Maximus, Inc. v. Lockheed Information Management Systems Co.

47 Va. Cir. 193, 1998 Va. Cir. LEXIS 300
CourtRichmond County Circuit Court
DecidedOctober 7, 1998
DocketCase No. LA-2356-4
StatusPublished
Cited by3 cases

This text of 47 Va. Cir. 193 (Maximus, Inc. v. Lockheed Information Management Systems Co.) is published on Counsel Stack Legal Research, covering Richmond County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maximus, Inc. v. Lockheed Information Management Systems Co., 47 Va. Cir. 193, 1998 Va. Cir. LEXIS 300 (Va. Super. Ct. 1998).

Opinion

BY JUDGE RANDALL G. JOHNSON

This case is before the court on several post-trial motions. Defendants, Lockheed Information Management Systems Company, Inc., (Lockheed) and the Center for the Support of Families (the Center), have filed motions to strike plaintiffs evidence, to set aside the jury’s verdict, and for a mistrial. Plaintiff, Maximus, Inc., asks the court to treble the jury’s award of damages and for costs and attorney’s fees under Va. Code § 18.2-500.

In November 1994, the Virginia Department of Social Services (DSS) initiated a procurement action pursuant to the Virginia Public Procurement Act, Va. Code §§ 11-35 etseq., to “privatize” two child support enforcement offices in Northern Virginia. Maximus and Lockheed were the only bidders. On April 13,1995, after the appointment of a selection panel and evaluation of the bids, DSS issued a Notice of Intent to award the contract to Maximus. On April 25, 1995, pursuant to Va. Code § 11-66, Lockheed filed a formal protest of DSS’ decision to award the contract to Maximus. While the protest contained a variety of allegations, the principal complaint was that two [194]*194members of the evaluation committee had undisclosed conflicts of interests that interfered with their objectivity and compromised the integrity of the evaluation process. After an investigation, the Notice of Intent was cancelled and the contract was later awarded to Lockheed.

On February 5,1996, Maximus filed this action against Lockheed and the Center. In its motion for judgment, Maximus alleged that Lockheed had tortiously interfered with its contract expectancy with DSS. Maximus claimed that Lockheed knew or should have known that the allegations contained in the protest were false, that the false allegations were intentionally and selectively presented to create an appearance of impropriety, and that the protest was calculated to wrongfully interfere with Maximus’ expected contract with DSS so that DSS would cancel the Notice of Intent and award the contract to Lockheed. Maximus also alleged that Lockheed, the Center, which was to be Lockheed’s subcontractor if Lockheed was awarded the contract, and an employee of the Center engaged in a conspiracy to injure Maximus’ reputation and business in violation of Va. Code §§ 18.2-499 and 18.2-500. The employee was later nonsuited.

The first trial was held in September 1996. After the presentation of plaintiffs evidence, the court granted defendants’ motion to strike. Basically, the court held that Lockheed had a qualified privilege to file its protest and that Maximus was required to prove malice or other egregious conduct in order to get the case to the jury. The court concluded that Maximus had not carried its burden. On appeal, the Supreme Court held that this court applied the wrong legal standard. The Supreme Court said that in order to establish a prima facie cause of action for tortious interference, Maximus had to show that:

(1) [I]t had a contract expectancy; (2) Lockheed knew of the expectancy; (3) Lockheed intentionally interfered with the expectancy; (4) Lockheed used improper methods to interfere with the expectancy; and (5) Maximus suffered a loss as a result of Lockheed’s disruption of the contract expectancy.

254 Va. 408, 414, 493 S.E.2d 375 (1997).

Noting that this court in sustaining the motion to strike had found that “if this were the end of the case” there was enough evidence to submit to the jury the issue of “whether the conduct of the defendants was improper,” id., the Supreme Court reversed. The second trial took place in July of this year. The jury returned a verdict in favor of Maximus for $1,500,000 on its tortious interference claim against Lockheed, and for $3,000,000 on its conspiracy [195]*195claim against both defendants. It is that verdict which is now before the court. Each of the motions will be considered separately.

I. Motion to Strike Plaintiff’s Evidence

Defendants’ motion to strike is based on four main arguments. First, defendants argue that they had a statutory right to file the protest and that Maximus failed to prove that any improper means were used in connection with the protest. Second, defendants argue that Maximus failed to prove that Lockheed’s protest was a proximate cause of the cancellation of the Notice of Intent Third, defendants argue that Maximus failed to prove a conspiracy. And fourth, defendants argue that Maximus’ proof of damages was not legally sufficient.

Defendants’ first three arguments can be disposed of quickly. With regard to Lockheed’s statutory right to file a protest, the court is well aware of it. In fact, the court agreed with defendants at the first trial that Lockheed’s statutory right to protest was so strong that it created a qualified privilege that Maximus could overcome only by showing malice or some other egregious conduct on the part of Lockheed. That is why Maximus’ evidence was struck. The Supreme Court, however, did not agree with defendants. The Supreme Court held that even in the face of Lockheed’s statutory right to protest, Lockheed could not interfere with Maximus’ contract expectancy by improper — not malicious or egregious — but improper means. Such improper means, said the Court, do not have to be tortious or illegal themselves and include such things as unfair competition and unethical conduct. Indeed, the factual record that was before the Supreme Court when it reversed this court is different from the present factual record only in that defendants’ evidence has now been presented. Maximus’ evidence is essentially the same. Since the Supreme Court held Maximus’ evidence of improper means to be sufficient to survive defendants’ motion to strike, the presentation of defendants’ evidence does nothing more than create a jury issue. Defendants’ motion to strike Maximus’ evidence on the issue of tortious interference cannot be sustained.

The court also cannot sustain defendants’ motion to strike Maximus’ evidence on the issue of proximate cause. While defendants argue that it was DSS’ independent investigation that led to the Notice of Intent being cancelled, DSS’ Division of Child Support Enforcement’s director, Michael Henry, testified unequivocally that he was convinced that Lockheed would litigate the award to Maximus and that he was afraid of a “public spectacle.” In light of that, according to Henry, it was an “easy call” to cancel the Notice of Intent. Since Henry was one of the people responsible for making the [196]*196decision whether or not to cancel the award, the jury clearly had sufficient evidence to find proximate cause.

Defendants’ third argument in support of their motion to strike involves Maximus’ conspiracy claim. That argument is also rejected. In Commercial Business Systems v. BellSouth, 249 Va. 39, 453 S.E.2d 261 (1995), the Supreme Court held that in order to prove a conspiracy under Va. Code §§ 18.2-499 and 18.2-500, a plaintiff must prove that the defendants acted intentionally, purposefully, and without legal justification. 249 Va. 47. Here, there was evidence that Robyn Large, within the scope of her employment with the Center, submitted an affidavit in support of Lockheed’s protest and that she knew why she was submitting the affidavit.

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Cite This Page — Counsel Stack

Bluebook (online)
47 Va. Cir. 193, 1998 Va. Cir. LEXIS 300, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maximus-inc-v-lockheed-information-management-systems-co-vaccrichmondcty-1998.