Banks v. Mario Industries of Virginia

Present: Hassell, C.J., Keenan, Koontz, Kinser, and Lemons,
JJ., and Russell and Lacy1, S.JJ.

BETTE L. BANKS

v. Record No. 061348

MARIO INDUSTRIES OF VIRGINIA, INC.

OPINION BY JUSTICE DONALD W. LEMONS
September 14, 2007
TROY COOK, ET AL.

v. Record No. 061355

MARIO INDUSTRIES OF VIRGINIA, INC.

FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE
Charles N. Dorsey, Judge

In these consolidated appeals from civil actions in which

a company alleged that certain former employees and agents

formed a competing business, we consider whether the trial

court erred by denying a motion to strike, submitting a breach

of fiduciary duty claim to the jury, submitting a verdict form

to the jury, instructing the jury, admitting a pre-resignation

memorandum into evidence, and failing to set aside a punitive

damages award.

I. FACTS AND PROCEEDINGS

A. The Parties

These consolidated appeals involve claims by Mario

Industries of Virginia, Inc. ("Mario"), a lighting

1
Justice Lacy participated in the hearing and decision of
this case prior to the effective date of her retirement on
August 16, 2007.
manufacturer and supply company, against its former employee,

Troy Cook ("Cook"); Cook's new company, Renaissance Contract

Lighting & Furnishings, Inc. ("Renaissance"); the other

principal in Renaissance, Joseph Cassell ("Cassell"); and two

of Mario's former sales representatives, The Darnell Group

("Darnell") and Bette L. Banks ("Banks").

B. Facts

The facts will be stated in the light most favorable to

Mario, the prevailing party at trial. Bitar v. Rahman, 272

Va. 130, 141; 630 S.E.2d 319, 325-26 (2006).

1. Background

Mario, a company that started more than eighty years ago,

manufactures and sells lighting products. Louis Scutellaro

("Scutellaro"), who purchased Mario from his uncle in 1988, is

Mario's president, and Delores Scutellaro, his wife, is its

secretary.

Mario maintains two separate divisions, namely a

residential retail sales division and a contract lighting

division ("contract lighting" or "contract sales"). This case

involves the contract lighting division which sells lighting,

lamps and other lighting products to hotels, nursing homes,

and government entities.

Mario did not require its employees to sign non-compete

or confidentiality agreements. However, Mario's employee

2
handbook explained that outside employment must not conflict

with Mario's interests and that employees had an obligation to

prevent actual or potential conflicts of interest. Mario's

employee handbook also specifically addressed the protection

of confidential information. Mario's employee handbook

prohibited: the unauthorized removal of files from the

computer and information systems, removing or copying Mario's

documents, removing company property, and personal use of

Mario's computer and information systems that was detrimental

to Mario.

Additionally, Mario restricted access to its sales

figures. Deidre Frank (“Frank”), the controller at Mario,

testified that Cook knew sales information was confidential.

Mario also took steps to protect its customer list that it

spent eighty years developing and, as Scutellaro testified,

was “worth millions” to Mario. Mario also treated as

confidential its computer assisted drawings, costing sheets,

target price points, selling prices, and key suppliers. Mario

“copyrights [some of its] items,” and its catalogs are

protected by copyright.

2. Independent Sales Representatives

Mario uses independent sales representatives in its

contract sales division to promote and sell Mario's products.

Each of Mario's sales representatives has an exclusive

3
territory. Scutellaro explained that "[i]n exchange [for an

exclusive territory], [Mario] expect[s] their loyalty. That's

the way it's done in this industry." In other words, in

exchange for an exclusive territory, Mario did not permit its

sales representatives to represent a competing company.

Mario's sales representatives are not Mario employees.

Mario does not provide its sales representatives with a

salary, health insurance, or pension benefits. Instead, the

sales representatives are only paid commissions. Mario's

commission rate is generally 8%, but that rate may fluctuate.

Mario withholds no taxes on commissions paid and issues IRS

1099 forms to its sales representatives rather than W-2 forms.

Mario pays for the catalogs, swatches, and samples it gives to

its sales representatives. Mario also pays most of the sales

representatives' expenses for attendance at Mario business

meetings.

Cook began working at Mario in 1990. Cook, an at-will

employee, served as the manager for Mario's contract sales

division from 1995 to November 7, 2003.

Banks was Mario's sales representative in Virginia,

Maryland, and D.C. from January 26, 1998 until her resignation

on June 1, 2004. Banks testified that she "was a contract

agent, an independent sales representative" and "was not an

employee of Mario."

