Court Opinion

ID: 1028123
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:35:35.576859+00
Date Added: 2024-06-11T12:31:17.952921
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 08-1219

WESTERN INSULATION, LP,

                Plaintiff – Appellee,

           v.

HAL MOORE; MELANIE MOORE,

                Defendants – Appellants.

Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.   James R. Spencer, Chief
District Judge. (3:05-cv-00602-JRS)

Argued:   January 27, 2009                 Decided:   March 12, 2009

Before MICHAEL, GREGORY, and AGEE, Circuit Judges.

Affirmed by unpublished opinion. Judge Agee wrote the opinion,
in which Judge Michael and Judge Gregory joined.

ARGUED: John B. Simpson, MARTIN & RAYNOR, P.C., Charlottesville,
Virginia,   for  Appellants.     Paul   James   Kennedy, LITTLER
MENDELSON, Washington, D.C., for Appellee. ON BRIEF: Ronald S.
Sofen, GIBBS, GIDEN, LOCHER, TURNER & SENET, L.L.P., Los
Angeles, California, for Appellants.        Stephen C. Tedesco,
LITTLER MENDELSON, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
AGEE, Circuit Judge:

                                   I.   Background

       In March 2001 the sole shareholder of Western Insulation,

Inc.    (“Insulation,      Inc.”),      Hal    Moore,     sold     the    company     to

Western, L.P. (“Western”), for $41,990,000.00.                      At the time of

the    sale,    Hal's    wife    Melanie   was    an    employee    and    the   Chief

Financial      Officer    of    Insulation,      Inc.     Both   Hal     and   Melanie

entered    into    identical       Confidentiality,        Non-Competition,           and

Non-Solicitation Agreements (collectively, “Agreements”), which

were to be interpreted and enforced in accordance with Virginia

law.

       Within     the    time     period   encompassed      by     the    Agreements

Melanie    used    Hal’s    longstanding       relationship      with     a    bank    to

obtain financing for two new insulation companies that would

compete with Western.            In March 2005 she signed a personal loan

guaranty for a $1.41 million line of credit to assist her friend

and former Insulation, Inc. employee, Stephanie Schulkamp, in

forming     one    of    those     companies,      American      Insulation,      Inc.

(“American”).           Without     Melanie’s      guarantee     and      assistance,

Schulkamp would not have qualified for the bank financing for

American.

       The loan guaranty agreement for American subjects Schulkamp

to various restrictions and bestows certain benefits on Melanie.

For example, Schulkamp can only earn $90,000 per year and must

                                           2
obtain    Melanie's      consent       to    make   any   purchase     for   American

exceeding      $25,000.         The    agreement     also   entitles     Melanie    to

certain financial information regarding American.                      In return for

the guaranty, Melanie received a security interest in American's

assets and an option to purchase 90 percent of American for

$9,000.       Schulkamp secured the guaranty with her home and her

shares    in    American       and    is    prohibited    from    transferring     any

collateral without Melanie’s consent.

       In addition to the guaranty for Schulkamp, Melanie signed a

separate personal loan guaranty for a $1.015 million commercial

line of credit to aid Dave Barnes, another former Insulation,

Inc.     employee.        With       Melanie’s      assistance     Barnes    obtained

financing       to     start     his       own   insulation      business,    Empire

Insulation, Inc. (“Empire”).                Melanie advised Barnes on the loan

amount he should seek and, as with Schulkamp, took advantage of

Hal’s relationship with a bank to obtain financing for Barnes,

which    he    would    not    have    received     without      her   guarantee   and

assistance.

       Hal leased a building and some trucks to American, sold

some of his trucks to Empire and hired two former employees of

Insulation, Inc.

       Alleging that the foregoing acts violated the Agreements,

Western sought compensatory damages and injunctive relief from

the Moores in the Circuit Court of Henrico County, Virginia.

                                             3
The       Moores      removed      the     action      to     federal    district       court.

Following a bench trial the district court ultimately found that

the       Moores      breached       the     Agreements          and     awarded      Western

$943,659.00 in compensatory damages but denied Western’s request

for injunctive relief.

