                           UNPUBLISHED

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT


                           No. 10-1684


MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY,

               Plaintiff - Appellant,

          v.

TERRENCE RAYMOND BATZLI; BATZLI WOOD & STILES, PC,

               Defendants - Appellees.




                           No. 10-1839


MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY,

               Plaintiff - Appellant,

          v.

TERRENCE RAYMOND BATZLI; BATZLI WOOD & STILES, PC,

               Defendants - Appellees.




                           No. 10-1910


MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY,

               Plaintiff - Appellee,

          v.
TERRENCE RAYMOND BATZLI; BATZLI WOOD & STILES, PC,

                Defendants - Appellants.



Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond.  Henry E. Hudson, District
Judge. (3:09-cv-00432-HEH)


Argued:   May 12, 2011                     Decided:   August 4, 2011


Before KING, SHEDD, and WYNN, Circuit Judges.


Affirmed by unpublished opinion. Judge Wynn wrote the majority
opinion, in which Judge King joined.     Judge Shedd wrote a
dissenting opinion.


ARGUED: Danny Mark Howell, SANDS ANDERSON, PC, McLean, Virginia,
for Minnesota Lawyers Mutual Insurance Company.    William F. D.
Gallalee, WILLIAMS MULLEN, Richmond, Virginia, for Terrence
Raymond Batzli and Batzli Wood & Stiles, PC. ON BRIEF: Michael
T. Marr, Jeffrey H. Geiger, Mikhael D. Charnoff, Douglas A.
Winegardner, SANDS ANDERSON, PC, McLean, Virginia, for Minnesota
Lawyers Mutual Insurance Company.   Harold E. Johnson, WILLIAMS
MULLEN, Richmond, Virginia, for Terrence Raymond Batzli and
Batzli Wood & Stiles, PC.


Unpublished opinions are not binding precedent in this circuit.




                                 2
WYNN, Circuit Judge:

       When      reviewing       the   denial       of    a     post-verdict     motion     for

judgment as a matter of law, we view the evidence in the light

most favorable to the party that prevailed at trial and will

affirm the denial of the motion “unless we conclude that the

jury lacked ‘a legally sufficient evidentiary basis’” to render

the challenged verdict.                 Sloas v. CSX Transp. Inc., 616 F.3d

380, 392 (4th Cir. 2010) (quoting King v. McMillan, 594 F.3d

301, 312 (4th Cir. 2010)).                     In this case, the district court

denied      a    motion    for    judgment          as    a    matter    of   law,   made   by

Minnesota Lawyers Mutual Insurance Company (“Minnesota Mutual”),

that     challenged        the     jury’s       verdict          that    Minnesota    Mutual

breached         its    professional        liability            insurance      contract     by

refusing to defend Terrence Batzli, a lawyer, and Batzli Wood &

Stiles,         P.C.,   his   law       firm     (collectively           “the    insureds”),

against a malpractice suit brought by one of Batzli’s former

clients.          Because there was sufficient evidence in the record

for a reasonable jury to conclude that Minnesota Mutual breached

the contract, we affirm.



                                               I.

                                               A.

       In       November   2004,       Richard       J.       Chasen    (“Richard    Chasen”)

hired Terrence Batzli (“Batzli”) of the law firm Batzli Wood &

                                                3
Stiles, P.C., (“Batzli Wood”) to represent him in his divorce

from    Karen       Chasen.      As     part       of    that   representation,           Batzli

engaged in property settlement negotiations with Karen Chasen’s

attorney, Murray Janus (“Janus”).

       Richard Chasen had various degrees of ownership in a number

of     businesses,        including          Chasen       Properties,        LLC,        (“Chasen

Properties”), a family business in which Richard Chasen, Karen

Chasen, and their three children each owned a 20% interest.                                    In

their answers to interrogatories, both Richard and Karen Chasen

indicated       a    belief     that        Karen       Chasen’s    interest        in    Chasen

Properties          was      marital        property.              Richard     Chasen        was

uncomfortable with Karen Chasen’s continued ownership of 20% of

Chasen Properties, particularly because that entity owned the

building housing N. Chasen & Son, Inc., Richard Chasen’s largest

business.        Accordingly, Richard Chasen advised Batzli that he

wanted to obtain Karen Chasen’s interest in Chasen Properties

during the settlement negotiations.

       On October 27, 2005, Batzli sent Janus a letter with a

settlement proposal.             After proposing Karen Chasen’s retention

of   certain        assets    such     as    the    marital     home    and    her       current

automobile, the document proposed the transfer to Richard Chasen

of Karen Chasen’s interests in “JACKAN, Chasen Properties, the

Chasen Family Limited Partnership, and her interest in all other



                                                4
marital assets.”           J.A. 487. 1            The letter also proposed that

Richard Chasen would pay Karen Chasen a $345,000 lump sum in

addition to a series of installment payments totaling $657,000.

      In response, Janus sent Batzli a letter on December 29,

2005,     stating      points     of     agreement             as   well    as      certain

counterproposals.        Importantly, the letter proposed that instead

of   transferring      her     interests          in    the    Chasen   Family      Limited

Partnership and JACKAN to Richard Chasen, Karen Chasen would

transfer     those    interests     to    the          couple’s     children     in    equal

percentages.         Karen Chasen also rejected the proposed payment

structure and suggested that Richard Chasen instead pay her a

lump sum of $500,000.           The letter did not mention the transfer

of   Karen    Chasen’s     interest      in       Chasen      Properties,     and     in   its

conclusion Janus wrote, “I believe this would resolve all issues

between the parties.”          J.A. 491.

      Batzli responded via letter on January 4, 2006, suggesting

that Richard Chasen would buy Karen Chasen’s interests in the

Chasen    Family     Limited    Partnership            and    JACKAN,   but    making      no

mention      of   Chasen     Properties.               Ultimately,      Richard       Chasen

decided not to buy those interests and, on January 9, 2006,

Batzli sent a letter to Janus stating, “[Richard] will agree,


      1
       Citations herein to “J.A. __” refer to the contents of the
Joint Appendix filed by the parties in this appeal.



                                              5
with regard to Karen’s interest in the Chasen Family Limited

Partnership and JACKAN, that Karen’s interest will simply be

transferred to the children.”             J.A. 109.        Batzli did not mention

Chasen Properties in this correspondence either.

     Notwithstanding, Batzli believed he had negotiated a deal

under which Karen Chasen would transfer her interest in Chasen

Properties       to     Richard     Chasen.        However,   Batzli   drafted    an

Agreement and Stipulation (“the Agreement”) which called for the

transfer of Karen Chasen’s interests in JACKAN and the Chasen

Family Limited Partnership to the children.                     Despite Batzli’s

intention to draft the Agreement so that Karen Chasen’s interest

in Chasen Properties would be transferred to Richard Chasen, he

failed    to    do    so.      As   drafted,      the   Agreement   indicated   that

Richard        Chasen       would    retain       “[h]is   interest    in   Chasen

Properties, LLC” instead of “their interest” in the business.