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 Darnell Group is a sales organization formed by Joseph

Darnell in 1992. Darnell was Mario's sales representative for

Illinois and Michigan from 1988 through the date of its

resignation on January 29, 2004.

3. Cook Forms Renaissance and Leaves Mario

In March 2003, Cook considered leaving Mario to establish

his own business. Cook prepared a memorandum ("Renaissance's

business plan") outlining some of his ideas and ambitions.

Cook intended for his business, Renaissance, a lighting and

furniture manufacturer, to compete with Mario's contract sales

division. Cook also contacted Cassell, who had previously

been the warehouse manager for Passport, a Mario company,

about forming Renaissance. At that time, Cassell was working

on his own plans to start a metal furniture manufacturing

business. Cassell was unfamiliar with contract lighting, so

Cook shared Renaissance's business plan with Cassell.

Renaissance's business plan contained confidential

information about Mario's growth rate, yearly sales totals,

past projects, target price points for customers, profit

margin, vendor lists, key accounts and suppliers, marketing

plans and strategies, production costs, commissions, trade

secrets, and intellectual property. Cassell and Cook admitted

that it was improper for Cook to reveal Mario's confidential

information. Cassell also admitted that he would not want his

5
competitor to have this information. Cassell admitted that

the information about Mario's business helped Renaissance

become "highly competitive."

By April 2003, Cook and Cassell had selected

Renaissance's name, chosen a facility, and created company

letterhead. Renaissance was incorporated in October 2003.

From March to November 2003, Cook and Cassell were

Renaissance's two employees. Cassell was the president of

Renaissance, and Cook was the vice president.

Cook worked for Renaissance while employed by Mario and

did so during normal working hours at Mario. Cook and Cassell

planned to take fifteen of Mario's sales representatives to

Renaissance. While employed at Mario, Cook spoke to at least

three sales representatives about Renaissance, including

Darnell.

Prior to his resignation, Cook sought legal advice with

regard to his resignation. He prepared a memorandum for his

attorney on a computer owned by Mario summarizing issues

regarding Mario, the contract lighting industry, Cook's

planned resignation, and Renaissance ("pre-resignation

memorandum"). In the pre-resignation memorandum, Cook stated:

"I feel sure I will be presented with opportunities for

previously negotiated projects.”

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 When Cook resigned in November 2003, Cook gave Scutellaro

a letter indicating that he left company information in a box

in his office. However, Scutellaro did not find the box.

Cook's business cell phone was returned to Mario, but the cell

number was not. Cook also deleted emails, quotes, files, and

electronic spreadsheet forms from his computer. Mario's

forensic computer expert testified that he found documents

related to the formation of Renaissance on the hard disk drive

of the computer Cook had used at Mario. The forensic expert

also recovered the pre-resignation memorandum. The computer's

hard drive also contained an electronic spreadsheet showing

all of the open projects associated with the Hilton Garden

Inns, a chain of hotels owned by a hotelier who was, at the

time, one of Mario’s most significant customers. All of these

documents had been printed from Mario's computer.

Cassell admitted that it was wrong for a sales

representative to take a contract from one manufacturer to

another. Nevertheless, after he resigned, Cook testified that

he "encouraged" Mario's sales representatives to send business

to Renaissance. Cook also used Mario's business phone book,

which contained valuable and confidential contact information

for Mario's customers, vendors, and sales representatives, to

help him at Renaissance. Cook and Cassell used Mario's

confidential information to obtain financing for Renaissance.

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Also, Renaissance took Mario's vendor and customer list and

Mario's pricing and sales figures "to use to their advantage."

4. Banks and Darnell Help Renaissance
While Still at Mario

Banks testified that Cook and Cassell did not ask or

encourage her to divert projects from Mario to Renaissance.

Nevertheless, after Cook resigned from Mario, Banks

"pretended" to be Mario's sales representative. Banks thought

Mario trusted her. Banks, however, admitted that she "had no

loyalty to Mario at all," and her only “boss” is her

“checkbook.” Banks admitted that confidential quotes should

normally not be sent to competitors because the information is

"commercially sensitive" to Mario. Banks also knew that Mario

expected her to act as its representative, and “if [she] did a

deal with a customer for which [Mario] gave a quote, [Mario]

would be the manufacturer.” Banks knew that Mario would not

let her represent both Mario and Renaissance. Banks, however,

admitted that, while representing Mario, she sent quotes to

Renaissance instead of sending them to Mario. Even Cook

conceded that Banks was disloyal to Mario and acted in her own

best interest. Banks would send a confidential Mario quote to

a competitor if "it was to [her] advantage" and "[i]f it means

putting a dollar in my checkbook."

