The Virginia Business Litigation Blog

January 15, 2026

Plaintiffs Bear the Burden of Proving Damages, Even if the Defendant Controls the Data

Proof of damages is an essential element to any claim for breach of contract. The plaintiff has the “burden of proving with reasonable certainty the amount of damages and the cause from which they resulted.” (See Sunrise Continuing Care, LLC v. Wright, 277 Va. 148, 156 (2009)). A fundamental feature of our legal system is that the party bringing the litigation must produce the evidence needed to support the claims. Defendants generally aren’t required to produce any evidence at all. The rule sounds innocuous but can be unforgiving in practice. In Virginia, a plaintiff seeking monetary relief must prove not only liability but the amount of its damages with reasonable certainty. Sometimes, the defendant is in sole possession of the relevant financial data, making it difficult (if not impossible) for a plaintiff to prove its case. According to a recent decision of the Virginia Supreme Court, rules are rules; they can’t be broken as a matter of equity or convenience.

In the case of Appian Corp. v. Pegasystems, Inc., a jury returned a verdict exceeding $2 billion after finding that a competitor had misappropriated trade secrets through what the record described as sustained corporate espionage. That massive judgment did not survive appellate review. Although the evidence was deemed sufficient to support the jury’s finding of trade secret misappropriation, the trial court had improperly instructed the jury that the defendant bore the burden of proving which portions of its profits were untainted by the misappropriation. That instruction reflected a widely accepted national approach to trade-secret damages. But it was held to be inconsistent with controlling Virginia law.

December 17, 2025

Filing a Responsive Pleading After the Deadline? You’ll Need a Good Reason

by Lee E. Berlik

A common mistake many lawyers make is to assume that deadlines can be missed without consequence. Judges want to hear cases on the merits, the thinking goes, so as long as you file a motion after the missed deadline and just explain why your pleading is late, the judge will almost certainly grant your motion “in the interests of justice” and allow the late filing. This way of thinking isn’t entirely faulty but misses an important caveat: the explanation needs to be a good one. Deadlines exist for a reason. Sure, courts prefer to adjudicate cases on the merits, but such adjudication is only possible for parties who show respect for the rules. Lawsuits are serious business; if you get served with one, you have an obligation to respond promptly. The rules will allow you to avoid a default judgment for good cause, but “good cause” requires more than just having a meritorious defense and lack of prejudice by the other side. Good cause means good cause.

Under Rule 3:8(a), defendants must file responsive pleadings within 21 days after service of process. Failure to do that results in default under Rule 3:19. Under Rule 3:19(b) provides that “[p]rior to the entry of judgment, for good cause shown the court may grant leave to a defendant who is in default to file a late responsive pleading.” (Emphasis added). The Virginia Supreme Court has found good cause to exist in circumstances involving (1) lack of prejudice to the opposing party; (2) good faith of the moving party; (3) promptness of the moving party in responding to the opposing party’s decision to progress with the case; (4) the existence of a meritorious claim or substantial defense; (5) the existence of legitimate extenuating circumstances, and (6) a justified belief that the suit has been abandoned or will be allowed to remain dormant on the docket. (See Westfall v. Westfall, 196 Va. 97, 103 (1954); Eagle Lodge, Inc. v. Hofmeyer, 193 Va. 864, 870 (1952); Worsham v. Nadon, 156 Va. 438, 443 (1931)). Ultimately, trial courts have discretion to rule as they see fit; this list of justifiable circumstances is not exhaustive or necessarily determinative, and the trial judge may decide to refuse leave to file late responsive pleadings even if good cause is shown. (See AME Fin. Corp. v. Kiritsis, 281 Va. 384, 392-393 (2011)).

November 1, 2025

Unjust Enrichment May Provide Remedy When Contract Unenforceable

by Lee E. Berlik

When parties invest time, money, and effort into a contract they believe to be enforceable, only to later discover it fails for indefiniteness or some other fatal defect, the legal and financial consequences can be severe. But under Virginia law, an aggrieved party may not be entirely without recourse. In certain cases, unjust enrichment can operate as a fallback remedy when the purported contract is deemed unenforceable.

In Ressa Construction, Inc. v. Dillaman (Va. Ct. App. Sept. 30, 2025), the Virginia Court of Appeals affirmed a circuit court ruling that a construction agreement was an unenforceable “agreement to agree” despite the fact that an installment payment had been made and building plans had been submitted to the county. When a dispute arose between the homeowners and the construction company hired for a remodeling project, the plaintiffs were allowed to back out and recover their deposit on a theory of unjust enrichment. The court held the construction contract was unenforceable as no meeting of the minds was ever reached regarding the scope of the project. The failure of the contract meant that the law of unjust enrichment came into play.