J.A. 119.       Batzli and Richard Chasen both reviewed the document,

and neither noticed the omission before Richard Chasen and Karen

Chasen signed the Agreement on January 11, 2006. 2



     2
       Richard Chasen would later testify that when he signed the
document, he believed that Karen Chasen’s interest in Chasen
Properties was supposed to transfer to him under the Agreement.
He based this belief on the “initial instructions” given to
Batzli upon his retention as counsel “as well as the previous
negotiations that had gone back and forth between Mr. Batzli and
Mr. Janus.” J.A. 358.



                                              6
      Thereafter,        Batzli      sent    Janus    a     follow-up      document        for

Karen Chasen to sign to affect the transfer of her 20% ownership

in Chasen Properties to Richard Chasen.                        Recognizing that the

Agreement    did       not   address      Karen    Chasen’s        interest      in   Chasen

Properties, Janus responded that his client had not agreed to

such a transfer.             Nonetheless, Janus stated that Karen Chasen

would be willing to transfer her interest in Chasen Properties

to   the   couple’s      children      as    she     had    done,       pursuant      to   the

Agreement,       with    respect     to     her   interests        in    JACKAN    and     the

Chasen Family Limited Partnership.                     Thereafter, Batzli called

Janus,     who    reiterated       that     Karen     Chasen       never    intended        to

transfer her interest in Chasen Properties to Richard Chasen.

Janus further asserted that Karen Chasen’s interest was separate

property, as it had been gifted to her individually by Richard

Chasen’s parents.

      Having      realized     his     drafting      omission,          Batzli    discussed

various options with Richard Chasen.                       Richard Chasen indicated

that he was unwilling to accept Karen Chasen’s offer to transfer

her interest in Chasen Properties to the children.                               Batzli and

Richard Chasen also discussed the option of moving to set aside

the Agreement on the theory that there was not a meeting of the

minds.     Richard Chasen declined to pursue that option because he

considered       the    Agreement      favorable      to     him    even    without        the



                                             7
transfer of Karen Chasen’s 20% interest in Chasen Properties. 3      A

third option was to move for correction of the Agreement on the

grounds that Batzli had made a scrivener’s error when he drafted

the Agreement.   Richard Chasen chose the third option.

     On August 24, 2006, at his client’s direction, Batzli filed

a motion 4 in the Circuit Court of the City of Richmond, Virginia,

seeking   correction   of   a   scrivener’s   error   “[p]ursuant   to



     3
        Under the Agreement, Richard Chasen received all of his
interest in N. Chasen & Son, Inc., the value of which had
appreciated by some $2 million during the marriage.       Janus had
expressed to Batzli Karen Chasen’s position that the business
was therefore “hybrid property” and she was entitled to a
portion of the appreciation.          See Va. Code Ann. § 20-
107.3(A)(3)(a) (2008) (“In the case of the increase in value of
separate property during the marriage, such increase in value
shall be marital property . . . to the extent that marital
property    or  the  personal   efforts  of  either    party   have
contributed to such increases, provided that any such personal
efforts    must  be   significant   and  result   in    substantial
appreciation of the separate property.”).     Richard Chasen told
Batzli he did not want to risk the possibility that a divorce
court, identifying this increase as marital property, might give
a portion to Karen Chasen. By keeping the Agreement in effect,
Richard Chasen hoped to avoid this possibility.      See id. § 20-
107.3(I) (“Nothing in this section shall be construed to prevent
the affirmation, ratification and incorporation in a decree of
an agreement between the parties pursuant to §§ 20-109 and 20-
109.1.”).
     4
       Batzli initially did not charge Richard Chasen for the
work done in preparing, drafting, or arguing the motion; Batzli
claimed that he gave Richard Chasen “courtesy discounts” for the
purpose of client relations.   J.A. 289.   Later, Batzli sent a
bill for a month’s worth of work, asking Chasen if he would pay
half the amount on the theory that the error was a “joint
mistake,” but Batzli ultimately accepted no money for that work
either. J.A. 292.



                                  8
Virginia Code § 8.01-428(B).” 5                     J.A. 462.       The motion asked the

court to change the Agreement to say that Richard Chasen would

receive “their interest” in Chasen Properties instead of only

“his interest.”               Essentially, the motion asserted that Karen

Chasen’s silence with respect to the portion of the October 27,

2005 proposal that mentioned Chasen Properties constituted her

assent      to   the    transfer        of       her    interest    in    the    business       to

Richard Chasen.               However, the court found that there was no

evidence      that     Karen     Chasen          ever    agreed     to    transfer      her    20%

interest in Chasen Properties.                          Moreover, the court held that

Karen       Chasen’s         silence        was     insufficient         to     indicate       her

agreement to the proposed transfer.                         See Va. Farm Bureau Mut.

Ins. Co. v. Hodges, 238 Va. 692, 695, 385 S.E.2d 612, 613 (1989)

(“A     binding        contract         is        not    formed      until       the    offeree

communicates an acceptance to the offeror.”).                              Accordingly, the

court       denied     the    motion        to    correct    the     alleged         scrivener’s

error.

        Thereafter, the Court of Appeals of Virginia affirmed the

Circuit      Court’s     denial        of    Richard       Chasen’s      scrivener’s       error

motion,       stating        “[t]here       is     no    evidence    in       this    record   to


        5
        This statute permits a court to correct “[c]lerical
mistakes in all judgments or other parts of the record and
errors therein arising from oversight or from an inadvertent
omission . . . .” Va. Code Ann. § 8.01-428(B) (2008).



                                                   9
suggest   a   meeting   of    the   minds    (i.e.,     a   contract—offer     and

acceptance) over wife’s relinquishment of her interest in Chasen

Properties.     As the trial court properly noted, wife’s silence

on this issue cannot be found to be an acceptance of husband’s

offer.”   Chasen v. Chasen, No. 0004-07-2, 2008 WL 2092260 at *4

(Va. Ct. App. May 20, 2008). 6



                                      B.

     Months    after    the   decision      by   the    Court   of   Appeals   of

Virginia, Batzli Wood renewed its Professional Liability Policy,

which was issued by Minnesota Mutual. 7                The renewed policy ran

from October 1, 2008 to October 1, 2009.                    The policy provided

coverage for any “act, error, or omission of the INSURED or a

person for whose acts the INSURED is legally responsible” 8 that

occurred “(1) during the POLICY PERIOD; or (2) prior to the

POLICY PERIOD and on or after the PRIOR ACTS RETROACTIVE DATE,

if the INSURED had no knowledge of facts which could reasonably
     6
       There were two arguments on appeal.    One concerned the
denial of the scrivener’s error motion. The other asserted that
the trial court erred in awarding Karen Chasen $10,000 per month
in spousal support; the latter issue has no bearing on this
appeal. Chasen, 2008 WL 2092260 at *1.
     7
        Minnesota Mutual had insured              Batzli      Wood   and   Batzli
against malpractice since 2005.
     8
       While Batzli Wood was the “named insured,” the policy made
clear that Batzli was himself, as an employee acting on behalf
of Batzli Wood, an “insured” as well.