Banks diverted the following projects from Mario to

Renaissance: Residence Inn Capitol, Fisherman's Wharf,

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Sheraton Key Largo, Big Sur Lodge, and Annapolis Marriott.

Banks explained that she did this because she felt that "[i]t

would have either cost Mario money or Bette Banks money. I

think that Mario has a whole lot more money than I do." On

June 1, 2004, Banks resigned from Mario and joined Renaissance

because Renaissance offered her a 10% commission.

Similar to Banks, Darnell diverted the Hyatt Deerfield

project from Mario to Renaissance. When Scutellaro confronted

Darnell with this information, he resigned and joined

Renaissance.

C. Causes of Action

Mario sued Banks for damages and in a separate action,

Mario sued Cook, Cassell, Renaissance, and Darnell. The two

suits against Banks and Cook and his co-defendants

(collectively “the defendants”) were consolidated into a

single action. Mario's case proceeded on the following

theories: (1) tortious interference with business relations

(against all the defendants); (2) common law conspiracy

(against all the defendants); (3) statutory conspiracy

(against all the defendants); (4) breach of fiduciary duty

(against Cook, Banks, and Darnell); (5) misappropriation of

trade secrets (against Cook, Cassell, and Renaissance); and

(6) conversion (against Cook, Cassell, and Renaissance).

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 D. Pre-Trial Objection

Prior to trial, Cook objected, on grounds of attorney-

client privilege, to Mario introducing Cook's pre-resignation

memorandum into evidence. The trial court overruled the

objection.

E. Alleged Damages & 40% Gross Profit Margin

At trial, Scutellaro qualified, without objection, as an

expert in "lighting manufacturing and quoting of lighting

products." Scutellaro testified about Mario’s lost revenues

and lost profits, allegedly resulting from the defendants’

actions that caused Mario to lose specific contract lighting

projects. Evidence offered by Mario regarding lost revenues

and lost profits (applying a 40.5434% gross profit margin) was

as follows:

PROJECT LOST REVENUES LOST PROFITS
Hilton Garden Inn $2,000,000 $810,868
Benjamin West $3,532,400 $1,419,019
Fisherman's Wharf $48,950 $19,845.99
Big Sur Lodge $25,793.08 $10,457.39
Annapolis $37,806.50 $15,328.04
Marriott
Residence Inn $12,420 $5,035.49
Capitol
Sheraton Key $32,615.12 $13,223.28
Largo
Hyatt Deerfield $96,480.62 $39,116.52
Other Contract $876,740 $400,000
Sales
File Recovery & N/A $25,625.90
Reconstruction
TOTAL $6,663,205.32 $2,758,519.61

10
 Mario’s lost profits figures were necessarily dependent

upon Scutellaro applying Mario’s 40.5434% gross profit margin

to its lost revenues. When asked what Mario's lost profits

were with respect to the Benjamin West project, Scutellaro

testified that Mario's gross profit margin is 40.5434% and

that it "is calculated by [Mario's] accountant." The

defendants then objected "[a]s to entering figures reportedly

given [to Scutellaro] by his accountant." Mario's counsel

indicated that the accountant was present. The trial court

sustained the objection on hearsay grounds. The question was

posed again. Notably, the parties did not condition

Scutellaro's response regarding the 40% gross profit margin on

Mario's accountant testifying. Upon posing the question

again, Scutellaro testified, without objection, that Mario's

gross profit margin was 40.5434%.

Mario never called its accountant to testify. Instead,

Scutellaro testified about the gross profit margin using an

exhibit demonstrating Mario’s gross profit margin. The

defendants again objected to Scutellaro testifying to Mario's

40% gross profit margin, arguing that Scutellaro was not

qualified as an expert in accounting. The trial court

overruled the objection, saying "I don't think he is

testifying as to anything that would require any expertise so

far."

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 Finally, the defendants objected, arguing that Mario did

not lay a proper foundation to Scutellaro applying the 40%

gross profit margin to Mario's lost revenues for each of the

projects. The trial court overruled the objection on the

grounds that "the foundation is his knowledge as an owner of

the business."

