et al. 1 Sheldon G. Adelson, third-party defendant.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

David Wolf (Edward R. Schwartz, Boston, with him), for plaintiff.

Andrew F. Lane, Boston, (Steven J. Goldberg with him), for defendants.


LYNCH, Justice.

In December, 1975, the plaintiff, Datacomm Interface, Inc. (DCI), commenced this nonjury unfair competition action against DataComm User, Inc. (User), and its parent company Computerworld, Inc. All these parties are Massachusetts corporations. Shortly thereafter, DCI obtained a temporary restraining order against User and Computerworld, enjoining the defendants from using the name "DATACOMM '76" to promote its 1976 national data communications trade show. The judge referred the case to a master and on his recommendation dissolved the temporary restraining order and also denied DCI's motion for a preliminary injunction. User then counterclaimed against DCI ultimately alleging that DCI engaged in unfair competition, conversion, abuse of process, interference with contractual relations, and defamation. User later amended its counterclaim, adding Sheldon G. Adelson, a principal of DCI, as a party. In February, 1976, User was granted a preliminary injunction enjoining DCI and Adelson from using a copy of a magazine circulation list.

Hearings before the master began in 1977, after the master allowed the defendants' motion for a bifurcated trial. In July, 1980, after approximately fifty days of trial, the master issued his final report on liability (facts final), finding against DCI on its unfair competition claim, and finding for User on its counterclaim for unfair competition, conversion, and abuse of process. User and Computerworld filed a motion pursuant to G.L. c. 231, § 6F (1984 ed.), for reasonable costs and attorney's fees, a motion to confirm the master's report, and later amended the counterclaim to include a claim under G.L. c. 93A, § 11.

In November, 1980, a judge confirmed the master's report on liability, 2 and ordered the case recommitted to the master for findings on the issue of counterclaim damages.

The master submitted his report (facts final) on User's counterclaim damages in December, 1982, awarding total damages of $33,250. The judge recommitted the case to the master for findings relating to the motion under G.L. c. 231 § 6F, and for clarification of a portion of the damage award. In August, 1984, after the master filed his report after recommital, the judge confirmed the master's report on damages, denied User and Computerworld's motion under G.L. c. 231, § 6F, and ruled that DCI and Adelson's actions had not constituted a violation of G.L. c. 93A. Judgment was entered in favor of User and Computerworld in the original action and for User on the counterclaim for $33,250.

All parties filed notices of appeal. DCI filed a motion including a request for leave to file a statement of the evidence. The judge denied the motion in October, 1984. DCI and Adelson nevertheless filed a statement of the evidence, and the judge allowed User and Computerworld's motion to strike the statement, imposing sanctions of $300. We granted DCI and Adelson's application for direct appellate review.

On appeal, DCI argues that the circumstances of User and Computerworld's promotion and operation of their data communications trade show, "DATACOMM '76," did in fact constitute unfair competition and that the master's report was erroneously confirmed; the master's failure to submit summaries and to report certain excluded evidence constituted prejudicial error; it was error to strike DCI and Adelson's statement of the evidence and to impose sanctions; and the damage awards are unsupported by the master's findings. On cross appeal, User challenges the denial of relief under G.L. c. 231, § 6F, and G.L. c. 93A. We affirm the judgment as it applies to DCI's unfair competition action. We affirm the judgment on User's counterclaim in part and reverse in part.

Sheldon G. Adelson was the principal investor in Communications Trends, Inc. (Trends), which in June, 1972, began publishing a magazine called The Data Communications User (TDCU) and continued publishing it continuously until May, 1975. The first issue of TDCU announced that it would sponsor a national trade show devoted exclusively to data communications called Data Communications INTERFACE '73. In July, 1972, Trends formed DCI, the plaintiff in this action, a wholly owned corporation. DCI was intended to own and operate the INTERFACE shows. The master found, however, that DCI never operated as a separate financial entity.

