Uncategorized Category Archives — The Virginia Business Litigation Blog Published by Virginia and Washington, D.C. Litigation & Appeals Attorney

March 31, 2022

No Post-Judgment Interest on Trebled or Punitive Damages

A successful civil lawsuit generally results in a judgment for some amount of money. Interest accumulates on that judgment, either at the rate lawfully specified in the contract or at Virginia’s standard “judgment rate” of six percent. (See Va. Code § 6.2-302). Money judgments can consist of many different types of damages awarded to the plaintiff, such as compensatory damages, punitive damages, costs and expenses, liquidated damages, trebled damages, and other damages authorized by statute. For years, many successful plaintiffs have garnished wages, seized assets, and taken other action to collect their judgments on the assumption that they were entitled to add 6% interest to the total amount of the judgment, regardless of how that judgment amount was reached. On March 24, 2022, the Supreme Court of Virginia held that post-judgment interest should only run on the portion of the judgment representing compensatory damages. Things like punitive damages and trebled damages do not fit within this category.

Yacoub Sidya v. World Telecom Exchange Communications, LLC, was a business dispute between a telecommunications company, its former CEO, and the owner of Y-Telecom, a vendor to World Telecom. World Telecom sued Sidya on various counts and was successful on its claims for misappropriation of trade secrets, tortious interference with business expectancy, and business conspiracy. The jury awarded $1.332 million, trebled to $3.996 million, punitive damages of $350,000, attorneys fees, and post-judgment interest of 6% applied to the judgment as a whole. Sidya had a problem with the trial court awarding 6% interest on the entire judgment of roughly $6.5M rather than applying interest only to the $1.332M attributable to compensatory damages. On appeal, the Virginia Supreme Court didn’t agree with all of Sidya’s arguments, but it agreed that post-judgment interest should be restricted to awards that are compensatory, rather than punitive, in nature.

June 20, 2018

“Improper Methods” Often Key to Tortious Interference Liability

by Lee E. Berlik

Perhaps a colleague at work is trying to get you fired. Or maybe you did already get fired, and your former boss is contacting prospective employers to make sure you don’t get hired. Either way, you’re not going to be very happy about it, and you may start to look into your legal options. When one person interferes with the employment status of another person, and does or says something with the intention of getting that person fired, and succeeds in that endeavor, the legal claim most often applicable is that of tortious interference with contract. A recent federal case, however, illustrates that successful claims require more than just an intent to disrupt another person’s employment; they require a showing that “improper methods” were used in the course of that disruption.

Because employment contracts are generally terminable at the will of either party (employees can quit, and employers can fire the employee, without being in breach of contract), tortious interference with employment relationships will not be actionable absent additional wrongdoing in the form of so-called improper methods. There is no hard-and-fast definition of “improper methods,” but Virginia cases have held that improper methods include:

Actions that are illegal or independently tortious
Violations of an established standard of a trade
Fraud or deceit
Unethical conduct
Sharp dealing
Overreaching
Actions that fall far outside the accepted practice of the “rough and tumble” world of free market competition

(See Duggin v. Adams, 234 Va. 221, 228 (1987); Lewis-Gale Med. Ctr., LLC v. Alldredge, 282 Va. 141, 153 (2011)).

January 23, 2010

Virginia Magistrate Judge Finds Reasonableness Paramount When Awarding Discovery Sanctions

by Lee E. Berlik

As any experienced litigation attorney will tell you, the discovery process is where many cases are won and lost. Consequently, the process is often contentious and characterized by wild fishing expeditions, invasion of privacy, and abusive tactics. The Federal Rules of Civil Procedure, however, allow judges to sanction attorneys who cross the line between aggressive, zealous representation and outright discovery abuse. A recent decision out of the United States District Court for the Eastern District of Virginia lays out the guidelines for whether to punish such tactics by awarding attorneys’ fees to the other side, and if so, how much to award.

In Rutherford Controls Int’l Corp. v. Alarm Controls Corp., both the plaintiffs (“Rutherford”) and the defendants agreed to an extended deadline by which the defendants would produce all documents responsive to Rutherford’s discovery requests. The day of the deadline came, and by the close of business, the plaintiffs had not received the promised documents. Rutherford promptly filed a motion to compel the required discovery. The defendants did produce some material prior to receiving notice of the motion to compel, but the production was minimal. The court heard arguments, and while it did not officially grant Rutherford’s motion, the judge expressed serious dissatisfaction with the defendants’ discovery responses (calling them “absolute nonsense”) and commanded them to answer all of the requests more thoroughly and accurately. The defendants, without protest, complied with the judge’s demands.

Rutherford proceeded to move for sanctions in the form of reimbursement of the $11,858.07 in attorneys’ fees it incurred in connection with the motion. Rule 37(a)(5)(A) specifically permits the recovery of “reasonable expenses” incurred in moving to Paper Dump.jpg compel discovery, “including attorney’s fees.” The court quickly determined that an award of attorneys’ fees was appropriate. Rutherford made a good faith attempt to obtain the discovery without court action, the defendants’ inadequate response was not substantially justified, and there were no extenuating circumstances that would make an award of expenses unjust. The real question was whether it would be reasonable to award Rutherford the full amount of fees they incurred.