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Present:    All the Justices
ADNAN SYED, ET AL.
v.    Record No.  091172                                           OPINION BY JUSTICE DONALD W. LEMONS
                                                                   June  10,  2010
ZH TECHNOLOGIES, INC., ET AL.
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Randy I. Bellows, Judge
I.    Facts and Proceedings Below
ZH Technologies, Inc.  (“ZH Tech”) and Abulala K. Naser
(“Naser”) filed a complaint against Adnan Syed  (“Syed”),
Sheriza Ousman  (“Ousman”), and Zerowire Technologies, Inc.
(“Zerowire”),1  in which ZH Tech and Naser alleged six causes of
action:  (1) breach of fiduciary duty,  (2) conversion,  (3)
unjust enrichment,  (4) fraud,  (5) violation of the Virginia
business conspiracy statute, and  (6) tortious interference
with contractual relationships.2
ZH Tech was incorporated in Virginia on March  26,  1999.
Naser, the sole owner, officer, shareholder, and employee of
ZH Tech, testified that ZH Tech  “is a technology company which
provides information technology solutions to client[s].”
Naser testified that from  1999 until May  2005, ZH Tech
1 Syed, Ousman, and Zerowire collectively will be referred
to herein as  “the Defendants.”
2 The judgment below regarding conversion, unjust
enrichment and fraud is not directly challenged on appeal and
only is implicated to the extent the Defendants challenge the
application of Code  §  13.1-754 to ZH Tech and Naser’s entire
complaint.




predominately provided contract services to the IRS such as  “a
deficient support system for taxpayers to catch fraud” and a
“data mining system.”    However, Naser also testified that in
the fall of  2002, ZH Tech began to expand its work.
Specifically, Naser testified that he wanted ZH Tech to obtain
more government contract work.
In  2002, Naser, Syed, Rajiv Bhatia, Faisal Rana and Asad
Khan signed a letter of intent to become partners in ZH Tech.
They intended to obtain historically underutilized business
zone  (“HUBZone”) status to obtain more government contract
work in the area of information technology system services.
See  13 C.F.R.  §  126.103  (defining  “HUBZone”).    ZH Tech was
denied HUBZone status.    Naser, Syed, Rajiv Bhatia, Faisal
Rana, and Asad Khan signed a document of dissolution by late
summer of  2003 after  “nothing materialized” for ZH Tech in
obtaining government contracts.
After the partnership dissolved, Naser continued to seek
business opportunities for ZH Tech.    In the summer of  2003 he
and Syed together sought to expand ZH Tech’s business.    Naser
testified that he and Syed planned to expand ZH Tech to
develop high-speed internet access for the hospitality
industry and to obtain other government contracts.    Naser also
testified that he and Syed  “agreed, and it was a gentleman’s
agreement that  [ZH Tech] is going to be  50/50” and that he
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would initially put in all the start up money,
and Mr. Syed’s duty  [was] computer work,
installation and the marketing and everything,
and also I would support like the  - equipment
order, other management issues, discussing
contracts and discussing installation support
contract, discussing the prices for the
hardware, discussing how much should we  [bill]
for the labor and all that.
While Naser maintains that he never told Syed he would be
a half-owner, director, shareholder, or officer of ZH Tech,
Naser considered Syed a partner of ZH Tech in both the
government contract and high-speed internet access
installation businesses of ZH Tech.    Furthermore, Naser
attempted to  “formalize” his partnership by adoption of a
written agreement with Syed in February  2005; however, Syed
never signed the partnership agreement.
Syed corroborated Naser’s testimony about starting a
partnership with Rajiv Bhatia and Faisal Rana in  2002 and that
the partnership dissolved in the summer of  2003.3    Syed also
corroborated Naser’s testimony that Syed began to provide
high-speed internet access installation and support in the
hospitality industry using ZH Tech’s name.    However, Syed
testified that while he and Naser agreed they would be
3 Naser testified that he, Syed, Rajiv Bhatia, Faisal
Rana, and Asad Khan formed a partnership, while Syed testified
that he, Naser, Rajiv Bhatia, Faisal Rana, and  “Mr. Hussein”
formed a partnership.    The letter of intent for this
partnership was signed by Syed, Naser, Faisal Rana, and Rajiv
Bhatia.    No issue in this case turns on the identity of either
“Mr. Hussein” or Asad Khan.
