Title: Online Res. Corp. v. Lawlor
Citation: N/A
Docket Number: 120208
State: Virginia
Issuer: Virginia Supreme Court
Date: January 10, 2013

1 
 
Present:  Kinser, C.J., Lemons, Millette, Mims, McClanahan, and 
Powell, JJ., and Lacy, S.J. 
ONLINE RESOURCES CORP. 
 
v.  Record No. 120208 
OPINION BY JUSTICE DONALD W. LEMONS 
 
 
 
 
 
 
 
January 10, 2013 
MATTHEW P. LAWLOR 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
Michael F. Devine, Judge 
In this appeal, we consider whether the Circuit Court of 
Fairfax County ("trial court") erred in a complex civil matter 
arising from termination of a corporation's chief executive 
officer from employment when it (1) refused to hold, as a matter 
of law, that no change in control occurred that would entitle 
Matthew P. Lawlor ("Lawlor") to mandatory severance benefits 
from Online Resources Corporation ("ORC"); (2) instructed the 
jury to construe any ambiguities in the contracts against the 
drafter; (3) submitted Lawlor's alternative theory of mandatory 
severance benefits to the jury; and (4) submitted Lawlor's claim 
for unjust enrichment to the jury. 
We also consider whether the trial court abused its 
discretion when it (1) admitted the testimony of James Reda, 
Lawlor's damages expert; (2) permitted Lawlor to amend his 
complaint to plead the basis for recovering attorneys' fees; and 
(3) awarded Lawlor attorneys' fees and expenses.  
 
 
2 
 
I. Facts and Proceedings  
In Lawlor's second amended complaint against ORC, he sought 
damages for breach of contract, unjust enrichment, and wrongful 
termination, as well as declarative and injunctive relief1 in 
connection with ORC's termination of Lawlor's employment as 
Chief Executive Officer ("CEO"), his position as Chair of the 
Board of Directors, and his employment with ORC.  Lawlor 
contended that he resigned under duress after reporting insider 
trading by Tennenbaum Capital Partners ("TCP"), ORC's largest 
voting shareholder.  He also claimed that he was denied payments 
under the 2005 Stock Plan, as amended ("2005 Plan"), 1999 Stock 
Option Plan ("1999 Plan"), and 2009 Change in Control Severance 
Agreement ("Severance Agreement") that provided certain payments 
in the event of a "change in control" in the company.  
Additionally, Lawlor claimed that he was entitled to 
compensation to offset a pay reduction he took in 2009 with the 
understanding that he would be made whole in the future.  
Additionally, he demanded attorneys' fees and expenses.2 
 
On March 24, 2011, Lawlor moved the court to defer the 
issue of attorneys' fees and expenses until after the trial.  
                                                          
 
 
1 Lawlor's claims for declarative and injunctive relief were 
dismissed and are not before us on appeal. 
 
2 Although the parties use the term "costs", the Severance 
Agreement upon which the claim is based provides for "expenses."  
Therefore, we will use the term "expenses" throughout this 
opinion. 
3 
 
The trial court granted the unopposed motion, and both parties 
endorsed the order as "agreed." 
An eleven-day jury trial took place in April 2011.  The 
jury found for Lawlor on all counts except Count VI for wrongful 
termination, and awarded Lawlor $2,325,000 on Count I for breach 
of the 2005 Plan, $494,266 on Count II for breach of the 1999 
Plan, $4,935,619 on Count III for breach of the Severance 
Agreement, and $360,000 on Count V for unjust enrichment, for a 
total of $5,295,619 in compensatory damages.3  In the bifurcated 
proceeding, the trial court awarded attorneys' fees of 
$2,131,034.75 to Lawlor. 
Change In Control 
Lawlor founded ORC in 1989 to provide on-line banking 
services.  ORC went public in 1999, and Lawlor continued to 
serve as its CEO and the Chairman of its Board of Directors.  In 
2006, TCP invested $75 million in ORC and became a Class A-1 
preferred shareholder with the right to designate a director to 
the Board.  In 2007, Michael Leitner ("Leitner") became TCP's 
designee to the Board of Directors.  Evidence presented revealed 
that Leitner and Lawlor had a contentious relationship.  
ORC's stock price dropped significantly in 2008 and 2009.  
In 2009, TCP announced that it was running three of its own 
                                                          
 
 
3 The damages in Count III overlapped with the damages in 
Counts I and II. 
4 
 
nominees for the Board of Directors.  A proxy contest ensued, 
and the TCP nominees were elected in May 2009.  In May 2009, the 
Board also approved the Severance Agreement.  Lawlor signed the 
Severance Agreement on May 13, 2009.  
Shortly after the proxy contest, Leitner wrote in an email 
to the other TCP nominees, who were now directors, that Lawlor 
"doesn't fully appreciate the significant governance change that 
has taken place, and that he is no longer in control.  It just 
doesn't seep in for him."  He added that Lawlor was resistant to 
"any process that requires him to seek our direction on issues" 
and "just doesnt [sic] get he is one election away from losing 
his job."  
On December 9, 2009, the Board of Directors met in closed 
session without Lawlor and agreed that it was time for him to 
step down as CEO.  On December 14, 2009, the Board voted to 
remove Lawlor immediately as CEO, but agreed to retain him as 
Chairman of the Board and as an employee until February 19, 
2010. 
On January 20, 2010, Lawlor resigned from the Board.  That 
same day, one of the incumbent directors,4 Joe Spalluto, also 
                                                          
 
 
4 The "Incumbent Board" is defined in the Severance 
Agreement as the individuals who constituted the Board as of May 
13, 2009, the date the Severance Agreement was executed.  An 
"incumbent director" is a person who was a director as of May 
5 
 
resigned from the Board.  The Board, which had ten seats, was 
then composed of four incumbent directors, the three new TCP 
directors, Leitner (the TCP designee), and two empty seats. 
 