                                      10
support a CLAIM at the effective date of this policy.” 9                            J.A.

563.        Under    the   policy,    the      insured     was    required   to   “give

immediate written notice” to Minnesota Mutual “in the event of a

CLAIM.”       J.A. 568.          The policy stated that a “claim” is made

whenever “an act, error or omission by any INSURED occurs which

has not resulted in a demand for DAMAGES but which an INSURED

knows or reasonably should know, would support such a demand.”

J.A. 563.       Coverage under the policy was explicitly conditioned

on compliance with the notice requirement.

       On January 8, 2009, Richard Chasen filed a malpractice suit

against Batzli and Batzli Wood in the Circuit Court of Henrico

County, Virginia, based on Batzli’s omission in drafting the

Agreement.          After receiving a “courtesy copy” of the complaint

on or about January 9, 2009, Batzli gave notice of the claim to

Minnesota      Mutual      via   letter   on     January    14,    2009.     Minnesota

Mutual responded by denying coverage because Batzli failed to

comply      with     the   policy’s    notice      requirement. 10         Batzli   was


       9
        Here,   all   relevant  conduct related to   Batzli’s
representation of Richard Chasen took place prior October 1,
2008 but after the prior acts retroactive date which, in the
case of Batzli, was the date on which he “first entered the
private practice of law.” J.A. 559.
       10
        Because both Batzli Wood and Batzli fell under the
policy’s definition of an “insured,” the notice requirement
could have been triggered by knowledge possessed by either
entity.   However, there is no evidence that Batzli Wood had
knowledge of any facts, other than those known to Batzli, which
(Continued)
                                            11
formally       served       with   the    Chasen      complaint      on       June    29,    2009.

Batzli again notified Minnesota Mutual of the claim, but the

insurance company once again denied coverage.

      On   July        9,    2009,    Minnesota        Mutual       filed      an    action     in

federal    court       in    the     Eastern    District       of    Virginia        seeking    a

declaratory       judgment         that   it   was     not   required          to    defend   the

Chasen malpractice action.                   Minnesota Mutual asserted that, at

the latest, when Batzli filed the scrivener’s error motion he

was aware of facts that he knew, or should have known, would

support a demand for damages.                   On August 5, 2009, Batzli filed

an   answer      and    counterclaim.            Under       the    counterclaim            Batzli

sought     a     declaratory          judgment        that     Minnesota            Mutual     was

obligated       to   defend        against     the    Chasen       malpractice        suit     and

indemnify the insured in the event of an unfavorable judgment in

the malpractice case.                Moreover, Batzli asserted a legal claim

for breach of contract based on Minnesota Mutual’s denial of

coverage.

      The parties filed cross-motions for summary judgment.                                   The

district court denied the cross-motions, reasoning that there

was “a genuine factual dispute between the parties as to whether

it   was   reasonable          for    Batzli     to    anticipate         a    claim    by    Mr.



would be relevant to a demand for damages based on Batzli’s
representation of Richard Chasen.



                                               12
Chasen.”     J.A. 170.        The district court granted Batzli’s request

for a jury trial on the breach of contract counterclaim and

stated that the declaratory judgment claims would be decided

after that trial.

     Trial      began    on     March    1,     2010,    and       a    central    issue      was

whether    Batzli’s      notice     to    Minnesota       Mutual         was     too   late    to

comply with the policy’s notice provision.                              Batzli argued that

he complied with the notice provision by notifying Minnesota

Mutual when      he     first    received       the     complaint         and     again   after

receipt    of    formal       service,     so      Minnesota           Mutual’s    denial     of

coverage constituted a breach of contract.                                Minnesota Mutual

argued    that    Batzli      had   sufficient          knowledge         to     trigger      the

contract’s notification requirement well before receipt of the

complaint and Batzli’s failure to notify Minnesota Mutual under

those circumstances constituted a failure to satisfy a condition

placed on coverage.           During the trial, Minnesota Mutual made two

motions for judgment as a matter of law (one after Batzli rested

his case and another at the close of all evidence); the district

court denied both.            Ultimately, the jury found for Batzli and

awarded damages of $8,400.

     Thereafter,        Minnesota        Mutual     filed      a       renewed    motion      for

judgment as a matter of law under Rule 50(b) of the Federal

Rules of Civil Procedure.                 First, Minnesota Mutual contended

that Batzli failed to present sufficient evidence to establish

                                              13
that the attorney’s fees sought were reasonable and necessary,

so Batzli could not state a prima facie case for breach of

contract     based    on     actual     damages.           Second,    Minnesota         Mutual

argued that Batzli’s failure to plead nominal damages barred any

attempt to establish a prima facie case by reliance thereon.

Finally, Minnesota Mutual argued that Batzli failed to prove

that he was entitled to coverage because there was insufficient

evidence      that     the     policy’s        notice         requirement         had     been

satisfied.

      The    district      court      agreed       with    Minnesota       Mutual’s      first

argument, reasoning that “Batzli’s failure to provide evidence

of the reasonableness of the fees, such as the nature of the

services      performed,       the      length       of    such     services,      and    the

applicable rates for such representation, left the jury with

insufficient evidence to justify the damages awarded.”                                   Minn.

Lawyers     Mut.   Ins.    Co.     v.      Batzli,    No.    3:09CV432-HEH,        2010     WL

2024487 at *4 (E.D. Va. May 19, 2010).                        Accordingly, the court

set   aside    the    award      of     attorney’s         fees.      However,      because

Minnesota     Mutual      failed      to    convince       the     court   that    “nominal

damages must be specifically plead or that a court is foreclosed

from inferring such damages under the facts at hand,” the court

rejected Minnesota Mutual’s second argument.                          Id. at *5.           The

court   awarded      nominal     damages       and        deemed    this   sufficient       to



                                              14
satisfy    the     damage      element       of    Batzli’s    prima    facie    case    for

breach of contract.