F. Motion to Strike

At the conclusion of Mario's case in chief and again at

the conclusion of all of the evidence, the defendants moved to

strike Mario's evidence. First, the defendants argued that

all damage claims based on the 40% gross profit margin should

be struck. The defendants argued that the Mario's "basic

underlying measure of gross profits . . . is so flawed as to

render the calculations speculative." The defendants further

argued that the 40% gross profit margin "is derived by

calculations that incorporate extraneous factors and look in

the wrong direction." Specifically, the defendants claimed

that "any damages that are derived using the 40 percent figure

should be struck because the 40 percent figure is so

inaccurate that it results in speculation or distortion."

Second, the defendants argued that the damages evidence

related to certain, specific lost projects should be struck

either because there was no evidence of what the winning bid

was for the project, there was no evidence that a purchase

12
order had been issued, the purchasing agent picked a different

vendor than Mario, or Mario never submitted a bid for the

projects.

Finally, the defendants argued that the breach of

fiduciary duty claim should be struck because Darnell and

Banks had no fiduciary duty to Mario. The trial court

overruled the motion to strike on each of these bases.

G. Jury Instructions

The defendants only objected to three of the jury

instructions. First, the defendants objected to jury

instructions 15 and 20 because the instructions were

"inconsistent with the requirements found in Williams v.

Dominion Technology Partners, 265 Va. 280[, 576 S.E.2d 752

(2003)], which requires that the Court determine whether a

fiduciary duty exists. That is an issue of law for the Court,

and that the breach of any such duty is an issue for the

jury." Jury instruction number 15 instructed the jury that

"[t]he issues raised by Mario Industries[’] breach of

fiduciary duty claim are as follows: 1) Did a fiduciary

relationship exist between the defendant[s] and Mario

Industries? 2) If so, did the defendant[s] violate the

fiduciary obligation?" Jury instruction number 20 instructed

the jury to determine whether the defendants "breached a

fiduciary duty that [they] owed to Mario Industries" and

13
whether the defendants' "breach of fiduciary duty was a

proximate cause of damage[s] to Mario." The trial court

overruled the defendants' objections.

The defendants also objected to jury instruction 16,

defining the status and duties of an employee. The defendants

specifically objected to the portion of Instruction 16 that

provides that "[e]mployees must exercise the utmost good faith

and loyalty toward their employer." The defendants argued the

language "sets a higher standard than is required by law."

The trial court overruled the objection. Other than the jury

instructions related to fiduciary duty, the defendants did not

object to any other jury instructions, including any of the

instructions on common law conspiracy.

H. Verdict Form

The verdict form was tendered without objection. The

verdict form was divided into sections permitting awards on

different theories and against all or some of the defendants.

The jury found in favor of Mario and against all of the

defendants as to Mario's compensatory damages claims, except

for the statutory conspiracy claim, in the amount of

$1,528,342.00. As to punitive damages, the jury found in

favor of Mario and against Cook in the amount of $56,700.00.

The defendants filed post-trial motions which were heard and

denied by the trial court. The trial court then entered a

14
final order consistent with the jury's verdict. The

defendants filed timely notices of appeal to this Court.

II. ANALYSIS

A. Standard of Review

We review this appeal under well-settled principles.

When parties come before us with a jury verdict
that has been approved by the trial court, they
hold the most favored position known to the
law. The trial court's judgment is presumed to
be correct, and we will not set it aside unless
the judgment is plainly wrong or without
evidence to support it. We view the evidence
and all reasonable inferences fairly deducible
from it in the light most favorable to the
prevailing party at trial.

Xspedius Mgmt. Co. v. Stephan, 269 Va. 421, 424-25, 611 S.E.2d

385, 387 (2005) (quotations and citations omitted). We review

matters of law de novo. Hubbard v. Dresser, Inc., 271 Va.

117, 122, 624 S.E.2d 1, 4 (2006).

B. Verdict Form and Damages Instructions

On appeal, Banks argues that the trial court erred “by

using a verdict form that lumped all of the defendants

together for the compensatory damage claim (other than

statutory conspiracy) and in not providing the jury with an

opportunity to differentiate between the damages recoverable

against the various defendants.” Instead, the verdict form

“lumped” Banks with the other defendants for claims for which

she was not sued. Banks also argues that the trial court

erred “by failing to instruct the jury on the elements of

15
damages which Mario may be entitled to recover.” There was no

objection made concerning the verdict form; however, Banks

urges the Court to apply the “plain error doctrine” and

reverse the trial court because there is "(1) error, (2) that

is plain, (3) that is substantial and (4) . . . seriously

affects the fairness, integrity and public reputation of the

judicial system." Of course, we consider such challenges

under the “ends of justice” exception found in Rule 5:25.