Trends and DCI had jointly obtained a loan from Capitol Bank, having pledged all the assets of both corporations as collateral. Trends suffered financial difficulty in May, 1975. Although Trends filed a petition in bankruptcy, Capitol Bank, pursuant to its security agreement with Trends and DCI, successfully foreclosed on the loan. In June, 1975, Computerworld purchased all assets of Trends which had been used in the publication and marketing of TDCU. The sale to Computerworld included: all copies of circulation lists used by Trends for subscription, circulation, or other such purposes in any form; all promotional materials; all rights to the name "The Data Communications User," and all other names owned by Trends; and all trademarks and goodwill pertaining to the publications.

Just after purchasing TDCU, Computerworld formed DataComm User, Inc., a wholly owned subsidiary corporation. The new publishers of TDCU decided that the magazine would again sponsor a data communications trade show, now to be called DATACOMM '76, to be held in New Orleans at the same site as INTERFACE '75.

The master found that the public was not confused or misled as to the source or origin of the DATACOMM '76 or INTERFACE '76 show. The master did find that some confusion existed as to which show was indeed the "ongoing" show. Although DCI's show was officially named Data Communications INTERFACE, it was, from its inception, commonly and popularly called INTERFACE. INTERFACE was the name by which DCI's show was intended to be known.

The master found that an allegation in the complaint in the instant action verified by Adelson that "the name Data Communications '7- has acquired a meaning exclusively identified with the product and services of the plaintiff so as to indicate the plaintiff's show" was a knowing misstatement. The master also found that Adelson knew INTERFACE '73, '74, and '75 had never been known as Data Communications '7-.

1. Procedural issues.

a. Summary of the evidence. DCI contends that by failing to append summaries of the evidence to his report, as requested by DCI, the master violated his duty under Rule 49(7) of the Rules of the Superior Court (1976). 3 We disagree.

The proper practice under rule 49(7) and Mass.R.Civ.P. 53(e)(2), as amended, 367 Mass. 917 (1975), to raise the issue, before the Superior Court judge, whether a finding of the master is supported by evidence has been extensively treated elsewhere and a detailed review need not be attempted here. See Chase v. Pevear, 383 Mass. 350, 358, 419 N.E.2d 1358 (1981), and cases and authorities cited. See also Greaney, Trials Before Masters: A Procedural and Substantive Primer for the Practicing Lawyer, 63 Mass.L.Rev. 195 (1978). DCI failed properly to follow the required procedure. Its procedural missteps are fatal to its claim for summaries.

Shortly after the July, 1980, filing of the master's final report on liability, DCI filed a document entitled, "Plaintiff's Objection to Master's Report re Liability," and moved to recommit the report. This document of approximately seventy-eight pages is an admixture of argument, objections to legal conclusions of the master, objections to factual conclusions of the master, objections to the master's conclusions regarding credibility of witnesses, objections to the master's failure to find facts that the testimony of the plaintiff's witnesses would support, and included numerous exhibits reproduced in part or entirely. This document was discursive, prolix, confusing, and, in part, argumentative. It also contained a request for summaries of the evidence. Most of the objections contain reference to transcript pages or to specific exhibits, but the presentation of the objections is confusing. In November, 1980, the judge allowed the defendants' motion to confirm the liability report without summaries. The plaintiff did not file a motion to order the master to submit summaries prior to the hearing. The master submitted his final report on damages in December, 1982, and in March, 1983, 4 DCI and Adelson filed objections to the report and moved to strike portions of the report or recommit. Requests for summaries of the evidence were dispersed throughout DCI and Adelson's twenty-eight pages of objections. Many of the transcript references are broad and cite fifty and one hundred page sections of transcript at a time. The final report on damages after recommittal was filed without summaries, the master's findings were confirmed, and judgment entered in accordance with the report in August, 1984. DCI and Adelson first moved to have the judge order the master to submit summaries of the evidence in September, 1984. A single justice of the Appeals Court denied a motion under Mass.R.A.P. 15(c), 365 Mass. 859 (1974), to order the master to report summaries because the case had gone to judgment.

DCI's summary requests fell short of the precision necessary for proper procedure. Even if the requests for summaries were not so lacking in the necessary degree of specificity required under rule 49(7), as to relieve the master of his obligation regarding summaries, we hold that DCI's failure to file a ...

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