Western Insulation, LP v. Moore

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 08-1219

WESTERN INSULATION, LP,

Plaintiff – Appellee,

v.

HAL MOORE; MELANIE MOORE,

Defendants – Appellants.

Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Chief
District Judge. (3:05-cv-00602-JRS)

Argued: January 27, 2009 Decided: March 12, 2009

Before MICHAEL, GREGORY, and AGEE, Circuit Judges.

Affirmed by unpublished opinion. Judge Agee wrote the opinion,
in which Judge Michael and Judge Gregory joined.

ARGUED: John B. Simpson, MARTIN & RAYNOR, P.C., Charlottesville,
Virginia, for Appellants. Paul James Kennedy, LITTLER
MENDELSON, Washington, D.C., for Appellee. ON BRIEF: Ronald S.
Sofen, GIBBS, GIDEN, LOCHER, TURNER & SENET, L.L.P., Los
Angeles, California, for Appellants. Stephen C. Tedesco,
LITTLER MENDELSON, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
AGEE, Circuit Judge:

I. Background

In March 2001 the sole shareholder of Western Insulation,

Inc. (“Insulation, Inc.”), Hal Moore, sold the company to

Western, L.P. (“Western”), for $41,990,000.00. At the time of

the sale, Hal's wife Melanie was an employee and the Chief

Financial Officer of Insulation, Inc. Both Hal and Melanie

entered into identical Confidentiality, Non-Competition, and

Non-Solicitation Agreements (collectively, “Agreements”), which

were to be interpreted and enforced in accordance with Virginia

law.

Within the time period encompassed by the Agreements

Melanie used Hal’s longstanding relationship with a bank to

obtain financing for two new insulation companies that would

compete with Western. In March 2005 she signed a personal loan

guaranty for a $1.41 million line of credit to assist her friend

and former Insulation, Inc. employee, Stephanie Schulkamp, in

forming one of those companies, American Insulation, Inc.

(“American”). Without Melanie’s guarantee and assistance,

Schulkamp would not have qualified for the bank financing for

American.

The loan guaranty agreement for American subjects Schulkamp

to various restrictions and bestows certain benefits on Melanie.

For example, Schulkamp can only earn $90,000 per year and must

2
obtain Melanie's consent to make any purchase for American

exceeding $25,000. The agreement also entitles Melanie to

certain financial information regarding American. In return for

the guaranty, Melanie received a security interest in American's

assets and an option to purchase 90 percent of American for

$9,000. Schulkamp secured the guaranty with her home and her

shares in American and is prohibited from transferring any

collateral without Melanie’s consent.

In addition to the guaranty for Schulkamp, Melanie signed a

separate personal loan guaranty for a $1.015 million commercial

line of credit to aid Dave Barnes, another former Insulation,

Inc. employee. With Melanie’s assistance Barnes obtained

financing to start his own insulation business, Empire

Insulation, Inc. (“Empire”). Melanie advised Barnes on the loan

amount he should seek and, as with Schulkamp, took advantage of

Hal’s relationship with a bank to obtain financing for Barnes,

which he would not have received without her guarantee and

assistance.

Hal leased a building and some trucks to American, sold

some of his trucks to Empire and hired two former employees of

Insulation, Inc.

Alleging that the foregoing acts violated the Agreements,

Western sought compensatory damages and injunctive relief from

the Moores in the Circuit Court of Henrico County, Virginia.

3
The Moores removed the action to federal district court.

Following a bench trial the district court ultimately found that

the Moores breached the Agreements and awarded Western

$943,659.00 in compensatory damages but denied Western’s request

for injunctive relief.

On appeal to this Court, we affirmed certain portions of

the district court’s judgment, but reversed other parts and

remanded the case for further proceedings. Although we agreed

with the district court that Hal breached his Agreement by

hiring the two former Insulation, Inc. employees, Western proved

no compensable damages for that breach. Hal’s other actions

were deemed to be arms-length transactions not in violation of

his Agreement. “We conclude[d] the district court erred in

finding that Hall breached his noncompete (other than by hiring

two former employees.” Western Insulation, LP v. Moore, 242 F.

App'x 112, 118-19 (4th Cir. 2007) (unpublished) (“Western I”).

