Title: Advanced Marine Enterprises v. PRC
Citation: N/A
Docket Number: 971950
State: Virginia
Issuer: Virginia Supreme Court
Date: June 5, 1998

Present:  All the Justices 
 
ADVANCED MARINE  
ENTERPRISES, INC., ET AL. 
 
v.  Record No. 971950   OPINION BY JUSTICE BARBARA MILANO KEENAN  
 
 
 
June 5, 1998 
PRC INC. 
 
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY 
Paul F. Sheridan, Judge 
 
 
In this appeal, we consider issues in a chancery proceeding 
involving both equitable and legal claims arising from an 
alleged business conspiracy and breach of an employment 
agreement. 
 
PRC Inc. (PRC) is a Delaware corporation that, among other 
things, provided marine engineering services under contract to 
the United States Navy.  Included in those services was 
"shipbuilding support" that PRC rendered to the Naval Sea 
Systems Command (NAVSEA).  Advanced Marine Enterprises, Inc. 
(AME), a Virginia corporation engaged in the business of marine 
engineering, also provided services under contracts with the 
Navy, including NAVSEA. 
PRC requires every new employee to sign a uniform 
Employment Agreement as a condition of employment.  The 
Employment Agreement obligates PRC employees to protect PRC's 
proprietary information and to refrain from disclosing such 
information to individuals outside the company.  The Employment 
Agreement also contains a non-competition provision, which 
provides in relevant part: 
Employee agrees not to compete with PRC for a period of 
eight months following termination of employee's 
employment, by rendering competing services to or, with 
respect to such services, solicit any customer of PRC for 
whom Employee performed services while employed by PRC, 
within 50 miles of a PRC office. 
 
 
At various times during 1995, due to the loss of certain 
marine engineering contracts, PRC informed some of its marine 
engineering employees that they should look for other 
employment.  On December 13, 1995, PRC announced that the 
company would be sold to Litton Industries, Inc. (Litton).1
In November 1995, prior to the announcement of the sale, C. 
Michael Pirrera, a senior manager in PRC's marine engineering 
department, contacted AME and inquired whether AME would be 
interested in employing all seven managers from PRC's marine 
engineering department (PRC Managers).  When AME expressed 
interest in hiring the PRC Managers, AME and the PRC Managers, 
led by Pirrera, formed a plan (the Plan) under which AME would 
attempt to hire every employee in the PRC marine engineering 
department. 
                     
1Due to a conflict of interest caused by the sale to Litton, 
PRC was later required to sell one of its primary marine 
engineering contracts, the 400D contract, to a buyer other than 
Litton.  In April 1996, PRC entered into a contract with Tracor, 
Inc., the parent company of Vitro Corporation (Vitro), for the 
sale of the "400D unit," which covered the 400D contract and 
approximately 80 PRC employees. 
 
2
Under the Plan, AME agreed to make secret job offers to all 
employees in PRC's marine engineering department.  These 
employees would be required to resign on the same day, December 
29, 1995, without notice to PRC, despite PRC's requirement that 
employees provide two weeks notice of their intent to leave 
PRC's employ.  The Plan's objective was to transfer PRC's entire 
marine engineering department to AME, including the PRC 
Managers, the other employees, all customer relationships, and 
all existing contracts.  As one PRC Manager stated, the idea was 
"to put together an entity that the [PRC] customer can't live 
without." 
AME knew about the terms of PRC's Employment Agreement 
before implementing the Plan.  AME was aware that it faced a 
potential lawsuit by PRC to enforce the Employment Agreement, 
and that PRC could assert other causes of action against AME, 
such as tortious interference with contract.  After projecting 
the nature and amount of damages that might result from a 
lawsuit by PRC, AME decided that the benefits of the Plan 
outweighed the potential consequences of a lawsuit. 
To implement the Plan, some of the PRC Managers developed a 
"matrix" describing how the PRC Managers would obtain the 
business of PRC's marine engineering department.  This "matrix" 
included detailed confidential and proprietary information about 
PRC's workload, the value of certain work, and the amount of 
 
3
government funding available for each job in PRC's marine 
engineering department.  The "matrix" also evaluated each of 
PRC's jobs regarding the ease with which the job could be 
"pulled" from PRC or "diverted" to AME. 
Based on employee information supplied by the PRC Managers, 
AME prepared "offer" letters to each of the PRC Managers and 
other marine engineering employees and authorized Pirrera to 
negotiate salaries with each employee.  The "offer" letters 
included a provision in which AME agreed to indemnify and hold 
harmless each PRC employee against any claim, demand, damage, or 
injury asserted by PRC in connection with the employee's 
employment by AME. 
The PRC Managers devised a schedule for distributing the 
"offer" letters to the PRC employees based on the PRC Managers' 
concern that some employees might "blab" to PRC after receiving 
their AME "offer" letter.  Under this schedule, the PRC Managers 
planned to give job offers to those PRC employees who might 
"blab" only after offers were given to the employees who were 
unlikely to "blab." 
The PRC Managers distributed the "offer" letters in mid-
December 1995.  The PRC Managers delivered each letter 
personally, encouraged each employee to accept AME's offer, and 
emphasized the need to keep PRC from gaining knowledge of the 
 
