Present: Lacy, Keenan, Koontz, Kinser, Lemons, and Agee, JJ.,
and Compton, S.J.
GOVERNMENT MICRO RESOURCES,
INC., ET AL.
v. Record No. 050943
ALAN W. JACKSON
OPINION BY JUSTICE ELIZABETH B. LACY
January 13, 2006
ALAN W. JACKSON
v. Record No. 050937
GOVERNMENT MICRO RESOURCES,
INC., ET AL.
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
LeRoy F. Millette, Jr., Judge
Alan W. Jackson sued his former employer Government Micro
Resources, Inc. (GMR) and its Chairman of the Board, Humberto
Pujals, Jr., for breach of contract and defamation.1 The jury
returned a verdict in favor of Jackson awarding him $200,500
in compensatory damages on his breach of contract claim and
$5,000,000 and $1,000,000 as compensatory and punitive
damages, respectively, on his defamation claim. The trial
court granted the defendants' post-trial motion for
remittitur, reducing the breach of contract award to $112,500,
the defamation compensatory damages to $1,000,000, and the
punitive damages to the statutory maximum of $350,000. Code
§ 8.01-38.1.
Jackson, GMR, and Pujals appealed the trial court's
judgment and we have consolidated the appeals for our
consideration. GMR and Pujals ask us to reverse the judgment
of the trial court. They assert that the trial court erred in
failing to strike Jackson's defamation claim and that the
evidence did not support a finding of actual malice necessary
for an award of punitive damages or to overcome the qualified
privilege they contend attached to the alleged defamatory
statements. Jackson seeks restoration of the jury's
compensatory damage award for his defamation claim.
For the reasons stated below, we conclude that Jackson's
defamation claim was not opinion, was timely and properly pled
and proven; that actual malice was shown by clear and
convincing evidence; and that in holding that the compensatory
damage award was excessive, the trial court did not consider
factors in evidence relevant to that damage award.
FACTS
The following facts are relevant to both appeals and we
recite them in the light most favorable to Jackson, the party
prevailing in the trial court. City of Lynchburg v. Brown,
270 Va. 166, 168, 613 S.E.2d 407, 408 (2005).
1
Jackson also included counts of actual and constructive
fraud which the trial court struck.
2
Following his discharge from the army, Jackson served
eight years with the National Security Agency where he
qualified for top secret and "specially comparted information"
security clearances following satisfactory completion of
multiple "full lifestyle polygraph" examinations. Upon
leaving the government, he worked for various technical
systems companies as senior officer or chief executive officer
developing a reputation for successfully turning financially
distressed business units into profitable entities and
expanding the companies.
In 2001, GMR, a technology resale and services company,
sought to increase its services business. To accomplish this
goal, GMR recruited Jackson to serve as president and chief
executive officer because of his connections with the federal
government, his top secret security clearances, and his
extensive experience with technology services in both the
public and private sectors.
Jackson began work at GMR on July 9, 2001. Within a
short period, Jackson realized the company's financial
situation differed significantly from what he was led to
believe when he accepted the position. For example, GMR's
line of credit was significantly reduced because Pujals caused
a transfer of properties from the company to himself by using
the company's line of credit to satisfy the mortgages on the
3
properties. Jackson also learned of a $1.1 million loss GMR
sustained in the first six months of 2001, a $400,000
accounting error reported by the chief financial officer in
August, and a $1.4 million discrepancy between the company's
listed inventory and that which it actually held.
In October 2001, as part of its effort to increase its
services business, GMR began discussions with Seisint, Inc.
(Seisint), a technology company with a super computer it
wished to market to the federal government. Seisint did not
have contacts with the federal government, but GMR could
provide those contacts through Jackson. The Seisint
executives, Henry E. Asher and Daniel W. Latham, worked
directly with Jackson. Eventually, GMR and Seisint executed a
memorandum of understanding detailing GMR and Seisint's
agreement to jointly market Seisint's super computer to the
federal government.
