Present: All the Justices 

FEDDEMAN & COMPANY, C.P.A., P.C. 

v. Record No. 991996 OPINION BY JUSTICE ELIZABETH B. LACY 

 June 9, 2000 

LANGAN ASSOCIATES, P.C., ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA 

Alfred D. Swersky, Judge 

 Feddeman & Company appeals a judgment setting aside a 

$3,300,000 jury verdict in its favor against six of its former 

employees and one of its competitors. Feddeman & Company, the 

plaintiff below, is a certified public accounting firm that, 

in 1997, had 31 employees and over $3,000,000 in yearly 

revenues. W. Kent Feddeman was a 95% shareholder and the 

president of the company. 

 The defendants are Langan Associates, a rival accounting 

firm, John P. Langan, its president, three former directors 

and employees of Feddeman & Company, Joseph M. Kotwicki, 

Cheryl L. Jordan, and J. Andrew Smith, and three former 

employees of Feddeman & Company, Nathaniel T. Bartholomew, 

Robert A. Casey, and John G. Wooldridge. 

 The events giving rise to this litigation began in August 

1996, when Kent Feddeman initiated discussions with John 

Langan regarding a possible buyout or merger of the two 

companies. In early 1997, Feddeman asked Kotwicki to take 

over the negotiations. 
 In the summer of 1997, the American Express Company made 

an offer to purchase both Langan Associates and Feddeman & 

Company. On August 31, 1997, Langan, Kotwicki, Bartholomew, 

Smith, Casey, Wooldridge, and Jeffrey S. Tenenbaum, Langan 

Associates' attorney, met in Tenenbaum's office. At this 

meeting, the attendees determined that they would refuse the 

American Express offer, and Kotwicki, Smith, Bartholomew, 

Casey, and Wooldridge would form a "Buying Group." The Buying 

Group planned to purchase Feddeman's 95% interest in Feddeman 

& Company and then merge the company with Langan Associates. 

The Buying Group also raised the possibility that they might 

have to resign from Feddeman & Company if the buyout 

negotiations were unsuccessful. The members of the Buying 

Group signed a retainer agreement with Tenenbaum authorizing 

him to represent them. At this meeting, or shortly 

thereafter, Kotwicki gave sample Feddeman & Company engagement 

letters and nonsolicitation agreements, along with other 

corporate and employment documents, to Tenenbaum in 

preparation for the merger. Feddeman was aware of and did not 

oppose this two-step merger process. 

 On September 29, 1997, the Buying Group offered Feddeman 

$2,000,000 for his interest in Feddeman & Company. In making 

the offer, Kotwicki reminded Feddeman that the corporate 

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directors were not bound by noncompete agreements and that 

they were free to leave Feddeman & Company if they wished. 

 On November 4, 1997, Feddeman made a counteroffer to the 

Buying Group. Four days later, Kotwicki told Feddeman that 

the counteroffer nullified the Buying Group's prior offer, and 

that if the Buying Group were to make another offer, it would 

be lower than the first. 

 On November 10, 1997, a second meeting was held at the 

offices of Langan Associates, again with Langan, Tenenbaum, 

and the Buying Group. Tenenbaum had been asked to do legal 

research on any potential liability which could arise if the 

Buying Group resigned and were subsequently employed by Langan 

Associates. Based on his research, Tenenbaum advised the 

Buying Group that to avoid liability, if they ultimately chose 

to resign, they should not solicit Feddeman & Company clients 

or employees until after their resignation, not use company 

resources in the preparation of their resignations, not make 

negative or adverse statements about Feddeman & Company, and 

not remove any company property. The Buying Group agreed that 

they would resign on December 1, 1997 if they "hadn't made a 

deal" with Feddeman and that the resignations "would be a form 

of leverage that could be used" in the negotiations.

 On November 12, 1997, at 7:00 a.m., Jordan, the members 

of the Buying Group except Casey, and four other Feddeman & 

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Company senior employees met at Smith's house. At this 

meeting, the Buying Group reported on the status of the merger 

negotiations, and indicated that if the negotiations did not 

improve there was a possibility that the Buying Group would 

resign on December 1, 1997. The Buying Group indicated that 

they believed Langan Associates would hire them if they 

resigned. They also told the senior employees present that 

they "would take care of them." 

On November 19, 1997, Kotwicki again discussed the 

resignation plan with Jordan. She indicated that she would be 

on vacation on December 1, so Kotwicki gave her a letter of 

resignation drafted for her by Tenenbaum, which she signed and 

gave to her own attorney. 