4
Plan prior to December 29, 1995, the date of the scheduled mass 
resignation. 
On December 20, 1995, Pirrera learned that rumors of the 
Plan might "leak out" to PRC.  In response, Pirrera sent an "e-
mail" message to the other PRC Managers on December 21, 1995, 
which stated: 
Subject: Execute 
Gentlemen: 
 
Based on yesterday's events we need to do the 
following: 
 
With the exception of the highest risk team 
members (i.e., people we are absolutely sure will 
blab), talk to the rest of the team today. 
 
 
Determine task backlogs immediately. 
 
 
Back up computer files immediately. 
 
Transfer files to client sites immediately. 
 
Remember gentlemen, we got to this point as a team and 
we will see this through as a team.  Let's roll! 
 
Mike 
 
 
On December 29, 1995, the whole group of 26 managers and 
employees from PRC's marine engineering department submitted 
letters resigning their employment with PRC, effective 
immediately.  Before leaving PRC and without PRC's knowledge or 
consent, many of the PRC Managers and other PRC employees copied 
their client files and sent the files to client sites so that 
the files would be available once the employees began working at 
 
5
AME.  Many of the PRC Managers and employees also made "back up" 
copies of PRC computer documents and files, which they removed 
from PRC without PRC's knowledge.  Some PRC Managers and 
employees also removed, without PRC's consent, various documents 
pertaining to ongoing projects and work in progress at PRC.  In 
many cases, there were no similar documents left at PRC.  All of 
the above-described information constituted confidential and 
proprietary information of PRC. 
 
In January 1996, PRC filed a bill of complaint against AME, 
two AME executives, the former PRC Managers, and the other 
former PRC marine engineering employees.2  Among other things, 
the bill of complaint contained a request for a temporary 
restraining order to prevent the defendants from using or 
disseminating PRC's confidential and proprietary information and 
from soliciting or performing services for their former PRC 
customers.  The chancellor entered the temporary restraining 
order on January 2, 1996, but later modified its terms to 
exclude AME's business with governmental entities. 
 
As amended, the bill of complaint also asserted both legal 
and equitable claims for relief.  The five Counts relevant to 
this appeal are: 1) breach of fiduciary duty (Count I); 2) 
intentional interference with contractual relations (Count II); 
                     
 
2In April 1996, AME signed a letter of intent with Nichols 
Research Corporation (Nichols) to sell AME to Nichols. 
 
6
3) intentional interference with prospective business and 
contractual relations (Count III); 4) specific performance and 
breach of the Employment Agreement (Count IV); and 5) violation 
of Code § 18.2-499 (Count VII). 
 
The matter was tried before a chancellor, who heard 
testimony from two expert witnesses and 41 other witnesses.  PRC 
presented the testimony of Mark Bleiweis, a certified public 
accountant, who is an expert in the area of damage calculation 
in contract disputes.  Bleiweis estimated that, of the several 
types of economic damage suffered by PRC in the loss of its 
marine engineering unit to AME, the largest amount of damages 
resulted from lost goodwill.  Bleiweis defined goodwill as the 
excess of the sales price of a business over the fair market 
value of the business' identifiable assets. 
To estimate the lost goodwill associated with the departure 
of the PRC Managers and employees, Bleiweis examined two sales 
of comparable businesses, PRC's sale of its 400D unit to Vitro 
and the sale of AME to Nichols.  Bleiweis subtracted the value 
of each "comparable company's" assets from its sales price to 
determine the goodwill associated with each comparable sale.  
With respect to the Vitro sale, he then adjusted this figure to 
reflect the value to Vitro associated with the funded 400D 
contract.  To account for the larger number of employees 
involved in both comparable sales, Bleiweis apportioned the 
 
7
estimated goodwill figure for each of the two comparable 
businesses among the total number of employees involved in each 
transaction. 
This calculation yielded a ratio or percentage that 
Bleiweis applied to calculate the goodwill lost by AME's 
acquisition of the 26 PRC employees.  Using the Vitro sale, 
Bleiweis estimated that PRC sustained $925,123 in goodwill 
damages from the loss of its marine engineering unit to AME.  
Using the sale of AME to Nichols, Bleiweis estimated that PRC's 
lost goodwill damages were $841,965. 
Bleiweis also testified that PRC will suffer a loss of 
profits as a result of the departure of the PRC Managers and 
employees.  Bleiweis estimated that the present value of the 
expected lost profits was $265,655, based on the revenues that 
the former employees' labor would have generated for PRC.  
However, he testified that these damages were included in his 
estimate of lost goodwill. 
 