The remainder of 2001 and the early months of 2002 did
not bring a significant change in GMR's financial status. On
March 5, 2002, GMR terminated Jackson's employment for cause.
The termination letter accused Jackson of "gross
mismanagement" of GMR's finances. Pujals admitted, however,
that when he wrote the letter he did not have "a specific
amount of money in mind" as a basis for that statement.
4
According to Asher, Pujals called Asher either the day
Jackson was terminated, or the next day, and told Asher that
Jackson "mismanaged the company and cost him a tremendous
amount of money." Latham testified that at a meeting in April
2002 between GMR and Seisint executives Pujals initiated the
subject of Jackson's firing and said that "Jackson had been
removed from his job because he lost $3 million." Pujals
testified that at the April meeting he had responded to
Asher's question regarding the details of Jackson's
termination by saying the company, and not Jackson, lost $3
million, which resulted in Pujals having to let Jackson go.
Pujals admitted that Jackson did not lose $3 million for GMR
and that "it would be false if someone said that."
Following his termination, Jackson entered employment
discussions with Seisint. Because of the information Asher
received from Pujals, Seisint, at Asher's direction did not
hire Jackson for a management position but rather engaged him
as a sales representative and consultant from March 6, 2002
until December 31, 2002. On January 1, 2003, Seisint hired
Jackson as senior vice-president of government programs, which
Jackson did not consider a management position.
Pujals was upset when he heard that Jackson was working
for Seisint because Jackson would not have known about Seisint
if not for GMR. Particularly, Pujals said: "And to find out
5
– and to find out that after we fired him for cause, that he's
already employed immediately after and he has already a
relationship right after was very, very – a very, very mean
thing for him to do."
I. The Defamatory Statements
The jury was instructed to return a verdict in favor of
Jackson if it found that Jackson proved either of the
following two statements:
Mr. Pujals called Hank Asher within a few
days of terminating Mr. Jackson (March 5,
2002). Mr. Pujals told Mr. Asher that Mr.
Jackson had mismanaged GMR, had lost what
Mr. Asher perceived or recalled as an
exorbitant amount of money, and that Mr.
Pujals had to let him go as a result; or
In April 2002, Mr. Pujals told Daniel
Latham, President of Homeland Defense
[and] Seisint, Inc., and/or Mr. Asher,
founder and CEO of Seisint, Inc., that he
fired Al Jackson because Mr. Jackson lost
$3 million.
GMR2 contends that the first statement was not contained in
Jackson's pleadings and was not timely asserted, that both
statements were opinion and therefore could not be the subject
2
GMR and Pujals filed a joint appeal. Therefore,
throughout our discussion of these appeals, "GMR" will refer
to Pujals and GMR collectively unless the context requires
otherwise.
6
of a defamation claim, and that Jackson did not prove that GMR
uttered either statement in haec verba or with malice.3
A. Pleading the Defamation Claim
Whether Jackson failed to plead and timely assert the
first statement, as GMR contends, depends on whether that
statement was included in the description of the alleged
defamation contained in the motion for judgment and a
subsequent bill of particulars. A motion for judgment
asserting a claim for defamation that does not recite all the
specifics of the alleged defamatory statement, although not
good pleading, may nevertheless state a "substantial cause of
action imperfectly." Federal Land Bank v. Birchfield, 173 Va.
200, 217, 3 S.E.2d 405, 411 (1939). The particulars of the
allegedly defamatory statement may be supplied in a bill of
particulars. Id. However, if, in supplying such specifics, a
litigant identifies an allegedly defamatory statement that was
not reasonably included in the original pleadings, such a
statement constitutes a separate claim of defamation and must
comply with Code § 8.01-247.1, the one-year statute of
limitations for defamation claims. See id. at 217-19, 3
S.E.2d at 411-12.