As previously mentioned, Banks did not object to the

verdict form. Additionally, the trial court was not required

to instruct the jury, sua sponte, on the elements of damages

Mario was entitled to recover in the absence of a request from

Banks to do so. Because Banks raises these arguments for the

first time on appeal and we find no reason to invoke the ends

of justice exception, the arguments are waived. Rule 5:25.

C. Breach of Fiduciary Duty

On appeal, Banks challenges the trial court’s decisions

on Mario’s breach of fiduciary duty claim with the following

assignments of error:

1. The trial court committed reversible error when it
refused to determine as a matter of law whether Ms. Banks
owed a fiduciary duty to Mario and instead submitted to
the jury the issue of whether a fiduciary relationship
existed between Ms. Banks and Mario.

2. The trial court committed reversible error when it failed
to strike Mario’s evidence regarding the breach of
fiduciary duty claim filed against Ms. Banks.

16
Cook also challenges the trial court’s decisions on Mario’s

breach of fiduciary duty claim:

1. The trial court committed reversible error when, despite
timely objection, it failed to follow the rule
established in Williams v. Dominion Technology Partners,
L.L.C., 265 Va. 280, 289, 576 S.E.2d 752, 758 (2003),
gave instructions Nos. 15, 16, and 20 over objection,
failed to determine as a matter of law whether defendants
Darnell Group and Cook owed a fiduciary duty of loyalty
to the plaintiff, failed to rule as a matter of law on
the extent of any such duty, and instead submitted the
existence of the duty to the jury.

2. The trial court committed reversible error in overruling
the defendants’ motions to strike, in giving over
objection instructions Nos. 15, 16, and 20 submitting the
existence and breach of a fiduciary duty to the jury, and
in overruling the defendants’ post-trial motion to set
aside, where the evidence showed as a matter of law that
Darnell Group owed no fiduciary duty to the plaintiff and
where the trial court failed to define and instruct on
the limited and changing duties Cook owed Mario under the
circumstances of this case.

The trial court did not err in submitting the breach of

fiduciary duty claim to the jury. Instruction 17, given

without objection, stated:

Agency is a fiduciary relationship between two
parties in which one party agrees to act on
behalf of and subject to the control of the
other party. In an agency agreement, the
parties agree that the agent shall act on
behalf of and subject to the control of the
principal. If a party is not an agent, that
party is not a fiduciary.

In other words, instruction number 17 informed the jury that

if agency was found, then the agent owed a fiduciary duty to

the principal. This instruction became the law of the case.

Ulloa v. QSP, Inc., 271 Va. 72, 80, 624 S.E.2d 43, 48 (2006).

17
 Cook was an employee of Mario and admitted he owed Mario

a duty of loyalty. Banks admitted that she was Mario's agent

and that she owed a duty of loyalty to Mario. These party

admissions combined with the fact that Banks' job was to

faithfully represent Mario's interests in her territory,

support the claim of a fiduciary duty. Finally, while Darnell

did not admit that it was Mario's agent, it was a sales

representative for Mario, under the same circumstances as

Banks. Pursuant to the instructions given, the jury could

have reasonably found that Darnell was Mario's agent.

Pursuant to instruction 17, once an agency relationship was

established, Cook, Banks, and Darnell necessarily owed a

fiduciary duty to Mario.

D. Pre-resignation Memorandum

Cook next argues that the trial court erred in allowing

Mario “to introduce into evidence, over objection, the

confidential pre-resignation memorandum Cook prepared for the

purpose of seeking legal advice from his lawyer.”

Specifically, Cook argues that "[t]he trial court violated

Virginia's longstanding recognition of the sanctity of

attorney-client communications when it allowed Mario to

introduce, over objection, and to emphasize repeatedly a

confidential memorandum that Cook prepared exclusively for the

18
purpose of seeking legal advice from his attorney." Cook’s

argument is without merit.

"Confidential communications between attorney and client

made because of that relationship and concerning the subject

matter of the attorney's employment are privileged from

disclosure, even for the purpose of administering justice."

Commonwealth v. Edwards, 235 Va. 499, 508-09, 370 S.E.2d 296,

301 (1988) (quotation omitted). This privilege, however, is

not absolute and may be waived. See Virginia Elec. & Power

Co. v. Westmoreland-LG&E Partners, 259 Va. 319, 326, 526

S.E.2d 750, 755 (2000).

Pursuant to Mario's employee handbook, Mario permitted

employees to use their work computers for personal business.