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partners in ZH Tech for the government contract business, the
work providing high-speed internet access for the hospitality
industry was not included in the ZH Tech partnership.    Syed
testified that he deposited the revenue from the first  “two,
three jobs” he completed for the high-speed internet access
business into the ZH Tech account that  “Mr. Naser runs.”
Syed also testified that he and Naser opened a separate
account in September  2003 dedicated to the high-speed internet
access business.    Syed also testified that he believed he was
an owner, officer and director of ZH Tech because Naser told
him he was.
However, when Syed tried to obtain documentation that he
was an officer, director and owner of ZH Tech in the course of
applying for a mortgage in December  2004, he discovered that
Naser was the only officer, director and owner of ZH Tech and
that ZH Tech’s corporate existence was terminated on August  2,
2004.    After that discovery, Syed was concerned about
potential personal liability for the work he did for ZH Tech
after ZH Tech’s corporate existence was terminated.    Syed
decided not to sign the partnership agreement Naser had sent
him.    Instead he and his wife, Ousman, founded a new
corporation, Zerowire, on February  15,  2005.
ZH Tech and Naser sought damages against Syed for breach
of fiduciary duty and alleged that Syed, in his capacity as an
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employee, breached a fiduciary duty owed to ZH Tech and Naser.
In response, Syed denied ever being an employee of, or
entering into an employment, nondisclosure or noncompetition
agreement with, ZH Tech.    Syed also pled that he and Naser
“agreed that they would be Partners,  [and] that  [they] would
share equally in ZH  [Tech] to obtain and to perform a[]
substantial subcontract for” a government agency, but that
“Defendant Syed would operate his own separate wireless
internet business using the ZH  [Tech] name until the partners
began performing the” government contract work.
At trial, Naser acknowledged that ZH Tech issued IRS  1099
tax forms to Syed in  2003 and  2004 that listed Syed’s
compensation as  “nonemployee” and identified Syed as an
“independent contractor,” that ZH Tech never gave Syed a W-2
form, and that ZH Tech never withheld money for tax purposes
from Syed.    While Naser now disputes Syed’s  1099 tax form for
2004, he stated that he did not tell the IRS in writing that
this tax form was incorrect.    Furthermore, Naser and ZH Tech’s
accountant testified that Naser never asked him to amend or
revoke Syed’s  2004  1099 tax form and that Naser had inquired
about issuing a W-2 form to Syed but that he told Naser that a
person’s status cannot  “retroactively” be converted after a
form has been filed.
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ZH Tech and Naser also sought damages against the
Defendants for statutory business conspiracy.    ZH Tech and
Naser alleged that Syed and Ousman willfully conspired to
injure ZH Tech by creating Zerowire and misappropriating ZH
Tech’s customers.    At trial, ZH Tech and Naser introduced
evidence suggesting a conspiracy between Syed and a man named
Trevor Warner  (“Warner”).    However, Warner was not referenced
in ZH Tech and Naser’s complaint.
At the conclusion of the evidence, but before closing
arguments were made, ZH Tech and Naser’s attorneys moved to
amend or conform the pleadings to the evidence pursuant to
Code  §  8.01-377.    ZH Tech and Naser argued that the evidence
at trial revealed that Syed was a partner, not an employee as
alleged in the complaint.    Therefore, ZH Tech and Naser sought
to amend their complaint or conform their averments to the
evidence that Syed breached his fiduciary duty as a partner.
ZH Tech and Naser also moved to amend their business
conspiracy cause of action to include a conspiracy between
Syed and Warner, which had not been pled, or to conform their
pleading and the jury instructions to the evidence that there
was a conspiracy between Syed and Warner.
The trial court denied ZH Tech and Naser’s motion to
amend their complaint.    The trial court stated that ZH Tech
and Naser’s motion to amend the fiduciary duty cause of action
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would be  “fundamentally unfair  .  .  . at this point” in the
trial.    The trial court also stated that it would be
“fundamentally unfair” to permit amendment of ZH Tech and
Naser’s business conspiracy cause of action after the
Defendants had  “put on their case.”    Nevertheless, the trial
court allowed ZH Tech and Naser to argue to the jury, based
upon instructions that conformed to the evidence, that Syed
breached his fiduciary duty to Naser and ZH Tech as a partner
and that Syed conspired with Warner against ZH Tech.