          On appeal to this Court, we affirmed certain portions of

the    district        court’s      judgment,        but     reversed    other      parts    and

remanded the case for further proceedings.                             Although we agreed

with      the    district       court     that     Hal      breached    his   Agreement       by

hiring the two former Insulation, Inc. employees, Western proved

no compensable damages for that breach.                            Hal’s other actions

were deemed to be arms-length transactions not in violation of

his    Agreement.           “We    conclude[d]        the     district    court      erred    in

finding that Hall breached his noncompete (other than by hiring

two former employees.”               Western Insulation, LP v. Moore, 242 F.

App'x 112, 118-19 (4th Cir. 2007) (unpublished) (“Western I”).

We affirmed the district court’s decision that Melanie breached

her Agreement, but held that the district court erred in (1)

placing a value of $500,000 on Western’s damages arising solely

as    a    result      of   the     Moores’      various       breaches,      (2)    awarding

damages         for    Western’s         reduced      profit     margins      because       such

evidence was speculative and (3) awarding damages for Western’s

lost profits.            Id. at 123-24.              However, we agreed with Western

that      the    district         court    erred      in     denying    its    request       for

                                                 4
injunctive        relief     and     accordingly       remanded    for        further

consideration by the district court.                Id. at 124.

        Consistent with our holding on appeal Western asked the

district court for injunctive relief

        to enjoin Melanie from (1) breaching her Agreement by
        providing any form of support to any of [Western’s]
        competition or to Schulkamp or Barnes personally; (2)
        controlling or monitoring the finances of American or
        Empire; and (3) exercising the option agreement or the
        security agreement that she formed with American,
        entering into an option agreement or a security
        agreement   with   Empire,  or   obtaining  any  other
        ownership interest arising from a loan guarantee in
        either of those companies.    Western also ask[ed] the
        court (4) to enjoin Hal from breaching his Agreement
        by, directly or indirectly, soliciting, hiring, or
        employing any person who was formerly employed by
        [Western], or soliciting work from any of [Western’s]
        customers.   Finally, Western ask[ed] the Court (5) to
        toll the Moores’ Agreements until March 12, 2009,
        extending them by two years, the period of time that
        the Moores allegedly breached their Agreements.

Western    Insulation,       L.P.    v.    Moore,   No.    3:05-CV-602,   2008     WL

191335, at *2 (E.D. Va. Jan. 22, 2008).                      These measures were

necessary, Western asserted, because the Moores’ actions reduced

the value of the goodwill for which Western had paid and it

would    suffer    further    harm    if    the   Moores    continued    to   assist

Western’s competitors.          Western also asked the district court to

enter an award for nominal damages against both Hal and Melanie

based on the adjudicated breach of the Agreements.

     The    Moores     argued       that   our    decision    absolved    them    of

liability for breaching their Agreements and implied that they

                                            5
were unlikely to breach them in the future.                        Based on this

interpretation of our prior decision they asked the district

court to reject Western’s request for nominal damages and enter

judgment in their favor because (a) Western’s prior failure to

prove compensatory damages necessarily foreclosed a successful

cause of action for breach of contract under Virginia law, and

(b) the doctrine of judicial estoppel barred Western’s request

for nominal damages.

      The district court conducted a thorough analysis of the

requirements     for   equitable      relief    and   found      such    relief   was

warranted as to Melanie, but not Hal.              Accordingly, the district

court forbade Melanie from:

      (1) providing any form of support to any of the
      Company's competitors or to Stephanie Schulkamp or
      David Barnes personally; (2) controlling or monitoring
      the finances of American or Empire; and (3) exercising
      the option agreement or the security agreement that
      she formed with American, entering an option agreement
      or a security agreement with Empire, and obtaining any
      other ownership interest in either of those companies
      arising from a loan guarantee.

Id.   at   *5.       Having   determined       that    Melanie     “breached      her

Agreement for a total of two years, ten months, and seventeen

days-the    period     from   March    5,   2005      to   the    date    of   [its]

Memorandum Opinion” (January 22, 2008), the court extended her

                                        6
obligations under the Agreement for that period of time. 1                         Id.

The court then determined that Western had not been irreparably

harmed by Hal’s breach of his Agreement and refused to “extend

his    obligations        under    [his]    Agreement”      or    enjoin   him     from

“soliciting, hiring, or employing any other people who worked

for [Western]”.        Id.

