Award Reduced for ‘Improper’ Ad Damnum

A jury award of $137,575 is reduced to $100,000 for a plaintiff company suing defendant company for breach of a nonsolicitation agreement, because plaintiff’s ad damnum clause sought damages “in excess of” the amount  of $100,000, and the higher award is improper under Virginia law, says a Fairfax Circuit Court.

Plaintiff Solentus is a Virginia corporation that contracts exclusively with the Federal Aviation Administration to provide project management, systems engineering, evaluation and system enhancement services. Gentlerock is a limited liability company in Virginia which similarly contracts for work with the FAA. Lam is the sole member and employee of Gentlerock.

The court finds that the ad damnum clause, seeking damages “in excess of $100,000,” is improper and thus the court must reduce the jury award to $100,000, the only ascertainable amount stated. Also, the non-solicitation clause is not overly broad as matter of law, and there was sufficient evidence for a rational trier of fact to find that defendant Gentlerock was performing similar work through Concepts Beyond as it had through plaintiff Solentus Inc. Nevertheless, the court finds that individual defendant Henry Lam cannot be held personally liable, as he was not a party to the agreement and Solentus failed to produce any credible evidence for a rational trier of fact to conclude that Gentlerock was merely Lam’s alter ego.  Virginia Supreme Court Rule 3:2(c)(ii)clearly states that plaintiff must provide the amount of damages requested. Not only does Merriam Webster define “amount” as the “total number or quantity,” but Virginia circuit courts have previously held the same. Stating “in excess of” does not state an amount, it does not provide a total number or quantity, nor even a specific range, but rather a floor. A plaintiff cannot ask a jury to award an amount in excess of that requested in the complaint.

As a result, a demurrer to an improper ad damnum clause, if brought, should be sustained. Even when an ad damnum is properly pled, a remittitur is warranted when the plaintiff receives more than the amount requested in the pleadings.

The ad damnum clause was improperly pled and the court cannot award damages beyond the only ascertainable “amount” proffered in the pleadings. The verdict must be reduced to $100,000.

No personal liability

Lam is not personally liable for the verdict. The non-solicitation agreement is unambiguous and Lam is plainly not a party to the contract. The fact that Lam signed on behalf of Gentlerock is made clear by both his exclusion from the agreement’s naming of the parties, and the definition of “Consultant” as Gentlerock. The only method of holding Lam personally liable is piercing the corporate veil and plaintiff failed to provide any evidence at trial justifying piercing the corporate veil.

The non-solicitation provision is not overly broad. It prevented Gentlerock from accepting business “competitive with the business conducted by [Solentus] from any of the Company’s customers,” (emphasis added by court). The Company’s customers, in turn, were defined as any entity to whom Gentlerock was introduced as a result of employment with Solentus or with respect to whom Gentlerock, directly or indirectly, alone or with others, provided services or prepared a bid or proposal to provide services on behalf of Solentus. There was more than credible evidence that Gentlerock was performing substantially the same work as it had been with Solentus, for the exact same program manager within the FAA’s ANG-C subdivision.

Judgment is entered against Gentlerock for $100,000.

Solentus Inc. v. Lam (Ortiz) No. CL 2016-3462, May 4, 2017; Fairfax Cir.Ct.; Anthony Vittoria for plaintiff; John C. Cook for defendant. VLW 017-8-047, 8 pp.