In closing arguments, ZH Tech and Naser argued that
“there are really two conspiracies” in this case: the first
being between Syed and Ousman who conspired by forming
Zerowire  “for the purpose of removing the high speed
[i]nternet  [access business] from ZH  [Tech],” and the second
between Syed and Warner who conspired to take business away
from ZH Tech for the benefit of Zerowire.    The jury
instructions on the business conspiracy claim stated in part
that the jury  “shall” find for Naser and ZH Tech if they
proved by clear and convincing evidence that  “Zerowire
Technologies or Mr. Syed or Ms. Ousman  .  .  . and at least one
other person acted in concert, agreed, associated, mutually
undertook or combined together.”
The trial court also gave the jury several instructions
on damages.    Regarding compensatory and punitive damages,
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Instruction I stated,  “[i]f you find compensatory damages
against a Defendant, then you, if you deem it appropriate, may
assess punitive damages on a separate line of the verdict form
against that Defendant.    If you decide to award punitive
damages, you must attribute them to each separate violation.”
Similarly, Instruction  70 stated,  “[i]f you award punitive
damages, you must state separately in your verdict the amount
you allow as compensatory damages and the amount you allow as
punitive damages.”
The jury verdict form was divided into several different
sections.    In relevant part, the first section asked the jury
to decide if Naser and ZH Tech proved their claims against the
Defendants.    The next section asked the jury to determine the
actual, numerical amount of the  “Plaintiffs’ Damages” for each
cause of action, if any.    In the  “Plaintiffs’ Damages”
section, the jury also was instructed:                            “If you found in favor
of Plaintiffs on their conversion, tortious interference or
business conspiracy claims you may, but are not required to,
assess punitive damages against  [the] Defendant[s] in
accordance with the instructions which have been given you.”
The jury verdict form contained this paragraph along with a
line for the amount of punitive damages, if any, the jury
might award against each of the defendants  (Zerowire, Syed,
and Ousman).
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After deliberations, the jury found Syed and Zerowire
liable to Naser and ZH Tech for conspiracy and tortious
interference, but then awarded  “[$]0” damages against Zerowire
and Syed for both conspiracy and tortious interference.
However, the jury awarded punitive damages against Zerowire of
$375,000 and against Syed for  $375,000.    The jury also found
Syed liable for breach of fiduciary duty and awarded Naser and
ZH Tech  $22,500 against Syed.4
Neither the parties nor the trial court raised an issue
with the jury’s verdict immediately after it was rendered and
the jury was dismissed.    However, the trial court suspended
the order confirming the jury verdict so that the Defendants
could file a memorandum of law on their motion to strike the
plaintiffs’ case, as well as other post-trial motions.
One of the Defendants’ arguments was that the trial court
erred by not striking Naser and ZH Tech’s evidence because ZH
Tech was not in existence at the time of the alleged
wrongdoings.    ZH Tech was incorporated in  1999; however, due
to its failure to file an annual report and pay its annual
registration fee, ZH Tech’s existence was terminated on
several occasions.    The Defendants contend all of the
4 The jury found Syed not liable for conversion, found
Syed and Ousman liable for unjust enrichment and awarded Naser
and ZH Tech damages in the amount of  $9,000 against Syed and
$13,500 against Ousman, and found Syed liable for fraud and
awarded Naser and ZH Tech  $22,500 against Syed.
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allegations of wrongdoing against them occurred during periods
of ZH Tech’s terminated existence, and therefore, ZH Tech
could not maintain a cause of action against them.    ZH Tech
responded to the Defendants’ motion to strike by arguing that
once ZH Tech was reinstated, it was to be treated as if its
corporate existence was never terminated.
After both parties briefed these post-trial issues, the
trial court issued a letter opinion and an order that
confirmed the jury verdict  “as to its findings of liability”
and set aside the verdict as to damages.    Relying on Zedd v.
Jenkins,  194 Va.  704,  74 S.E.2d  791  (1953), the trial court
held that the jury’s misunderstanding of the instructions and
jury verdict form was limited to damages alone and ordered a
new trial limited to that issue.