ORC offered Lawlor a severance package that Lawlor rejected 
because "it would have taken away any rights to claim for a 
change in control."  Lawlor maintained that a change in control 
had occurred, and that he was entitled to mandatory severance 
benefits under the 1999 Plan, the 2005 Plan, and the Severance 
Agreement.  All three of these plans defined "change in 
control," but with slight variations.  The 2005 Plan defined 
"change in control" in relevant part as: 
(i) When any "person" as defined in Section 
3(a)(9) of the Exchange Act and as used in 
Sections 13(d) and 14(d) thereof (including a 
"group" as defined in Section 13(d) of the 
Exchange Act, but excluding the Company, any 
Subsidiary or any employee benefit plan sponsored 
or maintained by the Company or any Subsidiary 
(including any trustee of such plan acting as 
trustee)), directly or indirectly, becomes the 
"beneficial owner" (as defined in Rule 13d-3 
under the Exchange Act, as amended from time to 
time), of securities of the Company representing 
50% or more of the combined voting power of the 
Company's then outstanding securities. 
 
(ii) The individuals who, as of January 1, 2005, 
constitute the Board (the "Incumbent Board"), 
cease for any reason to constitute at least a 
majority of the Board; provided however, that any 
individual becoming a director subsequent to such 
date, whose election, or nomination for election 
                                                                                                                                                                                           
13, 2009, or who was elected after May 13, 2009 by at least 
three-quarters of the directors comprising the Incumbent Board.   
6 
 
by the Company's stockholders, was approved by a 
vote of at least a majority of the directors then 
comprising the Incumbent Board shall, for 
purposes of this section, be counted as a member 
of the Incumbent Board in determining whether the 
Incumbent Board constitutes a majority of the 
Board. 
 
The 1999 Plan defined "change in control" as: 
(e) "Change in Control" means a change in control 
of the Company of a nature that; (i) would be 
required to be reported in response to Item 1 of 
the current report on Form 8-K, as in effect on 
the date hereof, pursuant to Section 13 or 15(d) 
of the Exchange Act; or (ii) without limitation 
such a Change in Control shall be deemed to have 
occurred at such time as (A) any "person" (as the 
term is used in Sections 13(d) and 14(d) of the 
Exchange Act) is or becomes the "beneficial 
owner" (as defined in Rule 13d-3 under the 
Exchange Act), directly or indirectly, of 
securities of the Company representing 25% or 
more of the Company's outstanding securities 
except for any securities of the Company 
purchased by any tax qualified employee benefit 
plan of the Company; or (B) individuals who 
constitute the Board of Directors of the Company 
on the date hereof (the "Incumbent Board") cease 
for any reason to constitute at least a majority 
thereof, provided that any person becoming a 
director subsequent to the date hereof whose 
election was approved by a vote of at least 
three-quarters of the directors comprising the 
Incumbent Board, or whose nomination for election 
by the Company's stockholders was approved by a 
Nominating Committee serving under an Incumbent 
Board, shall be, for purposes of this clause (B), 
considered as though he were a member of the 
Incumbent Board; or (C) a plan of reorganization, 
merger, consolidation, sale of all or 
substantially all of the assets of the Company or 
similar transaction occurs in which the Company 
is not the resulting entity. 
 
The Severance Agreement defined "change in control" as: 
7 
 
(e) A "Change in Control" shall mean any change 
in control of the Company of a nature that would 
be required to be reported in response to Item 
1(a) of the Current Report on Form 10-K,5 as in 
effect on the Effective Date, pursuant to Section 
13 or 15(d) of the Act; provided that, without 
limitation, such a "Change in Control" shall be 
deemed to have occurred if: 
 
(i) a third person, including a "group" as 
such term is used in Section 13(d)(3) of the Act, 
becomes the beneficial owner, directly or 
indirectly, of 50% or more of the combined voting 
power of the Company's outstanding voting 
securities ordinarily having the right to vote 
for the election of directors of the Company, 
unless such acquisition of beneficial ownership 
is approved by a majority of the Incumbent Board 
(as such term is defined in clause (ii) below); 
or 
 
(ii) individuals who, as of the date hereof, 
constitute the Board (the "Incumbent Board") 
cease for any reason to constitute at least a 
majority of the Board, provided that any person 
becoming a director subsequent to the date hereof 
whose election, or nomination for election by the 
Company's shareholders, was approved by a vote of 
at least three-quarters of the directors 
comprising the Incumbent Board (other than an 
election or nomination of an individual whose 
initial assumption of office is in connection 
with an actual or threatened election contest 
relating to the election of the Directors of the 
Company, as such terms are used in Rule 14a-11 of 
the Regulation 14A promulgated under the Act) 
shall be, for purposes of this provision, 
considered as though such person were a member of 
the Incumbent Board. 
 
ORC moved for summary judgment prior to trial, arguing 
that, as a matter of law, the Incumbent Board never ceased to be 
a majority and there was no change in control.  The trial court 
                                                          
 
 
5 This document reads "10-K", but the parties agreed below 
that this was a typographical error and should have been "8-K." 
8 
 
denied the motion, holding that the contract provisions were 
ambiguous. 
At trial, ORC moved to strike Lawlor's evidence of a change 
in control, arguing that Lawlor failed to present sufficient 
evidence to demonstrate that a change in control occurred.  The 
trial court denied the motion, holding that in the light most 
favorable to Lawlor there was sufficient evidence that a change 
in control had occurred to submit the matter to the jury.  The 
trial court noted there was evidence that the composition of the 
Board changed and that TCP wrested control of ORC from the 
people who were originally running the company.  ORC renewed its 
motion to strike at the close of evidence, and the trial court 
denied it.   
Alternate Theory of Severance Benefits 
 
At trial, Lawlor proposed an alternate theory to the jury 
for awarding severance benefits if the jury found there was no 
change in control.  Lawlor argued that Paragraph 1 of the 
Severance Agreement made payment of severance benefits mandatory 
for a termination prior to a change in control.  Paragraph 1 of 
the Severance Agreement stated: 
1. Purpose and Scope of Company Obligations.  The 
purpose of this Agreement is to document the 
severance benefits payable to the Participant in 
the event the Participant's employment with the 
Company (as defined below) is terminated as 
described herein.  For terminations prior to the 
Protected Period, the severance benefits that are 
9 
 
payable to the Participant are as set forth in 
the Company's Severance Pay Policy in effect on 
the date of execution of this Agreement. 
 