AME, the AME executives, and the PRC Managers and employees 
(collectively, "AME") offered the testimony of Edward H. Ripper, 
a certified public accountant, as an expert in government 
contract accounting claims and valuation.  Ripper testified that 
Bleiweis' conclusions were "substantially overstated," "highly 
speculative," and contained many "calculation[] errors."  Ripper 
provided several adjustments to Bleiweis' figures and concluded 
 
8
that PRC suffered zero damages from lost goodwill when Bleiweis' 
method was properly applied to the Vitro sale figures.  Ripper 
also testified that the Vitro and Nichols sales were not true 
"comparable" sales. 
 
On June 19, 1996, the chancellor found in favor of PRC on 
all counts at issue in this appeal, stating, "I think the method 
by which the [PRC Managers] elected to do this was covert, 
surreptitious, violated civil duties, [and] was absolutely 
wrong."  During post-trial hearings, the chancellor stated that 
"[t]he total impact of this thing was outrageous.  This was a 
group wrong, and they were intending to disadvantage their 
employer while sitting there silent setting up their own 
employer for the benefit of themselves and the benefit of AME." 
Ruling from the bench, the chancellor awarded $1,245,062 in 
compensatory damages on each of Counts I, II, III, and VII.  
Although this amount was awarded on each of these four Counts, 
the chancellor did not aggregate these amounts but entered a 
single compensatory damage award of $1,245,062.  Under Code 
§ 18.2-500, the chancellor then trebled the $1,245,062 
compensatory damage award entered on Count VII.  Thus, the total 
amount of non-punitive damages awarded was $3,735,186. 
The chancellor awarded punitive damages in the amount of 
$1,000,000 against AME, noting that he might be required to 
reduce that amount to $350,000 under Code § 8.01-38.1.  He also 
 
9
awarded varying amounts of punitive damages against certain PRC 
Managers and employees. 
The chancellor took under advisement AME's argument that 
the award of treble damages under Code § 18.2-500 was subject to 
the punitive damages ceiling fixed by Code § 8.01-38.1.  He also 
awarded PRC attorney's fees and costs, but deferred computation 
of those amounts to a later hearing. 
On Count IV, based on breach of the non-competition clause 
of the Employment Agreement, the chancellor enjoined certain PRC 
Managers and employees for seven and one-half months from 
performing services for and soliciting work from those NAVSEA 
jobs for which each manager or employee provided services while 
employed by PRC.  The chancellor stayed the injunction pending 
resolution of this appeal, and ruled that if the damages he 
awarded are approved on appeal, the injunction will be 
dissolved.3
After a hearing on several post-trial motions, the 
chancellor entered the final decree on June 18, 1997, about one 
year after the trial.  He essentially incorporated the terms of 
his bench ruling, but reduced the punitive damage award against 
AME to $350,000 to comply with the terms of Code § 8.01-38.1.  
He awarded PRC $475,000 in attorney's fees under Count VII (Code 
                     
 
3AME does not assign error to the conditional nature of the 
chancellor's injunction. 
 
10
§§ 18.2-499 and -500).  He also awarded PRC $113,365.56 in costs 
under Count VII.  The costs awarded included $47,922.73 for 
PRC's expert witness fees, $27,826.31 for transcripts, and 
expenses for other costs such as meals, legal research, parking, 
cab fare, law clerk "temporaries," overnight delivery services, 
messenger services, telephone calls, and photocopying charges.  
The chancellor also ruled that PRC was entitled to receive 
prejudgment interest on the entire award from June 19, 1996, the 
date of his bench ruling. 
On appeal, AME argues that the chancellor erred in (1) 
ruling that AME violated Code § 18.2-499, (2) enforcing the non-
competition covenant of the Employment Agreement, (3) his 
calculation of PRC's lost goodwill and profits and his 
determination that PRC met its burden of proving damages, (4) 
awarding punitive and treble damages, (5) awarding PRC costs, 
and (6) awarding PRC prejudgment interest. 
I. VIOLATION OF CODE § 18.2-499 
 
AME asserts that the chancellor erred in finding AME 
conspired to injure PRC in its business in violation of Code 
§ 18.2-499.  AME contends that to establish a violation of the 
statute, PRC was required to prove that AME acted with the 
purpose of injuring PRC.  AME argues that since the chancellor 
failed to apply this evidentiary standard, his finding that AME 
violated the statute constitutes reversible error.  AME also 
 