3
GMR's argument that the evidence was insufficient to
support a finding of actual malice in this assignment of error
is based on its assertion that the statements were entitled to
7
In this case, Jackson's motion for judgment recited that
Humberto ("Tico") Pujals and GMR made false and
defamatory statements to executives of Seisint,
Inc., stating that Mr. Jackson lost $3 million
for GMR and was terminated as a result.
In his bill of particulars, Jackson contended that "[o]n or
around" April 12, 2002, at a business meeting between certain
identified and unidentified Seisint executives and certain
representatives of GMR, Pujals stated that in 2001 Jackson
lost either "a significant amount" of money for GMR or
"enormous amounts" of money for GMR. The bill of particulars
also recited that "[o]n or around" April 12, Pujals "made the
statement to a Seisint executive (who has requested not to be
named) that Mr. Jackson 'lost $3 million for GMR last year.' "
On October 8, 2004, Jackson filed a supplemental answer
to GMR's first set of interrogatories based on the de bene
esse depositions of Asher and Latham taken by GMR September
20, 2004 and July 13, 2004, respectively.4 In that answer,
Jackson stated that Pujals called Asher "either the day, or
within a few days of terminating Mr. Jackson" and told Asher
that Jackson had "mismanaged" GMR, that Jackson lost what
a qualified privilege. Qualified privilege is addressed
infra.
4
Jackson's supplemental answer included five alleged
defamatory statements. The trial court excluded three
statements and they are not at issue on appeal. Therefore, we
only address the October 8 interrogatory answer as it relates
to the two statements made by Pujals.
8
Asher "perceived or recalled" to be an "exorbitant amount of
money," and that Pujals "had to let" Jackson go. The answer
also recited that Pujals told Asher and Latham that he fired
Jackson because Jackson "lost $3 million."
GMR argues here, as it did in the trial court, that the
first statement submitted to the jury involved a March phone
call to Asher, which was not pled in either the motion for
judgment or bill of particulars but was a new allegation of
defamation based on statements first identified in the October
8 interrogatory answer. Because this statement was not pled
within the one-year limitations period, GMR asserts that it
was untimely and should not have been presented to the jury.
In rejecting GMR's contention, the trial court concluded
that the information contained in the October 8 interrogatory
answer was "essentially the same allegation" as the statements
alleged in the motion for judgment and the bill of particulars
and did not constitute a new or separate defamation claim. We
find no error in the trial court's ruling.
The defamation claim in the motion for judgment and the
bill of particulars was that two statements were made to
Seisint executives at an indeterminate time around April 12,
2002, attributing the loss of large amounts of money to
Jackson's management of GMR. The October 8 interrogatory
answer named a previously "unidentified" Seisint executive to
9
whom one of the statements was made and identified the
location and time frame of one of the statements. The
information provided in the October 8 interrogatory answer,
the motion for judgment, and the bill of particulars was
consistent with the statements provided to the jury as
Jackson's defamation claim. Therefore, the first statement
was pled within the limitations period.
B. Opinion
GMR next argues that the statements at issue were matters
of opinion and thus could not be the basis of a defamation
claim. According to GMR, the terms "exorbitant" and
"mismanaged" contained in the allegedly defamatory statements
submitted to the jury represented Pujals' subjective judgments
and were expressions of opinion only.5
Statements that express only the speaker's opinion and
not matters of fact are not actionable as defamation because
such statements cannot be shown to be false. Fuste v.
Riverside Healthcare Ass'n, Inc., 265 Va. 127, 132, 575 S.E.2d
858, 861 (2003). "Statements that are relative in nature and
depend largely upon the speaker's viewpoint are expressions of
opinion." Id. Whether a statement is a statement of fact or
5
GMR also complains that the word "tremendous" reflects
opinion, not fact. However, although the jury heard testimony
that GMR's financial losses were "tremendous," that word does
10
opinion is a matter of law and is reviewed de novo on appeal.
Jordan v. Kollman, 269 Va. 569, 576, 612 S.E.2d 203, 206-07
(2005).
