Court Opinion

ID: 1057781
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:26:58.889828+00
Date Added: 2024-06-11T09:33:27.229554
License: Public Domain

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.

                                 1
                      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 relief 1 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.

                                 2
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.

                                   3
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

                                   4
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.

                                 5
     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:

                                6
     (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."

                                7
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

                                  8
     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

                                   9
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 the 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

                                  10
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

                                 11
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.

                                 12
     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:

                                13
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.

                          14
                             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

                                  15
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.

                                 16
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

                                 17
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.

                                 18
"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.

                                  19
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.

                                  20
     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

                                    21
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
                                                8
the date of execution of this Agreement."           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.

                                    22
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

                                   23
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

                                 24
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

                                   25
        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

                                   26
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

                                   27
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

                                   28
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

                                  29
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.

                                 30
        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

                                  31
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

                                32
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.

                                  33
     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).

                                34
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

                                 35
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).

                                   36
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

                                  37
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."

                                38