 On November 24, Feddeman's attorney presented Kotwicki 

with a $4,000,000 stock purchase proposal in which Feddeman 

would be paid over the course of eight years. Two days later, 

the Buying Group made a counteroffer of $4,000,000 to be paid 

over a ten year period, with no personal guarantees and a 

covenant not to compete from Feddeman. 

 Meanwhile, Feddeman learned of the proposed walkout and 

contacted Johnson & Lambert, a national accounting firm, to 

see if it could provide assistance if needed, and additionally 

to discuss possible merger options. 

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 On December 1, 1997, Feddeman announced to some of his 

employees that Johnson & Lambert had expressed interest in 

making a presentation to Feddeman & Company employees on 

December 3. The Buying Group met with Feddeman immediately 

after this announcement. Feddeman told them Johnson & Lambert 

had an interest in acquiring the firm, and that there would be 

positions for everyone. The Buying Group met with Feddeman a 

second time in his office, this time without Kotwicki. They 

questioned the potential merger with Johnson & Lambert and its 

impact on the planned buyout and merger with Langan 

Associates. Feddeman told them he just wanted them to hear of 

another opportunity and he advised them to talk to his lawyer.

 Following the meetings with Feddeman, members of the 

Buying Group met at lunch and decided to resign. They planned 

to talk to the senior managers after work to inform them of 

the resignation decision. After lunch, Kotwicki called 

Langan, informed him that the Buying Group was resigning, and 

asked if Langan Associates would hire the Buying Group and any 

others who might resign. Langan agreed. 

 Kotwicki had letters of resignation prepared for three 

senior employees, Mary D. Komatsoulis, James B. Kanuch, and 

Mike A. Benoudiz. That evening, after attending an event with 

Feddeman, Benoudiz and Kanuch met with Smith and were given 

the prepared letters of resignation. They were told of the 

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Buying Group's decision to resign and to work for Langan 

Associates, and that "they could come too." Smith, Benoudiz, 

and Kanuch returned to the office, and while Smith gathered 

his personal effects, Benoudiz and Kanuch signed their letters 

of resignation and gave them to Smith. That evening 

Komatsoulis, at Bartholomew's request, met with him. After 

the meeting, Komatsoulis returned to the office and signed her 

letter of resignation. A fourth employee was told to contact 

Kotwicki because he had a letter of resignation for her to 

sign. 

 That evening, Kotwicki called Jordan, who contacted her 

attorney and instructed him to release her letter of 

resignation. Kotwicki also obtained a letter of resignation 

from his son, Michael Kotwicki, a Feddeman & Company employee.

 The next morning, December 2, prior to going to work, 

Kotwicki went to Smith's house and collected the letters of 

resignation obtained from various employees. After leaving 

Smith's house, Kotwicki delivered 11 letters of resignation to 

Kent Feddeman. Feddeman accepted the resignations.

 That evening, Langan Associates held a reception for the 

Feddeman employees who had not yet resigned. Eventually, 25 

of the 31 Feddeman & Company employees resigned and began 

working for Langan Associates. By December 3, all the 

Feddeman & Company clients had been contacted by employees of 

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Langan Associates, and 50% of those clients eventually 

transferred their business to Langan Associates. 

 On April 9, 1998, Feddeman & Company filed an Amended 

Motion for Judgment asserting inter alia the following causes 

of action: Count I - Breach of Fiduciary Duty by Director 

Defendants, Count II - Usurpation of Corporate Business 

Opportunity as to Director Defendants and Employee Defendants, 

Count III - Breach of Fiduciary Duty of Employee Defendants, 

Count IV - Intentional Interference with Contract and Business 

Expectancies By All Defendants, and Count VI – Violation of 

Va. Code §§ 18.2-499 and –500, Conspiracy to Injure Another in 

Trade or Business, By All Defendants. Count V was dismissed 

by the trial court upon defendants' Plea in Bar.

 The defendants filed a counterclaim which alleged 

intentional interference with contractual rights and 

prospective economic advantage, unfair competition, and libel 

and slander. 

 Following a seven-day trial, the jury returned a verdict 

in favor of Feddeman & Company and against the defendants on 

all remaining counts in the Amended Motion for Judgment, with 

one exception. Cheryl Jordan was found not to have usurped a 

corporate business opportunity. The jury awarded damages in 

the amount of $3,300,000. The jury found in favor of the 

plaintiff on defendants' counterclaim.