     Next,        the    district       court      considered     Minnesota          Mutual’s

argument that Batzli’s notice of a claim by Richard Chasen was

untimely as a matter of law.                       It was uncontested that Karen

Chasen would not have agreed to transfer her interest in Chasen

Properties to Richard Chasen.                     The court opined that this fact,

combined        with    Richard       Chasen’s      apparent    overall       satisfaction

with the Agreement, was enough to support the jury’s conclusion

that a reasonable person in Batzli’s position would not have

thought that his drafting omission would support a demand for

damages.         Additionally,         the    court    noted    that    Richard        Chasen

never indicated an intention to sue, promptly paid attorney’s

fees,     and    maintained       a    positive       attorney-client         relationship

with Batzli during the divorce proceedings.                             Ultimately, the

court determined that there was sufficient evidence to permit a

reasonable        jury    to    find     in       Batzli’s     favor,    so     it     denied

Minnesota        Mutual’s      Rule      50(b)       motion.       Minnesota          Mutual

appealed. 11



     11
       Minnesota Mutual filed its notice of appeal of the denial
of its 50(b) motion on June 18, 2010.     On July 12, 2010, the
district court entered a Final Order declaring that Minnesota
Mutual has “an obligation to provide a defense and to indemnify
against all claims asserted” in the Chasen malpractice suit.
J.A. 767.   Minnesota Mutual filed a notice of appeal of the
(Continued)
                                              15
        On appeal, Minnesota Mutual argues that the district court

considered improper evidence when concluding that a jury could

find in favor of Batzli on the notice issue.            Minnesota Mutual

also contends that Batzli failed to establish the element of

damages necessary for a prima facie case of breach of contract

and that the court erred when determining that nominal damages

satisfied that element.         Batzli filed a cross-appeal, arguing

that the district court erred in reducing the damage award from

$8,400 to a nominal award of $1 because there was sufficient

evidence to support the jury’s award of actual damages.



                                      II.

     We review the denial of a renewed motion for judgment as a

matter of law de novo.        Sloas, 616 F.3d at 392.     “On appeal, we

view the evidence in the light most favorable to the prevailing

party and will affirm the denial of a Rule 50(b) motion unless

we   conclude    that   the    jury    lacked   ‘a   legally     sufficient

evidentiary basis’ to find in that party’s favor.”             Id. (quoting

McMillan, 594 F.3d at 312).           “[W]e are not permitted to retry

factual findings or credibility determinations reached by the

jury.     Rather, we are to assume that testimony in favor of the



Final Order on July 21, 2010.        Both of Minnesota             Mutual’s
appeals were consolidated into the instant case.



                                      16
non-moving party is credible, ‘unless totally incredible on its

face,’     and   ignore      the   substantive        weight   of    any    evidence

supporting the moving party.”             Cline v. Wal-Mart Stores, Inc.,

144 F.3d 294, 301 (4th Cir. 1998) (quoting Duke v. Uniroyal,

Inc., 928 F.2d 1413, 1419 (4th Cir. 1991)).                    Ultimately, “[i]f

reasonable minds could differ about the verdict, we are obliged

to affirm.”      ABT Bldg. Prods. Corp. v. Nat’l Union Fire Ins. Co.

of Pittsburgh, 472 F.3d 99, 113 (4th Cir. 2006).

     Mindful of this deferential standard of review, we must

determine      whether     there   was   sufficient     evidence     presented      at

trial     to   allow   a   reasonable    jury    to    conclude     that   Minnesota

Mutual breached        its   contract    with    Batzli    Wood     and    Batzli   by

denying coverage.          To establish a claim for breach of contract

under Virginia law, 12 a plaintiff must demonstrate: “(1) ‘a legal

obligation of a defendant to the plaintiff,’ (2) ‘a violation or

breach of that right or duty,’ and (3) ‘a consequential injury

or damage to the plaintiff.’”                 Westminster Investing Corp. v.


     12
        Because this case commenced in the Eastern District of
Virginia, was based on diversity jurisdiction, and concerned a
dispute over the coverage provided by an insurance policy issued
in Virginia, we apply Virginia law.    See Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941) (holding that a
federal court sitting in diversity jurisdiction must apply the
choice-of-law principles of the State in which the federal court
is located); Buchanan v. Doe, 246 Va. 67, 70, 431 S.E.2d 289,
291 (1993) (“[T]he law of the place where an insurance contract
is written and delivered controls issues as to its coverage.”).



                                         17
Lamps Unlimited, Inc., 237 Va. 543, 546, 379 S.E.2d 316, 317

(1989) (quoting Caudill v. Wise Rambler, 210 Va. 11, 13, 168

S.E.2d 257, 259 (1969)); cf. Filak v. George, 267 Va. 612, 619,

594    S.E.2d    610,    614     (2004)    (“The      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.”).

       Here, the “obligation” in question was Minnesota Mutual’s

duty to defend against the malpractice suit brought by Richard

Chasen.     However, because the notice requirement in the policy

operated as a condition to coverage, Minnesota Mutual argues

that it owed no legally enforceable duty to defend.



                    A. Proof of Minnesota Mutual’s Breach

       To address Minnesota Mutual’s contention, we must determine

whether a reasonable jury could have concluded that the insured

satisfied the policy’s notice requirement.                     Under the insurance

contract, Batzli was required to “give immediate written notice”

to Minnesota Mutual whenever “an act, error or omission by any

INSURED   occurr[ed]       which    ha[d]       not   resulted    in    a   demand   for

DAMAGES but which an INSURED [knew] or reasonably should [have

known], would support such a demand.”                  J.A. 563       Virginia courts

have   consistently       held    that,    to    be   entitled    to    coverage,    an

                                           18
insured must “substantially comply” with such notice provisions.

See, e.g., Craig v. Dye, 259 Va. 533, 537, 526 S.E.2d 9, 12

(2000). 13

       Of course, in this case, notice was eventually supplied to

Minnesota Mutual.        However, under the policy, the duty to notify

Minnesota Mutual arose whenever the insured did something that

he knew, or reasonably should have known, would support a demand

for    damages.         Thus,    we   must        consider          whether    there       was

sufficient      evidence        in    the        record        to    support        a     jury

determination that, prior to learning that he was a defendant in

the malpractice suit, Batzli neither knew, nor reasonably should

have known, that deficiencies in his representation of Richard

Chasen would support a claim for damages.

       Minnesota    Mutual      attacks     the    district         court’s    conclusion

that    there     was   sufficient        evidence        to    support       the       jury’s


       13
        As stated in Atlas Ins. Co. v. Chapman, 888 F.Supp. 742
(E.D. Va. 1995),
     [t]he rationale behind the rule requiring compliance with
the notice provision is compelling.    Absent the requirement of
prompt notice by the insured of all accidents and occurrences
which could implicate the policy, the insurer is at the mercy of
its insured’s willingness to reveal such potential claims.    As
the Virginia Supreme Court has made plain, notice provisions are
designed to afford the insurer the opportunity to make a timely
investigation of all circumstances surrounding the accident and
to prepare an adequate defense if necessary on behalf of the
insured.
     Id. at 745 (citing North River Ins. Co. v. Gourdine, 205
Va. 57, 62, 135 S.E.2d 120, 123 (1964)).