(Emphasis added.)  An email from the CFO, Cathy Graham, was 
admitted to show she recommended changing the words "may be 
payable" to "are payable" because the benefits were intended to 
be "contractually guaranteed" and not discretionary. 
Expert Testimony on Damages 
ORC moved to exclude the testimony of Lawlor's damages 
expert, James Reda.  ORC argued that Reda admitted he was not an 
expert in stock valuation and that he did not conduct his own 
independent evaluation of ORC's stock value; consequently, ORC 
argued his testimony as to the value of ORC stock should be 
excluded.  The trial court denied the motion. 
 
Reda qualified as an executive compensation consultant, 
with an expertise in advising companies on how much to pay 
executives, including salary, bonus, long-term incentives, 
severance requirements, and extra benefits.  He testified that 
he was asked to calculate the severance amounts Lawlor was 
entitled to receive in the event of a change in control of ORC, 
as well as the severance amounts to which Lawlor would be 
entitled if a determination were made that there had not been a 
change in control.  
Reda explained that as part of determining the value of 
Lawlor's damages, he considered the value of Lawlor's stock 
10 
 
options.  Reda used two different stock prices when performing 
his calculations.  For the first set of calculations, Reda used 
the stock price of $7.01 per share, which was highest price 
actually achieved between the date of Lawlor's termination and 
the date of trial.  Reda testified that under a change in 
control scenario, using the stock price of $7.01 per share, 
Lawlor was entitled to a severance payment of $4,935,619.  Reda 
testified that if no change in control occurred, using the stock 
price of $7.01 per share, Lawlor was entitled to a severance 
payment of $3,269,893. 
Reda testified that Lawlor's damages could be even higher 
if the value of ORC stock were to increase.  For the second set 
of calculations, Reda used the stock price of $10.53 per share, 
which was a number he obtained from a Raymond James Investment 
Report that projected what the ORC stock price might be over a 
period including 2010 and 2011.  Using that stock price, Reda 
determined that Lawlor's damages under a change in control 
scenario would be $6,686,992. 
Unjust Enrichment 
 
At trial, Lawlor testified that he voluntarily accepted a 
5% pay reduction in 2009; however, he had a clear understanding 
with the compensation committee and the Board that he was 
underpaid relative to the performance of the company, and he 
took the pay cut "with the understanding that it was going to 
11 
 
pay off down the road with the company coming back, rectifying 
that kind of a thing."  He admitted that there was no written 
agreement, but he had "the understanding from the Board that 
they were going to correct my compensation, and I ha[d] every 
right to expect that at least the 30 percent that I took option 
on, that they would make me whole."  Lawlor testified that Erv 
Shames ("Shames"), the chairman of the compensation committee, 
told Lawlor his compensation would be corrected.   
 
Shames testified that the pay reductions in 2009 were 
Lawlor's idea in order to improve the company's earnings and 
cash position.  Shames testified that Lawlor was not promised 
anything in exchange for his agreement to accept the pay 
reduction. 
 
The court instructed the jury to find for Lawlor on Count 
V, the claim for unjust enrichment, if the jury found that 
Lawlor  
[H]as proved by the greater weight of the 
evidence that (1) the Plaintiff conferred a 
benefit on the Defendant; and (2) the Defendant 
knew that the Plaintiff was conferring the 
benefit; and (3) the Defendant accepted or 
retained the benefit under circumstances which 
would make it inequitable for the Defendant to 
retain the benefit without paying for its value.  
 
Jury Instruction N 
 
Jury Instruction N was given at trial, which read: "In 
interpreting a contract, you should resolve any doubts about the 
12 
 
meaning of a word or phrase against the party who 
[drafted/prepared] the contract."  ORC objected to that 
instruction being given on the grounds that Lawlor participated 
in the drafting of the agreements at issue in this case.  Lawlor 
argued that ORC's general counsel was the drafter.  The trial 
judge determined that the jury should decide who the drafter was 
and who should get the benefit of any ambiguities. 
Attorneys' Fees 
 
On May 23, 2011, Lawlor moved for over $2 million in 
attorneys' fees.  Lawlor argued that under the plain language of 
the Severance Agreement he was entitled to all reasonable fees 
incurred in the entire action, not merely the claim for breach 
of the Severance Agreement.  Paragraph 13 of the Severance 
Agreement states as follows: 
If a Participant commences a legal action to 
enforce any of the obligations of the Company 
under this Agreement and it is ultimately 
determined that the Participant is entitled to 
any payments or benefits under this Agreement, 
the Company shall pay the Participant the amount 
necessary to reimburse the participant in full 
for all reasonable expenses (including reasonable 
attorneys' fees and legal expenses) incurred by 
the Participant with respect to such action. 
 
ORC argued that Lawlor's claim for attorneys' fees was waived 
pursuant to Rule 3:25, because Lawlor failed to specifically 
state the basis for the request in his complaint. 
13 
 
 
The court denied Lawlor's motion for attorneys' fees, 
finding the basis for the demand was not sufficiently pled 
pursuant to Rule 3:25.  Lawlor filed a motion for 
reconsideration, which the court denied.   
 
On July 8, 2011, Lawlor filed a motion for leave to amend 
his complaint pursuant to Rule 1:8 in order to set forth with 
more specificity the basis for his demand for attorneys' fees.  
ORC claimed prejudice, arguing that it did not know Lawlor was 
going to request attorneys' fees for all of his claims.  ORC 
argued that if Lawlor was entitled to attorneys' fees, it was 
only for Count III because that was the only count related to 
the Severance Agreement.  A hearing on Lawlor's motion was held, 
after which the trial court granted the motion to amend, finding 
the posture of the case was still "pre-trial" as it concerned 
attorneys' fees, so the amendment was appropriate in accordance 
with Rule 1:8.  The trial court also held that under Delaware 
law, Lawlor was entitled to all of his attorneys' fees and 
expenses, not just the ones directly attributable to Lawlor's 
enforcement of the Severance Agreement.  The trial court then 
granted Lawlor's previously filed motion for award of fees and 
expenses and awarded him $2,131,034.75.   
 
ORC filed its notice of appeal, and we granted an appeal on 
the following assignments of error: 
14 
 
1. 
The trial court erred by refusing to hold, as a matter 
of law, that the Company underwent no "change in 
control" that would entitle Lawlor to the mandatory 
severance benefits that he claimed. 
 