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 The defendants filed a Motion To Strike and To Set Aside 

the Verdict and, following further briefing and argument, the 

trial court granted that motion. Feddeman & Company filed 

this appeal, and the defendants assigned cross-error. 

I. 

On appellate review of the trial court's action setting 

aside the verdict, we consider whether there was sufficient 

credible evidence to establish the claims against the 

defendants, and we consider the evidence and reasonable 

inferences therefrom in the light most favorable to the 

plaintiff. Nichols v. Kaiser Foundation Health Plan, 257 Va. 

491, 494, 514 S.E.2d 608, 609 (1999); Carter v. Lambert, 246 

Va. 309, 313-14, 435 S.E.2d 403, 405-06 (1993). 

 In Counts I and III of the Motion for Judgment, the 

plaintiff claimed that defendants Kotwicki, Smith, Jordan, 

Casey, Bartholomew, and Wooldridge breached their fiduciary 

duties to the corporation. In setting aside the jury's 

verdicts in favor of the plaintiff on Counts I and III, the 

trial court concluded that these defendants did not breach 

their fiduciary duties because they were entitled to engage in 

"reasonable preparations to compete within certain 

limitations." 

 We agree that, prior to resignation, these defendants 

were entitled to make arrangements to resign, including plans 

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to compete with their employer, and that such conduct would 

not ordinarily result in liability for breach of fiduciary 

duty. However, the right to make such arrangements is not 

absolute. This right, based on a policy of free competition, 

must be balanced with the importance of the integrity and 

fairness attaching to the relationship between employer and 

employee or corporation and corporate director. Science 

Accessories Corp. v. Summagraphics Corp., 425 A.2d 957, 962-63 

(Del. 1980); Maryland Metals, Inc. v. Metzner, 382 A.2d 564, 

568 (Md. 1978). Under certain circumstances, the exercise of 

the right may constitute a breach of fiduciary duty. 

Restatement (Second) of Agency § 393 cmt. 1 (1957). 

Liability for breach of fiduciary duty has been imposed 

when the employees or directors misappropriated trade secrets, 

misused confidential information, and solicited an employer's 

clients or other employees prior to termination of employment. 

See, e.g., Maryland Metals, and cases cited therein. Whether 

specific conduct taken prior to resignation breaches a 

fiduciary duty requires a case by case analysis. 

 In Duane Jones Co. v. Burke, 117 N.E.2d 237 (N.Y. 1954), 

certain officers, directors, and employees of an advertising 

agency "met and agreed to take over the business" of their 

employer "either by purchase of the controlling interest in 

the corporation or by resignation en masse and the formation 

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of a new agency." Id. at 245. The employees presented a 

purchase offer for the controlling interest in the agency and 

told the majority stockholder, who was also president of the 

agency, that if the offer was not accepted, the employees 

would resign. The offer was rejected and shortly thereafter 

the members of the group submitted resignations on the same 

day in substantially identical form. A new advertising agency 

was formed and, within a month, the new agency had acquired 9 

of the approximately 25 clients formerly serviced by the old 

company, Duane Jones Co., and had acquired more than 50% of 

that agency's personnel. The evidence also showed that the 

new agency acquired certain clients and employees through the 

action of the defendants while those defendants were 

completing their duties with their former employer, although 

the defendants had already stated their intention to resign. 

Id.

 In approving the jury verdict in favor of the plaintiff, 

the Court of Appeals of New York concluded that each of the 

defendants was required to " 'exercise the utmost good faith 

and loyalty in the performance of his duties' " and that their 

conduct " 'fell below [that] standard.' " Id. at 245. 

 Similarly in ABC Trans National Transport, Inc. v. 

Aeronautics Forwarders, Inc., 413 N.E.2d 1299 (Ill. App. 

1980), the court found that the coordinated resignation of key 

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management employees pursuant to their organized plan 

resulting in "the sudden, potentially crippling loss of half 

of [the employer's] business and major customers, as well as 

substantial numbers of its personnel" was an actionable breach 

of fiduciary duty. Id. at 1306. 

 The evidence in the instant case is substantially similar 

to that in the Duane Jones case. Here, the employee and 

director defendants met and formulated a plan to resign en

masse if Kent Feddeman rejected their buyout offer, knowing 

that a resignation or walk out by all of them would "be 

devastating to" the corporation. The plan included 

anticipation of future employment with Langan Associates, a 

rival business, and such future employment included securing 

plaintiff's clients and employees as clients and employees of 

Langan Associates. The record shows that these defendants 

informed other employees of the plan to resign, supplied 

resignation letters for use by other employees, and told 

employees that they were "going to go join John Langan, and 

they could come too."

