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REID, et al. v. BOYLE, et al.



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REID, et al.

v.

BOYLE, et al.


March 3, 2000

Record Nos. 990769 & 990780

A. WILLIAM REID AND RISING TIDE PRODUCTIONS,
INC.

v.

JOHN J. BOYLE, ET AL.

JOHN J. BOYLE, ET AL.

v.

A. WILLIAM REID

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA
BEACH


H. Thomas Padrick, Jr., Judge

Present: Carrico, C.J., Compton,[1] Lacy, Hassell, Keenan, Koontz,
and Kinser, JJ.

OPINION BY JUSTICE LEROY R. HASSELL, SR.


I.

In these appeals of judgments entered by the
chancellor, we consider, among other things: whether the
plaintiff established by clear and convincing evidence that he
owned an interest in a leasehold; whether the plaintiff proved
with reasonable certainty damages he incurred as a result of the
defendants’ breach of contract; and whether the plaintiff proved
a cause of action under the Virginia Antitrust Act.

II. PROCEEDINGS

Angas William Reid filed an amended bill of
complaint against John J. Boyle, Cellar Door Venues, Inc. (Cellar
Door Venues), and Cellar Door Productions of Virginia, Inc.
(Cellar Door Productions). Reid asserted that he owned one-third
of Cellar Door Venues’ leasehold interest in an
"[a]mphitheater project" in Virginia Beach. He pled
causes of action for breach of contract, "unjust
enrichment," and fraud. Reid also filed a motion for
judgment against Cellar Door Productions. Reid alleged that
Cellar Door Productions breached its employment contract with
him.

Rising Tide Productions, Inc., a Virginia
corporation founded by Reid, and Reid filed a separate bill of
complaint against Boyle, Kenneth A. MacDonald, Mike Tabor, The
Boathouse Food Service Company, Cellar Door Productions, and
Cellar Door Venues. Reid and Rising Tide Productions alleged in
this proceeding that these defendants violated the Virginia
Antitrust Act, Code ? 59.1-9.1, et seq. The
chancellor transferred the law action to the equity side of the
court and consolidated the proceedings.

At the conclusion of an ore tenus
hearing, the chancellor held that Cellar Door Productions
breached its contract with Reid and that it was indebted to Reid
in the amount of $333,325.67. The chancellor held that Reid owned
a one-third interest in the net value of Cellar Door Venues’
leasehold interest and that Reid’s interest had a value of
$3,566,343. The chancellor entered a judgment in favor of Reid
for that amount against John J. Boyle and Cellar Door Venues,
jointly and severally. The chancellor held that Reid and Rising
Tide Productions failed to prove that the defendants in the
antitrust proceeding had violated the Virginia Antitrust Act, and
he entered a judgment in favor of those defendants. The
defendants appeal the judgments adverse to them, and Reid and
Rising Tide Productions appeal the judgment entered in the
antitrust case.

III. FACTS

A.

When the chancellor hears evidence ore tenus,
his decree is entitled to the same weight as a jury verdict, and
we are bound by the chancellor’s findings of fact unless they are
plainly wrong or without evidence to support them. Prospect
Development Co.
v. Bershader, 258 Va. 75, 80, 515
S.E.2d 291, 294 (1999); Rash v. Hilb, Rogal &
Hamilton Co.
, 251 Va. 281, 283, 464 S.E.2d 791, 793 (1996).
Also, we will review the evidence and all reasonable inferences
fairly deducible therefrom in the light most favorable to Reid in
the two appeals of judgments in favor of Reid. Bershader,
258 Va. at 80, 515 S.E.2d at 294.

B.

Reid began to work for Cellar Door Productions
in 1981 as a "talent middle agent." He made
arrangements for bands to perform at colleges, and he received a
commission for his services. In 1982, Reid was promoted to the
position of president of Cellar Door Productions. In that
capacity, he continued to "[sell] talent" to colleges,
and he "book[ed]" music concerts at facilities such as
the Hampton Coliseum and the Norfolk Scope, as well as clubs. He
also managed Cellar Door Productions’ office.