We affirmed the district court’s decision that Melanie breached

her Agreement, but held that the district court erred in (1)

placing a value of $500,000 on Western’s damages arising solely

as a result of the Moores’ various breaches, (2) awarding

damages for Western’s reduced profit margins because such

evidence was speculative and (3) awarding damages for Western’s

lost profits. Id. at 123-24. However, we agreed with Western

that the district court erred in denying its request for

4
injunctive relief and accordingly remanded for further

consideration by the district court. Id. at 124.

Consistent with our holding on appeal Western asked the

district court for injunctive relief

to enjoin Melanie from (1) breaching her Agreement by
providing any form of support to any of [Western’s]
competition or to Schulkamp or Barnes personally; (2)
controlling or monitoring the finances of American or
Empire; and (3) exercising the option agreement or the
security agreement that she formed with American,
entering into an option agreement or a security
agreement with Empire, or obtaining any other
ownership interest arising from a loan guarantee in
either of those companies. Western also ask[ed] the
court (4) to enjoin Hal from breaching his Agreement
by, directly or indirectly, soliciting, hiring, or
employing any person who was formerly employed by
[Western], or soliciting work from any of [Western’s]
customers. Finally, Western ask[ed] the Court (5) to
toll the Moores’ Agreements until March 12, 2009,
extending them by two years, the period of time that
the Moores allegedly breached their Agreements.

Western Insulation, L.P. v. Moore, No. 3:05-CV-602, 2008 WL

191335, at *2 (E.D. Va. Jan. 22, 2008). These measures were

necessary, Western asserted, because the Moores’ actions reduced

the value of the goodwill for which Western had paid and it

would suffer further harm if the Moores continued to assist

Western’s competitors. Western also asked the district court to

enter an award for nominal damages against both Hal and Melanie

based on the adjudicated breach of the Agreements.

The Moores argued that our decision absolved them of

liability for breaching their Agreements and implied that they

5
were unlikely to breach them in the future. Based on this

interpretation of our prior decision they asked the district

court to reject Western’s request for nominal damages and enter

judgment in their favor because (a) Western’s prior failure to

prove compensatory damages necessarily foreclosed a successful

cause of action for breach of contract under Virginia law, and

(b) the doctrine of judicial estoppel barred Western’s request

for nominal damages.

The district court conducted a thorough analysis of the

requirements for equitable relief and found such relief was

warranted as to Melanie, but not Hal. Accordingly, the district

court forbade Melanie from:

(1) providing any form of support to any of the
Company's competitors or to Stephanie Schulkamp or
David Barnes personally; (2) controlling or monitoring
the finances of American or Empire; and (3) exercising
the option agreement or the security agreement that
she formed with American, entering an option agreement
or a security agreement with Empire, and obtaining any
other ownership interest in either of those companies
arising from a loan guarantee.

Id. at *5. Having determined that Melanie “breached her

Agreement for a total of two years, ten months, and seventeen

days-the period from March 5, 2005 to the date of [its]

Memorandum Opinion” (January 22, 2008), the court extended her

6
obligations under the Agreement for that period of time. 1 Id.

The court then determined that Western had not been irreparably

harmed by Hal’s breach of his Agreement and refused to “extend

his obligations under [his] Agreement” or enjoin him from

“soliciting, hiring, or employing any other people who worked

for [Western]”. Id.

The district court also determined that language in the

Agreements “relieve[d] Western of the burden of proving damages

to establish a claim” for breach of contract and that this

Court’s determination that Western’s evidence on compensatory

damages was insufficient to support an award did not preclude an

award of nominal damages. Id. at *6. The district court

rejected the Moores’ arguments, entered judgment against both

Hal and Melanie, and awarded nominal damages of $100.00 against

both defendants.

The Moores timely appealed the judgment of the district

court and we have jurisdiction under 28 U.S.C. § 1291. For the

reasons that follow, we affirm the district court’s judgment in

all respects.

1
Absent injunctive relief the Moores’ obligations under
their Agreements would have expired on March 12, 2008.

7
 II. Injunctive Relief

As an initial matter, we note that “we review the grant of

a permanent injunction for abuse of discretion.” Virginia Soc’y

for Human Life, Inc. v. Federal Election Comm'n, 263 F.3d 379,

392 (4th Cir. 2001). This same standard applies to our review of

an injunction’s scope. Id. “With respect to injunctive relief,

‘[w]hat we mean when we say that a court abused its discretion,

is merely that we think that [it] made a mistake.’” Wilson v.

Office of Civilian Health and Med. Programs of the Uniformed

Servs., 65 F.3d 361, 363 (4th Cir.1995) (quoting Direx Israel,

Ltd. v. Breakthrough Medical Corp., 952 F.2d 802, 814 (4th

Cir.1991)).