                                            19
determination, arguing that the court erred as a matter of law

by    improperly         basing      its        decision      on       evidence       that      had    no

bearing on the issue.                  Specifically, Minnesota Mutual asserts

that    the       district     court       erred      by     basing       its     decision       on    1)

Richard       Chasen’s        failure       to        threaten          suit     and/or        Batzli’s

subjective         belief     that    Richard             Chasen       would    not     sue    him;    2)

Batzli’s          belief      that     he        enjoyed           a     good-attorney           client

relationship with Richard Chasen; and 3) whether a claim brought

by Richard Chasen would be meritorious.

        To    the     extent        that    Minnesota          Mutual           argues        that    the

district court erred by relying on Richard Chasen’s subjective

impressions of the circumstances, Minnesota Mutual misreads the

court’s opinion.              To begin, the district court was well aware

that    the       test     employed    is       an    objective          one,     and    quoted       the

following from Dan River, Inc. v. Commercial Union Ins. Co., 227

Va. 485, 317 S.E.2d 485 (1984):

        Failure to give timely notice will not be excused when
        the insured only subjectively concludes that coverage
        under the policy will not be implicated. Such a policy
        provision   requires  the   insurer  to   be  notified
        whenever, from an objective standpoint, it should
        reasonably appear to the insured that the policy may
        be involved.

Id.    at    489,     317    S.E.2d        at    487.        Moreover,          Minnesota        Mutual

misinterprets the basis of the district court’s decision.                                             The

court       noted    that     the    evidence             established          that   Karen      Chasen

would       not     have    agreed     to        transfer          her    interest        in     Chasen

                                                     20
Properties to Richard Chasen.                  The court stated that “[t]his

uncontested       fact,    coupled       with        Chasen’s       apparent        overall

satisfaction      with    the   other    favorable          terms     of    the    property

settlement Agreement, provided a legally sufficient basis for

the jury to conclude that Batzli did not reasonably believe that

his drafting error could support a claim for damages.”                              Batzli,

2010 WL 2024487 at *6.             In short, Minnesota Mutual is correct

that a court cannot rely on an insured’s subjective belief that

his client will not sue, but is incorrect in asserting that

subjective beliefs formed the foundation of the district court’s

judgment.

        Minnesota    Mutual     also    contends       that     the    district       court

erred by considering the likelihood of Richard Chasen’s success

on the merits in the event that a claim were brought.                                  Once

again, Minnesota         Mutual    mischaracterizes           the     district      court’s

analysis.       The court did not opine that Batzli did not need to

notify Minnesota Mutual because any foreseeable potential claim

would    lack    merit;    instead,     it     determined       that       there    was    no

reasonably       foreseeable      potential        claim.       The    distinction         is

perhaps    confusing      because      both    conclusions          could       potentially

result    from    the    determination        that    Batzli’s        error      caused    no

damage to his client.             See Campbell v. Bettius, 244 Va. 347,

352, 421 S.E.2d 433, 436 (1992) (“In a legal malpractice action,

the   fact   of     negligence     alone      is     insufficient          to    support   a

                                          21
recovery of damages.      The client must prove that the attorney’s

negligence proximately caused the damages claimed.”).

     Like    the    district   court,      we    are   unconcerned       with   the

ultimate merits of a potential claim.              However, we also conclude

that a reasonable belief that an insured’s error caused no harm

to the insured’s client is relevant to whether an objectively

reasonable person in the insured’s position would expect his

error to give rise to a claim for damages.                          See Commercial

Underwriters Ins. Co. v. Hunt & Calderone, P.C., 261 Va. 38, 540

S.E.2d 491 (2001).      In Hunt & Calderone, an accountant missed a

filing deadline for one of her clients and knew the error

     could potentially result in a loss of a $125,000 tax
     credit for the client, but she did not think that a
     claim would result because she was told by an
     administrator of the government tax credit program
     that sufficient funds would likely be available after
     all the timely applications had been processed.

Id. at 38, 540 S.E.2d at 492.           Further, when told of the error,

the client said he was satisfied with the assurances made by the

government   administrator.          Id.        However,     when    funds   proved

unavailable, the client sued the accountant, who then sought a

defense from her professional liability insurer.                      The insurer

denied   coverage    because   the    accountant       had    not    notified   the

insurer when the initial error occurred.                The Supreme Court of

Virginia ruled that, on these facts, the accountant was entitled




                                      22
to a defense under the insurance contract.                   Id. at 44, 540

S.E.2d at 494.

     This case is analogous.             The evidence demonstrates that

shortly after realizing his drafting error, Batzli learned of

facts supporting a reasonable belief that no harm had been done

to his client by the error.            To begin, a reasonable jury could

conclude   that   no   damage    to    Richard   Chasen    resulted   from   his

payment of fees for Batzli’s services.               See Rutter v. Jones,

Blechman, Woltz & Kelly, P.C., 264 Va. 310, 314, 568 S.E.2d 693,

695 (2002) (stating in a malpractice suit arising from lawyer’s

alleged    drafting    error    that   “the   fee   [the   client]    paid   the

defendants for their services was not an injury resulting from

legal malpractice.       It was merely the agreed-upon cost of the

service, the consideration given for the contract, and not the

damage or injury arising from the breach of the contract.”). 14




     14
        Notably, there was no evidence that Richard Chasen’s
payment of Batzli’s legal fees was contingent on Batzli
negotiating the transfer of Karen Chasen’s interest in Chasen
Properties.   In any event, a contingent fee arrangement would
arguably have been unenforceable on public policy grounds absent
extenuating circumstances.   See Smith v. Ramey, No. 8511, 1988
WL 619384 at *2 (Va. Cir. Ct. 1988) (recognizing prohibition of
“contingent fee contracts in domestic relations cases except in
extraordinary circumstances”); see also 7 Am. Jur. 2d Attorneys
at Law § 260 (2007) (“A fee contract contingent on procuring a
divorce, or contingent in amount on the amount of alimony,
support, or property settlement to be obtained, is against
public policy and void.”).



                                        23
     More      importantly,   Janus   told   Batzli   that   Karen   Chasen’s

interest in Chasen Properties was separate property that she was

unwilling to transfer to Richard Chasen.              Indeed, Karen Chasen

testified that she would not have signed an agreement to such a

transfer. 15     A reasonable jury therefore could have determined

that Batzli could not have anticipated a demand for damages for

failing to procure that which was unprocurable. 16



     15
        The following excerpt from Karen Chasen’s deposition
testimony, which was presented to the jury, clarifies that Karen
Chasen would not have agreed to transfer her interest in Chasen
Properties to Richard Chasen:
     Q:   . . . . Prior to signing the agreement—or at any time—
did you ever agree to give your interest in Chasen Properties,
LLC to [Richard] Chasen?
     A:   No.
          . . . .
     Q:   If you had read this agreement and it had stated that
you had transferred your interest in Chasen Properties, LLC to
[Richard Chasen], would you have signed that agreement?
     A:   I would not have signed it.
J.A. 391.