In American Communications Network, Inc. v. Williams, 264
Va. 336, 341-42, 568 S.E.2d 683, 686 (2002), we held that in
considering whether a statement was one of fact or opinion, we
do not isolate parts of an alleged defamatory statement.
Rather, the alleged defamatory statement must be considered as
a whole to determine whether it states a fact or non-
actionable opinion.
The alleged defamation in this case is that Jackson's
mismanagement caused GMR to lose money in 2001 which, in turn,
was the basis for Jackson's termination. Whether a company's
financial loss is the result of mismanagement is a fact that
can be proven. Indeed, in this case, the parties introduced
substantial evidence regarding the cause or causes of GMR's
financial losses. The evidence also established that
government contracting was a very competitive business and
success was often based on contacts with "the appropriate
people." The trial court observed that the evidence showed
that Pujals' statements were made as a matter of fact "with
the intent to defame Mr. Jackson so that he would not be able
not appear in the statements submitted to the jury and we need
not include it in our discussion.
11
to go to Seisint and get employment with them and cut GMR out
of the picture."
Accordingly, we conclude that the trial court did not err
in ruling that the alleged defamatory statements were not
opinion.
C. Proof of Defamation
To prevail on a defamation claim, a "sufficient number"
of the defamatory words must be proven "to make out a good
cause of action. . . . They must be substantially proven as
alleged." Birchfield, 173 Va. at 215, 3 S.E.2d at 410. GMR
contends that because neither Asher nor Latham could recall
the exact words of the first or second statement,
respectively, Jackson failed to carry his burden of proof and
the trial court should have struck the defamation claim.
However, Asher and Latham were not the only persons who
testified as to the content of the defamatory statements.
Jackson testified, "in the telephone call with Dan
Latham, he told me that . . . Mr. Pujals said I had lost $3
million for GMR, and that's why I had been fired." Jackson
also testified that Asher told Jackson that he understood
Jackson "lost $3 million for GMR" and that is why Jackson was
fired. Pujals testified that he told Asher and Latham that
the company lost $3 million dollars and "we had to let Jackson
go."
12
Latham testified that Asher was present when Pujals told
Latham that Jackson was fired because Jackson had "lost $3
million," and that $3 million "was a large sum of money for a
company the size [of] GMR." Asher testified that he had one
and possibly two conversations with Pujals in which Pujals
told Asher that Jackson had "mismanaged the company" and cost
the company "tremendous" amounts of money.
This evidence is sufficient to satisfy the standard that
the defamatory words "must be substantially proven as
alleged." Birchfield, 173 Va. at 215, 3 S.E.2d at 410.
Finally, GMR complains that the evidence was insufficient
to support a finding of actual malice.6 Actual malice is also
required as a basis for awarding punitive damages. GMR has
assigned error to the trial court's failure to strike the
punitive damage award and, therefore, we will address GMR's
arguments regarding the sufficiency of the evidence of actual
malice in the following discussion which addresses that
assignment of error.
II. Proof of Actual Malice
GMR also assigns error to the trial court's failure to
strike Jackson's claim for punitive damages asserting Jackson
6
In conjunction with this assertion, GMR argued on brief
that the trial court erred in finding that the statements were
defamatory per se; however, GMR did not assign error to this
holding and consequently we do not address it. Rule 5:17(c).
13
failed to provide clear and convincing proof of actual malice.
GMR contends that the test we have established for such proof
requires "much more than mere falsity" to sustain a finding of
actual malice. Citing Jordan, 269 Va. at 580, 612 S.E.2d at
209, and The Gazette, Inc. v. Harris, 229 Va. 1, 50, 325
S.E.2d 713, 746 (1985), GMR asserts that this Court has
determined that to establish actual malice, a plaintiff must
produce clear and convincing proof that there were reasons for
a defendant to doubt the veracity of the defamatory statement
or that all judgment and reason were abandoned and no
objective basis existed for the defamatory charge. GMR
misstates the law and misapplies these cases.