After the retrial on damages, the trial court entered
judgment for Naser and ZH Tech against Syed for business
conspiracy, tortious interference, breach of fiduciary duty,
unjust enrichment, and fraud.    The award was in favor of Naser
and against Syed  “in the amount of  $162,658.21  (which includes
compensatory damages of  $36,146.27 plus  $108,438.81 of trebled
damages pursuant to Virginia Code  §  18.2-500(a), and
$18,073.13 for punitive damages).”    Also, the award was in
favor of ZH Tech and against Syed  “in the amount of
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$180,731.34  (which includes  $108,438.81 for compensatory
damages and  $72,292.53 for punitive damages).”
As to Zerowire, the trial court entered judgment in favor
of Naser and ZH Tech and against Zerowire on business
conspiracy and tortious interference.    The award was in favor
of Naser and against Zerowire  “in the amount of  $23,245.89
(which includes  $23,245.89 of trebled damages pursuant to
Virginia Code  §  18.2-500(a)).”    Also, the award was entered in
favor of ZH Tech and against Zerowire  “in the amount of
$11,622.94  (which includes  $7,748.63 for compensatory damages
and  $3,874.31 for punitive damages).”
The trial court also entered judgment in favor of Naser
and ZH Tech and against Ousman on the unjust enrichment cause
of action; however, no damages were awarded to Naser or ZH
Tech against Ousman.    Finally, the trial court awarded Naser
and ZH Tech attorneys’ fees  “in connection with the business
conspiracy claim” in the amount of  $644,447.35 and expenses of
$31,943.30.    While the trial court noted  “that if attorney
fees could not be recovered under the business conspiracy
claim, the Court would have ordered attorney fees in an
equivalent amount under the fraud claim,” the trial court only
awarded attorneys’ fees and costs under the business
conspiracy claim.
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The Defendants timely noted their appeal to this Court,
and we granted the Defendants an appeal on six assignments of
error:
1. The trial court erred in instructing the jury on
breach of partnership duty theory and on the jury’s
responsibility to return a verdict against Mr. Syed if the
jury found Mr. Syed breached a partnership fiduciary duty to
Naser despite the fact that such theory was never pled in the
bill of complaint.
2. The trial court erred in allowing Naser and ZH Tech to
argue to the jury that the jury may find a civil conspiracy if
Mr. Syed conspired with Trevor Warner  (“Mr. Warner”) despite
the fact that the bill of complaint neither listed Mr. Warner
as a defendant nor as a co-conspirator under its civil
conspiracy count.
3. The trial court erred in confirming the jury’s verdict
as to the issue of liability and ordering a new trial on
damages despite the fact that the jury in the first trial
awarded  “0” damages to the prevailing party on the count of
civil conspiracy and one cannot be found guilty of civil
conspiracy until and unless it can first be proven that
damages have been sustained.
4. The trial court erred in ordering a new trial on
damages after the jury came back with a  $0 verdict on civil
conspiracy and tortious interference counts because claims
cannot be retried when punitive damages are awarded, but no
compensatory damages are awarded as a predicate.
5. The trial court erred in refusing to strike all of
plaintiffs’ evidence despite the fact that ZH Tech’s corporate
existence was terminated during the time of the alleged wrong.
6. The trial court erred in awarding attorneys’ fees to
Naser and ZH Tech because they failed to segregate them from
attorneys’ fees expended on other claims.
II.    Analysis
A. Standard of Review
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We review this appeal under well-settled principles.
When parties come before us with
a jury verdict that has been approved
by the trial court, they hold the most
favored position known to the law.
The trial court’s judgment is presumed
to be correct, and we will not set it
aside unless the judgment is plainly
wrong or without evidence to support
it.    We view the evidence and all
reasonable inferences fairly deducible
from it in the light most favorable to
the prevailing party at trial.
Xspedius Mgmt. Co. v. Stephan,  269 Va.  421,
424-25,  611 S.E.2d  385,  387  (2005)
(quotations and citations omitted).    We
review matters of law de novo. Hubbard v.
Dresser, Inc.,  271 Va.  117,  122,  624 S.E.2d
1,  4  (2006).
Banks v. Mario Indus.,  274 Va.  438,  450-51,  650 S.E.2d  687,
694  (2007).
B. Code  §  13.1-754
“Statutory interpretation is a question of law which we
review de novo, and we determine the legislative intent from
the words used in the statute, applying the plain meaning of
the words unless they are ambiguous or would lead to an absurd
result.”    Wright v. Commonwealth,  278 Va.  754,  759,  685 S.E.2d
655,  657  (2009).    The Defendants argue that the trial court
erred by not striking Naser and ZH Tech’s evidence because ZH
Tech’s corporate existence was terminated at the time of all
the alleged wrongdoings.