Cellar Door Productions, acting through its
sole shareholder, John J. Boyle, entered into an oral employment
contract with Reid in 1983. Boyle is the majority shareholder of
numerous entertainment-related companies that form a "family
of companies" described as the Cellar Door Companies. These
corporations include Cellar Door Productions and Cellar Door
Venues. Boyle exercised virtually absolute control of these
corporations and directed their offices and employees. Boyle
conducted the financial affairs of these corporations with
"an air of informality."

Pursuant to the terms of the oral contract,
Reid’s compensation was calculated by determining Cellar Door
Productions’ annual revenue, deducting expenses and any
advancements of income to Reid or Boyle, and
"split[ting]" the profit "50/50" between Reid
and Boyle.

In December 1992, Reid signed a written
employment contract with Cellar Door Productions. In 1993, Reid
signed a subsequent written employment contract with Cellar Door
Productions. Even though the 1993 contract contained a specific
methodology by which Reid would be compensated, Reid and Cellar
Door Productions ignored the prescribed method of compensation.
Reid testified that "[n]othing changed" regarding his
method of compensation. In response to the question: "[How] [w]ere you paid under [the] contract?", Reid stated:

"You know what, I don’t know if I was paid
under a contract. I know how I was paid. . . . A.J.
Wasson [Boyle's chief financial officer] would come in at the end
of the year. We would take all the available cash that was in the
account. All the expenses were taken out mutually between Jack
Boyle and myself, and we split the difference. And we split what
was there. So that was — it’s not exactly how it was
calculated in the contract. If you read that contract, it says
all kinds of tax stuff and deferred this and deferred
that. . . . I don’t think anyone could explain the
computation as it exists in that contract.

"We split the profit 50/50, and we did it
from ’83 or ’84, and it was done that way every year as it
relates to Cellar Door Productions."

Wasson initially testified that when
determining Reid’s compensation, Wasson adhered to the terms of
the written contract. However, during cross-examination, Wasson
admitted that he had not taken into consideration the various tax
adjustments contained in the written contract. Finally, in
response to the court’s question, "[y]ou all had a very
informal arrangement where they figured out available cash and
they split it," Wasson responded, "That’s right, except
for the tax adjustment." David H. Williams, the chief
operating officer for all of the Cellar Door Companies, testified
that Reid had a compensation agreement with Cellar Door
Productions, and he received 50% of the profits generated by that
corporation.

In the early 1990s, Reid conceived the idea of
the creation of an amphitheater located in the City of Virginia
Beach. The amphitheater would have a capacity of 20,000 seats.
Reid believed that the amphitheater could attract major bands
because it would be larger than existing concert facilities in
Virginia. Reid testified: "Bands play where they can make
the most money. It’s called venue driven. The higher the
capacity, the more tickets they can sell, the more money they can
make, and hence, the more money a promoter [such as Cellar Door
Productions] can make." Reid, who had "a little bit of
experience working on" the development of the Classic
Amphitheater in Richmond, approached Boyle and said: "[W]e
need to have an amphitheater here." Boyle responded:
"[A]s he said many times . . . Bill Reid, if you
pull this off, you get half." Reid did not, however,
memorialize this agreement in writing.

Reid undertook extensive efforts to develop an
amphitheater in Virginia Beach. He had meetings with Virginia
Beach city officials, including City Council members. The City
retained a consulting company to advise the City about the
feasibility of construction of an amphitheater. During the
ensuing three years, Reid served as president of Cellar Door
Productions and also pursued the creation of an amphitheater in
Virginia Beach. Boyle continued to encourage Reid to pursue the
development of an amphitheater, and Boyle told Reid: "This
is your future. This is your future. This is your kids’ college
education."

Subsequently, the City decided to participate
in the construction of an amphitheater and to invest its
financial resources in the project. The City of Virginia Beach
Development Authority (also referred to as the City) ultimately
executed an agreement with Cellar Door Venues, a Florida
corporation which is primarily owned and exclusively controlled
by Boyle. Pursuant to the terms of this agreement, Cellar Door
Venues acquired a leasehold interest in the GTE Virginia Beach
Amphitheater and served as operator of the amphitheater.