A total of 11 resignations were submitted on December 2 

and, within four days, a total of 25 of the plaintiff's 31 

employees resigned and joined Langan Associates. By December 

5, all of the plaintiff's clients had been solicited to join 

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Langan Associates and approximately half of those clients 

eventually moved their accounts to Langan Associates. 

In considering this evidence, the jury was instructed 

that employees and directors of a corporation are required to 

"exercise the utmost good faith and loyalty" toward the 

corporation and may not act "in a manner adverse to the 

corporation's interest." The jury was also told that 

corporate directors, while employed by the corporation, could 

inform other employees of their intent to leave the 

corporation, but could not solicit such employees to join them 

in a rival business and could not use confidential or 

proprietary information. 

The evidence shows that these defendants did more than 

prepare to leave their employment and advise others of their 

plan. As in Duane Jones, the totality of the defendants' 

actions provided credible evidence to support a jury 

determination that their conduct fell below the required 

standard of good faith and loyalty and constituted a breach of 

fiduciary duty. Therefore, the judgment of the trial court 

setting aside the jury verdict in favor of plaintiff on Counts 

I and III was error. 

II. 

 Count VI of the Motion for Judgment charged that the 

employee and director defendants, along with Langan Associates 

12
and John P. Langan, individually, violated Code §§ 18.2-499 

and –500 because these defendants, intentionally and without 

legal justification, conspired to injure plaintiff's business 

and, as a result of that conspiracy, plaintiff suffered 

financial harm. The jury was instructed that to prevail on 

this count, the plaintiff had to prove by clear and convincing 

evidence that these defendants combined for the purpose of 

willfully and maliciously injuring plaintiff's business and 

that the business was injured as a result of these actions. 

The jury was further told that 

[t]he term 'malice' means that the defendants 

acted intentionally, purposefully and without 

legal justification. Without legal justification 

may include a breach of their fiduciary duty or 

assisting someone to breach their fiduciary duty. 

Should corporate officers or directors act in 

concert to breach their fiduciary duties and 

cause injury to the corporation, they may be 

liable for conspiracy. The term 'malice' does 

not require the plaintiff to prove that a 

conspirator was motivated by hatred, personal 

spite, ill will or a desire to injure the 

plaintiff. 

The jury returned a verdict finding that all corporate 

director and employee defendants as well as John Langan and 

Langan Associates violated §§ 18.2-499 and -500. The trial 

court set aside the jury verdict, finding that there was no 

evidence that these defendants "combined with an intent to 

injure" plaintiff and that there was no evidence of "unlawful 

acts in furtherance of the combination." 

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The plaintiff contends that the jury's finding of 

conspiracy was supported by evidence that John Langan and the 

members of the Buying Group met on August 31, November 10, and 

November 12 and formulated a plan to impose "leverage" on 

Feddeman to accept the buyout offer. The plan was that the 

members of the Buying Group would resign en masse if Feddeman 

refused the buyout offer and, with Langan's agreement, go to 

work for Langan Associates. Jordan, although not a member of 

the Buying Group, was told of and agreed to participate in the 

resignation plan. The plan also included securing the 

resignations of other senior employees, whom John Langan also 

agreed to hire. 

The plaintiff maintains that Langan Associates' 

participation in the conspiracy is shown by evidence that its 

legal counsel represented the Buying Group, advised the Buying 

Group regarding the resignation and solicitation of other 

employees and clients of the plaintiff, drafted Jordan's 

resignation letter, and was paid for these services by Langan 

Associates. 

 Establishing a conspiracy in violation of §§ 18.2-499 and 

–500 does not require proof that the conspirators' "primary 

and overriding purpose is to injure another." Advanced Marine 

Enterprises v. PRC Inc., 256 Va. 106, 117, 501 S.E.2d 148, 154 

(1998). As indicated in the instruction given to the jury in 

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this case, the plaintiff was only required to show that the 

defendants acted "intentionally, purposefully, and without 

lawful justification." Id., 501 S.E.2d at 154-55. 

The trial court concluded that the defendants' actions 

were undertaken for no other purpose than "to effectuate the 

planned merger." However, considering the evidence and all 

reasonable inferences therefrom in the light most favorable to 

the plaintiff, as we must, we find that this conclusion was 

error. 