11
asserts that there was no evidence AME acted with the purpose of 
injuring PRC.  We disagree with AME's arguments. 
In Commercial Business Systems, Inc. v. BellSouth Services, 
Inc., 249 Va. 39, 453 S.E.2d 261 (1995), we addressed the 
question whether a violation of Code § 18.2-499 requires proof 
of actual malice.  There, the plaintiff alleged that the 
defendant's employee, in violation of Code § 18.2-499, conspired 
to destroy the plaintiff's reasonable business expectancy for a 
contract renewal with the defendant corporation by awarding a 
contract to the plaintiff's competitor in exchange for 
commercial bribes.  The trial court granted the defendant's 
motion for summary judgment on the ground that the plaintiff 
failed to prove actual malice, which required the plaintiff to 
establish that the conspirator's primary and overriding purpose 
was to injure the plaintiff's trade or business.  Id. at 46-47, 
453 S.E.2d at 266-67. 
We reversed the trial court, holding that the plaintiff was 
not required to prove actual malice.  We stated that Code 
§§ 18.2-499 and –500 do not require a plaintiff to prove that a 
conspirator's primary and overriding purpose is to injure 
another in his trade or business.  Id. at 47, 453 S.E.2d at 267.  
Rather, we explained that these statutes merely require proof of 
legal malice, that is, proof that the defendant acted 
 
12
intentionally, purposefully, and without lawful justification.  
Id.
PRC's evidence was plainly sufficient to meet this standard 
of proof.  The individuals in the business conspiracy 
participated in a scheme to take the entire marine engineering 
department from PRC and relocate the department at AME.  As 
stated above, AME and the PRC Managers and employees planned and 
implemented this scheme in secrecy while the PRC Managers and 
employees were still employed by PRC.  The PRC Managers and 
employees planned and executed a mass resignation without notice 
to PRC.  They took from PRC original client documents and copies 
of documents containing confidential and proprietary information 
without PRC's permission or knowledge.  Thus, we conclude that 
the evidence supports the chancellor's finding that AME 
conspired to injure PRC in its business in violation of Code 
§§ 18.2-499 and -500. 
II. NON-COMPETITION CLAUSE OF EMPLOYMENT AGREEMENT 
 
AME asserts that the non-competition clause in the 
Employment Agreement was unenforceable because it was 
unreasonably broad, unduly harsh, and oppressive.  We disagree. 
To determine whether a non-competition agreement may be 
enforced, a chancellor must consider the following criteria: 
(1) Is the restraint, from the standpoint of  
the employer, reasonable in the sense that it 
is no greater than necessary to protect the 
 
13
employer in some legitimate business interest? 
 
(2) From the standpoint of the employee, is the 
restraint reasonable in the sense that it is not 
unduly harsh and oppressive in curtailing his 
legitimate efforts to earn a livelihood? 
 
(3) Is the restraint reasonable from the standpoint 
of a sound public policy?  
 
New River Media Group, Inc. v. Knighton, 245 Va. 367, 369, 429 
S.E.2d 25, 26 (1993)(quoting Roanoke Eng. Sales v. Rosenbaum, 
223 Va. 548, 552, 290 S.E.2d 882, 884 (1982)); accord Blue Ridge 
Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369, 371-72, 
389 S.E.2d 467, 468-69 (1990). 
In New River Media, we enforced a non-competition agreement 
in which a radio disc jockey contracted not to engage in a 
competing business within 60 air miles of his employer's radio 
station for 12 months after leaving his employment.  245 Va. at 
369-70, 429 S.E.2d at 26-27.  In Roanoke Engineering Sales, we 
enforced an agreement that prohibited a corporate officer from 
competing with his employer for three years in any similar 
business located in Virginia or North Carolina that covered the 
same sales territory served by the employer.  223 Va. at 553, 
290 S.E.2d at 885. 
When compared with these agreements, the non-competition 
provision before us is not unduly harsh and oppressive in 
curtailing the legitimate efforts of former PRC employees to 
earn a livelihood.  The restraints imposed also are reasonable 
 
14
from the standpoint of a sound public policy.  The non-
competition provision does not contain a blanket prohibition 
against working for a competitor.  Instead, the covenant merely 
prohibits an employee for eight months from "rendering competing 
services to or, with respect to such services, solicit[ing] any 
customer of PRC for whom Employee performed services while 
employed by PRC, within 50 miles of a PRC office." 
The agreement's geographic limitation is not rendered too 
burdensome because PRC has approximately 300 offices worldwide.  
In the context of the brief time period involved and the narrow 
definition of prohibited services, the geographic restriction 
does not pose an unreasonable restraint on departing employees.  
Likewise, the restriction on solicitation of PRC customers is 
reasonable because the restriction is limited to the same eight-
month period and was interpreted by the chancellor as applying 
only to certain specialized engineering areas of NAVSEA and 
individuals serviced by each employee while employed by PRC.  
Thus, the record supports the chancellor's conclusion that the 
non-competition provision is valid and enforceable. 
We also find no merit in AME's contention that the eight-
month period provided in the non-competition clause has expired 
and may not be enforced.  On January 2, 1996, the chancellor 
entered a temporary injunction enforcing the terms of the non-
competition clause.  For "public policy" reasons relating to 
 