Initially, the City agreed to contribute
$7,000,000 of the construction costs of the amphitheater, and
Boyle, through companies that he controlled, agreed to contribute
$5,000,000. After a site for the amphitheater was selected, the
City learned that there were problems with the soil conditions
and, therefore, the cost of construction would be higher than had
been anticipated. City officials scheduled a meeting that was
attended by Reid, Boyle, and Richard Rosenbaum, who was described
as "Boyle’s personal attorney." During the meeting, the
City officials informed Boyle that the City expected him to
increase his contribution to the project to help pay for the
increased cost of construction associated with the soil
conditions.

After the meeting with the City officials,
Boyle and Reid had a conversation in a car, and Rosenbaum was
present. Reid described the conversation as follows: "I
remember vividly, and I remember when it happened, we were [in
the car] approaching the airport. And [Boyle] said, Bill, my
contribution’s going to have to go up from 5 to $7 million.
Because of that, I’m going to have to cut you down on your
percentage from 50 percent to 33 percent." Even though Reid
was upset that Boyle had decided to decrease Reid’s percentage of
ownership in the project, Reid felt "that it was only fair
that I take less . . . and [Boyle] take more."
Reid did not request that Boyle document this agreement in
writing because Reid and Boyle had been involved in "other
deals" in which Reid had an ownership interest that was not
memorialized with written documentation.

Cellar Door Productions contributed between
$150,000 and $200,000 of its profits to fund the initial stages
of the amphitheater project. Approximately half of this money
belonged to Reid as a result of the "50/50"
compensation arrangement that he had with Cellar Door
Productions. When asked why he was not concerned that the money,
half of which was his, was used to help finance the initial
phases of the development of the amphitheater, Reid responded:
"Because I figured I owned it. I owned a third. What
difference did it make?"

The City required a letter of credit from
Cellar Door Venues in the amount of $696,000 before the City
would proceed with site preparation for the construction of the
amphitheater. The purpose of the letter of credit was to
reimburse the City for certain costs it incurred in the event
that the project was abandoned because of the poor soil
conditions. Reid, along with Boyle and his wife, Janet A. Boyle,
signed the letter of credit as guarantors. Reid also signed a
separate guaranty in the amount of $696,000. Reid testified that
he signed the guaranty "[b]ecause it was clear in my mind
and in Jack Boyle’s mind that I was a one-third owner of the
[a]mphitheater." Reid stated that he would not have signed
the guaranty had he not had an ownership interest in the project.
Reid testified that his house was used as collateral for the
letter of credit. In response to requests for admission, Cellar
Door Productions admitted that "Reid’s signing as a personal
guarantor went above and beyond his job description as President
of Cellar Door Productions."

Reid and Boyle’s relationship began to
deteriorate in 1997. Reid and Boyle met for lunch in Virginia
Beach, and Reid complained about problems that he was
experiencing that he thought were detrimental to their mutual
business interests. During that meeting, Reid reminded Boyle that
Reid was "a one-third partner with him." Boyle
responded that he had a poor memory and requested that Reid
"[write] down all of the points" that they had
discussed and "fax him back the points that [they] had
discussed." During the meeting, Boyle did not deny that Reid
owned an ownership interest in the amphitheater project.

Subsequently, Reid forwarded a memorandum to
Boyle which described the subjects they discussed at the Virginia
Beach luncheon. Included among those subjects was Reid’s
assertion that he owned a one-third interest in the amphitheater
project. Even though Boyle subsequently discussed the other
subjects that were contained in the memorandum with Reid, he did
not discuss Reid’s claim of ownership in the amphitheater
project.

Thomas J. Lyons, Jr., Boyle’s friend for over
35 years, testified on behalf of Reid. Lyons and his wife
attended a concert in July 1996 at the newly constructed Virginia
Beach Amphitheater as guests of Boyle and his wife. Lyons
complimented Boyle for the excellent work and effort that Reid
had undertaken in making the amphitheater a reality. According to
Lyons, Boyle stated: "Well, that’s why he’s my
partner. . . . that’s why he owns 35 percent in
this — in the Amphitheater or this project." After
Lyons finished his testimony, the chancellor remarked on the
record that Boyle stood up from his seat and "hugged"
Lyons, even though Lyons had just provided testimony detrimental
to Boyle.