However, Mario's employee handbook provided that there was no

expectation of privacy regarding Mario's computers. Cook

created the pre-resignation memorandum on a work computer

located at Mario's office. Cook printed the document from

this computer, and Cook sent it to his attorney for the

purposes of seeking legal advice. Cook then deleted the

document from the computer. Mario's forensic computer expert,

however, retrieved the document from the computer's hard

drive. We held in Clagett v. Commonwealth, 252 Va. 79, 92,

472 S.E.2d 263, 270 (1996), that “the [attorney-client]

privilege is waived where the communication takes place under

19
circumstances such that persons outside the privilege can

overhear what is said.” See Edwards, 235 Va. at 509, 370

S.E.2d at 301 (“The privilege may be expressly waived by the

client, or a waiver may be implied from the client's

conduct.”). Therefore, we hold that the trial court did not

err in admitting the pre-resignation memorandum into evidence.

E. Damages

On appeal, Cook, Cassell, Renaissance, and Darnell

challenge the damages award, asserting that:

The trial court committed reversible error in
overruling the defendants’ motions to strike
and post-trial motion to set aside regarding
the plaintiff’s proof of damages where, as a
matter of law, the plaintiff’s damages evidence
was speculative, contingent, uncertain, failed
to show the claimed damages with any reasonable
certainty, failed to show that the defendants’
acts or omissions were the direct and proximate
cause of the claimed damages, and rested on the
testimony of an unqualified expert.

Banks also challenges the damages award, asserting that

“[t]he trial court committed reversible error when it failed

to sustain the motion to strike Mario’s evidence because its

proof of damages was speculative, counterfactual, unsupported

by the evidence, and failed to prove proximate cause.”

We review the trial court's ruling denying the motion to

strike in accordance with well-settled principles:

When the sufficiency of a plaintiff's evidence
is challenged by a motion to strike, the trial
court should resolve any reasonable doubt as to

20
 the sufficiency of the evidence in plaintiff's
favor and should grant the motion only when it
is conclusively apparent that plaintiff has
proven no cause of action against defendant, or
when it plainly appears that the trial court
would be compelled to set aside any verdict
found for the plaintiff as being without
evidence to support it.

Saks Fifth Ave., Inc. v. James, Ltd., 272 Va. 177, 188, 630

S.E.2d 304, 311 (2006) (quotations omitted).

In order to recover damages for lost profits from the

defendants, Mario

had 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. When an established business, such
as [Mario], is injured, interrupted, or
destroyed, the measure of damages is the
diminution in value of the business by reason
of the wrongful act, measured by the loss of
the usual profits from the business.

Id. (quotations and citations omitted). Therefore,

where the loss of prospective profits is the
direct and proximate result of the breach . . .
and they can also be proved with a reasonable
degree of certainty, such loss is recoverable,
but it is equally well settled that prospective
profits are not recoverable in any case if it
is uncertain that there would have been any
profits, or the alleged profits are so
contingent, conjectural, or speculative that
the amount thereof cannot be proved with a
reasonable degree of certainty.

Id. at 188-89, 630 S.E.2d at 311 (quotations omitted).

Accordingly, first Mario "must show a causal connection

between the defendant[s'] wrongful conduct and the damages

21
asserted. Second, [Mario] must prove the amount of those

damages by using a proper method and factual foundation for

calculating damages." Id. at 189, 630 S.E.2d at 311.

The admissibility of evidence and the sufficiency of

evidence are distinct issues. It follows that objections to

the admissibility of evidence and the sufficiency of evidence

are also distinguishable.

" '[A]n objection to the admissibility of evidence must

be made when the evidence is presented. The objection comes

too late if the objecting party remains silent during its

presentation and brings the matter to the court's attention by

a motion to strike made after the opposing party has

rested.' " Bitar v. Rahman, 272 Va. 130, 139, 630 S.E.2d 319,

324 (2006) (quoting Kondaurov v. Kerdasha, 271 Va. 646, 655,

629 S.E.2d 181, 185 (2006)). However, “[i]n some

circumstances, a defect in an expert witness’ testimony may

not be apparent until the testimony of that witness is

completed.” Id. at 140, 630 S.E.2d at 324-25. Therefore, an

objection to the admissibility of the evidence “raised at that

first opportunity is timely.” Id.; see also Vasquez v.

Mabini, 269 Va. 155, 163, 606 S.E.2d 809, 813 (2005). In

contrast,

an objection to the sufficiency of the evidence
is properly made by a motion to strike, rather
than when the evidence is first offered.
Obviously, the objecting party cannot be sure,

22
 nor can the court decide, until the offering
party has rested, whether the various fragments
of evidence have added up to a justiciable
whole.