       The district court also determined that language in the

Agreements “relieve[d] Western of the burden of proving damages

to    establish    a   claim”      for   breach   of    contract    and    that    this

Court’s     determination         that   Western’s     evidence    on   compensatory

damages was insufficient to support an award did not preclude an

award      of   nominal    damages.        Id.   at   *6.    The    district      court

rejected the Moores’ arguments, entered judgment against both

Hal and Melanie, and awarded nominal damages of $100.00 against

both defendants.

       The Moores timely appealed the judgment of the district

court and we have jurisdiction under 28 U.S.C. § 1291.                       For the

reasons that follow, we affirm the district court’s judgment in

all respects.

       1
       Absent injunctive relief the Moores’ obligations under
their Agreements would have expired on March 12, 2008.

                                            7
                          II.    Injunctive Relief

       As an initial matter, we note that “we review the grant of

a permanent injunction for abuse of discretion.”                  Virginia Soc’y

for Human Life, Inc. v. Federal Election Comm'n, 263 F.3d 379,

392 (4th Cir. 2001).       This same standard applies to our review of

an injunction’s scope. Id. “With respect to injunctive relief,

‘[w]hat we mean when we say that a court abused its discretion,

is merely that we think that [it] made a mistake.’” Wilson v.

Office of Civilian Health and Med. Programs of the Uniformed

Servs., 65 F.3d 361, 363 (4th Cir.1995) (quoting Direx Israel,

Ltd.   v.   Breakthrough      Medical     Corp.,   952   F.2d     802,    814    (4th

Cir.1991)).

       On appeal Melanie challenges the district court’s grant of

injunctive relief on several grounds.               First, she contends the

restrictions    imposed    on    her    are   overly     broad.      Second,      she

argues that injunctive relief was inappropriate because there

was no evidence establishing that she would violate the terms of

her    Agreement   in   the     future.       Finally,     Melanie       avers    the

district court erred in extending the terms of her Agreement for

two years, ten months, and seventeen days from the date of the

district court’s order.          For the reasons below we reject these

arguments.

                                          8
A.     Overbreadth of the Injunction

       The relevant portion of the district court’s Order granting

equitable relief to Western provides as follows:

       Melanie Moore is hereby ENJOINED from
              (1)   providing  any   form  of   financial
              assistance, including a loan guarantee, to
              any competitor of Western Insulation, Inc.,
              or to Stephanie Schulkamp or David Barnes
              personally;

              (2) engaging in any financial control or
              oversight   of    American  Insulation, Inc.
              (“American”)   or    Empire Insulation, Inc.
              (“Empire”); and

              (3)    exercising any option agreement and
              security agreement that she entered with
              American, entering any option agreement or
              security agreement with Empire, or obtaining
              any other form of ownership or business
              interest in American or Empire,

       for a period of two years, ten months, and seventeen
       days from the date of this Order.

J.A. 852-53.       Melanie contends this language is impermissibly

broad because sections (1) and (2) are unlimited in duration and

thus are indefinite time restrictions on her.                 She also avers

that    section    (1)   exceeds    the   scope    of   her    Agreement   by

precluding even personal financial assistance to either Barnes

or Schulkamp.     We find Melanie’s arguments unavailing.

       A plain reading of the Order’s language indicates the time

limitation applies with equal force to all three sections, not

just    the    last   prohibition    against      exercising    options    and

agreements with American or Empire.            Moreover, the Order itself

                                      9
makes clear that the district court’s rationale is “explained in

the Memorandum Opinion accompanying this Order.”                    J.A. 852.      In

its Memorandum Opinion the district court stated that

     Melanie has breached her [Non-Compete Agreement] for a
     total of two years, ten months, and seventeen days –
     the period from March 5, 2005 to the date of this
     Memorandum Opinion. Accordingly, the Court will issue
     an injunction that will, in effect, extend her
     obligations under her Agreement for a period of that
     length.

J.A. 845 (emphasis added).             The reference to “obligations,” in

plural    form,     provides     additional      evidence    that     all    of   the

prohibitions in the district court’s order were subject to the

time limitation.        The district court’s Order and the record show

unequivocally,       contrary    to    Melanie’s     strained    interpretation,

that she is enjoined from all the enumerated activities for a

period of two years, ten months, and seventeen days from January

22, 2008.