Reid had a conversation with Boyle in October
1997, and he requested that Boyle provide Reid with a written
agreement documenting Reid’s interest in the amphitheater
project. Later, Boyle had a telephone conversation with Reid, and
Boyle informed Reid "I got the agreement. I wanted to give
it to you, but it was too — the lawyers made it too
complicated." Reid never saw the document. In November 1997,
Reid received a letter from Boyle. Pursuant to the terms of the
letter, Boyle essentially promised Reid that Boyle would give
Reid 10% of the profit stream generated by the amphitheater and
10% of the proceeds from any sale of Cellar Door Venues. Reid
rejected the terms of the letter, which he described as a
counteroffer.

Boyle testified that he told Lyons that Reid
was his partner, but he denied telling Lyons that Reid owned an
interest in the amphitheater project. Boyle stated that he only
promised Reid that Boyle would "split" certain profits
from the amphitheater project with him. Furthermore, Boyle
testified that none of the presidents who worked for him in his
various corporations owned any interests in any corporations with
him. However, Reid testified that he was an equity owner in a
corporation known as Abyss and that Boyle was also an owner of
the corporation. Reid did not receive any written documentation
of his ownership interest in Abyss until he was fired from his
position of president of Cellar Door Productions in December
1997. Reid was also a shareholder in another corporation with
Boyle called BWRM.

Boyle often entered into business ventures with
others without documenting the nature of the relationships in
writing. Boyle testified that his son, along with four other
persons including Reid, are the owners of a corporation in
Virginia Beach called Abyss. Boyle gave the following testimony
about the ownership of this corporation:

"Q: Was there anything in writing setting
forth what understandings there were about how the Abyss was
going to get started and who was going to own what or do what?

"A: You’d have to check with them.

"Q: You don’t recall?"

"A: No.

"Q: You don’t worry about those
details?"

"A: No, I don’t."

Boyle also testified that he gave the ownership
of a corporation called the Capital Ballroom to David Williams.
When asked, "[d]id you put that in writing prior to it
opening, that you were going to give [Williams] that
ownership?", Boyle responded, "[n]o." Even though
Boyle was in the process of selling most of the corporations
within the Cellar Door Companies to another corporation, SFX, for
$106,000,000, he testified that he did not have a definitive
agreement in place at the time of trial.

At the conclusion of the trial, the chancellor
made a specific finding that "Mr. Boyle just was not
credible."

IV. THE OWNERSHIP CASE

A.

The defendants, Boyle, MacDonald, Tabor, The
Boathouse Food Service Company, Cellar Door Productions, and
Cellar Door Venues, argue that the chancellor erred in holding
that Reid presented sufficient evidence to establish an
enforceable contract. The defendants assert that Reid’s purported
contract was vague and lacked specificity. The defendants also
contend that Reid failed to establish the parties to the contract
and the type of ownership interest that had been promised to
Reid. We disagree with these defendants.

We have stated the following contract
principles which are equally pertinent here:

"The law does not favor declaring
contracts void for indefiniteness and uncertainty, and leans
against a construction which has that tendency. While courts
cannot make contracts for the parties, neither will they permit
parties to be released from the obligations which they have
assumed if this can be ascertained with reasonable certainty from
language used, in the light of all the surrounding circumstances.
This is especially true where there has been partial performance.
McDaniel v. Daves, 139 Va. 178, 190, 123 S.E. 663,
666 [1924]; Phillips Petroleum Company v. Buster,
241 F.2d 178 [10th Cir. 1957], cert. denied, 355
U.S. 816 . . . .

"We have repeatedly said that in
construing a contract, ‘[r]egard should be had to the intention
of the parties, and such intention should be given effect. To
arrive at this intention, regard is to be had to the situation of
the parties, the subject matter of the agreement, the object
which the parties intended to accomplish. A construction should
be avoided if it can be done consistently with the tenor of the
agreement, which would be unreasonable or unequal, and that
construction which is most obviously just is to be favored as
most in accordance with the presumed intention of the parties.’ Seward
v. American Hardware Co., 161 Va. 610, 625, 626, 171 S.E.
650, 659 [1933]; White v. Sayers, 101 Va. 821, 826,
45 S.E. 747, 749 [1903]."

High Knob, Inc. v. Allen, 205 Va.
503, 507-08, 138 S.E.2d 49, 53 (1964). Accord W.J.
Schafer Assoc.
v. Cordant, Inc., 254 Va. 514, 519-20,
493 S.E.2d 512, 515 (1997); Allen v. Aetna Casualty
& Surety
, 222 Va. 361, 363-64, 281 S.E.2d 818, 819-20
(1981).