2. 
The trial court erred by instructing the jury to 
construe any ambiguity in the contracts against the 
drafter; that rule of last resort was unnecessary to 
interpret the contract language and did not apply 
because Lawlor, the CEO and Chairman of the Board, 
directed and oversaw the drafting of the very 
documents he sought to enforce against the Company. 
 
3. 
The trial court erred by failing to reject Lawlor's 
alternative theory that he was entitled to mandatory 
severance benefits, even absent a change in control, 
because the plain language of the Severance Agreement 
did not alter the discretionary terms of the Company's 
severance policy. 
 
4. 
The trial court erred by failing to exclude the 
testimony of Lawlor's damages expert when he admitted 
he was unqualified to determine the value of the 
Company's stock, yet proceeded to choose speculative, 
high-end stock valuations to compute Lawlor's damages. 
 
5. 
The trial court erred in ruling the evidence 
sufficient to support Lawlor's unjust enrichment claim 
because there was no evidence ORC should reasonably 
have understood it was obligated to compensate Lawlor 
for the company-wide pay cut Lawlor instituted when he 
was Chairman and CEO. 
 
6. 
Because Lawlor should not have recovered for breach of 
the Severance Agreement in Count III – the only Count 
involving a fee-shifting provision – the trial court 
erred by awarding him attorney's fees and expenses. 
 
7. 
The trial court erred in holding that the Severance 
Agreement at issue in Count III entitled Lawlor to 
recover his legal fees for the entire case, including 
unsuccessful and unrelated counts. 
 
8. 
The trial court erred in permitting Lawlor to amend 
his complaint, post-verdict, to plead the basis for 
recovering attorneys' fees under Rule 3:25.  
 
15 
 
II. Analysis 
A. 
Change in Control 
i. 
Standard of Review 
"Whether the language of a contract is ambiguous is a 
question of law that we review de novo."  Preferred Sys. 
Solutions, Inc. v. GP Consulting, LLC, 284 Va. 382, 391, 732 
S.E.2d 676, 680 (2012).  We have said that "[c]ontract language 
is ambiguous when 'it may be understood in more than one way or 
when it refers to two or more things at the same time.'"  Id. 
(quoting Eure v. Norfolk Shipbuilding & Drydock Corp., 263 Va. 
624, 632, 561 S.E.2d 663, 668 (2002)).  Ordinarily it is the 
duty of the court to construe a written contract when it is 
clear and unambiguous on its face, but when a contract is 
ambiguous it is necessary to resort to parol evidence to 
ascertain the intention of the parties.  In such cases, if 
reasonable people could draw different conclusions, the meaning 
of the contract upon the evidence presented should be submitted 
to the jury.  See Greater Richmond Civic Recreation, Inc. v. 
A.H. Ewing's Sons, Inc., 200 Va. 593, 596, 106 S.E.2d 595, 597 
(1959).  
ii. Choice of Law 
The 1999 and 2005 Plans as well as the Severance Agreement 
contain provisions requiring that these instruments be 
interpreted under Delaware law.  However, at trial the parties 
16 
 
offered a potpourri of citations from Virginia and Delaware and 
elsewhere making it difficult to ascertain what law the parties 
thought controlled a particular issue.  Additionally, on appeal 
ORC cites Delaware law on matters which at trial it did not 
advance.  Throughout this opinion such discrepancies will be 
noted. 
iii. Analysis 
 
Lawlor advances two primary grounds for his assertion that 
there was a change in control sufficient to support the jury's 
award: 
(1) 
The 1999 Plan and the Severance Agreement include a 
change of a nature that would be required to be reported 
in response to section 1 of SEC Form 8-K,6 and 
(2) 
The 1999 and 2005 Plans and the Severance Agreement each 
provided that a change in control would occur when the 
"Incumbent Board" members ceased to have a majority. 
 
ORC maintains that, as a matter of law, there was no change 
in control and the question never should have been submitted to 
the jury.  Much of ORC's argument involves interpretation of 
Delaware corporate law.  However, this case is fundamentally a 
contract dispute.  Predominantly, in this case, whether there 
                                                          
 
 
6 It is unnecessary to address this basis for change of 
control because we resolve this question upon the second basis 
advanced. 
17 
 
was a change in control is a factual determination.  
Additionally, to the extent that the contractual provisions are 
ambiguous, it is proper to submit the question to the jury for 
consideration.  See Greater Richmond Civic Recreation, 200 Va. 
at 596, 106 S.E.2d at 597. 
 
A threshold question is presented: For determination of the 
number of directors required, does the term "Board" in these 
contract provisions unambiguously mean only the directors then 
sitting, or does it mean the total number of seats irrespective 
of whether the seat is filled?  Lawlor's argument on this 
question is two-fold: 
(1) 
the plain meaning of the contractual provisions provide 
that "Board" refers to the total number of directorships, 
and 
(2) 
at best, the provisions are ambiguous and the jury was 
permitted to resolve the matter. 
 
Considering the Severance Agreement, Lawlor notes that the 
term "Incumbent Board" refers to individuals who are defined and 
that a change in control occurs when the Incumbent Board ceases 
for any reason to be a majority of the Board.  He further argues 
that after he and Spalluto resigned, at most only five Incumbent 
Board members remained on the ten seat Board of Directors.  
Arguing that six seats are required for a majority under the 
18 
 
contract provisions, Lawlor asserts that a change of control 
took place. 
 
Additionally, Lawlor points to the testimony of Michael 
Bisignano, ORC's General Counsel and the principal drafter of 
the language in question.  He testified that unlike the term 
"Incumbent Board," the term "Board" did not refer to 
individuals, although he could have drafted the agreement in 
such a manner to so provide.  Also, Lawlor introduced into 
evidence the ORC Board of Directors Manual ("Manual") and argued 
that the Manual repeatedly used the term "Board of Directors" to 
refer to all seats. 
 
ORC seeks to incorporate Delaware corporate law into the 
Severance Agreement by asserting that "majority of the Board" 
has a "default" meaning that excludes vacant seats.  The record 
does not show that anyone intended such a meaning and the 
testimony of ORC's general counsel is contrary to such an 
interpretation of the contractual provisions. 
 