15
nature of the work and the governmental status of actual and 
potential "customers," the chancellor lifted the injunction two 
weeks later with regard to AME's business with governmental 
entities.  Thus, since the portion of the injunction involving 
governmental entities was in effect only for two weeks, the 
chancellor did not err in ruling that seven and one-half months 
out of the eight-month prohibition on competition still may be 
enforced with respect to such governmental entities.  See Blue 
Ridge Anesthesia, 239 Va. at 374, 389 S.E.2d at 470; Paramount 
Termite Control Co. v. Rector, 238 Va. 171, 176-77, 380 S.E.2d 
922, 926 (1989); Roanoke Eng. Sales, 223 Va. at 556, 290 S.E.2d 
at 886. 
III. "GOODWILL" DAMAGES AND SUFFICIENCY  
OF EVIDENCE OF DAMAGES 
 
AME contends that the chancellor erred in accepting PRC's 
evidence of damages, including its evidence of lost goodwill and 
profits.  AME argues that PRC's evidence was based on flawed 
methodology and speculative calculations.  Specifically, AME 
asserts that the chancellor failed to consider that PRC's marine 
engineering department made a profit of only $45,108 in 1995, 
and that the price for the sale of PRC to Litton did not change 
after the departure of the PRC Managers and employees.  We 
disagree with AME's arguments. 
 
16
 
As trier of fact, the chancellor evaluated the testimony 
and the credibility of the witnesses.  See RF&P Corp. v. Little, 
247 Va. 309, 321, 440 S.E.2d 908, 916 (1994); Richardson v. 
Richardson, 242 Va. 242, 246, 409 S.E.2d 148, 151 (1991).  We 
will not set aside his findings on appeal unless they are 
plainly wrong or without evidentiary support.  Willis v. 
Magette, 254 Va. 198, 201, 491 S.E.2d 735, 736 (1997); RF&P 
Corp., 247 Va. at 321, 440 S.E.2d at 916. 
After hearing detailed testimony from Bleiweis, PRC's 
expert, and Ripper, AME's expert, the chancellor accepted 
Bleiweis' methodology and evidence of damages.  We cannot say, 
as a matter of law, that the chancellor's determination was 
plainly wrong. 
In determining PRC's damages for lost goodwill, the 
chancellor accepted Bleiweis' variation of the market value 
approach, a frequently-used method for computing goodwill 
damages that is based on the difference between the price a 
business would sell for and the value of its non-goodwill 
assets.  See Russell v. Russell, 11 Va. App. 411, 416, 399 
S.E.2d 166, 169 (1990).  Because there was no sale associated 
with the transfer of the PRC Managers and employees to AME, 
Bleiweis utilized a variation of this approach by determining 
the value of goodwill associated with comparable sales and 
adjusting this figure to approximate PRC's lost goodwill caused 
 
17
by the departure of the PRC Managers and employees.  Ripper 
never criticized Bleiweis' use of the market value approach, but 
only stated that Bleiweis made certain errors in applying this 
method. 
The chancellor found that the closest comparable sale for 
purposes of measuring lost goodwill was PRC's sale of the 400D 
unit to Vitro.  The evidence showed that the purchase agreement 
between Vitro and PRC identified the goodwill associated with 
that sale by providing that Vitro would pay PRC $4,424,091 more 
than the value of the tangible assets involved.  Using Bleiweis' 
methodology, the chancellor decreased this amount to reflect the 
value that Vitro would receive from the funded 400D contract and 
then adjusted the resulting figure to reflect the smaller number 
of employees involved in the departure of the PRC Managers and 
employees. 
The chancellor concluded that the comparable sale of AME to 
Nichols corroborated Bleiweis' damage estimate for lost goodwill 
based on the Vitro comparable sale.  Since there was no actual 
sale by PRC to AME, the chancellor rejected Ripper's opinion 
that the "best" transaction for measuring PRC's lost goodwill 
was the actual transfer of the PRC Managers and employees to 
AME. 
 
Although Bleiweis estimated the amount of profit PRC lost 
by the departure of its marine engineering unit to AME, he 
 
18
stated that these damages were included in his calculation of 
lost goodwill.  Thus, in determining PRC's total damages, 
Bleiweis concluded that a separate damage figure for lost 
profits should not be added to the damage amount for lost 
goodwill.  The chancellor agreed with Bleiweis on this issue and 
declined to award additional damages for lost profits, finding 
that lost profits damages were "subsumed" within the court's 
goodwill calculation. 
The chancellor's conclusions reflected his acceptance of 
Bleiweis' methodology as the most appropriate and accurate 
measure of lost goodwill and profits.  Thus, AME's complaint 
essentially is reduced to the fact that the chancellor accepted 
the testimony of PRC's expert witness, rather than the testimony 
offered by AME's expert.  Since the chancellor's findings 
regarding PRC's lost profits and damages for lost goodwill are 
supported by credible evidence, we will not disturb those 
findings on appeal.  See City of Manassas v. Board of 
Supervisors, 250 Va. 126, 137, 458 S.E.2d 568, 574 (1995); 
Jamerson v. Womack, 244 Va. 506, 510, 423 S.E.2d 180, 182 
(1992); Russell, 11 Va. App. at 417, 399 S.E.2d at 169. 
For the same reasons, we find no merit in AME's contention 
that the damage award was excessive as a matter of law.  
Although the record shows that the price for the sale of PRC to 
Litton did not change after the departure of the PRC Managers 
 