Kondaurov, 271 Va. at 655, 629 S.E.2d at 185-86 (citation

omitted).

In this case, nothing prohibited the defendants from

moving to strike Mario’s evidence at the conclusion of its

case in chief or at the conclusion of all of the evidence.

However, such a motion testing sufficiency of the evidence

must be weighed by the evidence that has been admitted. Here

Scutellaro qualified as an expert witness in the lighting

industry. After a preliminary challenge based upon hearsay,

the evidence of a 40% gross profit margin was elicited without

objection. The trial court observed that Scutellaro was

testifying from knowledge “as an owner.” Pursuant to our

prior holdings in Bitar, Kondaurov, Vasquez, and Countryside

Corp. v. Taylor, 263 Va. 549, 552 & n.2, 561 S.E.2d 680, 682 &

n.2 (2002), such evidence was admitted without objection and

the question of admissibility of this evidence is not the

proper subject of a motion to strike which tests sufficiency.2

2
There may be circumstances where evidence is admitted
conditioned upon further foundational support and the
satisfaction of that condition may not be known until the
conclusion of the case-in-chief or at the end of presentation
of all of the evidence. The proper motion at that time is a
motion to exclude the evidence. Assuming that exclusion of
the evidence creates deficiencies in the quantum of proof, a

23
 1. Hilton Garden Inn

The following evidence regarding Mario’s damages from

losing the Hilton Garden Inn project was admitted without

objection. In 1999, Mario entered “a contract or program”

with Hilton “making their lighting exclusively for [Hilton

Garden Inn’s] guest rooms.” During the course of this

exclusive contract or program, in April 2003, Cook received a

request for pricing from Hilton on a Hilton Garden Inn

project. In May 2003, Cook submitted a bid for the Hilton

Garden Inn project without properly working out the pricing.

Scutellaro testified that “there were no calculations done.

This was just really a guess . . . I have to assume it was an

educated guess.” Scutellaro testified that "[b]ecause of

[Cook's] improper quote [Mario] lost the job, [Mario] lost the

business." Scutellaro further testified that his calculation

for the project was 10% lower than Cook's calculation for the

job. This difference "means the difference between getting a

job and losing a job." As a result of losing this project,

Mario is "no longer the exclusive vendor for lighting for

Hilton Garden Inn." Additionally, Scutellaro testified that

Mario had "a reasonable expectation of getting all of these

projects."

motion to strike may then test the sufficiency of the
evidence.

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 As a result of losing the Hilton Garden Inn project,

Mario claimed $2,000,000 in lost revenue and $810,868 in lost

profits. Scutellaro testified that he knew who was awarded

the project; however, he had no evidence of the amount of the

winning bid. This evidence was admitted without objection.

Having been admitted, the evidence was sufficient to support a

jury finding that Mario would have won the Hilton Garden Inn

project based on Mario's long-term relationship with Hilton

and Mario’s contract or program as “the exclusive guest room

lighting manufacturer” for Hilton Garden Inn.

2. Benjamin West

The following evidence regarding Mario’s damages from

losing the Benjamin West project was also admitted without

objection. Mario had a prior working relationship with

Benjamin West. Benjamin West solicited bids from Mario and

two other companies to supply lighting products to unspecified

buyers. Cook submitted Mario's bid on his last day of work.

Scutellaro learned of Cook's bid after Cook resigned when

Benjamin West contacted Mario to inquire about samples. When

Scutellaro reviewed the project's file, Scutellaro learned

that Cook attended a meeting in September 2003 with the

president of Benjamin West and two other lighting

manufacturers. Scutellaro testified that he reviewed Cook's

notes from the meeting with Benjamin West and testified that

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"this [wa]s not a speculation project, this [wa]s [a]

reality." Scutellaro asserted that Cook "ball parked" the

pricing for the project, failing to do the work necessary to

get an accurate quote. Scutellaro testified that Cook “did

nothing to quote this three and a-half million dollar project,

potentially a $30 million project.” Scutellaro also testified

that Cook submitted a bid to Benjamin West that was a million

dollars too high. Scutellaro stated that "because of [Cook's]

bogus bid, [Benjamin West] had eliminated us from the

project."

As a result of losing the Benjamin West project, Mario

claimed $3,532,400 in lost revenue and $1,419,019 in lost

profits. Scutellaro testified that Ashley Lighting won the

project. The evidence was admitted without objection. Having

been admitted, the evidence was sufficient to support a jury

verdict finding that Mario would have won the Benjamin West

project based on Mario's long-term relationship with Benjamin

West.