     16
        Additionally, we find no support for the contention that
Batzli’s error harmed Richard Chasen by causing him to pay for
more than he received under the Agreement. Stated differently,
there is no support for the argument that Richard Chasen might
not have been willing to pay as much if he had known that he was
not getting Karen Chasen’s interest in Chasen Properties as part
of the deal. However, the $500,000 that Richard Chasen paid was
first proposed by Karen Chasen, who obviously did not consider
it consideration for her transfer of her interest in Chasen
Properties.   Also, the jury heard evidence that “there was no
document or spreadsheet that showed how the 500k [figure] was
arrived at.”    J.A. 307.   Moreover, Batzli testified that “the
$500,000 was paid to get her to agree to what she ultimately
agreed to.” J.A. 308.



                                      24
      Minnesota Mutual argues that evidence of other harm would

have led a reasonable lawyer in Batzli’s position to notify his

insurer.     First, Minnesota Mutual contends that Batzli should

have known that his failure to recognize the drafting error kept

him from arguing during the spousal support hearing that Karen

Chasen     had    additional           income-producing         separate     property.

However, a reasonable jury could instead have focused on Karen

Chasen’s testimony that she never received any money or income

from her 20% interest in Chasen Properties.                        Minnesota Mutual

also argues that Batzli should have known that his conflict of

interest in pursuing the scrivener’s error motion instead of

seeking to have the Agreement set aside constituted actionable

malpractice.       But      a    reasonable       jury    could    have     relied    on

evidence    showing    that       Richard       Chasen,   not     Batzli,    made     the

decision to pursue the scrivener’s error motion.

      In addition to evidence supporting a reasonable belief that

there was no loss to the client, there was evidence, as in Hunt

& Calderone, that the client was comfortable with the result,

notwithstanding the professional error.                   The jury heard evidence

that Richard Chasen rejected the idea of seeking to set aside

the Agreement and renegotiate.                  Indeed, under the Agreement as

written,    Richard      Chasen        received     the   full     interest    in     an

arguably joint asset that had appreciated by $2 million during

the   marriage.       The       jury    heard     testimony     that   it    was     more

                                           25
important to Richard Chasen to keep that aspect of the deal

intact    than    to    pursue       Karen        Chasen’s     interest      in      Chasen

Properties.            Further,        the        jury    heard       evidence        that,

notwithstanding        the    error,    Batzli       secured    for    his    client        $4

million of a $6 million estate.

     Under    these     circumstances,            viewing     the    evidence     in    the

light most favorable to Batzli, as we must, we conclude that the

jury had a sufficient evidentiary basis to conclude that Batzli

reasonably    thought        his   drafting       error   would      not   result      in    a

claim until he learned from Richard Chasen that a claim would in

fact be filed, at which point he promptly notified Minnesota

Mutual.     Likewise there was sufficient evidence to support the

jury’s conclusion that prior to October 1, 2008, the effective

date of the policy, Batzli had no knowledge of facts that could

reasonably support a demand for damages.                       Minnesota Mutual was

therefore    obligated        to   provide        insurance    coverage       under     the

insurance contract.           Because there is no dispute that Minnesota

Mutual subsequently denied coverage, there was also sufficient

evidence in the record to support the jury’s conclusion that

Minnesota Mutual breached that obligation.



                        B.    Proof of Damage to Batzli

     Next,       Minnesota         Mutual         maintains         that     there      was

insufficient evidence presented at trial to permit a reasonable

                                             26
jury to conclude that the damage element of a breach of contract

claim    had    been    satisfied.            Minnesota       Mutual       agrees    with     the

trial court’s determination that actual damages were not proven

to a reasonable degree of certainty.                        However, Minnesota Mutual

challenges the district court’s determination that an award of

“nominal       damages”       supported        by     the    evidence        at     trial    was

sufficient       to    make    out       a    prima     facie       case    for     breach    of

contract.       We find no merit to Minnesota Mutual’s argument.

     It    stands      to     reason     that        Minnesota      Mutual’s      refusal      to

defend    the     malpractice        suit       forced       Batzli    to     retain        legal

counsel.        Moreover, there was evidence that the cost of those

legal services was billed to Batzli.                        In other words, there was

sufficient evidence to support a determination that there was

“injury    or    damage       to   the       plaintiff      caused    by    the     breach     of

obligation.”          Filak, 267 Va. at 619, 594 S.E.2d at 614.                               The

district       court     awarded         nominal       damages        for    that      breach.

Significantly,         the    Virginia        Supreme       Court    has    explained        that

“[n]ominal damages are those recoverable where a legal right is

to be vindicated against an invasion that has produced no actual

present loss of any kind or where, from the nature of the case,

some injury has been done the amount of which the proofs fail to

show.”     News Leader Co. v. Kocen, 173 Va. 95, 107-08, 3 S.E.2d

385, 390 (1939) (quotation omitted); see also 22 Am. Jur. 2d

Damages § 8 (2003) (“The term ‘nominal damages’ describes two

                                                27
types of awards: (1) those damages recoverable where a legal

right is to be vindicated against an invasion that has produced

no actual, present loss of any kind; and (2) the very different

allowance made when actual loss or injury is shown, but the

plaintiff fails to prove the amount of damages.”).

      The district court relied on the inferred nominal damages

that result from the violation of the legal rights created by

the   contract.           Minnesota          Mutual    correctly        argues     that    such

damages are insufficient to satisfy the third prong of a prima

facie case for breach of contract.                           However, neither of the

cases      on     which       Minnesota        Mutual        relies     stands      for     the

proposition that nominal damages can never satisfy the third

element in a Virginia breach of contract claim.

      In    Orebaugh          v.    Antonious,        190    Va.    829,    58    S.E.2d    873

(1950),     the       court    considered       an     action      by   a   property      owner

alleging that a contractor hired to install a heating system

breached        his    contract       because     the       heating     system     failed   to

operate properly.             Id. at 830, 58 S.E.2d at 873.                      However, the

evidence also showed that the property owner had since sold the

property        with    the        heater    still     inoperable.          There     was    no

evidence of the sale price or evidence that the property owner

took less for the property because of the faulty heating system.

The   court      stated       that     the    plaintiff       did     not   “introduce      any

evidence from which it could be determined that she suffered any

                                                28
loss or damage” other than the nominal damages inferred from the

violation of her legal rights under the contract.                  Id. at 833.

As such, the court held that judgment in favor of the plaintiff

was in error.    Id. at 834.