19
and employees, Bleiweis emphasized that the departing group had 
goodwill value for purposes of maintaining the customer 
relationships necessary for contract retention.  As stated 
above, the chancellor based the award of damages on his 
acceptance of Bleiweis' testimony, which constituted credible 
evidence in support of that award. 
IV. PUNITIVE AND TREBLE DAMAGES 
 
AME argues that a chancellor in equity may not award 
punitive damages because any award of damages in equity is 
limited to compensating an injured party to make it "whole."  
AME contends that punitive damages are in the nature of a 
penalty and extend beyond mere compensation.  AME also asserts 
that treble damages are punitive in nature and, thus, are 
likewise unavailable in a court of equity.  We disagree with 
AME's arguments. 
When a court of equity acquires jurisdiction of a cause for 
any purpose, the court may retain the entire cause to accomplish 
complete justice between the parties.  Thus, the chancellor may 
hear legal claims and enforce legal rights by applying remedies 
available only at law.  Waskey v. Lewis, 224 Va. 206, 213, 294 
S.E.2d 879, 882 (1982).  This rule applies "even to the extent 
of establishing legal rights and granting legal remedies which 
would otherwise be beyond the scope of [the chancellor's] 
authority."  Erlich v. Hendrick Constr. Co., Inc., 217 Va. 108, 
 
20
115, 225 S.E.2d 665, 670 (1976) (citing Johnston v. Bunn, 108 
Va. 490, 493, 62 S.E. 341, 342 (1908)); see Iron City Sav. Bank 
v. Isaacsen, 158 Va. 609, 625, 164 S.E. 520, 525 (1932). 
The rule is based on the principle that once a court of 
equity obtains jurisdiction in a case, the court has discretion 
to transfer the parties to a court of law for adjudication of 
their law claims or to conclude the litigation by giving 
complete relief in the chancery cause.  Iron City, 158 Va. at 
625, 164 S.E. at 525.  The purpose of this rule is to prevent a 
"circuity of action and expense."  See Smith v. Smith, 92 Va. 
696, 698, 24 S.E. 280, 280 (1896).  If a chancellor decides to 
retain jurisdiction over legal claims, the chancellor acts "as a 
substitute for the court of law."  Id.; Iron City, 158 Va. at 
637, 164 S.E. at 529. 
PRC's bill of complaint sought both equitable and legal 
remedies.  AME could have moved to transfer PRC's legal claims 
to the law side of the court under Code § 8.01-270, where it 
would have been entitled to a jury trial, but chose not to 
proceed in this manner.  Thus, AME cannot now complain that the 
chancellor improperly awarded legal relief to PRC.  See Brown v. 
May, 202 Va. 300, 309-10, 117 S.E.2d 101, 108 (1960).  We also 
observe that the chancellor awarded compensatory, punitive, and 
treble damages under the various legal claims, not under any 
equitable claims.  Therefore, we conclude that the chancellor 
 
21
acted within his discretion in awarding legal relief on the law 
claims before him. 
We disagree with AME that our decision in Colonna Dry Dock 
Co. v. Colonna, 108 Va. 230, 61 S.E. 770 (1908), requires a 
different conclusion.  There, in an appeal from a decree denying 
specific performance of a contract, we addressed the issue 
whether the chancellor properly ruled that the forfeiture of a 
deposit would constitute a penalty and, therefore, could not be 
enforced in equity.  Id. at 240, 61 S.E. at 774.  Thus, unlike 
the present case, Colonna did not involve legal claims, but only 
a request for equitable relief.  Since the chancellor here 
restricted his award of damages that are available solely at law 
to the law claims before him, Colonna is inapposite. 
 
We also disagree with AME's contention that the chancellor 
erred in awarding treble damages.  Code § 18.2-500(a) provides 
in relevant part: 
Any person who shall be injured in his reputation, trade, 
business or profession by reason of a violation of § 18.2-
499, may sue therefor and recover three-fold the damages by 
him sustained, and the costs of suit, including a 
reasonable fee to plaintiff's counsel; and without limiting 
the generality of the term, "damages" shall include loss of 
profits. 
 
This subsection explicitly allows an award of treble 
damages on proof of the cause of action provided under Code 
§ 18.2-499.  Nevertheless, AME asserts that treble damages may 
not be awarded in equity because Code § 18.2-500(b), which sets 
 
22
forth the equitable relief available for business conspiracy 
claims brought under the statute, does not specifically state 
that treble damages may be awarded in a chancery case.  Code 
§ 18.2-500(b) provides in relevant part: 
Whenever a person shall duly file a bill in chancery in the 
circuit court of any county or city against any person 
alleging violations of the provisions of § 18.2-499 and 
praying that such party defendant be restrained and 
enjoined from continuing the acts complained of, such court 
shall have jurisdiction to hear and determine the issues 
involved, to issue injunctions pendente lite and permanent 
injunctions and to decree damages and costs of suit, 
including reasonable counsel fees to complainants' and 
defendants' counsel. 
 