     Melanie also contends that the district court’s prohibition

against    personal      financial     assistance     to   Barnes    or     Schulkamp

goes beyond the terms of her Agreement with Western.                         However,

if   Melanie      had    not    breached       the   Agreement      by      providing

substantial       financial     assistance      to   establish      businesses     in

direct competition with Western, as she had agreed not to do,

she would remain free to offer personal financial assistance to

Barnes or Schulkamp if she wished.                   As the district court no

doubt    realized,      equitable     relief   prohibiting      direct      financial

                                         10
assistance to Empire and American but permitting a virtually

unlimited     subsidy       for        the     personal        expenditures       of    those

companies’ principals would naturally and impermissibly accrue

to the benefit of Empire and American by simply moving funds

from one pocket to another.                   The relief designed by the district

court was “no more burdensome to the defendant than necessary to

provide     complete       relief        to      the      plaintiffs.”        Califano     v.

Yamasaki,    442    U.S.    682,        702,    99     S.Ct.    2545,    61     L.Ed.2d   176

(1979).     As such, the district court did not err.

B.   Future Violations

     Melanie asserts that the award of injunctive relief was

unwarranted because there was no evidence she would violate the

Agreement in the future.                She argues that under Virginia law the

decision     to     enter        an     injunction         prohibiting        “the     future

commission of an anticipated wrong depends, in each case, upon

the nature of the wrong and upon the likelihood that the wrong

will be committed.”              WTAR Radio-TV Corp. v. City of Virginia

Beach, 216 Va. 892, 895, 223 S.E.2d 895, 899 (1976).                                      She

asserts     that    because           there    is    no    evidence      in     the    record

suggesting that she will violate the Agreement in the future,

entry of injunctive relief was improper.                          These arguments are

unpersuasive for several reasons.

     In    Western     I    we    addressed          Western’s    cross-appeal,         which

challenged    the    district           court’s      refusal     to     grant    injunctive

                                               11
relief    because       “indispensable       parties       [were]      not    before       the

Court, whose presence would be necessary in order . . . to

fashion complete injunctive relief.”                 242 Fed.Appx. at 124.                  We

determined       that    “[a]lthough     clearly       some       of   the        injunctive

relief    that     Western       requested    would     ‘undermin[e]              legitimate

commercial contracts or employment agreements,’ [a] subset of

relief    Western”       requested    would    not.         Id.        Accordingly,         we

reversed the district court’s denial of injunctive relief and

remanded     to    the    district     court    to     determine        in        the   first

instance whether to award such relief.                      The relief granted by

the      district        court     compares      favorably,            indeed           almost

identically, to that approved by this Court in Western I.

      Melanie’s arguments also rest on the false premise that

Western does not suffer continuing damage from Melanie’s breach.

Her   loan   guaranties      enabled    Empire       and    American         to    exist    as

continuing competitors to whom Western may still lose business.

Absent the injunction Melanie’s intimate financial entanglement

with American and Empire could continue unabated, to Western’s

detriment.        In short, the likelihood that Melanie may commit a

“new” breach in the future is irrelevant when her breach and the

resulting damage continue.

C.    Time Limitation

      Melanie further claims the district court erred because the

extension of the non-compete provisions of her Agreement should

                                         12
have   been     for    one    year,       five     months,       and       twenty-three     days,

instead of two years, ten months, and seventeen days as imposed.

She    argues    that     because         we   determined         in       Western   I    certain

injunctive relief would have been proper, the extension of her

obligations under the Agreement should be limited to the time

between her breach on March 5, 2005 and the date of the district

court’s original (albeit erroneous) decision on August 29, 2006

instead of the date of its judgment entered on remand.                                          In

short,   Melanie       says       she    should       not   be    penalized        because      the

district       court    erred        in      her      favor      by    refusing      to     enter

injunctive      relief       in    its    first       decision        on    August   29,    2006.

Again, we disagree.