To recover punitive damages in a defamation case, the
plaintiff must prove actual malice by "clear and convincing
evidence that [the defendant] either knew the statements he
made were false at the time he made them, or that he made them
with a reckless disregard for their truth." Ingles v. Dively,
246 Va. 244, 253, 435 S.E.2d 641, 646 (1993) (emphasis added).
A plaintiff seeking punitive damages can prevail by
establishing either circumstance by clear and convincing
evidence.
In both cases cited by GMR, the second circumstance –
reckless disregard for the truth – was relied upon to show
actual malice. In Jordan, the defendant claimed that he did
14
not know that the statements at issue were false; rather, he
believed the statements to be true. 269 Va. at 580-81, 612
S.E.2d at 209. Similarly in The Gazette, the Court assumed
without deciding that the plaintiff failed to prove that the
defendant knew the defamatory statements were false. 229 Va.
at 49, 325 S.E.2d at 746. These cases are not relevant to the
instant case because Jackson predicates his case of actual
malice on Pujal's knowledge that his defamatory statements
were false.
In considering GMR's assertion that Jackson did not
provide clear and convincing evidence of actual malice, we
independently review the record, The Gazette, 229 Va. at 19,
325 S.E.2d at 727, and we review the facts in the light most
favorable to the party prevailing below. Jordan, 269 Va. at
577, 612 S.E.2d at 207. The record in this case contains
clear and convincing evidence that at the time Pujals made the
statements ascribing GMR's loss of large amounts of money in
2001 to Jackson, he knew those statements were false.
Pujals himself testified that he knew Jackson did not
lose $3 million for GMR and that "it would be false if someone
said that." According to Asher, Pujals called Asher either
the day of or the day after Jackson's termination and told
Asher that Jackson had mismanaged GMR and lost a tremendous or
exorbitant amount of money. Latham testified that at a
15
meeting in April, Pujals also initiated the conversation
regarding Jackson stating that "Jackson had been removed from
his job because he lost $3 million." In neither of these
conversations did Pujals mention that the company's financial
situation had been affected by a reduced line of credit, the
$1.1 million loss in the first half of 2001, the $400,000
accounting error, or the $1.4 million drop-ship inventory
problem, none of which could be attributed to Jackson.
In summary, Pujals knew his statements were false. He
initiated both conversations in which he defamed Jackson. Our
independent review of the record, considering the evidence in
the light most favorable to Jackson, shows clear and
convincing proof of actual malice; thus, the trial court did
not err in refusing to strike Jackson's punitive damage claim.
III. Qualified Privilege
The principle of qualified privilege protects a
communication from allegations of defamation if made in good
faith, to and by persons who have corresponding duties or
interests in the subject of the communication. Smalls v.
Wright, 241 Va. 52, 54, 399 S.E.2d 805, 807 (1991). A
plaintiff can overcome the privilege by providing evidence
that the statements were made with malice. Fuste, 265 Va. at
134, 575 S.E.2d at 863. In this case, the trial court
concluded that the privilege did not exist and declined to
16
instruct the jury on the issue. GMR asserts this holding was
error.
We need not resolve whether qualified privilege applied
to the alleged defamation in this case because, even if it
did, the trial court's failure to instruct the jury was
harmless error. In Great Coastal Express, Inc. v. Ellington,
230 Va. 142, 154, 334 S.E.2d 846, 854 (1985), we held that the
trial court erred in instructing the jury that a qualified
privilege could be overcome if actual malice was established
by a preponderance of the evidence. We held such error
harmless, however, because the jury awarded punitive damages
pursuant to an instruction that required proof of actual
malice by clear and convincing evidence. Id. at 155, 334
S.E.2d at 855. Thus, "the jury necessarily found that the
plaintiff had carried the heavier burden of proof . . . of
malice sufficient to defeat the privilege." Id.