Applying these principles, we hold Reid
presented evidence which would permit the chancellor to
ascertain, with reasonable certainty, from the language that the
parties used and in light of all the surrounding circumstances,
that Reid entered into an oral contract with Boyle and Cellar
Door Venues and that pursuant to the terms of this contract,
Boyle and Cellar Door Venues promised to give Reid a one-third
interest in the value of Cellar Door Venues’ leasehold interest
in the amphitheater. Reid presented evidence of the following
pertinent facts. Boyle exerted absolute control of Cellar Door
Venues which owned the leasehold interest, and Boyle conducted
the corporation’s financial affairs with an "air of
informality." Boyle promised Reid that he would own
one-third of the amphitheater project if Reid could bring his
concept of an amphitheater in Virginia Beach to fruition. Boyle
repeatedly assured Reid that Reid owned a one-third interest in
the amphitheater project. As we have already stated, Boyle told
Lyons, his friend for 35 years, that Reid owned an interest in
the amphitheater project.

Reid also partially performed this oral
contract. Reid permitted approximately $88,000 of compensation
that he ultimately received from Cellar Door Productions to fund
the initial operational costs for Cellar Door Venues.
Significantly, Reid signed a letter of credit and a guaranty
which the City required before it would proceed with the
construction of the amphitheater. Boyle and Cellar Door Venues
admitted in their response to a request for admission that Reid’s
acts of signing the personal guaranty and letter of credit were
"above and beyond" his job responsibilities as
president of Cellar Door Productions.

The chancellor was also certainly entitled to
consider, as a surrounding circumstance, Boyle’s history of
giving employees, including Reid, ownership interests in
corporations that Boyle controlled. The chancellor also
considered the fact that Cellar Door Venues’ primary asset was
its leasehold interest with the City, and Boyle’s statement to
Reid that Boyle had an agreement that would confer an ownership
interest to Reid in the amphitheater project, but that "the
lawyers [had] made it too complicated" and that Boyle
intended to return it to the lawyers for simplification.

B.

The defendants observe that Reid had a written
contract with Cellar Door Productions which contained the
following provision:

"Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and, upon its effectiveness,
shall supersede all prior agreements, understandings and
arrangements, both oral and written, between the Executive and
the Company (or any of its affiliates) with respect to such
subject matter. This Agreement may not be modified in any way
unless by a written instrument signed by both the Company and the
Executive."

The defendants contend that even though Reid
asserts that the oral contract for ownership of an interest in
the amphitheater was a "new deal" between Boyle and
Reid which was unrelated to the above-referenced provision in the
employment agreement, "the alleged oral contract addresses
precisely the subject matter addressed by the [e]mployment
[a]greement." Continuing, the defendants say that the
amphitheater project was a business opportunity of the Cellar
Door Companies pursued locally by Reid as president of Cellar
Door Productions, that at the time of the alleged oral contract
Cellar Door Venues "did not yet exist, and any ‘new’ deal
between Boyle and Reid necessarily required alteration of Reid’s
[e]mployment [a]greement with [Cellar Door] Productions."
Additionally, these defendants contend that the chancellor failed
to articulate the burden of proof he applied in holding that Reid
proved his oral contract claim. We disagree with defendants.

We have held that a contract in writing may be
modified by a new oral contract. In Zurich General Accident
& Liability Ins. Co.
v. Baum, 159 Va. 404, 409,
165 S.E. 518, 519 (1932), we stated:

"A contract in writing, but not required
to be so by the statute of frauds, may be dissolved or varied by
a new oral contract, which may or may not adopt as part of its
terms some or all of the provisions of the original written
contract. . . . Nor does it make any difference
that the original written contract provided that it should not be
substantially varied except by writing. This stipulation itself
may be rescinded by parol and any oral variation of the writing
which may be agreed upon and which is supported by a sufficient
consideration is by necessary implication a rescission to that
extent."

Additionally, modification of a contract must
be shown by "clear, unequivocal and convincing evidence,
direct or implied." Stanley’s Cafeteria, Inc. v. Abramson,
226 Va. 68, 73, 306 S.E.2d 870, 873 (1983).