On appeal Melanie challenges the district court’s grant of

injunctive relief on several grounds. First, she contends the

restrictions imposed on her are overly broad. Second, she

argues that injunctive relief was inappropriate because there

was no evidence establishing that she would violate the terms of

her Agreement in the future. Finally, Melanie avers the

district court erred in extending the terms of her Agreement for

two years, ten months, and seventeen days from the date of the

district court’s order. For the reasons below we reject these

arguments.

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A. Overbreadth of the Injunction

The relevant portion of the district court’s Order granting

equitable relief to Western provides as follows:

Melanie Moore is hereby ENJOINED from
(1) providing any form of financial
assistance, including a loan guarantee, to
any competitor of Western Insulation, Inc.,
or to Stephanie Schulkamp or David Barnes
personally;

(2) engaging in any financial control or
oversight of American Insulation, Inc.
(“American”) or Empire Insulation, Inc.
(“Empire”); and

(3) exercising any option agreement and
security agreement that she entered with
American, entering any option agreement or
security agreement with Empire, or obtaining
any other form of ownership or business
interest in American or Empire,

for a period of two years, ten months, and seventeen
days from the date of this Order.

J.A. 852-53. Melanie contends this language is impermissibly

broad because sections (1) and (2) are unlimited in duration and

thus are indefinite time restrictions on her. She also avers

that section (1) exceeds the scope of her Agreement by

precluding even personal financial assistance to either Barnes

or Schulkamp. We find Melanie’s arguments unavailing.

A plain reading of the Order’s language indicates the time

limitation applies with equal force to all three sections, not

just the last prohibition against exercising options and

agreements with American or Empire. Moreover, the Order itself

9
makes clear that the district court’s rationale is “explained in

the Memorandum Opinion accompanying this Order.” J.A. 852. In

its Memorandum Opinion the district court stated that

Melanie has breached her [Non-Compete Agreement] for a
total of two years, ten months, and seventeen days –
the period from March 5, 2005 to the date of this
Memorandum Opinion. Accordingly, the Court will issue
an injunction that will, in effect, extend her
obligations under her Agreement for a period of that
length.

J.A. 845 (emphasis added). The reference to “obligations,” in

plural form, provides additional evidence that all of the

prohibitions in the district court’s order were subject to the

time limitation. The district court’s Order and the record show

unequivocally, contrary to Melanie’s strained interpretation,

that she is enjoined from all the enumerated activities for a

period of two years, ten months, and seventeen days from January

22, 2008.

Melanie also contends that the district court’s prohibition

against personal financial assistance to Barnes or Schulkamp

goes beyond the terms of her Agreement with Western. However,

if Melanie had not breached the Agreement by providing

substantial financial assistance to establish businesses in

direct competition with Western, as she had agreed not to do,

she would remain free to offer personal financial assistance to

Barnes or Schulkamp if she wished. As the district court no

doubt realized, equitable relief prohibiting direct financial

10
assistance to Empire and American but permitting a virtually

unlimited subsidy for the personal expenditures of those

companies’ principals would naturally and impermissibly accrue

to the benefit of Empire and American by simply moving funds

from one pocket to another. The relief designed by the district

court was “no more burdensome to the defendant than necessary to

provide complete relief to the plaintiffs.” Califano v.

Yamasaki, 442 U.S. 682, 702, 99 S.Ct. 2545, 61 L.Ed.2d 176

(1979). As such, the district court did not err.

B. Future Violations

Melanie asserts that the award of injunctive relief was

unwarranted because there was no evidence she would violate the

Agreement in the future. She argues that under Virginia law the

decision to enter an injunction prohibiting “the future

commission of an anticipated wrong depends, in each case, upon

the nature of the wrong and upon the likelihood that the wrong

will be committed.” WTAR Radio-TV Corp. v. City of Virginia

Beach, 216 Va. 892, 895, 223 S.E.2d 895, 899 (1976). She

asserts that because there is no evidence in the record

suggesting that she will violate the Agreement in the future,

entry of injunctive relief was improper. These arguments are

unpersuasive for several reasons.