      In Bailey v. Potter, No. 1:05c936(JCC), 2006 WL 1582410

(E.D. Va. June 5, 2006), the court considered an action brought

by an employee alleging that her employer breached a contractual

duty to review the employee’s leave requests to ensure they were

“properly coded.” 17     Plaintiff alleged that the employer breached

the contract by improperly coding some of her leave time as

“Leave Without Pay” instead of “Office of Worker Compensation

Program Leave Without Pay.” Id. at *3.              The court concluded that

“there was no meaningful difference between” the two time codes

and   that,   consequently,     if   the   leave    time   was   coded   as   the

plaintiff     desired,     “Plaintiff       would     receive      no    benefit

whatsoever.”      Id.     The   court      then   rejected   the   plaintiff’s

assertion that nominal damages inferred from the inconsequential

violation of her legal rights would satisfy the third element of

a breach of contract suit.           Id. at *4 (“Essentially, Plaintiff

seeks to eviscerate the “consequential injury or damage” element

      17
       Although we distinguish Bailey, we also note that, as an
unpublished opinion, it bears no precedential weight that would
necessarily alter our analysis. United States v. Ruhe, 191 F.3d
376, 392 (4th Cir. 1999) (“[U]npublished opinions are not
binding precedent in this circuit.”); see also Local Rule 36(c).



                                      29
of a claim for breach of contract, as nominal damages would

always be inferred upon the allegation of a breach of a binding

agreement.”).

      This     case    is    distinguishable     from    Orebaugh    and    Bailey

because here, “actual loss or injury is shown, but the plaintiff

fails to prove the amount of damages.”                   See 22 Am. Jur. 2d

Damages § 8 (2003).             Batzli demonstrated that he had to pay

attorney’s fees as a result of Minnesota Mutual’s breach, but

failed to prove that the amount claimed was reasonable. 18                      As

such,      nominal    damages   were   appropriate. 19       Both   Orebaugh   and

Bailey involved circumstances where there was no evidence that

any damage (other than the abstract damage caused by violation

of legal rights created by a contract) resulted from the breach

of   contract.        In    other   words,    both   cases   held   that   nominal

damages of the first sort discussed in Kocen cannot support a


      18
           See infra, Section III.
      19
        We reject Minnesota Mutual’s contention that Batzli’s
failure to specifically plead nominal damages barred the award
thereof, particularly when the counterclaim asked the court to
award, in addition to the costs and fees incurred in prosecuting
the counterclaim and defending the Chasen malpractice suit,
“such other and further relief as the Court deems just.” [J.A.
76]   See Yniguez v. State, 975 F.2d 646, 647 n.1 (9th Cir.
1992)(per curiam)(“Although the plaintiff’s complaint does not
expressly request nominal damages, it did request ‘all other
relief that the Court deems just and proper under the
circumstances.’   That is sufficient to permit the plaintiff to
pursue nominal damages.”).



                                         30
breach      of    contract       action.        However,       those       cases       provide   no

support      for        the    contention       that     nominal       damages         can    never

satisfy the damage element of a prima facie case for breach of

contract under Virginia law.

       Indeed, in Crist v. Metropolitan Mortg. Fund, Inc., 231 Va.

190,   343       S.E.2d       308     (1986),    the    court    reviewed         a    breach     of

contract action in which the trial court awarded nominal damages

but denied compensatory damages.                        The court affirmed, stating

“[b]ecause         damages,           if     any,     cannot     be        established          with

reasonable         certainty,          no    actual     damages        can    be       recovered.

Accordingly,           we     will    affirm    the    judgment       of    the       trial   court

denying      compensatory            damages    but     awarding       nominal        damages     of

$100.”           Id.    at     195,    343     S.E.2d    at     311.         Crist      therefore

contradicts            Minnesota       Mutual’s       contention       that       a    breach    of

contract cannot be established absent proof of actual damages,

as well as the contention that nominal damages are insufficient

to satisfy the damage prong of the prima facie case.

       In    sum,       we    conclude       that     there    was    sufficient         evidence

presented to the jury to permit its conclusion that Minnesota

Mutual owed a duty to its insured and that the breach of that

duty caused the insured to suffer damage.                                  Consequently, the

jury had a legally sufficient evidentiary basis to find for the

insured on the breach of contract counterclaim.                               See Filak, 267

Va. at 619, 594 S.E.2d at 614.                           Accordingly, we affirm the

                                                 31
denial of Minnesota Mutual’s renewed motion for judgment as a

matter of law.



                            III.     Batzli’s Cross Appeal

       In   his     cross    appeal,        Batzli    contends         that   the    district

court erred when reducing the damage award from $8400 to $1 and

argues      that     the     evidence        supported        the      jury’s       award   of

compensatory damages.               Batzli concedes that ruling in his favor

would    require      our    determination          that    he     presented      sufficient

evidence       to   permit     a    reasonable       jury     to      determine     that    the

attorney’s fees sought were reasonable and necessary.                                See Hiss

v.   Friedberg,       201    Va.     572,    577,     112    S.E.2d      871,   876    (1960)

(“[W]here       a   breach     of    contract       has     forced      the   plaintiff     to

maintain or defend a suit with a third person, he may recover

the counsel fees incurred by him in the former suit provided

they     are    reasonable          in     amount     and     reasonably        incurred.”)

(emphasis added); accord Fidelity Nat’l Title Ins. Co. of N.Y.

v. S. Heritage Title Ins. Agency, 257 Va. 246, 254, 512 S.E.2d

553, 558 (1999).

       Minnesota Mutual does not contest the fact that its refusal

to   provide        coverage       under     the     policy      necessitated        Batzli’s

independent         retention       of   legal     counsel       to    defend   the    Chasen

complaint—i.e. that Batzli incurred damages.                              To support the

contention that the damage award was reasonable, Batzli points

                                              32
to the malpractice complaint which he argues demonstrates the

complexity   and   high   stakes      of    the    case,    the   fact    that   the

complaint had been “pending” for a year, 20 and Batzli’s testimony

that he had incurred $8,400 in legal fees for the defense of the

malpractice action.       We conclude that such a paltry evidentiary

showing   was   insufficient     as    a    matter    of    law   to     support   a

determination      that    the     amount         awarded    as    damages       was

“reasonable.”

     In Chawla v. BurgerBusters, Inc., 255 Va. 616, 499 S.E.2d

829 (1998), the Supreme Court of Virginia stated:

     In determining whether a party [seeking recovery of
     attorney’s fees] has established a prima facie case of
     reasonableness, a fact finder may consider, inter
     alia, the time and effort expended by the attorney,
     the nature of the services rendered, the complexity of
     the services, the value of the services to the client,
     the results obtained, whether the fees incurred were
     consistent with those generally charged for similar
     services, and whether the services were necessary and
     appropriate.