In this case, even if the alleged defamation was entitled
to a qualified privilege, the privilege would have been lost
if the jury found Pujals uttered the statements with actual
malice. As discussed above, the jury was required to and did
find that the statements were made with actual malice when it
awarded punitive damages. Because we have already concluded
that the record supports the award of punitive damages, we
hold that any failure to instruct the jury on qualified
17
privilege was harmless error because the privilege would have
been lost upon the jury's finding of actual malice.
IV. Remittitur
The trial court set aside the jury's $5 million
compensatory damage award for defamation and ordered
remittitur of $4 million leaving a compensatory damage award
of $1 million. Jackson accepted the judgment of the trial
court under protest and filed this appeal pursuant to Code
§ 8.01-383.1.
A trial court may set aside a verdict because it is
excessive if the amount awarded shocks the conscience of the
court either because it indicates "the jury has been motivated
by passion, corruption or prejudice" or "has misconceived or
misconstrued the facts or the law," or because it is so
disproportionate "to the injuries suffered as to suggest that
it is not the product of a fair and impartial decision."
Shepard v. Capitol Foundry of Virginia, Inc., 262 Va. 715,
720-21, 554 S.E.2d, 72, 75 (2001) (quoting Edmiston v.
Kupsenel, 205 Va. 198, 202, 135 S.E.2d 777, 780 (1964));
Poulston v. Rock, 251 Va. 254, 258, 467 S.E.2d 479, 481
(1996).
The trial court in this case concluded that the $5
million jury verdict was shockingly excessive, explaining that
it did not believe the jury was motivated by "bias, passion,
18
or prejudice," but rather "misconceived or misunderstood the
facts or the law." The trial court opined that the jury
confused and commingled elements of contract and defamation
damages leading to an excessive compensatory defamation award.
In reviewing a trial court's order of remittitur, we
apply an abuse of discretion standard. Shepard, 262 Va. at
721, 554 S.E.2d at 75. Applying this standard requires a two-
step analysis: (1) we must find in the record both the trial
court's conclusion the verdict was excessive and its analysis
demonstrating that it "considered factors in evidence relevant
to a reasoned evaluation of the damages" when drawing that
conclusion, and then (2) we must determine whether the
remitted award is "reasonab[ly] relat[ed] to the damages
disclosed by the evidence." Poulston, 251 Va. at 259, 467
S.E.2d at 482 (quoting Bassett Furniture Indus. v. McReynolds,
216 Va. 897, 911-12, 224 S.E.2d 323, 332 (1976)). "Both of
these steps require an evaluation of the evidence relevant to
the issue of damages" and mandate that we consider the
evidence in the light most favorable to the party awarded the
jury verdict, in this case Jackson. Shepard, 262 Va. at 721,
554 S.E.2d at 75.
Jackson asserts the trial court abused its discretion in
concluding the $5 million jury verdict was excessive. The
record contains the trial court's conclusion the verdict was
19
excessive and its reasons for that conclusion. However, we do
not find support for the trial court's conclusion in the
record because the trial court failed to consider, in the
light most favorable to Jackson, all the "factors in evidence
relevant to a reasoned evaluation of the damages." Poulston,
251 Va. at 259, 467 S.E.2d at 482. Thus, we hold that the
trial court abused its discretion in setting aside the jury
verdict on compensatory damages for defamation and in ordering
remittitur.
The trial court's explanation for its belief that the
jury misconceived or misunderstood the facts and the law is
that the jury was confused about which of Jackson's injuries
could be compensated in the defamation award. An obvious
example of the jury's confusion and commingling, according to
the trial court, was the jury's breach of contract award.
Neither party disputes that the jury was confused and
improperly included in the breach of contract award $88,000
related to defamation. This confusion and commingling,
according to the trial court, indicates that the jury was also
confused and improperly commingled other elements and evidence
of damages in setting the defamation award.
The trial court, appropriately, did not rely solely on
the jury's mistake regarding the breach of contract award as
sufficient support for its belief that the jury was also
20
confused and included improper elements of damage in the
defamation award. The trial court identified other factors
and evidence which it believed supported the conclusion that
the defamation award was the product of confusion and
inclusion of improper elements of damage.
