Hospital Media Network, LLC v. Henderson, 187 Conn. App. 40

Henderson was chief revenue officer of Hospital Media Network (HMN) from Jan 1 to Sept 5, 2013, after serving as a consultant. HMN paid him salary and a $25,000 bonus (paid through his consulting entity).
While employed by HMN, Henderson worked with Generation Partners on its acquisition of Captivate, a competitor in the digital-ad space; acquisition closed Sept 26, 2013.
Upon closing, Henderson received a $150,000 finder’s fee, a three‑year consulting contract ($50,000/year), and the opportunity to purchase restricted Captivate stock.
HMN sued alleging CUTSA violations, tortious interference, breach of employee loyalty/fiduciary duty and usurpation of corporate opportunities; Henderson was defaulted for discovery abuses, admitting liability for the pleaded claims.
At a damages hearing, the trial court awarded HMN $454,579.76 based on equitable forfeiture (Henderson’s 2013 salary and bonus) and disgorgement (finder’s fee, consulting fees, stock value). Trial court found Henderson’s conduct "uninformed" rather than malicious and acknowledged his contribution to HMN’s growth.
On appeal, the Connecticut Appellate Court affirmed liability but reversed in part, holding the wholesale forfeiture and full disgorgement were disproportionate and remanding for a new damages hearing.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Effect of default on liability and damages proof	Default admits essential liability facts; HMN need only prove damages amount	Henderson argued duty of loyalty did not apply and plaintiff waived claims	Default precluded contesting liability; plaintiff must still prove damages amount
Availability of forfeiture of employee compensation	HMN sought forfeiture of salary/bonus earned during disloyal period	Henderson argued Connecticut law prohibits forfeiture of past compensation	Forfeiture is an equitable, discretionary remedy; past compensation may be forfeited but wholesale forfeiture was an abuse given equities
Proper measure and scope of forfeiture/apportionment	Forfeiture of full compensation and bonus requested	Henderson emphasized his valuable services and lack of willful misconduct; urged apportionment	Court must weigh Wall Systems factors; apportionment often appropriate where employee provided value; full forfeiture here was disproportionate
Disgorgement of third‑party benefits	HMN sought disgorgement of finder’s fee, consulting fees, and stock value in full	Henderson argued some fees compensated services performed before/after HMN employment and thus unrelated to breach	Disgorgement permitted for profits from breach but should be limited to benefits attributable to disloyal acts; full disgorgement was improper where compensation related to services outside disloyal period

Wall Systems, Inc. v. Pompa, 324 Conn. 718, 154 A.3d 989 (Conn. 2017) (articulates discretionary nature of forfeiture and disgorgement and lists factors for courts to weigh)
Equity One, Inc. v. Shivers, 310 Conn. 119, 74 A.3d 1225 (Conn. 2013) (default admissions establish liability and plaintiff need not reprove pleaded facts)
Abbott Terrace Health Center, Inc. v. Parawich, 120 Conn. App. 78, 990 A.2d 1267 (Conn. App. 2010) (discusses scope/effect of default and limitations on defenses at damages hearing)
New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 970 A.2d 592 (Conn. 2009) (explains restitutionary remedies aim to force disgorgement of unjust benefits, not compensate plaintiff)
Cameco, Inc. v. Gedicke, 157 N.J. 504, 724 A.2d 783 (N.J. 1999) (recognizes forfeiture and apportionment where breach is limited or employee provided value)