We have also held that contracting parties,
through a course of dealing, may evince a mutual intent to modify
the terms of their contract. The circumstances surrounding the
conduct of the parties must be sufficient to support a finding of
mutual intention that the modification be effective and such
intention must be shown by clear, unequivocal, and convincing
evidence, direct or implied. Id.

We hold that Reid established with clear,
unequivocal, and convincing evidence that he and the defendants
orally modified the written contract, and that they also modified
the contract by their course of dealing. The facts contained in
Part III.A. of this opinion, which we need not repeat, clearly
demonstrate that Reid established by clear, unequivocal, and
convincing evidence that Boyle, acting on behalf of himself and
Cellar Door Venues, promised Reid that he would have a one-third
interest in the amphitheater leasehold in return for Reid’s
efforts to bring the project to fruition.

Furthermore, the evidence summarized in Part
III.A. of this opinion clearly indicates that Reid and Cellar
Door Productions modified the written contract by their course of
dealing. The parties simply ignored the terms of the written
employment agreement. For example, Cellar Door Productions never
followed the terms of the written employment contract when
determining the amount of compensation owed to Reid. The written
contract was misplaced and when the various lawsuits were filed,
the litigants did not even know which written contract was the
so-called operative contract.

In Mullins v. Mingo Lime & Lumber
Co.
, 176 Va. 44, 50, 10 S.E.2d 492, 494 (1940), we stated
that "an agreement for service must be certain and definite
as to the nature and extent of service to be performed, the place
where and the person to whom it is to be rendered, and the
compensation to be paid, or it will not be enforced." Here,
the terms of the oral contract are certain and definite. Reid was
required to perform the necessary services to make the
amphitheater a reality, and the services were to be performed for
Boyle and the corporations that he controlled in the Cellar Door
Companies. The compensation that Reid was to receive was a
one-third interest in the value of the amphitheater project, in
this instance, the value of the leasehold that Cellar Door Venues
acquired with the City.

C.

The defendants argue, "[h]ow was Reid to
receive [an] ‘ownership interest’ and what was it? [Cellar Door] Venues is a stock corporation, yet . . . Boyle and Reid
never discussed ‘stock’ or ‘equity.’ There is no evidence of an
agreement by Boyle to convey 33% of Venues’ shares to Reid, even
though that was the only [a]mphitheater-related entity in which
Boyle could have transferred ownership." The defendants also
contend that the circuit court "effectively treated Reid as
if he were a shareholder of Venues who had a right to put his
shares to the corporation upon his termination, at a price
measured by the going concern value of the corporation."

We find no merit in the defendants’
contentions. The chancellor did not award Reid shares of stock in
Cellar Door Venues; nor did the chancellor treat "Reid as if
he were a shareholder of [Cellar Door] Venues."
Additionally, the chancellor did not award Reid one-third of the
value of Cellar Door Venues. Rather, the chancellor merely
enforced the terms of the contract that Boyle made with Reid. The
chancellor made a finding of fact that Boyle gave Reid a
one-third interest in the leasehold, and the chancellor
determined the value of Reid’s leasehold interest. We also
observe that the defendants do not assert that Boyle lacked the
legal authority to convey a corporate asset, in this instance a
portion of the leasehold interest, to Reid.

D.

The chancellor, in his judgment order,
dismissed Reid’s claim of unjust enrichment as moot because the
chancellor held that Reid established that he had an oral
contract for a one-third interest in the amphitheater lease with
Boyle and Cellar Door Venues. However, the chancellor at Reid’s
request held in the alternative that the evidence was sufficient
to support a claim for unjust enrichment. The defendants assert
that the chancellor erroneously applied principles of equity. We
need not consider the court’s alternative holding because Reid
prevailed on his breach of an oral contract claim. See Royer
v. Board of County Supervisors, 176 Va. 268, 279-80, 10
S.E.2d 876, 881 (1940); accord Nedrich v. Jones,
245 Va. 465, 477, 429 S.E.2d 201, 207 (1993).

E.