The resolution of the change in control question in this 
contractual dispute based upon Board membership is not a matter 
of Delaware corporate law.  Rather, it is a matter of contract 
interpretation.7  The trial court determined that the term 
                                                          
 
 
7 ORC states in its brief that the Delaware standards of 
contract interpretation are the same as Virginia standards, 
which may account for the citation of no Delaware cases on the 
subject. 
19 
 
"Board" was ambiguous, and that he could not decide "as a matter 
of law that incumbent Board members did or did not cease to 
constitute a majority of the Board."  Counsel for ORC conceded 
in his argument on the motion to strike that the "issue of is it 
seats or is it people", "I think reasonable people can disagree 
on that."  On the evidence presented, we cannot say that the 
trial court erred in submitting the question to the jury and we 
cannot say that the jury verdict was plainly wrong or without 
evidence to support it.  See Code § 8.01-680. 
B. 
Jury Instruction N 
i. 
Standard of Review 
 
When reviewing the substance of jury instructions given by 
a trial court, this Court's responsibility is to see that the 
law has been clearly stated and the instructions cover all 
issues which the evidence fairly raises.  Bennett v. Sage 
Payment Solutions, Inc., 282 Va. 49, 55, 710 S.E.2d 736, 740 
(2011).  A litigant is entitled to jury instructions supporting 
their theory of the case if there is sufficient evidence to 
support that theory and if the instructions correctly state the 
law.  Id.  There must be more than a scintilla of evidence 
introduced in support of a requested instruction.  Id.  The 
determination whether a jury instruction accurately states the 
relevant law is a question of law that we review de novo.  
20 
 
Orthopedic & Sports Physical Therapy Assocs. v. Summit Group 
Props., LLC, 283 Va. 777, 782, 724 S.E.2d 718, 721 (2012). 
ii. Analysis 
 
Jury Instruction N directed the jury to construe any 
ambiguities in the contracts against the drafter.  On appeal, 
ORC argues that under Delaware law the doctrine of contra 
proferentem is a rule of last resort and thus an instruction on 
this doctrine should not have been given in this case.  ORC 
cites numerous Delaware cases in support of its position on 
appeal.  At trial, however, ORC never raised any arguments under 
Delaware law or referred the trial court to any Delaware case 
law that would prohibit this instruction from being given.  The 
trial judge informed the parties that he was going to use a 
Virginia Model Jury Instruction instead of the federal model 
instructions or Delaware instructions the parties originally 
submitted.  The parties did not object to this decision by the 
trial court and have not assigned error to it on appeal.   
The only objection to the instruction offered by ORC was 
that Lawlor was not entitled to it because he participated in 
the drafting of the various contracts at issue.   That was the 
only argument made to the trial court against this instruction, 
and therefore that is the only argument we will consider on 
appeal.  Rule 5:25.  Accordingly, we will not consider the 
argument ORC makes on appeal based upon Delaware law. 
21 
 
At trial, Bisignano testified that he was the principal 
drafter and that Lawlor merely gave him several copies of form 
contracts.  The trial court judge found that both parties were 
involved in the drafting, and determined that he would grant 
Instruction N and leave it to the jury to decide who the drafter 
was as a matter of fact, and then apply the principle of contra 
proferentem. 
While it appears from the record that Lawlor did present 
"more than a scintilla" of evidence to support the proposition 
that he was not the drafter of the terms in question, a jury 
verdict based on an erroneous instruction need not be set aside 
if it is clear that the jury was not misled.  Riverside Hosp., 
Inc. v. Johnson, 272 Va. 518, 536-37, 636 S.E.2d 416, 426 
(2006).  Applying this principle, we conclude that even if 
Instruction N was improperly given, such error would not require 
the jury verdict to be set aside in this case.  The instruction 
did not dictate to the jury who the drafter was; rather, it left 
the contested issue to their resolution.   
C. 
Alternative Theory of Severance Benefits 
i. 
Standard of Review 
 
As noted at the outset of Part II above, whether the 
language of a contract is ambiguous is a question of law that is 
reviewed de novo.  Preferred Sys. Solutions, 284 Va. at 391, 732 
S.E.2d 676.  We have also held that contract language is 
22 
 
ambiguous when it may be understood in more than one way or when 
it refers to two or more things at the same time. Id.   
ii. Analysis 
The language of paragraph 1 of the Severance Agreement 
states that "[f]or terminations prior to the Protected Period, 
the severance benefits that are payable to the participant are 
as set forth in the Company's Severance Pay Policy in effect on 
the date of execution of this Agreement." 8  The phrase "are 
payable" has a mandatory connotation.  The benefits referenced 
in the Severance Pay Policy ("Severance Policy") are 
discretionary, as the Severance Policy states, "[s]everance pay 
and benefits are available for eligible employees in the event 
of an involuntary separation, not cause-related, to provide 
salary and benefit continuation to ease the employee's 
transition.  Severance eligibility is determined by Executive 
Management."  The Severance Policy also stated that all of its 
components were "subject to change without prior notice and as 
appropriate to reflect the current business and financial 
conditions of the company." 
ORC argues that the Severance Agreement does not supersede 
the Severance Policy, but merely references the Severance Policy 
as a secondary means of requesting severance if a change of 
                                                          
 
 
8 The Severance Agreement and the Severance Pay Policy are 
two different documents. 
23 
 
control has not occurred.  Lawlor asserts that the language "the 
severance benefits that are payable" clearly renders severance 
under the Severance Pay Policy mandatory rather than 
discretionary. 
It appears that both of these possible interpretations of 
the Severance Agreement are reasonable.  Because there is more 
than one reasonable way to understand this language, the 
language is ambiguous.  Accordingly, the circuit court did not 
err in holding that it was ambiguous and in permitting Lawlor to 
introduce extrinsic evidence to support his position. 
D. 
Expert Testimony 
i. 
Standard of Review 
"Whether a witness is qualified to testify as an expert is 
a matter within the sound discretion of the trial court and the 
trial court's decision will not be set aside on appeal unless 
the record clearly shows that the witness is unqualified."  
Lockheed Info. Mgmt. Sys. Co. v. Maximus, Inc., 259 Va. 92, 111, 
524 S.E.2d 420, 430 (2000).  The Court applies an "abuse of 
discretion standard when reviewing a trial court's decision to 
admit expert opinion testimony."  CNH America LLC v. Smith, 281 
Va. 60, 66, 704 S.E.2d 372, 375 (2011).  Expert testimony is 
admissible not only when scientific knowledge is required, but 
when experience and observation in a special calling give the 
24 
 