The trial court first identified as a source of confusion
the jury instructions disallowing emotional distress damages
on the breach of contract claim but allowing such damages on
the defamation claim. These instructions, in the court's
view, led the jury to include in the defamation award
emotional distress damages that arose not from the defamation,
but from Jackson's termination. This conclusion, however, is
not supported by the record.
The trial court, in response to GMR's motion in limine,
excluded any evidence of emotional distress damages based on
Jackson's termination from GMR, and we find no such evidence
in the record. Nevertheless, GMR attempts to defend the trial
court's conclusion by referencing portions of the record out
of context where Jackson refers to his emotional state at the
time of his termination from GMR.
As evidence that Jackson's emotional distress stemmed
from his termination, GMR cites Jackson's testimony that he
"was already under quite a bit of pressure as it was, since
[he] had been terminated with no severance" and that the
21
defamation was "in addition to the shock" Jackson had already
endured. However, Jackson made these statements in response
to counsel's inquiry regarding his reaction upon learning of
the defamation. GMR also highlights Jackson's discussion of
"having to start over" and "build a career again." This
testimony did not, as GMR suggests, pertain solely to his
employment situation upon termination from GMR, but also to
his career "at the moment" of trial when he was still trying
to overcome the harm resulting from the defamation.
Therefore, viewing the evidence in the light most favorable to
Jackson, we conclude that the record does not contain
sufficient evidence regarding Jackson's emotional distress
caused by termination from GMR to conclude that the jury
included damages based on such emotional distress in its
defamation award.
Next, the trial court reasoned that the jury improperly
included in the defamation award economic injuries Jackson had
identified as flowing from his loss of employment with GMR,
such as loss of GMR stock options. The trial court found that
statements Jackson's counsel made during argument on the
remittitur motion reinforced its conclusion. Again, the
record does not support this conclusion.
Jackson introduced evidence of the potential benefits
stemming from his employment with GMR as part of his fraud
22
claims. The trial court struck those claims and so instructed
the jury. Nowhere in the record did Jackson claim these
potential benefits as an element of damages, either for breach
of contract or for defamation.
While arguing against remittitur, Jackson's counsel did
not identify those economic benefits as an element of
Jackson's damages, but rather discussed them in response to
the trial court's inquiry regarding why the amount of the
award, $5 million, was not shocking. Counsel explained that
in the context of this case, $5 million was not an extravagant
amount because chief executive officers and members of
management in these types of businesses regularly dealt in
multi-million dollar opportunities such as those Jackson
identified as having taken place at GMR prior to his
termination. And, counsel continued, the jury was entitled to
consider numbers of such size in making the defamation award
because corporations were not offering Jackson such
opportunities following the defamation, although they had
offered opportunities to him prior to the defamation.
More importantly, in considering reasons which might
account for the size of the defamation award, the trial court
ignored other evidence and elements upon which the jury could
have based the award. The trial court held that the
defamatory statements constituted defamation per se and
23
properly instructed the jury that Jackson was entitled to
compensatory damages for injury to his personal and business
reputation, humiliation, and embarrassment without proof of
any actual or pecuniary injury. The trial court also
instructed the jury that in determining damages for the
defamation claim it could
take into consideration all of the circumstances
surrounding the statement, the occasion on which it
was made and the extent of its publication, the
nature and character of the insult, the probable
effect on those who heard the statement, and its
probable and natural effect upon the plaintiff's
personal feelings and upon his standing in the
community and in business.
Your verdict should be for an amount that will fully
and fairly compensate him for:
(1) any loss or injury to his business;
(2) any insult to him including any pains,
embarrassment, humiliation, or mental
suffering;
(3) any injury to his reputation; and
(4) any actual, out-of-pocket losses that were
caused by the statement.