We conclude that this provision does not preclude an award 
of treble damages in a law claim heard in chancery.  Instead of 
limiting the relief available in chancery, this subsection 
grants a complainant the additional right to seek and obtain 
injunctive relief, as well as "damages and costs of suit."  The 
term "damages" in subsection (b) refers to the "three-fold" 
recovery of damages described in subsection (a). 
Notably, much of the language from subsection (a) is not 
repeated in subsection (b).  For example, subsection (b) does 
not expressly refer to a "person who shall be injured in his 
reputation, trade, business or profession by reason of a 
violation of § 18.2-499," yet this requirement is clearly a 
predicate for recovery under the statute in equity, as well as 
in law.  Lost profits also are not mentioned in subsection (b), 
 
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but this subsection necessarily contemplates the right to seek 
recovery of lost profits in equity as compensatory damages.  
Thus, on consideration of the language of the entire statute, we 
conclude that a chancery court is permitted to award treble 
damages on a law claim under the provisions of Code § 18.2-500. 
 
We also find no merit in AME's contention that our decision 
in Porter v. Wilson, 244 Va. 366, 421 S.E.2d 440 (1992), 
dictates a different result.  Porter involved a trespass action 
in which a plaintiff contended, among other things, that the 
trial court erred in refusing to award him treble damages under 
Code § 55-334 for the unauthorized removal of timber from his 
property.  Id. at 367, 421 S.E.2d at 441.  Observing that treble 
damages are in the nature of a penalty and are not favored, we 
held that since the timber was removed by one acting under a 
bona fide claim of right, the trial court did not abuse its 
discretion in refusing to award treble damages.  Id. at 371-72, 
421 S.E.2d at 443.  Thus, contrary to AME's assertion, Porter 
did not involve the issue whether treble damages may be awarded 
in a chancery case. 
AME next contends that the chancellor's award of both 
punitive and treble damages was duplicative.  Although AME 
concedes that the chancellor awarded punitive and treble damages 
under separate counts of the bill of complaint, AME argues that 
the conduct underlying the claims is the same and, therefore, 
 
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that the chancellor erred in awarding both types of damages.  We 
disagree with AME's argument. 
The awards of punitive and treble damages were based on 
separate claims involving different legal duties and injuries.  
The chancellor awarded punitive damages under Counts I, II, and 
III, for breach of fiduciary duty, intentional interference with 
contractual relations, and intentional interference with 
prospective business and contractual relations.  The award of 
treble damages was limited to the business conspiracy claim of 
Count VII. 
To prevail in its business conspiracy claim, PRC was 
required to prove that the defendants combined, associated, 
agreed, or acted in concert together for the purpose of 
willfully and maliciously injuring PRC in its business "by any 
means whatever."  Code § 18.2-499.  In contrast, the claims 
asserted in Counts I through III do not require such proof and 
relate solely to the employment relationship between PRC and the 
PRC Managers and employees.  Thus, the chancellor did not err in 
awarding PRC both punitive and treble damages. 
We also find no merit in AME's contention that an award of 
treble damages is subject to the ceiling on punitive damages set 
forth in Code § 8.01-38.1.  When the words of a statute are 
unambiguous, we accord the statutory language its plain meaning.  
Haislip v. Southern Heritage Ins. Co., 254 Va. 265, 268, 492 
 
25
S.E.2d 135, 137 (1997); Archambault v. Roller, 254 Va. 210, 213, 
491 S.E.2d 729, 731 (1997). 
Under the plain language of Code § 8.01-38.1, the 
limitation of $350,000 applies only to an award of "punitive" 
damages.  If the General Assembly had intended for an award of 
treble damages to be subject to this limitation, it would have 
included an express reference to such damages in the statutory 
language.  See Jones v. Jones, 249 Va. 565, 570, 457 S.E.2d 365, 
368 (1995); Allstate Ins. Co. v. Eaton, 248 Va. 426, 430, 448 
S.E.2d 652, 655 (1994).  In the absence of such a reference, we 
will not construe the plain statutory language in a manner that 
amounts to holding that the legislature meant other than what it 
actually stated.  See Davis v. Tazewell Place Assocs., 254 Va. 
257, 260-61, 492 S.E.2d 162, 164 (1997); Haislip, 254 Va. at 
268, 492 S.E.2d at 137; Jones, 249 Va. at 570, 457 S.E.2d at 
368. 
V. COSTS 
 
AME challenges the chancellor's award of several items of 
"costs."  AME asserts that in the absence of an explicit 
statutory provision, expert witness fees cannot be shifted to 
the losing party.  AME also contends that the chancellor abused 
his discretion in including numerous charges, such as fees for 
legal research and temporary employees, as costs in this case. 
 