13




Code  §  13.1-754 states in relevant part:
Upon the entry by the Commission of an order of
reinstatement, the corporate existence shall be
deemed to have continued from the date of
termination of corporate existence, and any
liability incurred by the corporation or a
director, officer, or other agent after
termination of corporate existence and before
the reinstatement shall be determined as if the
termination of corporate existence had never
occurred.
However, prior to a  2004 amendment by the General Assembly,
former Code  §  13.1-754  (1999) read in relevant part:
Upon the entry by the Commission of an order of
reinstatement, the corporate existence shall be
deemed to have continued from the date of
termination of corporate existence except that
reinstatement shall have no effect on any
question of personal liability of the directors,
officers or agents in respect to the period
between termination of corporate existence and
reinstatement.
Under former Code  §  13.1-754, prior to the  2004
amendment, it is clear that the General Assembly intended for
corporate officers, directors and agents to remain personally
liable for the periods of time a corporation’s existence was
terminated, regardless whether the corporation’s existence was
reinstated.    However, in the  2004 amendment to Code  §  13.1-
754, the General Assembly adopted the principle that if a
corporation’s existence is reinstated the legal consequence of
actions by officers, directors and agents are determined as
14




though the corporation remained in existence throughout the
period of termination.    See  2004 Acts ch.  601.
While this principle applies to any potential liability
of corporate officers, directors and agents, the General
Assembly also expressly provided that  “[u]pon the entry by the
Commission of an order of reinstatement, the corporate
existence shall be deemed to have continued from the date of
termination.”    Id.    ZH Tech’s reinstatement following
termination has the retroactive effect of placing it in a
position as if its termination had never occurred.    The trial
court did not err in denying the Defendants’ motion to strike.
C. Breach of Fiduciary Duty
Syed argues on appeal that the trial court erred by
allowing Naser and ZH Tech to present a new theory under their
breach of fiduciary duty cause of action that was not pled in
their complaint.    In their complaint, Naser and ZH Tech only
allege that Syed breached a fiduciary duty to ZH Tech as an
employee.
As previously recited, the trial court denied ZH Tech and
Naser’s motion to amend the complaint to allege breach of
fiduciary duty both as an employee and a partner, but
nonetheless gave instructions to the jury and permitted
closing argument that accomplished the same objectives.
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The jury found that Syed breached a fiduciary duty to ZH
Tech; however, the record does not reveal whether the jury
found that he committed such breach in the capacity of an
employee or as a partner.
We have previously stated:
Code  §  8.01-377 provides that when, at trial,
there appears to be a variance between the
evidence and the allegations, the court  “if it
consider that substantial justice will be
promoted and that the opposite party cannot be
prejudiced thereby,” may, instead of allowing
the pleadings to be amended, direct that the
facts be determined.    The statute further
provides that after such factual finding, the
court  “shall give judgment according to the
right of the case,” if it considers that the
variance  “could not have prejudiced the
opposite party.”
Hensley v. Dreyer,  247 Va.  25,  27,  439 S.E.2d  372,  373  (1994).
This Court reviews whether the trial court correctly
determined that a variance was not prejudicial to a party
under an abuse of discretion standard.    See id. at  30,  439
S.E.2d at  375.    Furthermore, this Court has held that
[w]e adhere to the principle that a court
may not base a judgment or decree upon facts
not alleged or upon a right, however
meritorious, that has not been pleaded and
claimed.    Every litigant is entitled to be told
in plain and explicit language the adversary’s
ground of complaint.    Ted Lansing Supply Co. v.
Royal Aluminum and Constr. Corp.,  221 Va.  1139,
1141,  277 S.E.2d  228,  230  (1981).    Like any
other rule, however, this principle must be
reasonably applied, keeping in mind that its
purpose is to prevent surprise.    Kennedy v.
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Mullins,  155 Va.  166,  180,  154 S.E.  568,  572
(1930).