The combined lost profits from the Hilton Garden Inn

project, $810,868, and the Benjamin West project, $1,419,019,

were $2,229,887, exceeding the compensatory damages award. We

hold that the evidence was sufficient to support the jury’s

conclusion that the defendants’ wrongful conduct caused

Mario’s damages and that there was sufficient evidence from

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both the Hilton Garden Inn project and the Benjamin West

project to support the compensatory damages award.

Accordingly, we need not consider the remaining projects from

which Mario alleges damages. Bitar, 272 Va. at 141, 630

S.E.2d at 325-26 (“[W]here the trial court has declined to

strike the plaintiff's evidence or to set aside a jury

verdict, the standard of appellate review in Virginia requires

this Court to consider whether the evidence presented, taken

in the light most favorable to the plaintiff, was sufficient

to support the jury verdict in favor of the plaintiff.”).

Additionally, the evidence was sufficient to support the

compensatory damages verdict against all the defendants. As

previously noted, some theories of recovery were not asserted

against all the defendants. However, on the claim of common

law conspiracy, each of the defendants was alleged to have

conspired with the others to injure Mario in its legitimate

business expectations. The jury instructions on the subject,

given without objection, were:

Jury Instruction No. 7

The issues with regard to Mario Industries
common law conspiracy claim are as follows:
1). Did two or more defendants combine to
accomplish, by some concerted action, a
criminal or unlawful purpose; or
2). Did two or more defendants combine to
accomplish, by some concerted action, a lawful
purpose by criminal or unlawful means.

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 On either of these issues, the plaintiff
has the burden of proof by the greater weight
of the evidence.

Jury Instruction No. 8

A common law conspiracy consists of two or
more persons combining to accomplish, by some
concerted action, some criminal or unlawful
purpose or some unlawful purpose by criminal or
unlawful means.

Jury Instruction No. 9

No cause of action for common law
conspiracy may exist without resulting injury
and the damage produced must arise as the
effective result of the conspiracy.

Jury Instruction No. 10

You shall find for Mario Industries on its
claim of common law conspiracy and against the
defendants, or two or more of them, if it
proves by a preponderance of evidence either
that:
1). Two or more defendants combined to
accomplish, by some concerted action, a
criminal or unlawful purpose which resulted in
damage to the plaintiff; and
2). Two or more defendants combined to
accomplish, by some concerted action, some
lawful purpose by either criminal or unlawful
means which resulted in damage to plaintiff.
You shall find for the defendants, or any
of them, if the plaintiff fails to prove either
of these elements.

Jury Instruction No. 14

When two or more persons join in a
conspiracy, then each one is liable for any
tortious acts of the other that is committed
within the scope of the conspiracy.

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 Upon review of the evidence presented, we conclude that

it was sufficient to support the compensatory damages verdict

for common law conspiracy against all the defendants.

F. Punitive Damages

Finally, Cook argues that the trial court erred in not

setting aside “the punitive damages verdict against Cook,

because no awardable compensatory damages were proved, and

because as a matter of law Cook did not act with the required

level of misconduct and did undertake reasonable efforts to

ensure that his resignation and subsequent conduct were

lawful.” Phrased differently, Cook argues that punitive

damages should not have been awarded because "the evidence, as

a matter of law, fails to prove malice, willfulness, or

wantonness by Cook." Therefore, the evidence does not support

a punitive damages award. Cook's argument is without merit.

The purpose of punitive damages “is not so much to

compensate the plaintiff but to punish the wrongdoer and to

warn others,” and such damages “may be recovered only where

there is misconduct or actual malice, or such recklessness or

negligence as to evince a conscious disregard of the rights of

others.” Hamilton Dev. Co. v. Broad Rock Club, 248 Va. 40,

45, 445 S.E.2d 140, 143 (1994) (quotation omitted). Jury

instruction 47, given without objection, defined “actual

malice” as ”a sinister or corrupt motive such as hatred,

29
personal spite, ill will, or a desire to injure the

plaintiff.”

In this case, Cook formed Renaissance while he was

employed at Mario, and Cook admitted that he intended for

Renaissance to compete with Mario. Based upon this evidence,

the jury could have concluded and did conclude that Cook had

the requisite malice to injure Mario. We hold that the trial

court did not err in refusing to set aside the award of

punitive damages against Cook.

III. CONCLUSION

For the reasons stated, we will affirm the judgment of

the trial court.

Affirmed.

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