September 16, 2025

Illusory Agreements Are Not Enforceable

by Lee E. Berlik

Contracts require both mutuality of assent and consideration to be enforceable. Legally sufficient consideration consists of bargained-for promises and obligations. If the consideration for the promise of one party is the promise of the other party, “there must be absolute mutuality of engagement, so that each party has the right to hold the other to a positive agreement. Both parties must be bound, or neither is bound.” (Am. Agric. Chem. Co. v. Kennedy & Crawford, 48 S.E. 868, 870 (Va. 1904)). A contract consisting solely of illusory promises will be deemed to lack consideration and will therefore not be enforceable. An illusory promise is one that—upon closer inspection—is not really a promise at all. An illusory promise leaves one party with complete discretion as to whether to perform the promise or abandon it. If the promise can be ignored at the will of the party, the promise has no value and will render the contract unenforceable.

Truist Bank learned this when the Western District of Virginia refused to enforce a boilerplate arbitration clause in a contract with one of its customers. In Kiser v. Truist Financial Corporation, the court denied Truist’s motion to compel arbitration, concluding that even if an arbitration agreement existed, it was illusory and therefore unenforceable.

August 19, 2025

Continuing Breach vs. Recurring Breach

by Lee E. Berlik

In civil litigation, there is a time limit for taking legal action, as determined by the statute of limitations applicable to the claim. To determine whether the deadline has passed, it becomes necessary to identify the date from which the time period (typically 2-5 years) should be measured. In most breach-of-contract actions, for example, the limitations period would start to run from the date the contract was breached. In cases where the wrong is continuous and ongoing, however, it can be difficult to identify a specific start date for the statute of limitations. Some states will postpone the expiration of the statute of limitations until the continous wrong comes to an end, though Virginia will usually look only to the date the continuous activity commenced. On the other hand, when wrongful acts are not continuous but occur only at recurring intervals, each occurrence is considered a separate wrong and starts the clock on a new limitations period. Sometimes a judge can rule as a matter of law as to whether a particular breach should be regarded as continuous or recurring; other times, however, such as when material facts are in dispute, juries must make the determination. Whether particular activity can be properly characterized as “continuing” or “recurring” will often make or break the case.

July 28, 2025

Enforceable Noncompetes Require Careful Tailoring

by Lee E. Berlik

In Virginia, restrictive covenants—particularly non-compete and non-solicitation clauses—are enforceable only if narrowly tailored to protect a legitimate business interest without unduly burdening an individual’s ability to earn a livelihood. Courts apply a three-part test: the restraint must (1) be no broader than necessary to protect the employer’s interests, (2) not be unduly harsh or oppressive to the employee, and (3) be reasonable in light of sound public policy. (See Modern Env’ts v. Stinnett, 263 Va. 491, 493 (2002)). Importantly, any ambiguity in the language is construed against the drafter (the employer, typically). The Supreme Court of Virginia has long emphasized that restrictive covenants are disfavored and must be drafted with surgical precision if they are to withstand judicial scrutiny. Earlier this month, the Norfolk Circuit Court decided Knepper v. The Lawson Companies, Inc., in which it analyzed an employer’s restrictive covenants and found them unenforceable due to indefinite language and multiple instances of overbreadth.

Kristopher Knepper, a former executive at The Lawson Companies (TLC), was hired in 2016 to serve as Director of Development and Acquisitions, later rising to Vice President. As part of his employment onboarding, Knepper signed a standalone “Restrictive Covenants Agreement” that prohibited him from engaging in low-income housing development work within broad geographic boundaries for two years after his departure. Separately, in 2020, Knepper became a partial owner of TLC’s affiliated holding company, TLC Holding, LLC, when he was granted Class B membership units. That ownership interest triggered a second set of restrictive covenants, this time embedded in the company’s Operating Agreement. These restrictions were functionally similar to those in the earlier agreement but extended indefinitely, applying as long as Knepper remained a member of the LLC.

June 6, 2025

Anticipatory Breach and Adequate Assurance in Virginia

by Lee E. Berlik

Parties to long-term service contracts often face considerable uncertainty when signs emerge that the other party may not follow through on its obligations. At common law, a party may bring an action for anticipatory breach only when the other party’s repudiation is “clear, absolute, and unequivocal”. Courts have long demanded a high threshold for such a claim, in part to guard against frivolous accusations of breach based on mere suspicion or miscommunication. But this stringent standard gives rise to a critical practical dilemma: what should a party do when it reasonably suspects the other party is not going to perform, yet cannot point to any definitive repudiation? Suppose, for example, that a contractor repeatedly misses deadlines, stops responding to communications, and is rumored to be insolvent—but has not explicitly stated an intent not to perform. Has that party repudiated? Under traditional common law principles, perhaps not. But the aggrieved party is left in a perilous bind: do they continue investing time, money, and resources into a contract that may collapse, or do they terminate the agreement and risk being accused of breach themselves?