       The    thrust     of       Melanie’s        argument       is       that   although      the

Moores       successfully         opposed       the    entry      of       injunctive      relief

against them in the district court, she should benefit from our

subsequent determination in Western I that injunctive relief was

appropriate as to her.                  This argument disregards the fact that,

absent injunctive relief, Melanie’s breaches were permitted to

continue during the pendency of the appeal until entry of the

district      court’s        Order      on     January      22,       2008.       See     Western

Insulation,       L.P.,       No.       3:05-CV-602,          2008     WL     191335,      at    *5

(finding that Melanie “breached her Agreement on March 5, 2005,

when she obtained the right to purchase American, a breach that

has continued to this day.”).                      The district court did not abuse

                                                 13
its discretion in forging its injunctive remedy and extending

Melanie’s     obligations   as    provided    in   the    district     court’s

judgment.

                          III.    Nominal Damages

     The Moores make two principal arguments in support of their

contention that the district court erred in awarding nominal

damages to Western.      They assert that Western’s failure to prove

compensatory damages as determined by this Court in Western I

precludes Western from establishing all the elements necessary

for a breach of contract claim under Virginia law.              In addition,

they argue the principle of judicial estoppel applies.

A.   Breach of Contract Damages

     Under Virginia law “[t]he elements of a breach of contract

action are (1) a legally enforceable obligation of a defendant

to a plaintiff; (2) the defendant’s violation or breach of that

obligation; and (3) injury or damage to the plaintiff caused by

the breach of obligation.” Filak v. George, 267 Va. 612, 619,

594 S.E.2d 610, 614 (2004)); Ulloa v. QSP, Inc., 271 Va. 72, 79,

624 S.E.2d 43, 48 (2006); see also Sunrise Continuing Care, LLC

v. Wright, Record No. 072501, 2009 WL 103320, at *3 (Va. Jan.

16, 2009).).      “Proof of damages is an essential element of a

breach   of   contract   claim,   and   failure    to   prove   that   element

warrants dismissal of the claim.”            Id. at *5.     “The plaintiff

                                     14
also has the ‘burden of proving with reasonable certainty the

amount    of    damages     and   the   cause       from    which    they    resulted;

speculation       and     conjecture    cannot       form     the    basis     of     the

recovery.’” Id. (quoting Shepherd v. Davis, 265 Va. 108, 125,

574 S.E.2d 514, 524 (2003)).            The Moores argue that in light of

our determination in Western I that Western failed to prove its

claim for compensatory damages, the district court improperly

awarded nominal damages in satisfaction of the third element of

a breach of contract claim.             We believe the Moores misconstrue

Virginia law related to damages in the context of the facts of

this case.

        "[I]t is . . . well-settled that parties to a contract may

specify the events or pre-conditions that will trigger a party's

right     to    recover     for   the   other       party's     breach       of     their

agreement.”           Ulloa, 271 Va. at 79, 624 S.E.2d at 48.                        This

includes the right to contract in such a way as “to eliminate

damages as a required element of a breach of contract action.”

Id. at 80, 624 S.E.2d at 48.             Like the Ulloa Court, “the focus

of our analysis is to determine whether the parties in fact

agreed     to    modify    the    traditional       elements    of    a     breach     of

contract action so as to permit [Western] to obtain a valid

breach    of    contract    verdict     in    the    absence    of    a     finding    of

damages.”       Id.

        Section 5 of each Agreement provided as follows:

                                         15
      5.   Remedies.    Moore hereby acknowledges that his
      covenants and obligations hereunder are of special,
      unique,   unusual,   extraordinary,  and   intellectual
      character, which gives them a peculiar value, the
      actual and threatened breach of which shall result in
      substantial injuries and damages, for which monetary
      relief may fail to provide an adequate remedy at law.
      Accordingly, Moore agrees that the Partnership shall
      be entitled, in the event of an actual or threatened
      breach of this Agreement, to seek remedies including,
      but not necessarily limited to (i) temporary or
      permanent    injunctive     relief;   (ii)     specific
      performance, and (iii) monetary relief, to the extent
      that monetary relief may constitute an adequate remedy
      in whole or in part . . .

J.A. 762 (emphasis added).