The defendants contend that the chancellor
"adopted a measure of damages . . . unsupported by
the facts or by the testimony of the expert witnesses."
Reid’s business valuation expert testified that Cellar Door
Venues had a value of $20,289,791, and the defendants’ expert
witnesses testified that Cellar Door Venues had a value of
$10,567,000. Each of the expert witnesses described the
methodologies he used to support his valuation. The defendants
contend that the chancellor’s holding that the value of Cellar
Door Venues’ leasehold interest in the amphitheater was
$16,000,000 constitutes a compromise and is the "functional
equivalent of a compromise jury verdict." Reid asserts that
the defendants may not raise this issue on appeal because they
failed to make any objection in the circuit court to the
methodology that the chancellor used in placing a value on the
leasehold interest. Responding in their reply brief, the
defendants state that the chancellor’s purported error "is
not an error that could have been addressed as an evidentiary
objection, as it is a defect in the reasoning process by which
the court . . . reached its result."

We agree with Reid. Rule 5:25 states in
relevant part:

"Error will not be sustained to any ruling
of the trial court . . . unless the objection was
stated with reasonable certainty at the time of the ruling,
except for good cause shown or to enable this Court to attain the
ends of justice."

The chancellor’s determination that the
leasehold interest had a value of $16,000,000 is a ruling within
the intendment of Rule 5:25. The application of Rule 5:25 is not
limited to evidentiary rulings. Rather, Rule 5:25 "exists to
protect the trial court from appeals based upon undisclosed
grounds, to prevent the setting of traps on appeal, to enable the
trial judge to rule intelligently, and to avoid unnecessary
reversals and mistrials." Fisher v. Commonwealth,
236 Va. 403, 414, 374 S.E.2d 46, 52 (1988), cert. denied,
490 U.S. 1028 (1989).

F.

Gregory F. Lawson, who qualified as an expert
witness on the subject of business valuation, testified on behalf
of Reid that the value of Cellar Door Venues’ leasehold interest
in the amphitheater was $20,045,000. The defendants argue that
the chancellor erred by admitting Lawson’s testimony because they
claim his testimony was speculative and lacked a "proper
evidentiary foundation." We disagree. We have reviewed
Lawson’s testimony in its entirety, and we hold that the
chancellor did not abuse its discretion by admitting in evidence
the challenged testimony.

V. THE COMPENSATION CASE

As we have already stated, Reid claimed that
Cellar Door Productions breached its contract by failing to pay
him compensation that he was entitled to receive for the 1997
calendar year. Reid testified that he was entitled to receive 50%
of all profits realized in each calendar year by Cellar Door
Productions.

Willie J. Rountree, a certified public
accountant who qualified as an expert witness, reviewed certain
financial documents that had been produced by the defendants and
information that Reid had provided to him. Rountree described the
compensation methodology as follows. Cellar Door Productions
"took the cash at the end of the year [and made] certain
adjustments. For instance, if there [were] additional receivables
outstanding for cash that had not been received for [concerts] that had already been completed, they would add those as
additions to cash. If [there] were accounts payable outstanding
for bills that had not been paid at the end of the year, they
would show those as subtractions from cash available for the
split, and they would also add back any advances that [Reid or
Boyle] had received during the year to come up with a balance
they called available cash. And that would be split between the
two of them."

Rountree stated, during the defendants’
cross-examination, that information that he relied upon in making
his calculations had been provided to him by Reid. The defendants
asked Rountree to assume that Reid had already received certain
payments as compensation which Rountree had not used in his
calculations. The defendants further asked Rountree whether this
assumption would affect the amount of compensation he believed
Reid was entitled to receive from Cellar Door Productions.
Rountree replied yes. In response to the chancellor’s question,
whether, in Rountree’s opinion, Cellar Door Productions owed Reid
$334,665.21, Rountree replied in the affirmative. Rountree also
stated in response to that same question that even though the
defendants’ counsel raised interesting issues about Rountree’s
assumptions, Rountree had not seen sufficient documentation to
opine whether the defendants’ assumptions were correct.

The defendants contend that the chancellor
erred by relying upon Rountree’s testimony because Rountree did
not know whether the defendants’ assumptions were correct.
Additionally, the defendants contend that Rountree relied upon
certain information that had been provided by Reid that Wasson,
chief financial officer and director of business development for
the Cellar Door Companies, disputed.

