By Robert McCabe
robert.mccabe@pilotonline.com
Nearly eight months after a jury awarded a small business hundreds of thousands of dollars in a lawsuit against Virginia International Terminals, a judge in Norfolk has stricken the damages, leaving the owners of the company empty-handed.
Woody and Michelle Ball of Virginia Beach-based Tidewater Overhead Door Inc. sued VIT, the Virginia Port Authority's operations arm, in September 2013. They alleged that VIT conspired with a trusted employee of their company to divert business from them to the employee, who was willing to do the work at a lower rate for another firm.
In late October, a jury agreed, awarding the couple actual and punitive damages of at least $418,270. The amount could have grown to $800,000 or more because of provisions enabling the tripling of damages on one of the three counts, plus attorney's fees.
Two weeks ago, however, the Norfolk Circuit Court judge who presided at the trial last fall entered an order finalizing her decision to strike the monetary award.
"The Court finds that Tidewater Overhead Door did not prove its damages with reasonable certainty, leaving the jury to do no more than speculate as to the actual damages in making its award," Judge Karen J. Burrell wrote in a May 6 letter preceding the final order in the case. "The jury award is therefore improper."
Woody Ball responded to Burrell's decision in an email June 25.
"My wife and I believed in 'truth, justice, and the American way' in the courtroom," he wrote.
"We feel betrayed by a legal system which, in our mind, clearly favors big business. We are left to wonder what good a jury serves if a judge can overturn its considered verdicts well over seven months after those verdicts were rendered."
His company is appealing the case, he said.
Burrell's final order was entered 11 days before her last day on the job. She was not reappointed by the General Assembly this year and will leave on Tuesday. Juvenile Judge Michelle J. Atkins was appointed to take her place, effective Wednesday.
Kevin Holden, Tidewater Overhead's attorney, declined to comment.
Daniel Warman, an attorney for VIT, deferred questions to VIT, a private operating subsidiary of the Virginia Port Authority, whose terminals it runs.
"The court made its decision," said Joe Harris, an authority spokesman. "We are grateful for the court's careful consideration."
In her May 6 letter, Burrell stated that the plaintiff sought lost profits on the basis of "gross profits," which included overhead.
"This court finds that overhead expenses generally are not recoverable and therefore should not be included in the lost profit calculation," she wrote.
The ruling generated a weeks-long volley of exchanges between the opposing sides in the case.
In a May 22 motion, Tidewater Overhead asked Burrell to take another look at her ruling.
The company stated that the only costs not deducted from its damage evidence were fixed costs "not related to the project at issue and of the type that could not be recouped through other work."
The company also attached one of Burrell's instructions to the jury, specifically addressing the issue: "In this case there is no specific evidence of any overhead costs and plaintiff is not seeking overhead costs as damages. Therefore, any award you make, if any, must not include overhead costs."
The company also argued that while the judge's ruling struck the damages, it did not overturn the jury's finding that VIT "conspired to improperly interfere with and damage Tidewater Overhead Door's business."
"It took several years and no small amount of diligence and courage for Tidewater Overhead Door to uncover the nature and extent of VIT's misconduct, mostly because VIT went to lengths to conceal its misdeeds," the company's motion stated.
"Still, a jury concluded that VIT willingly and maliciously conspired to damage Tidewater Overhead Door's business, engaged in illegal acts or legal acts by illegal means, and enticed and enabled a Tidewater Overhead Door employee to betray his long-time employer. VIT should not escape the repercussions of such actions merely because it is difficult to prove the precise amount of damages, especially when the difficulty in establishing such damages is due to misconduct."
A week later, VIT fired back with a brief supporting the judge's opinion, arguing that the door company's "claimed profit margin had a substantial amount of overhead built in, which was contradicted by no other evidence."
The judge sided with VIT in a June 4 order that rejected the company's motion, Tidewater Overhead Door refused to give up, and days later rejected the proposed order and pushed for a new trial, "as the ruling on the motion to strike is at odds with the instructions provided to the jury."
The defense shot back, arguing that the manner in which the jury was instructed was "moot" because by granting VIT's motion to strike, "the Court ruled that the evidence was insufficient to submit the case to the jury in the first place."
With the judge's ruling, Tidewater Overhead's whole case was tossed, VIT argued.
Carl Tobias, a professor of law at the University of Richmond, said it's unusual for a judge to strike a jury's damages, though it does happen.
"It seems like an unusual amount of time from the jury verdict to May," he said.
The complexity of the case, however, reflected in the exchanges between the parties after the judge's May 6 opinion letter, may help explain why it took so long before the final order was entered, Tobias added.
On Oct. 23, a jury ruled against VIT on three counts: statutory conspiracy, common law conspiracy and aiding and abetting a breach of fiduciary duty.
The judge's order brings to a close - for the time being - a case rooted in events that began to unfold in October 2010 at Newport News Marine Terminal.
Ball and his wife alleged in the suit that Norfolk-based VIT asked their company to design and install a prototype for a water-barrier device on one of 25 storage doors at the terminal.
If the prototype were approved, it would be installed on the other 24 doors, the suit stated.
Their company assigned primary responsibility for the project to an employee, who successfully completed the project, winning approval from VIT and CrossGlobe, the tenant at the Newport News facility.
Around the time the prototype was demonstrated, the employee learned "that there was an undisclosed 'problem' with Tidewater Overhead Door's bid on the Newport News project" - that the price "was supposedly too high," the suit stated.
The employee then gave confidential business information about the Newport News project to relatives who used it to "undercut and steal this business from Tidewater Overhead Door," the lawsuit alleged.
The company claimed in its suit that VIT encouraged the deception and that the employee continued working for Tidewater while he was secretly involved with the competing firm.
Among the documents in the court file is an email circulated within VIT the day after the successful demonstration of the prototype.
"We recently found out that the contractor who designed the roll up door water intrusion device works for more than one company," the email states, adding that the contractor's other company would be willing to install the devices for a little more than a third of the price quoted by Tidewater Overhead.
"We just received this information and I thought it to be imperative that everyone knew this new cost," the note concluded.
Court documents show that the Balls' company settled with the employee and other individuals and companies originally named as defendants in the suit. The records don't give the terms of the settlements.