expert knowledge of a subject beyond that of persons of common 
knowledge and ordinary experience.  Id. 
ii. Analysis 
ORC argues that the trial court erred in permitting Reda to 
testify after he admitted that he was not an expert in stock 
valuation.  In CNH America, we held that the trial court abused 
its discretion in permitting the plaintiff's hydraulics expert 
to testify after admitting that he was not an expert in the 
specifics of disc mower hydraulics.  Id. at 69, 704 S.E.2d at 
376.  In that case, the expert was only qualified to testify 
regarding hydraulic systems generally, but he nonetheless 
testified about the hydraulic system of the specific disc mower 
at issue.  Id. at 65, 704 S.E.2d at 374. 
Reda was not offered as an expert in stock valuation; he 
was offered as an expert in executive compensation.  In reaching 
his determination of Lawlor's damages, Reda used two different 
stock prices in his calculations.  For the first calculation he 
used the stock price of $7.01 per share, which was the actual 
price that ORC stock reached in February 2011.  For the second 
calculation, he used the stock price of $10.53 per share, a 
number obtained from a Raymond James Investment Report that was 
prepared for ORC.  We previously affirmed a trial court's 
determination that the use of calculations by others "went to 
the weight of [the expert]'s testimony, not to his qualification 
25 
 
as an expert witness."  Lockheed, 259 Va. at 111, 524 S.E.2d at 
430.   
The jury awarded Lawlor the amount of damages that Reda 
calculated using the $7.01 per share stock price.  Because this 
stock price was the actual publicly traded stock price, it was 
reasonable for Reda to use that number in his calculations, and 
an independent valuation of the stock was not required to make 
his testimony admissible.  The fact that the stock price had 
dropped significantly since Reda performed his calculations 
using the $7.01 price per share was information that ORC could 
use on cross-examination and that the jury could consider when 
determining an award for damages; however, it did not affect the 
admissibility of Reda's testimony.  As in Lockheed, we cannot 
say that this expert was unqualified to offer the subject 
testimony.  Id. 
 
Unlike the expert in CNH America, Reda did not take general 
knowledge and apply it to specific unknowns in this case.  
Instead, Reda took reliable stock valuations that he did not 
calculate and used those valuations to create the specific 
calculation that he was well-qualified to compute.  Accordingly, 
the trial court did not abuse its discretion when it admitted 
Reda's expert opinion testimony.   
E. 
Unjust Enrichment 
i. 
Standard of Review 
26 
 
A judgment should be reversed for insufficient evidence 
only if it is "plainly wrong or without evidence to support it."  
Atrium Unit Owners Ass'n v. King, 266 Va. 288, 293, 585 S.E.2d 
545, 548 (2003) (internal quotation marks omitted). 
ii. Analysis 
ORC argues that the trial court erred in ruling that the 
evidence was sufficient to support Lawlor's unjust enrichment 
claim, because there was no evidence that "ORC should reasonably 
have understood it was obligated to compensate Lawlor for the 
company-wide pay cut Lawlor instituted when he was Chairman and 
CEO."  Lawlor contends the evidence was sufficient to prove that 
he worked for a substantially reduced salary and performed well, 
and that there was an understanding that he would be made whole 
in the future.  Although ORC moved to strike the unjust 
enrichment count, thereby preserving its claim regarding the 
sufficiency of the evidence, ORC did not object to the specific 
wording of the jury instruction on this issue.  It is well 
settled that instructions given without objection become the law 
of the case and thereby bind the parties in the trial court and 
this Court on review.  Owens-Illinois, Inc. v. Thomas Baker Real 
Estate, Ltd., 237 Va. 649, 652, 379 S.E.2d 344, 346 (1989). 
The instruction did not direct the jury to determine that 
ORC "should reasonably have understood it was obligated to 
compensate Lawlor."  Instead, the instruction first required a 
27 
 
finding that Lawlor conferred a benefit on ORC, which he did 
when he took the voluntary pay reduction.  Second, the 
instruction required a finding that ORC knew Lawlor was 
conferring a benefit.  There is no dispute that ORC knew Lawlor 
was taking a voluntary pay reduction.  Lastly, the instruction 
required a finding that ORC "accepted or retained the benefit 
under circumstances which would make it inequitable for [ORC] to 
retain the benefit without paying for its value."  Lawlor 
presented evidence that he took this pay cut with the 
understanding that in the future, when the company was doing 
better financially, he would be made whole.   
We cannot say that, viewed in the light most favorable to 
Lawlor, the jury's award on the unjust enrichment claim, based 
upon the instruction it was given, was plainly wrong or without 
evidence to support it.  
F. 
Attorneys' Fees 
i. 
Standard of Review 
 
The decision of the trial court to allow an amendment to 
the complaint for attorneys' fees is a determination within the 
sound discretion of the trial court.  On appeal, we review the 
trial court's decision for abuse of discretion.  See Peterson v. 
Castano, 260 Va. 299, 302-03, 534 S.E.2d 736, 738 (2000).  
Whether the Severance Agreement entitled Lawlor to recover his 
legal fees for all claims in the entire case is a question of 
28 
 
law, which this Court reviews de novo.  Cappo Management V, Inc. 
v. Britt, 282 Va. 33, 37, 711 S.E.2d 209, 210-11 (2011).    
ii. Post-Verdict Amendment 
 
Rule 1:8 provides in pertinent part that "[n]o amendments 
shall be made to any pleading after it is filed save by leave of 
court" and that "[l]eave to amend shall be liberally granted in 
furtherance of the ends of justice." 
 
Rule 3:25 provides in pertinent part that "[a] party 
seeking to recover attorney's fees shall include a demand 
therefor" and that "[t]he failure of a party to file a demand as 
required by this rule constitutes a waiver by the party of the 
claim for attorney's fees, unless leave to file an amended 
pleading seeking attorney's fees is granted under Rule 1:8." 
 