In a case of variance, Code  §  8.01-377
gives a trial court the discretion to apply the
foregoing rule reasonably either by permitting
amendment of the pleadings  (and possibly
postponing the trial) or, in lieu of amendment,
by having the facts determined and rendering
judgment, but only on the condition that no
prejudice results.    While the statute is
remedial in purpose and should be liberally
construed, Provident Life and Accident Ins. Co.
v. Walker,  190 Va.  1016,  1025,  59 S.E.2d  126,
130  (1950), it should not be interpreted in a
manner inconsistent with its plain language.
City of Richmond v. Richmond Metro. Auth.,  210
Va.  645,  648,  172 S.E.2d  831,  833  (1970).
Hensley,  247 Va. at  30,  439 S.E.2d at  375.
ZH Tech and Naser did not plead that Syed breached a
fiduciary duty as a partner of ZH Tech.    Rather, ZH Tech pled
that Syed breached a fiduciary duty to ZH Tech as an employee.
Syed presented a defense that he was not an employee of ZH
Tech but did not have the opportunity to defend against the
partnership allegation.    The trial court observed that it
would have been  “fundamentally unfair” for ZH Tech and Naser
to amend the complaint after the close of all the evidence.
We hold that it also was fundamentally unfair and prejudicial
to Syed to accomplish the same objective by permitting jury
instructions and argument on matters not pled.    The trial
court erred by allowing Naser and ZH Tech’s breach of
fiduciary duty claim to proceed on the unpled claim that Syed
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breached a fiduciary duty as a partner.    We will therefore
reverse the judgment concerning breach of fiduciary duty and
remand for retrial on the merits.    On retrial, any renewed
motion for amendment of pleadings may be considered in the
discretion of the trial court.
D. Business Conspiracy
On appeal, Syed and Zerowire raise several issues
regarding the judgment on the business conspiracy cause of
action  (Code  §§  18.2-499 and  18.2-500).    First, Syed and
Zerowire argue that the trial court erred in allowing Naser
and ZH Tech’s business conspiracy cause of action to proceed
to the jury under a theory not pled in Naser and ZH Tech’s
complaint.    Specifically, Syed and Zerowire argue that ZH Tech
and Naser alleged a conspiracy between Syed and Ousman against
ZH Tech and the trial court erred by instructing the jury it
could consider evidence and argument that Syed conspired
against ZH Tech with Warner as a theory for finding Syed
liable to ZH Tech.
Second, Syed and Zerowire argue that the trial court
erred in granting a new trial on damages because proof of some
damage is an element of the cause of action and here the jury
awarded  “[$]0” compensatory damages.    We need only to resolve
the second question.
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The jury found Syed and Zerowire liable for business
conspiracy; however, the jury awarded  “[$]0” compensatory
damages for the business conspiracy cause of action.
Additionally, the jury awarded punitive damages against Syed
in the amount of  $375,000 and Zerowire in the amount of
$375,000.    The trial court confirmed the jury’s verdict as to
liability, but granted a new trial on damages.    It is not
necessary to recite what occurred on the retrial for damages
because the trial court erred in confirming the jury’s verdict
as to liability.
Code  §  18.2-499(A) provides as follows:
Any two or more persons who combine, associate,
agree, mutually undertake or concert together
for the purpose of  (i) willfully and maliciously
injuring another in his reputation, trade,
business or profession by any means whatever
or  .  .  . shall be jointly and severally guilty
of a Class  1 misdemeanor. Such punishment shall
be in addition to any civil relief recoverable
under  §  18.2-500.
Code  §  18.2-500(A) provides:
Any person who shall be injured in his
reputation, trade, business or profession by
reason of a violation of  §  18.2-499, may sue
therefor and recover three-fold the damages by
him sustained, and the costs of suit, including
a reasonable fee to plaintiff’s counsel, and
without limiting the generality of the term,
“damages” shall include loss of profits.
An action under these statutes is different from a common
law action for conspiracy.    Code  §  18.2-500 requires a finding
19




of some compensatory damages as an element of determining
liability under the statute.    Once liability is found, the
compensatory damages are subject to trebling.    See Code
§  18.2-500.    However, if there is no finding of compensatory
damages, liability under this statute has not been established
because no  “injury” has been  “sustained.”                         “Consistent with
Code  §  18.2-500, the jury instructions required the jury to
find proof of injury and proof that the injured party suffered
damages as a predicate to a verdict on a business conspiracy
claim.”    Ulloa v. QSP, Inc.,  271 Va.  72,  78 n.1,  624 S.E.2d
43,  47 n.1  (2006).    Because the jury’s verdict form awarding
“[$]0” clearly indicated that no injury was sustained, Naser
and ZH Tech did not bear their burden of proof on liability
and it was error for the trial court to conduct a retrial on
damages.    We will reverse the trial court’s judgment on the
business conspiracy cause of action and enter judgment for
Syed and Zerowire.