In Western I we addressed Western’s cross-appeal, which

challenged the district court’s refusal to grant injunctive

11
relief because “indispensable parties [were] not before the

Court, whose presence would be necessary in order . . . to

fashion complete injunctive relief.” 242 Fed.Appx. at 124. We

determined that “[a]lthough clearly some of the injunctive

relief that Western requested would ‘undermin[e] legitimate

commercial contracts or employment agreements,’ [a] subset of

relief Western” requested would not. Id. Accordingly, we

reversed the district court’s denial of injunctive relief and

remanded to the district court to determine in the first

instance whether to award such relief. The relief granted by

the district court compares favorably, indeed almost

identically, to that approved by this Court in Western I.

Melanie’s arguments also rest on the false premise that

Western does not suffer continuing damage from Melanie’s breach.

Her loan guaranties enabled Empire and American to exist as

continuing competitors to whom Western may still lose business.

Absent the injunction Melanie’s intimate financial entanglement

with American and Empire could continue unabated, to Western’s

detriment. In short, the likelihood that Melanie may commit a

“new” breach in the future is irrelevant when her breach and the

resulting damage continue.

C. Time Limitation

Melanie further claims the district court erred because the

extension of the non-compete provisions of her Agreement should

12
have been for one year, five months, and twenty-three days,

instead of two years, ten months, and seventeen days as imposed.

She argues that because we determined in Western I certain

injunctive relief would have been proper, the extension of her

obligations under the Agreement should be limited to the time

between her breach on March 5, 2005 and the date of the district

court’s original (albeit erroneous) decision on August 29, 2006

instead of the date of its judgment entered on remand. In

short, Melanie says she should not be penalized because the

district court erred in her favor by refusing to enter

injunctive relief in its first decision on August 29, 2006.

Again, we disagree.

The thrust of Melanie’s argument is that although the

Moores successfully opposed the entry of injunctive relief

against them in the district court, she should benefit from our

subsequent determination in Western I that injunctive relief was

appropriate as to her. This argument disregards the fact that,

absent injunctive relief, Melanie’s breaches were permitted to

continue during the pendency of the appeal until entry of the

district court’s Order on January 22, 2008. See Western

Insulation, L.P., No. 3:05-CV-602, 2008 WL 191335, at *5

(finding that Melanie “breached her Agreement on March 5, 2005,

when she obtained the right to purchase American, a breach that

has continued to this day.”). The district court did not abuse

13
its discretion in forging its injunctive remedy and extending

Melanie’s obligations as provided in the district court’s

judgment.

III. Nominal Damages

The Moores make two principal arguments in support of their

contention that the district court erred in awarding nominal

damages to Western. They assert that Western’s failure to prove

compensatory damages as determined by this Court in Western I

precludes Western from establishing all the elements necessary

for a breach of contract claim under Virginia law. In addition,

they argue the principle of judicial estoppel applies.

A. Breach of Contract Damages

Under Virginia law “[t]he elements of a breach of contract

action are (1) a legally enforceable obligation of a defendant

to a plaintiff; (2) the defendant’s violation or breach of that

obligation; and (3) injury or damage to the plaintiff caused by

the breach of obligation.” Filak v. George, 267 Va. 612, 619,

594 S.E.2d 610, 614 (2004)); Ulloa v. QSP, Inc., 271 Va. 72, 79,

624 S.E.2d 43, 48 (2006); see also Sunrise Continuing Care, LLC

v. Wright, Record No. 072501, 2009 WL 103320, at *3 (Va. Jan.

16, 2009).). “Proof of damages is an essential element of a

breach of contract claim, and failure to prove that element

warrants dismissal of the claim.” Id. at *5. “The plaintiff

14
also has the ‘burden of proving with reasonable certainty the

amount of damages and the cause from which they resulted;

speculation and conjecture cannot form the basis of the

recovery.’” Id. (quoting Shepherd v. Davis, 265 Va. 108, 125,

574 S.E.2d 514, 524 (2003)). The Moores argue that in light of

our determination in Western I that Western failed to prove its

claim for compensatory damages, the district court improperly

awarded nominal damages in satisfaction of the third element of

a breach of contract claim. We believe the Moores misconstrue

Virginia law related to damages in the context of the facts of

this case.

"[I]t is . . . well-settled that parties to a contract may

specify the events or pre-conditions that will trigger a party's

right to recover for the other party's breach of their

agreement.” Ulloa, 271 Va. at 79, 624 S.E.2d at 48. This

includes the right to contract in such a way as “to eliminate

damages as a required element of a breach of contract action.”