Lawlor attached the Severance Agreement to his Second 
Amended Complaint.  Rule 1:4(i) provides: "The mention in a 
pleading of an accompanying exhibit shall, of itself and without 
more, make such exhibit a part of the pleading." In his 
complaint, Lawlor alleged a breach of the Severance Agreement in 
Count III, and in his prayer for relief, he requested attorneys' 
fees. 
It is undisputed that both parties agreed to wait until 
after trial on the merits to litigate the issue of attorneys' 
fees.  ORC contends that the trial court abused its discretion 
by allowing Lawlor to amend his complaint to include a more 
29 
 
specific reference to the Severance Agreement, which was the 
basis for Lawlor's fee request.  ORC argues that under this 
Court's holding in Powell v. Sears, Roebuck & Co., 231 Va. 464, 
344 S.E.2d 916 (1986), post-verdict amendments are not 
permitted.   
The trial court in this case determined that Powell's 
restriction on post-verdict amendments did not apply because the 
parties were "not post-verdict on attorney fees."  While we 
disagree with the trial court's determination that the 
attorneys' fee issue was "not post-verdict," we hold that in the 
context of this case, it was not an abuse of discretion to 
permit recovery of attorneys' fees. 
A review of ORC's brief illuminates the real issue.  ORC 
states, "[f]or while Lawlor's counsel had disclosed before trial 
that he planned to seek fees under Count 3, he failed to 
disclose that he would seek fees for all of the other counts, 
even if he lost them."  ORC's admission reveals that an 
amendment on this issue was unnecessary regarding claims for 
attorneys' fees under Count III, but may have been necessary to 
cover additional fees under an expanded theory under Delaware 
law characterized by Lawlor as an "all or nothing" recovery. 
Because we reject Lawlor's theory regarding expanded recovery of 
legal fees, he is left with recovery only under Count III, a 
30 
 
claim that ORC admits was properly identified at trial.  See 
Part II.F.iii., infra. 
iii. Amount of Fees 
 
Paragraph 13 of the Severance Agreement states: 
If a Participant commences a legal action to 
enforce any of the obligations of the Company 
under this Agreement and it is ultimately 
determined that the Participant is entitled to 
any payments or benefits under this Agreement, 
the Company shall pay the Participant the amount 
necessary to reimburse the participant in full 
for all reasonable expenses (including reasonable 
attorneys' fees and legal expenses) incurred by 
the Participant with respect to such action. 
 
(Emphasis added.)  A plain reading of this paragraph makes it 
clear that a participant is only entitled to attorneys' fees and 
legal expenses for legal actions brought to enforce obligations 
of ORC "under this Agreement."   
 
Curiously, ORC contends that our holding in Ulloa v. QSP, 
Inc., 271 Va. 72, 624 S.E.2d 43 (2006), is controlling and bars 
Lawlor's recovery of attorneys' fees for anything beyond Count 
III, and that the trial court mistakenly ruled that Delaware law 
entitled Lawlor to fees on all counts on an "all or nothing" 
basis.  We note that the Severance Agreement is governed by 
Delaware law, and our holding in Ulloa is therefore 
inapplicable.  We must, therefore, examine Delaware law and the 
cases relied upon by the trial court. 
31 
 
In reaching its determination that Lawlor was entitled to 
all of his attorneys' fees and expenses, the trial court relied 
upon West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 
2009 Del. Ch. LEXIS 23 (Del. Ct. Ch. 2009),  Comrie v. Enterasys 
Networks, Inc., 2004 Del. Ch. LEXIS 53 (Del. Ct. Ch. 2004), and 
Brandin v. Gottlieb, 2000 Del. Ch. LEXIS 97 (Del. Ct. Ch. 2000), 
to reach its conclusion that Delaware law espouses an "all or 
nothing" approach to attorneys' fees.  However, all of those 
cases involved situations distinguishable from the facts in this 
case. 
In all three of the cited cases, the issue before the court 
was whether the party seeking attorneys' fees was a "prevailing 
party" since they had not been successful on all the claims they 
brought.  Additionally, in each of these cases, the court 
interpreted provisions of a particular agreement.  The court in 
all three cases determined that under the "all or nothing" 
approach, the party who prevailed on any of their claims was the 
"prevailing party" and they were entitled to all their fees, 
even fees for the claims they lost.  See West-Willow Bay Court, 
2009 Del. Ch. LEXIS 23 at *31-34 & n.58 (holding that the 
plaintiff was entitled to all of its fees for the breach of 
contract action, even though the plaintiff was denied specific 
performance); Comrie, 2004 Del. Ch. LEXIS 53 at *7-11 (holding 
that the court's decision rested solely on a breach of contract 
32 
 
theory and the plaintiffs were the prevailing party even though 
they only received 28% of the remedy sought); Brandin, 2000 Del. 
Ch. LEXIS 97 at *86-92 and n.76 (holding that plaintiff was the 
prevailing party and entitled to all of her litigation expenses 
even though she was unsuccessful on some of her claims).  All of 
the claims in these cases were related to breach of the same 
underlying agreement or contract.  In the present case, by 
contrast, Lawlor's claims for unjust enrichment, wrongful 
termination, breach of 2005 Plan and breach of 1999 Plan were 
separate from the claim to enforce ORC's obligations under the 
Severance Agreement. 
 
Because, as noted above, we affirm the jury's verdict for 
breach of the Severance Agreement in Count III, we hold that the 
trial court would be correct in awarding Lawlor attorneys' fees 
and expenses with respect to that count.  However, the trial 
court erred in awarding Lawlor his attorneys' fees and expenses 
for the claims outside of Count III.  We note that Lawlor did 
not prevail on his claim for wrongful termination but the 
attorneys' fees calculation was apparently included this claim.  
We reverse the trial court's award of $2,131,034.75 in 
attorneys' fees and remand this matter to the trial court for a 
determination of the amount of attorneys' fees and expenses 
Lawlor incurred as a result of enforcing ORC's obligations under 
the Severance Agreement.  We are mindful that such a 
33 
 
determination will require careful consideration of overlapping 
issues. 
III.  Conclusion 
 
We hold that the trial court did not err when it: 
(1) 
refused to hold, as a matter of law, that no change in 
control occurred; held that the language regarding change 
in control was ambiguous; submitted the question to the 
jury; and held that the evidence was sufficient to support 
and affirm the jury's award;   
(2) 
gave Jury Instruction N;  
(3) 
submitted Lawlor's alternative theory of severance benefits 
to the jury; and 
(4) 
held the evidence was sufficient to support Lawlor's unjust 
enrichment claim. 
 