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In response, PRC contends that under the provisions of Code 
§ 18.2-500, PRC was entitled to all reasonable litigation 
expenses as the prevailing party at trial.  We disagree with 
PRC. 
The taxing of costs in litigation was unknown at common law 
and is purely a creature of statute.  Ryan v. Davis, 201 Va. 79, 
85, 109 S.E.2d 409, 414 (1959).  Code § 18.2-500 provides that 
"costs of suit, including a reasonable fee to plaintiff's 
counsel" may be recovered on proof of a violation of Code 
§ 18.2-499.  Thus, with the exception of reasonable attorney's 
fees, Code § 18.2-500 makes no provision for an award of costs 
other than those ordinarily awarded under the general statutes 
of Title 14.1 of the Code addressing the taxing of costs.  See 
Code §§ 14.1-177 through -201. 
Since trial courts are vested with discretion under the 
relevant provisions of Title 14.1 to determine what costs should 
be taxed against a losing party, we examine the costs challenged 
by AME to determine whether the chancellor abused his 
discretion.  AME takes exception to the chancellor's award of 
expert witness fees, and expenses for express mail service, 
messengers, meals, law clerk "temporaries," computer-based legal 
research, "library research," photocopies, parking, taxicabs, 
telephone calls, and transcripts.  We conclude that the 
chancellor abused his discretion in awarding PRC recovery for 
 
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the above-challenged expenses.  Generally, unless otherwise 
specified by statute, a trial court's discretion to award costs 
under Code § 18.2-500, or under the relevant provisions of Code 
§§ 14.1-177 through –201, is limited only to those costs 
essential for prosecution of the suit, such as filing fees or 
charges for service of process. 
Finally, we disagree with PRC's assertion that, in Ryan v. 
Davis, we "did not question" the trial court's award of costs 
for expert witness fees in a condemnation case.  Since the State 
Highway Commissioner did not assign cross-error to the award of 
such "costs," the issue was not before us in that case. 
VI. PREJUDGMENT INTEREST 
 
AME asserts that the chancellor erred in awarding interest 
from June 19, 1996, the date of the bench ruling, because some 
of the damages still were unliquidated.  PRC responds that the 
chancellor did not err in awarding interest from that date, 
because the chancellor did not reduce the original amount of the 
award, with the exception of his reduction of the $1,000,000 
punitive damage award to comply with Code § 8.01-38.1. 
Generally, prejudgment interest is not allowed on 
unliquidated damages in dispute between the parties.  Skretvedt 
v. Kouri, 248 Va. 26, 36, 445 S.E.2d 481, 487 (1994); Beale v. 
King, 204 Va. 443, 447, 132 S.E.2d 476, 479 (1963).  However, 
the issue whether interest should be awarded, and from what date 
 
28
any interest should run, is a matter submitted to the sound 
discretion of the trial court.  Code § 8.01-382; Skretvedt, 248 
Va. at 36, 445 S.E.2d at 487-88; Marks v. Sanzo, 231 Va. 350, 
356, 345 S.E.2d 263, 267 (1986). 
When the chancellor ruled on June 19, 1996, that PRC was 
entitled to $1,245,062 in compensatory damages, several matters 
remained to be resolved.  First, the chancellor ruled that the 
parties would argue at a later date the issue whether treble 
damages awarded under Code § 18.2-500 were subject to the 
statutory "cap" of Code § 8.01-38.1.  Second, although the 
chancellor awarded $1,000,000 in punitive damages against AME, 
he announced that he would determine at a later date whether 
this amount should be reduced under the provisions of Code 
§ 8.01-38.1.  Third, in his bench ruling, the chancellor did not 
determine the amount of attorney's fees or costs to be awarded 
PRC.  Thus, as of the date of the bench ruling, the amount of 
AME's liability remained unliquidated as to all amounts except 
the original compensatory damage award of $1,245,062. 
The chancellor did not resolve these outstanding issues 
affecting the amount of AME's liability until June 18, 1997, the 
date of entry of the final decree.  AME did not cause the delay 
in the chancellor's entry of the decree.  Rather, the chancellor 
candidly acknowledged that he was the cause of the one-year 
delay.  Thus, we conclude that the chancellor abused his 
 
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discretion in awarding prejudgment interest on all amounts in 
excess of $1,245,062. 
For these reasons, we will affirm the chancellor's decree, 
with the exception of the portion of costs and prejudgment 
interest specified in this opinion, and will remand the case for 
entry of a decree regarding costs and interest that is 
consistent with the principles set forth herein.4
Affirmed in part, 
reversed in part, 
             and remanded. 
                     
 
4Although AME argues that the chancellor erred in adopting 
the findings of fact as drafted by PRC, AME does not suggest 
that this constitutes ground for reversal of this appeal.  Thus, 
we do not address this argument on appeal. 
 
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