Id. at 80, 624 S.E.2d at 48. Like the Ulloa Court, “the focus

of our analysis is to determine whether the parties in fact

agreed to modify the traditional elements of a breach of

contract action so as to permit [Western] to obtain a valid

breach of contract verdict in the absence of a finding of

damages.” Id.

Section 5 of each Agreement provided as follows:

15
 5. Remedies. Moore hereby acknowledges that his
covenants and obligations hereunder are of special,
unique, unusual, extraordinary, and intellectual
character, which gives them a peculiar value, the
actual and threatened breach of which shall result in
substantial injuries and damages, for which monetary
relief may fail to provide an adequate remedy at law.
Accordingly, Moore agrees that the Partnership shall
be entitled, in the event of an actual or threatened
breach of this Agreement, to seek remedies including,
but not necessarily limited to (i) temporary or
permanent injunctive relief; (ii) specific
performance, and (iii) monetary relief, to the extent
that monetary relief may constitute an adequate remedy
in whole or in part . . .

J.A. 762 (emphasis added).

Based on paragraph 5 of the Agreements, the district court

concluded that because a breach by Hal or Melanie “shall result

in substantial injuries,” and shall entitle Western “to seek

remedies including, but not necessarily limited to . . .

monetary relief, to the extent that monetary relief may

constitute an adequate remedy in whole or in part,”

identification of the remedies would be “superfluous unless it

was intended to emphasize that Western would not have to prove

it suffered harm.” J.A. 847-48. The Moores contest this

interpretation of paragraph 5. 2

2
Although Ulloa, like this case, involved the breach of the
“confidentiality, no-solicitation, and non-competition
provisions” of a contract, it is not dispositive of the issues
presented in this appeal. 271 Va. at 76, 624 S.E.2d at 46. The
Virginia Supreme Court’s determination that Ulloa’s employer was
not required to prove damages as an element of its breach of
contract claim rested on the parties’ consent to jury
(Continued)
16
 “A court's primary focus in considering disputed

contractual language is to determine the parties' intention,

which should be ascertained, whenever possible, from the

language the parties employed in their agreement.” Pocahontas

Mining LLC v. CNX Gas Co., LLC, 276 Va. 346, 352, 666 S.E.2d

527, 531 (2008). Here, in the first sentence of section 5 of

the Agreements, the Moores explicitly acknowledge that any

breach on their part “shall result in substantial injuries and

damages . . . .” By this plain language the parties have agreed

that a breach by Hal or Melanie necessarily results in damage to

Western for which Western “shall be entitled to . . . to seek”

various remedies, including injunctive relief and/or monetary

damages. Thus, the parties contractually agreed that a breach

of contract claim could be established absent proof of

compensatory damages. While the language in the Moores’

Agreements permitted Western to establish a breach of contract

claim under Virginia law once the first two elements were

proven, Western’s compensatory damages were limited to those

monetary damages it could prove with “reasonable certainty”

instructions mandating a verdict adverse to Ulloa if his
employer proved only two elements – that there was a contract
and Ulloa breached it. Once the jury found a breach of contract
on those instructions, it became the law of the case. 271 Va.
at 80, 624 S.E.2d at 48.

17
which, in this case, were none. The question remains, however,

whether Western, once it proved a breach, could recover nominal

monetary damages under Virginia law when it did not prove

compensatory damages.

“[U]pon the breach of a valid and binding contract the law

infers nominal damages, it does not infer or presume substantial

or compensatory damages. The latter must be proven by competent

evidence. [Compensatory damages] are such as indemnify the

plaintiff and generally measure the plaintiff's actual loss and

provide amends therefor.” Orebaugh v. Antonious, 190 Va. 829,

834, 58 S.E.2d 873, 875 (1950).

In Crist v. Metropolitan Mortg. Fund, Inc., 231 Va. 190,

195, 343 S.E.2d 308, 311 (1986), the Supreme Court of Virginia

affirmed a lower court’s award of nominal damages. The Virginia

trial court had determined that the plaintiff established the

defendant’s breach of contract but failed to prove compensatory

damages. The trial court awarded nominal damages in the amount

of $100.00. On appeal, the Supreme Court of Virginia affirmed

“the judgment of the trial court denying compensatory damages

but awarding nominal damages of $100” because when “damages, if

any, cannot be established with reasonable certainty, no actual

damages can be recovered.” Id. (emphasis added).