In addition, because the award of  $644,447.35 in
attorneys’ fees and  $31,943.30 in costs to Naser and ZH Tech
was made pursuant to Code  §  18.2-500 and because we reverse
the business conspiracy judgment upon which it was based, we
must also reverse that award.
E. Tortious Interference
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Syed and Zerowire assert that the trial court erred in
granting a new trial on damages because the common law
tortious interference claim cannot be retried when punitive
damages were awarded but compensatory damages were not.    We
agree.
In deciding to grant a new trial on damages only, the
trial court, relying solely on Zedd,  194 Va.  704,  74 S.E.2d
791, reasoned that the jury’s entry of punitive damages but
not compensatory damages was due to the jury’s
misunderstanding of the jury instructions and the jury verdict
form.    The trial court held that the jury’s award of punitive
damages without corresponding compensatory damages did not
have an  “impact upon liability.”    Accordingly, the trial court
held that the jury’s misunderstanding of the instructions and
jury verdict form was limited to damages alone and ordered a
new trial on damages only.
The jury instructions on damages stated that, in order to
award punitive damages, the jury had to award compensatory
damages.    Instruction I stated that  “[i]f you find
compensatory damages against a Defendant, then you, if you
deem it appropriate, may assess punitive damages on a separate
line of the verdict form against that Defendant.    If you
decide to award punitive damages, you must attribute them to
each separate violation.”    Instruction  70 also stated that
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“[i]f you award punitive damages, you must state separately in
your verdict the amount you allow as compensatory damages and
the amount you allow as punitive damages.”    Furthermore, the
jury verdict form had a specific section for the jury to
assess the amount, if any, they could award for punitive
damages.
While the trial court relied on Zedd, that case is
distinguishable.    In Zedd, the jury’s verdict originally
stated,  “‘[w]e, the Jury, find for Plaintiff in the amount of
$3,000.00 as punitive damages only,’” and the trial court told
the jury to change their verdict to,  “‘[w]e the Jury, find for
the Plaintiff in the amount of  $3,000.00.’”                      194 Va. at  705-
06,  74 S.E.2d at  792.    We held in Zedd that
[t]he original finding of the jury was not a
verdict for defendant.    It was a finding for
plaintiff in express terms.    It was illegal in
that it contained an assessment of punitive
damages without finding that plaintiff was
entitled to any compensatory, or even nominal,
damages.    Evidently the jury misunderstood, or
misconstrued the instruction on damages.
Id. at  708,  74 S.E.2d at  793.
However, here, after being instructed that in order to
award punitive damages it had to award compensatory damages,
the jury explicitly found zero compensatory damages against
Syed and Zerowire on the tortious interference claim.    This
case is distinguishable from Zedd because in that case the
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jury’s verdict did not explicitly find zero compensatory
damages.    Because the jury here explicitly found zero
compensatory damages but awarded punitive damages, the trial
court erred by granting a new trial on damages.
It is well-established that  “an award of compensatory
damages  .  .  . is an indispensable predicate for an award of
punitive damages, except in actions for libel and slander.”
Gasque v. Mooers Motor Car Co.,  227 Va.  154,  159,  313 S.E.2d
384,  388  (1984); see also Murray v. Hadid,  238 Va.  722,  732,
385 S.E.2d  898,  905  (1989).    Therefore, we will reverse the
trial court and will enter final judgment for Syed and
Zerowire on the tortious interference claim.
III.    Conclusion
For the reasons stated, we hold that the trial court
erred by entering judgment against Syed and Zerowire on the
business conspiracy claim and the tortious interference claim
and for allowing the breach of fiduciary duty claim to proceed
despite variance from the factual averments and legal theory
pled.    Accordingly, we will affirm in part and reverse in part
the judgment of the Circuit Court of Fairfax County and remand
the breach of fiduciary duty cause of action to be retried.
Affirmed in part,
reversed in part, and
remanded in part.
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