In deciding to order remittitur, the trial court failed to
address Jackson's evidence regarding injury to his reputation,
humiliation, and embarrassment. The trial court also failed
to acknowledge Jackson's right to recover greater damages
because he presented evidence of his untarnished reputation
prior to the defamation and of his fear the defaming remarks
24
reached members of the business community beyond the Seisint
executives. See Poulston, 251 Va. at 261-62, 467 S.E.2d at
483.
Jackson established that though he immediately began
working for Seisint after his termination, the defaming
remarks caused him to lose the chance of obtaining a
management position and the lucrative opportunities available
to similarly situated managers. From March 2002 to January
2003, Jackson worked in sales and as a consultant to Seisint
and other companies. His earnings were largely commission-
based, dependent upon his success in selling Seisint's systems
to the federal government. When Seisint eventually hired him,
Jackson did not hold what he considered a management position
because he did not report to the chief executive officer, was
not included in management meetings, and had no ability to
make management decisions. Seisint hired approximately six
managers in the year Jackson served as a consultant and
employee. Jackson expressed distress and humiliation due to
losing his opportunity to manage after 25 years: "It made me
feel, frankly, quite humiliated and as though I was underused,
and it put me in a stressful situation where I didn't have
much control."
Jackson established his unblemished reputation by
testifying to his rise in his field, including obtaining and
25
maintaining coveted top-level security clearances with the
federal government through multiple extensive "lifestyle
polygraph" examinations. He also discussed his fears about
wider publication of the defaming remarks when he testified to
receiving no inquiries from potential employers after sending
resumes to "tens of people literally" compared to 15 months
earlier, prior to the defamation, when he had three potential
job opportunities.
In determining that the defamation award was excessive,
the trial court did not address the injuries presumed in
defamation per se or the evidence regarding the impact of the
defamation on Jackson's emotional state, reputation, and
employment opportunities, all of which the jury was entitled
to consider. Therefore, the record does not support a finding
that the trial court "considered factors in evidence relevant
to the reasoned evaluation of the damages." Poulston, 251 Va.
at 259, 467 S.E.2d at 482.
Finally, GMR also contends we should affirm the trial
court's order because, in comparison with other verdicts for
defamation upheld in Virginia, the defamation award in this
case is excessively large. In the recent case of Rose v.
Jaques, 268 Va. 137, 597 S.E.2d 64 (2004), we declined to
compare verdicts as a means to measure a verdict's
excessiveness, but instead analyzed, as we have today, whether
26
the jury was influenced by passion, corruption, or prejudice,
or misunderstood the facts or law. Id. at 159, 597 S.E.2d at
77 (citing Shepard, 262 Va. at 720-21, 554 S.E.2d at 75).
Additionally, verdicts for defamation per se are not suitable
for comparison because each case is factually unique and
because juries are entitled to presume and award compensatory
damages even if the plaintiff cannot prove actual injury. See
Poulston, 251 Va. at 260-61, 467 S.E.2d at 483. Thus, we find
no merit in GMR's argument that Jackson's verdict is excessive
when compared with other defamation verdicts.
V. Summary
In summary, the alleged defamatory statements were timely
and properly pled and proven and were not statements of
opinion. Assuming without deciding that the statements were
entitled to qualified privilege, the failure to instruct the
jury on this issue was harmless error because actual malice
was established by clear and convincing evidence. The trial
court abused its discretion in setting aside the jury award
for compensatory damages based on defamation and in ordering
remittitur because the record does not support the trial
court's conclusion that the award was excessive or was the
product of jury confusion and commingling. Further, the trial
court failed to consider elements of recovery upon which the
27
compensatory damage award could be based and the evidence
which supported those elements.
Accordingly, we will affirm the judgment of the trial
court, but will reverse that portion of the judgment setting
aside the compensatory damage award on Jackson's defamation
claim and ordering remittitur and enter final judgment
reinstating the jury verdict on that award.
Record No. 050943 – Affirmed.
Record No. 050937 – Reversed and
final judgment.
28