      Based on paragraph 5 of the Agreements, the district court

concluded that because a breach by Hal or Melanie “shall result

in substantial injuries,” and shall entitle Western “to seek

remedies     including,      but    not   necessarily       limited    to    .    .   .

monetary     relief,    to    the     extent    that       monetary    relief      may

constitute      an     adequate      remedy     in     whole     or     in       part,”

identification of the remedies would be “superfluous unless it

was intended to emphasize that Western would not have to prove

it   suffered   harm.”        J.A.    847-48.        The   Moores     contest     this

interpretation of paragraph 5. 2

      2
       Although Ulloa, like this case, involved the breach of the
“confidentiality,     no-solicitation,     and    non-competition
provisions” of a contract, it is not dispositive of the issues
presented in this appeal. 271 Va. at 76, 624 S.E.2d at 46. The
Virginia Supreme Court’s determination that Ulloa’s employer was
not required to prove damages as an element of its breach of
contract   claim  rested   on  the   parties’  consent   to  jury
(Continued)
                                          16
        “A     court's        primary        focus          in     considering           disputed

contractual       language        is   to    determine           the   parties'     intention,

which        should    be     ascertained,            whenever         possible,        from     the

language the parties employed in their agreement.” Pocahontas

Mining LLC v. CNX Gas Co., LLC, 276 Va. 346, 352, 666 S.E.2d

527, 531 (2008).             Here, in the first sentence of section 5 of

the     Agreements,         the   Moores      explicitly           acknowledge          that     any

breach on their part “shall result in substantial injuries and

damages . . . .”            By this plain language the parties have agreed

that a breach by Hal or Melanie necessarily results in damage to

Western for which Western “shall be entitled to . . . to seek”

various       remedies,      including       injunctive           relief       and/or    monetary

damages.        Thus, the parties contractually agreed that a breach

of    contract        claim       could     be        established         absent        proof     of

compensatory          damages.         While       the      language       in     the     Moores’

Agreements permitted Western to establish a breach of contract

claim    under        Virginia     law      once      the    first       two    elements        were

proven,       Western’s      compensatory          damages        were    limited       to     those

monetary       damages      it    could     prove       with      “reasonable       certainty”

instructions mandating a verdict adverse to Ulloa if his
employer proved only two elements – that there was a contract
and Ulloa breached it. Once the jury found a breach of contract
on those instructions, it became the law of the case.   271 Va.
at 80, 624 S.E.2d at 48.

                                                 17
which, in this case, were none.          The question remains, however,

whether Western, once it proved a breach, could recover nominal

monetary    damages   under   Virginia    law    when    it    did    not    prove

compensatory damages.

     “[U]pon the breach of a valid and binding contract the law

infers nominal damages, it does not infer or presume substantial

or compensatory damages.      The latter must be proven by competent

evidence.     [Compensatory    damages]    are    such    as    indemnify      the

plaintiff and generally measure the plaintiff's actual loss and

provide amends therefor.” Orebaugh v. Antonious, 190 Va. 829,

834, 58 S.E.2d 873, 875 (1950).

     In Crist v. Metropolitan Mortg. Fund, Inc., 231 Va. 190,

195, 343 S.E.2d 308, 311 (1986), the Supreme Court of Virginia

affirmed a lower court’s award of nominal damages.               The Virginia

trial court had determined that the plaintiff established the

defendant’s breach of contract but failed to prove compensatory

damages.    The trial court awarded nominal damages in the amount

of $100.00.     On appeal, the Supreme Court of Virginia affirmed

“the judgment of the trial court denying compensatory damages

but awarding nominal damages of $100” because when “damages, if

any, cannot be established with reasonable certainty, no actual

damages can be recovered.”      Id. (emphasis added).

     Virginia    law,    as    expressed    in     Orebaugh          and    Crist,

distinguishes between nominal and compensatory damages.                    Nominal

                                   18
damages do not, by definition, compensate the aggrieved party –

they merely recognize that the aggrieved party’s rights have

been    violated     by   the   party     in    breach.         Virginia    law      thus

provides for an award of nominal damages in cases where the

plaintiff proves that a breach of contract occurred but does not

prove    compensatory      damages,      as    in    this   case.     Although       not

specifically adopted by the Supreme Court of Virginia, this view

comports      with   Section     346     of    the    Restatement        (Second)     of

Contracts and other secondary sources:

        (1) The injured party has a right to damages for any
        breach by a party against whom the contract is
        enforceable unless the claim for damages has been
        suspended or discharged.