Additionally, we hold that the trial court did not abuse 
its discretion when it: 
(1) 
permitted James Reda to testify as Lawlor's damages expert; 
and 
(2) 
awarded attorneys' fees and expenses for breach of the 
Severance Agreement. 
 
However, we hold that the trial court erred in determining 
the Severance Agreement entitled Lawlor to recover his legal 
fees for claims that were not related to breach of the Severance 
Agreement.  
34 
 
 
Accordingly, we will affirm the judgment of the trial court 
in part, reverse in part and remand for further proceedings 
consistent with this opinion. 
Affirmed in part, 
reversed in part, 
and remanded. 
 
 
JUSTICE MCCLANAHAN, with whom Justice Mims joins, concurring in 
part and dissenting in part. 
 
The majority's disposition of the change in control issue 
in this case ignores the language of the contracts and 
disregards fundamental principles of corporate governance.  In 
every contract at issue here, the parties agreed that the 
contract was to be controlled by Delaware law.  Virginia 
respects such choice of law clauses.  Paul Business Sys., Inc. 
v. Canon U.S.A., Inc., 240 Va. 337, 342, 397 S.E.2d 804, 807 
(1990) ("[W]here parties to a contract have expressly declared 
that the agreement shall be construed as made with reference to 
the law of particular jurisdiction, we will recognize such 
agreement and enforce it, applying the law of the stipulated 
jurisdiction.").  Delaware law thus applies to this case. 
"One of the most basic tenets of Delaware corporate law is 
that the board of directors has the ultimate responsibility for 
managing the business and affairs of a corporation."  Quickturn 
Design Sys., Inc. v Shapiro, 721 A.2d 1281, 1291 (Del. 1998).  
35 
 
Thus, the Board of Directors controls the company, not the CEO.  
See Del. Code Ann. tit. 8, § 141(a) ("The business and affairs 
of every corporation . . . shall be managed by or under the 
direction of a board of directors.").  In fact, the CEO only has 
powers such as may be granted by the board of directors.  See 
Del. Code Ann. tit. 8, § 142(a).  Simply put, for a change of 
control to occur, the body with the control must change; a 
change in the control, power, or influence of the CEO is 
irrelevant. 
It is with these core concepts in mind that we must analyze 
whether there has been a "change in control" under the 2005 
Plan, the 1999 Plan, and the Severance Agreement (the 
contracts).  And, the context of the contracts cannot be 
ignored.  "In Delaware, contract interpretation is a matter of 
law.  The intent of the parties is ascertained from the language 
of the contract in its context."  Fujisawa Pharm. Co., Ltd. v. 
Kapoor, 655 A.2d 307 (Del. 1995) (citations omitted).  The 
majority opines that the majority of the board could be 
reasonably interpreted as a majority of the total number of 
seats on the board, rather than the majority of the occupied 
seats.  However, in the context of control by the incumbent 
members and any change therefrom, empty seats cannot be 
considered; empty seats on the board are irrelevant to a 
controlling majority.  Unoccupied seats hold no power of control 
36 
 
and the number of unoccupied seats cannot diminish the majority 
voting power.  Regardless of the number of unoccupied seats, as 
long as the incumbent board retains a majority of the voting 
power, it retains the power of the board and control over the 
company.  All three contracts state that there is a change of 
control if the incumbent board "cease[s] for any reason to 
constitute at least a majority of the Board." To conclude that 
there was a change in control in this board, one must reject the 
reality that incumbent members of the board held a majority 
voting power of the board of directors – the body of control – 
throughout the events of this controversy. 
The 1999 Plan and the Severance Agreement mandate that a 
change of control also occurs when there is a change in control 
"of a nature that . . . would be required to be reported . . . 
pursuant to . . . the [Securities] Exchange Act."  The SEC 
definition of control focuses on the power to direct the 
management and policies of a company – that is the board's 
function.1  Del. Code Ann. tit. 8, § 141(a).  Consistent 
therewith, under general corporate law principles, the power to 
direct a company lies in the board of directors, not any single 
                                                          
 
1 SEC regulations define "control" as "the possession, direct 
or indirect, of the power to direct or cause the direction of 
the management and policies of a person, whether through the 
ownership of voting securities, by contract, or otherwise."  17 
C.F.R. § 240.12b-2 (2011).  The term "person" includes a company 
under 15 U.S.C. § 78c(a)(9). 
37 
 
individual.  Del. Code Ann. tit. 8, § 142(a).  Although Lawlor 
saw the company as his own, control rested with the board of 
directors.  Id.  And, the mere waning of a single director's 
power is not enough to constitute a change in control that then 
must be reported to the SEC.  To hold otherwise would be a 
breathtakingly radical application of the law of corporate 
governance.  
Additionally, Lawlor's alternative theory of severance 
benefits should not have been submitted to the jury because the 
language of the contract was not ambiguous.  As the majority 
notes, the Severance Agreement stated that, in the event there 
was no change in control, "severance benefits that are payable 
to the participant are as set forth in the Company's Severance 
Pay Policy in effect at the date of the execution of this 
Agreement."  The referenced Severance Pay Policy states that 
payments under this plan are under the discretion of executive 
management.  The incorporation by reference of the Severance Pay 
Policy in the Severance Agreement does not transform the nature 
of the payments under the Severance Pay Policy from a 
discretionary matter to a mandatory one, particularly in light 
38 
 
of sections 2 and 3 of the Severance Pay Policy granting 
executive management power over such payments.2 
In sum, because I believe there was no change in control as 
a matter of law, I would hold the trial court erred in 
submitting Lawlor's claims for mandatory severance benefits to 
the jury and would reverse the trial court's judgment awarding 
damages on those claims.  Since I do not believe the issue of 
change of control should have been submitted to the jury for 
consideration, I would not reach the issues related to the 
admission of the expert testimony and award of attorneys' fees 
and expenses.  However, I agree that, based on the jury 
instruction submitted without objection, the evidence was 
sufficient to submit the claim for unjust enrichment and would 
affirm the trial court's judgment awarding damages on that 
claim. 
                                                          
 
2 Section 2 states that "Severance pay and benefits are 
typically provided . . . as deemed appropriate by Executive 
Management."  Section 3 states that "Severance pay and benefits 
are available for eligible employees [as] determined by 
Executive Management."