The evidence is clear that the plan to submit 

resignations was initiated as a means of exerting leverage 

against Feddeman to accept the Buying Group's offer and thus 

facilitate a merger of plaintiff with Langan Associates. This 

plan was based on the principle that the departure of the 

defendants and the other employees would so adversely impact 

the plaintiff that Feddeman would not accept those 

resignations and let the employees depart. Injury to the 

plaintiff was a known and intended result of the plan. The 

employee and director defendants cannot avoid responsibility 

for their actions because their resignation plan was not their 

first or preferred choice of action. The evidence in this 

case is clearly sufficient to support a jury determination, 

not only that the defendants acted intentionally and 

15
purposefully, but that they knew and intended that their 

resignation plan, if implemented, would injure the plaintiff. 

This knowledge was not limited to the employee and 

director defendants. John Langan and Langan Associates were 

aware that the resignation plan was considered "leverage" and 

that, if implemented, would adversely affect the plaintiff. 

Langan and Langan Associates facilitated development of the 

plan by providing legal services and agreeing to hire 

plaintiff's former employees. 

The evidence also supports a jury determination that the 

defendants' actions were without legal justification. The 

jury was instructed that the failure of legal justification 

"may include a breach of their fiduciary duty or assisting 

someone to breach their fiduciary duty." As discussed above, 

the evidence was sufficient to support a jury finding that the 

planned resignation en masse from Feddeman & Company was a 

breach of the director and employee defendants' fiduciary 

duties. The evidence was also sufficient to show that the 

conduct of John Langan and Langan Associates assisted the 

director and employee defendants in the breach of their 

fiduciary duties. Applying the jury instruction to this 

evidence, we find there was sufficient credible evidence for 

the jury to conclude that the defendants' actions were without 

legal justification. 

16
Accordingly, the trial court erred in setting aside the 

jury verdict in favor of the plaintiff on Count VI. 

III. 

The plaintiff sought compensatory damages for a single 

injury resulting from the various causes of action and the 

jury awarded a single damage amount of $3,300,000. In light 

of our holding that the trial court erred in setting aside the 

jury verdict in favor of the plaintiff on the breach of 

fiduciary duty counts, and the statutory conspiracy count, it 

is unnecessary to consider the plaintiff's assignments of 

error regarding the trial court's action in setting aside the 

jury's verdicts on the intentional interference with contract 

and business expectancy and usurpation of corporate 

opportunity.1 However, the defendants argue that, even if the 

trial court erred in setting aside the jury verdict, final 

judgment should not be entered in favor of the plaintiff, 

because the trial court erred in instructing the jury. 

In an assignment of cross-error, the defendants assert 

that the trial court erred when it refused two jury 

instructions offered by the defendants concerning breach of 

 1

 We also note that usurpation of corporate business 

opportunity is generally considered a breach of fiduciary duty 

rather than conduct constituting a distinct cause of action. 

Trayer v. Bristol Parking, Inc., 198 Va. 595, 603-04, 95 

S.E.2d 224, 230 (1956); Meiselman v. Meiselman, 309 N.C. 279, 

306-08, 307 S.E.2d 551, 567 (N.C. 1983). 

17
fiduciary duty. The trial court stated that it would not give 

these two instructions because the matters they addressed were 

covered in other instructions. Additionally, the trial court 

observed that other instructions adequately set out the 

elements of the cause of action and that one of the 

instructions "sounds like [defendants'] closing argument." 

We agree that the proposed instructions were cumulative 

of other instructions given on this issue. While a party is 

entitled to jury instructions supporting his theory of the 

case, if supported by adequate evidence, a trial judge is not 

required to give proffered jury instructions which are 

cumulative or repeat matters contained in other instructions. 

Medlar v. Mohan, 242 Va. 162, 168-69, 409 S.E.2d 123, 127 

(1991); Adams v. Plaza Theatre, Inc., 186 Va. 403, 409-10, 43 

S.E.2d 47, 51 (1947). Therefore, the trial court's refusal to 

give the defendants' proffered instructions was not error. 

IV. 

 In summary, for the reasons stated, we will reverse the 

judgment of the trial court and reinstate the verdict of the 

jury in favor of the plaintiff on Counts I, III, and VI. 

Because the trial court did not consider entry of an award in 

18
accordance with the provisions of § 18.2-500, we will remand 

the case for entry of a judgment consistent with this opinion.2

Reversed and remanded.

 2

 Section 18.2-500 provides that a person injured in his 

business through violation of § 18.2-499 may recover "threefold the damages by him sustained" along with costs and 

attorneys' fees. 

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