We find no merit in the defendants’
contentions. We have reviewed Rountree’s testimony in its
entirety, along with his exhibits that include his calculations.
Rountree testified that his opinions and calculations were based
upon the defendants’ audited financial statements, financial
documents produced during discovery, and information provided by
Reid. We hold that this information is sufficient to support
Rountree’s opinions.

VI. THE ANTITRUST CASE

After Reid was terminated as president of
Cellar Door Productions, he founded Rising Tide Productions,
Inc., a Virginia corporation which is "a promoter of live
music entertainment." Reid serves as president of Rising
Tide Productions.

Reid and Rising Tide Productions contend that
defendants Boyle, MacDonald, Tabor, The Boathouse Food Service
Company, Cellar Door Productions, and Cellar Door Venues
prevented Reid and Rising Tide Productions from booking concerts
at "two publicly owned, unique, essential concert venues,
the GTE Virginia Beach Amphitheater and The Boathouse." The
Boathouse "is a concert facility with a capacity of
approximately 2,460." The City of Norfolk owns The
Boathouse, which is leased by The Boathouse Food Service Company,
a corporation which is "a part of the Cellar Door family of
companies." MacDonald is president and general manager of
Cellar Door Productions. Tabor is the general manager of the
Virginia Beach Amphitheater.

Reid and Rising Tide Productions presented
evidence that their attorneys forwarded a letter to the
defendants’ attorneys and inquired how Reid and Rising Tide
Productions might rent the Virginia Beach Amphitheater and The
Boathouse. Reid testified that when he attempted to rent the
amphitheater, he was denied permission to do so. Additionally,
William B. Wells, a promoter, testified that an employee of the
Cellar Door Companies tried to discourage Wells from transacting
business with Reid and Rising Tide Productions. The Cellar Door
Companies employee warned Wells that he should not transact
business with Reid.

Michael Mitnick, a certified public accountant,
testified that the ability to rent The Boathouse and the
amphitheater is essential to a Virginia Beach concert promoter
such as Reid. He opined that concert bands that perform in large
outdoor amphitheaters are required to transact business with the
defendants because they control all the large amphitheaters in
Virginia and North Carolina.

Reid and Rising Tide Productions sought
injunctive relief against the defendants for their purported
violations of the Virginia Antitrust Act. The chancellor
dismissed Reid’s antitrust claims and entered a judgment on
behalf of the defendants. Reid asserts, among other things, that
the chancellor erred in failing to grant the requested injunctive
relief. Responding, the defendants assert that Reid and Rising
Tide Productions failed to prove that the defendants violated the
Virginia Antitrust Act. We agree with the defendants.

Code ? 59.1-9.2 of the Virginia Antitrust
Act states:

"The purpose of this chapter is to promote
the free market system in the economy of this Commonwealth by
prohibiting restraints of trade and monopolistic practices that
act or tend to act to decrease competition. This chapter shall be
construed in accordance with the legislative purpose to implement
fully the Commonwealth’s police power to regulate commerce."

Code ? 59.1-9.5 states: "Every
contract, combination or conspiracy in restraint of trade or
commerce of this Commonwealth is unlawful." Code
? 59.1-9.6 states: "Every conspiracy, combination, or
attempt to monopolize, or monopolization of, trade or commerce of
this Commonwealth is unlawful." Code ? 59.1-9.12(a)
states:

"Any person threatened with injury or
damage to his business or property by reason of a violation of
this chapter may institute an action or proceeding for injunctive
relief when and under the same conditions and principles as
injunctive relief is granted in other cases."

The record is simply devoid of sufficient facts
that would have permitted the chancellor to conclude that the
defendants violated any of the aforementioned statutes. Reid and
Rising Tide Productions failed to prove the existence of any
contract or conspiracy in restraint of trade or commerce.
Additionally, Reid and Rising Tide Productions failed to
establish the existence of a conspiracy, combination, or attempt
by the defendants to monopolize trade or commerce in this
Commonwealth.

VII.

For the reasons stated, we will affirm the
judgments entered by the chancellor.

 

Record No. 990769 — Affirmed.

Record No. 990780 — Affirmed.

 

FOOTNOTES:

[1] Justice Compton participated in
the hearing and decision of this case prior to the effective date
of his retirement on February 2, 2000.

 

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