This is precisely the kind of commercial uncertainty that the Restatement (Second) of Contracts § 251 and Uniform Commercial Code § 2-609 aim to mitigate. (See Virginia Code § 8.2-609). These doctrines create a mechanism for managing contractual insecurity without requiring parties to wait helplessly for either full breach or explicit repudiation. Under both frameworks, when one party has “reasonable grounds for insecurity” regarding the other’s performance, it may demand “adequate assurance” that the other will fulfill its obligations. This is not a demand to terminate, but a demand for clarity. If the other party fails to provide such assurance within a “reasonable time”—defined by the U.C.C. as not to exceed thirty days—that failure itself may be treated as a repudiation. This shifts the analysis from one focused solely on the subjective intentions of the potentially breaching party, to one that also accounts for the objective commercial realities faced by the insecure party. It empowers the party to take protective measures—up to and including suspending performance—without having to meet the virtually unreachable threshold of proving an unequivocal anticipatory breach at common law.

April 26, 2025

No Contract Without Meeting of the Minds

by Lee E. Berlik

In Virginia, as in other states, there must be a “meeting of the minds”—mutuality of assent—before a contract will be formed. This concept of mutual assent requires that the parties have a common, distinct and unambiguous intention regarding the material terms of the agreement. (See Phillips v. Mazyck, 273 Va. 630, 636 (2007)). To determine whether mutual assent has been reached sufficient to form an enforceable contract, courts look to the parties’ words and actions. Before finding a meeting of the minds has been reached, courts will want to see evidence that the parties both communicated their intentions to each other. A party’s internal, private thoughts will not be considered.

The Court of Appeals decided a case last week demonstrating these principles. The case of Somers v. W.D. Campbell and Son, Inc. basically involved a situation where an individual believed an insurance company was obligated to maintain insurance on his daughter’s vehicle but the insurance company disagreed, pointing out that the parties never reached a meeting of the minds as to any such arrangement. The case was initiaed in general district court, was appealed to circuit court, and appealed again to the Virginia Court of Appeals. Each court reached the same conclusion: that without a meeting of the minds, no contract was ever formed.

March 22, 2025

Tortious Interference with Nonsolicitation Agreements

by Lee E. Berlik

Employees bound to non-solicitation agreements know they can get in trouble with their former employer if they try to recruit their former colleagues to join them at a competing company. What many don’t realize is that the new employer can also wind up in legal trouble if it is aware of the non-solicitation (or-noncompetition) agreement and actively encourages the employee to violate its terms. The new employer didn’t sign the non-solicitation agreement and obviously isn’t bound by its terms but can be held liable for “tortious interference” when certain requirements are met.

Under Virginia law, a claim for tortious interference with contract requires four elements: (1) A valid contractual relationship or business expectancy; (2) Knowledge of that relationship by the defendant; (3) Intentional interference causing a breach or termination; and (4) Resultant damages. In the recent case of Brillient Corp. v. RELI Group, Inc., the defendant sued for tortious interference with a non-solicitation contract tried to get the case dismissed by arguing that despite its knowledge of the contract, its terms had not been violated because the employees at issue applied for jobs of their own volition and had not been solicited or induced to do so by the defendant. The Eastern District of Virginia rejected the argument and allowed the claim to proceed.

January 15, 2025

Parent Companies Not Automatically Liable for Actions of Subsidiaries

by Lee E. Berlik

Corporate successor liability is a nuanced area of law, often entangling issues of contracts, corporate structure, and equity. The recent decision in PAE National Security Solutions, LLC v. Constellis, LLC (Va. Ct. App. Jan 7, 2025) serves as a reminder that when a company acquires another’s assets, the acquiring company does not automatically assume the seller’s debts and liabilities unless an exception applies. As articulated in La Bella Dona Skin Care, Inc. v. Belle Femme Enterprises, LLC, 294 Va. 243 (2017), Virginia recognizes four exceptions to the general rule:

Express or Implied Assumption of Liabilities: The buyer explicitly or implicitly agrees to assume the seller’s obligations;
De Facto Merger or Consolidation: The circumstances surrounding the transaction warrant a finding that there was a consolidation or de facto merger of the two corporations;
Mere Continuation: The buyer is a continuation of the seller, often sharing leadership, operations, or other characteristics; or
Fraudulent Transaction: The sale is a sham designed to defraud creditors.

In the PAE case, the court examined these exceptions and found no grounds to impose successor liability.

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