Virginia law, as expressed in Orebaugh and Crist,

distinguishes between nominal and compensatory damages. Nominal

18
damages do not, by definition, compensate the aggrieved party –

they merely recognize that the aggrieved party’s rights have

been violated by the party in breach. Virginia law thus

provides for an award of nominal damages in cases where the

plaintiff proves that a breach of contract occurred but does not

prove compensatory damages, as in this case. Although not

specifically adopted by the Supreme Court of Virginia, this view

comports with Section 346 of the Restatement (Second) of

Contracts and other secondary sources:

(1) The injured party has a right to damages for any
breach by a party against whom the contract is
enforceable unless the claim for damages has been
suspended or discharged.

(2) If the breach caused no loss or if the amount of
the loss is not proved under the rules stated in this
Chapter, a small sum fixed without regard to the
amount of loss will be awarded as nominal damages.

Restatement (Second) Contracts § 346 (1981).

Only nominal damages are recoverable upon the breach
of a contract, if no actual or substantial damages
result from the breach or no damage is shown.
Examples include those cases in which:

(1) actual damage is uncertain or not
susceptible of proof;

(2) damages are too remote, conjectural, and
speculative to form the basis of a legal recovery;
. . . .

22 Am. Jur. 2d Damages § 17.

To hold, as the Moores urge, that Western’s failure to

prove compensatory damages extinguishes a remedy of nominal

19
damages for breach of contract would contradict Virginia law as

expressed in Orebaugh and Crist. Accordingly, the district

court did not err in entering judgment against Hal and Melanie

and awarding nominal damages to Western from both. 3

B. Judicial Estoppel

We also reject the Moores’ argument that Western’s request

for nominal damages on remand from this Court is barred by the

doctrine of judicial estoppel.

Judicial estoppel is a principle developed to prevent
a party from taking a position in a judicial
proceeding that is inconsistent with a stance
previously taken in court. See John S. Clark Co. v.
Faggert & Frieden, P.C., 65 F.3d 26, 28 (4th
Cir.1995). Three elements must be satisfied before
judicial estoppel will be applied. ‘First, the party
sought to be estopped must be seeking to adopt a
position that is inconsistent with a stance taken in
prior litigation.’ Lowery v. Stovall, 92 F.3d 219,
224 (4th Cir.1996). The position at issue must be one
of fact as opposed to one of law or legal theory. Id.
‘Second, the prior inconsistent position must have
been accepted by the court.’ Id. Lastly, the party
against whom judicial estoppel is to be applied must
have ‘intentionally misled the court to gain unfair
advantage.’ Tenneco Chems., Inc. v. William T.

3
We observe that, as a practical matter, few plaintiffs
will find a purpose in pleading nominal damages when they
primarily seek to recover compensatory damages. That being
said, we note that a properly pled request for nominal damages
is not negated if a claim for compensatory damages fails. See,
generally, Orebaugh, 190 Va. at 834, 58 S.E.2d at 875. We also
note that our affirmance of Western’s award of nominal damages
against the Moores does not address whether that award qualifies
Western as a “prevailing party” under the Agreements. That
issue is not before us in this appeal and we express no opinion
in that regard.

20
 Burnett & Co., 691 F.2d 658, 665 (4th Cir.1982).
This bad faith requirement is the ‘determinative
factor.’ John S. Clark Co., 65 F.3d at 29.

Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir. 2007). “The

purpose of the doctrine is to prevent a party from playing fast

and loose with the courts, and to protect the essential

integrity of the judicial process.” 4 Lowery, 92 F.3d at 223.

1996). In the present case, the doctrine of judicial estoppel

does not bar Western’s request for, nor the district court’s

award of, nominal damages.

Western’s argument on remand that it was entitled to

recover nominal damages was legal, not factual, and was a direct

response to this Court’s determination on appeal in Western I

that it had failed to prove compensatory damages. Prior to our

decision in Western I, there was no reason for Western to assert

its entitlement to nominal damages in light of its steadfast

belief that it should recover (and could prove) compensatory

damages. For the same reason, it is plainly evident that

Western did not act in bad faith or intentionally mislead the

district court. The doctrine of judicial estoppel simply does

not apply to the district court’s award of nominal damages on

remand in this matter.

4
As we have noted, “judicial estoppel is a matter of
federal law, not state law. . . .” Lowery, 92 F.3d at 223 n.3.

21
 IV.

In conclusion, we affirm the district court’s judgment,

including the award of injunctive relief, the entry of judgment

against Hal and Melanie and the award of nominal damages against

both.

AFFIRMED

22