        (2) If the breach caused no loss or if the amount of
        the loss is not proved under the rules stated in this
        Chapter, a small sum fixed without regard to the
        amount of loss will be awarded as nominal damages.

Restatement (Second) Contracts § 346 (1981).

        Only nominal damages are recoverable upon the breach
        of a contract, if no actual or substantial damages
        result from the breach or no damage is shown.
        Examples include those cases in which:

             (1)     actual   damage            is     uncertain      or       not
        susceptible of proof;

             (2) damages are too remote, conjectural, and
        speculative   to form the basis of a legal recovery;
        . . . .

22 Am. Jur. 2d Damages § 17.

        To   hold,   as   the   Moores   urge,       that   Western’s      failure    to

prove    compensatory      damages     extinguishes         a   remedy    of    nominal

                                          19
damages for breach of contract would contradict Virginia law as

expressed   in   Orebaugh   and   Crist.   Accordingly,   the   district

court did not err in entering judgment against Hal and Melanie

and awarding nominal damages to Western from both. 3

B.   Judicial Estoppel

     We also reject the Moores’ argument that Western’s request

for nominal damages on remand from this Court is barred by the

doctrine of judicial estoppel.

     Judicial estoppel is a principle developed to prevent
     a party from taking a position in a judicial
     proceeding  that   is    inconsistent   with  a  stance
     previously taken in court.     See John S. Clark Co. v.
     Faggert & Frieden, P.C., 65 F.3d 26, 28 (4th
     Cir.1995).    Three elements must be satisfied before
     judicial estoppel will be applied.    ‘First, the party
     sought to be estopped must be seeking to adopt a
     position that is inconsistent with a stance taken in
     prior litigation.’    Lowery v. Stovall, 92 F.3d 219,
     224 (4th Cir.1996). The position at issue must be one
     of fact as opposed to one of law or legal theory. Id.
     ‘Second, the prior inconsistent position must have
     been accepted by the court.’      Id. Lastly, the party
     against whom judicial estoppel is to be applied must
     have ‘intentionally misled the court to gain unfair
     advantage.’    Tenneco Chems., Inc. v. William T.

     3
       We observe that, as a practical matter, few plaintiffs
will find a purpose in pleading nominal damages when they
primarily seek to recover compensatory damages.      That being
said, we note that a properly pled request for nominal damages
is not negated if a claim for compensatory damages fails. See,
generally, Orebaugh, 190 Va. at 834, 58 S.E.2d at 875. We also
note that our affirmance of Western’s award of nominal damages
against the Moores does not address whether that award qualifies
Western as a “prevailing party” under the Agreements.       That
issue is not before us in this appeal and we express no opinion
in that regard.

                                    20
      Burnett & Co., 691 F.2d 658, 665 (4th Cir.1982).
      This bad faith requirement is the ‘determinative
      factor.’ John S. Clark Co., 65 F.3d at 29.

Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir. 2007).                             “The

purpose of the doctrine is to prevent a party from playing fast

and   loose   with    the    courts,     and    to        protect    the   essential

integrity of the judicial process.” 4                 Lowery, 92 F.3d at 223.

1996).     In the present case, the doctrine of judicial estoppel

does not bar Western’s request for, nor the district court’s

award of, nominal damages.

      Western’s     argument      on   remand       that    it   was   entitled    to

recover nominal damages was legal, not factual, and was a direct

response to this Court’s determination on appeal in Western I

that it had failed to prove compensatory damages.                      Prior to our

decision in Western I, there was no reason for Western to assert

its entitlement to nominal damages in light of its steadfast

belief that it should recover (and could prove) compensatory

damages.      For    the   same    reason,     it    is    plainly     evident    that

Western did not act in bad faith or intentionally mislead the

district court.       The doctrine of judicial estoppel simply does

not apply to the district court’s award of nominal damages on

remand in this matter.

      4
       As we have noted, “judicial estoppel is a matter of
federal law, not state law. . . .” Lowery, 92 F.3d at 223 n.3.

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                                 IV.

    In   conclusion,   we   affirm    the   district   court’s   judgment,

including the award of injunctive relief, the entry of judgment

against Hal and Melanie and the award of nominal damages against

both.

                                                                 AFFIRMED

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