Id. at 623, 499 S.E.2d at 833.              In Mullins v. Richlands Nat’l

Bank, 241 Va. 447, 403 S.E.2d 334 (1991), the court said: “In

determining a reasonable fee, the fact finder should consider

such circumstances as the time consumed, the effort expended,


     20
        Notwithstanding Batzli’s argument to the contrary, the
amount of time that had elapsed since the complaint was filed is
irrelevant to our inquiry given the absence of any evidence
regarding what, if any, actions were taken by Batzli’s lawyers
to defend against the Chasen complaint during that time.



                                       33
the    nature     of     the       services       rendered,          and    other       attending

circumstances.          Ordinarily, expert testimony will be required to

assist the fact finder.”                 Id. at 449, 403 S.E.2d at 335. 21

       Here,     there       was    no     testimony          regarding         how    much    time

Batzli’s lawyers spent on the defense of the Chasen complaint,

no     indication       of     what       services        they       performed         in     their

representation of Batzli, and no testimony, expert or otherwise,

regarding      the     rates       charged    by      lawyers       defending         malpractice

suits in Virginia.             In light of Chawla and Mullins, we conclude

that    Batzli’s       argument—that         $8,400          was    per    se    reasonable      in

light of the amount sought in the “complex” malpractice action—

is meritless.        See Crist, 231 Va. at 195, 343 S.E.2d at 311.                              In

short,      Batzli      had        the    burden        of     demonstrating           that     the

attorney’s       fees    paid        to    the        lawyers       defending         the   Chasen

complaint were reasonable, and he failed to satisfy that burden.

       This allocation of the burden of proof is also dispositive

of    Batzli’s    second       argument.              Batzli       maintains      that      because

       21
        Expert testimony is not necessarily required if lay
testimony can establish the reasonableness of the fee award.
For instance, when a party seeking attorney’s fees submitted
“almost 300 pages of contemporaneous time records detailing the
activities for which fees were sought” and “affidavits of its
attorneys upon the reasonableness of the hourly rates charged
and the accuracy of the time billed,” the court ruled that
expert testimony was not necessary.   Tazewell Oil Co., Inc. v.
United Va. Bank, 243 Va. 94, 111-12, 413 S.E.2d 611, 620-21
(1992).   No such time records or affidavits were presented in
this case.



                                                 34
Minnesota    Mutual   did   not   object   to   the    evidence    entered   in

support of the reasonableness determination, he is foreclosed

from arguing that the amount awarded was unreasonable.               However,

applying such a rule would relieve the plaintiff of the burden

of making a prima facie case simply because his opponent was

silent.     We decline Batzli’s invitation to so dramatically shift

the burden of proof.

     Ultimately, to decide the cross appeal in Batzli’s favor

would require the absurd conclusion that a party establishes the

“reasonableness” of attorney’s fees if (when viewed in the light

most favorable to that party), the evidence shows that the fees

were assessed in a difficult case.              However, following Chawla

and Mullins, we conclude that more is required to support a

determination     that      the    attorney’s         fees   assessed    were

reasonable. 22    Because    Batzli    failed    to    present    evidence   to

establish the reasonableness of the attorney’s fees for which he


     22
        As discussed above, the district court did not rely on
the actual compensatory damages award of $8,400 to confirm
Batzli’s satisfaction of the damage element of a prima face
breach of contract claim.    Instead, the court imposed nominal
damages.   Indeed, if precisely quantifiable actual damages were
the only basis for finding a breach of contract in this case,
the court would have been compelled to grant Minnesota Mutual’s
motion.   See Bennett v. Fairfax Cnty., Va., 432 F.Supp.2d 596,
600 (E.D. Va. 2006) (stating that a court “must enter judgment
as a matter of law if . . . the verdict in favor of the non-
moving party would necessarily be based on speculation and
conjecture.”)(quotation omitted).



                                      35
was to be compensated through the jury’s award of damages, the

district court did not err by setting aside that damage award.



                                          IV.

     In       sum,   while    reasonable       minds     may    disagree   regarding

whether   Batzli      should    have     notified      Minnesota      Mutual    earlier

than he did, even when faced with reasonable disagreement about

the propriety of the verdict, we must affirm the denial of a

renewed motion for judgment as a matter of law.                            ABT Bldg.

Prods. Corp, 472 F.3d at 113.                We conclude that the jury had a

sufficient      evidentiary      basis    to    support        its   conclusion     that

Minnesota Mutual breached its insurance contract by refusing to

defend    Batzli     and     Batzli   Wood     against    the    Chasen    complaint.

Accordingly, we affirm the district court’s denial of Minnesota

Mutual’s motion for judgment as a matter of law.                       Also, because

the factual determinations necessarily made by the jury in the

trial    as    to    Batzli’s    counterclaim       are    dispositive,        we   also

affirm the grant of declaratory judgment to Batzli.

                                                                               AFFIRMED




                                          36
SHEDD, Circuit Judge, dissenting:

      Terrence Batzli’s Professional Liability Insurance Policy

with Minnesota Lawyers Mutual does not cover an error made prior

to   the    liability      policy’s   date,    “which   an    insured    knows   or

reasonably should know, would support” a demand for damages.

(J.A.      25.)      The   majority    holds    that    there    was    sufficient

evidence for the jury to find that Batzli lacked, or that any

reasonable        person   in   his   position    would      have   lacked,   such

knowledge under the facts of this case.                   In my view, Batzli

reasonably should have known, as a matter of law, that he faced

a potential demand for damages from Mr. Chasen.                  Therefore, with

due respect, I dissent.

      As the majority correctly notes, when determining whether

sufficient evidence exists to support a jury verdict, “we may

not substitute our judgment for that of the jury.”                       Price v.

City of Charlotte, N.C., 93 F.3d 1241, 1249 (4th Cir. 1996).

However, “[w]hile we are compelled to accord the utmost respect

to jury verdicts . . . [we] have a duty to reverse the jury

verdict[] if the evidence cannot support it.”                   Id. at 1249-1250

(internal citations omitted).

      The evidence presented in this case cannot support the jury

verdict.      The record clearly establishes that Batzli knew he had

committed a significant error and that his error could support a

claim for damages.          Batzli believed that there was an agreement

                                        37
between Mr. and Ms. Chasen, pursuant to which Ms. Chasen would

give her 20% interest in Chasen Properties, LLC to Mr. Chasen.

Batzli drafted a property settlement agreement (“the Agreement”)

between   Mr.    and   Ms.   Chasen   with     the     intent     of     ensuring   Mr.

Chasen would receive Ms. Chasen’s 20% interest.                     However, Batzli

admittedly made an error in drafting the Agreement and testified

to this fact before the jury, stating:

     And that’s where I made the error.      I said “his
     interest.”   It should have said “their interest” in
     Chasen Properties, LLC.

(J.A. 258.)       Batzli also admitted his error to Mr. Chasen in a

letter    and,    consequently,     offered       to   bear   the      costs   of   the

action in state court to correct the error.                         Moreover, upon

realizing his error, Batzli said that he felt sick about it and

had lost sleep over it.

     Finally,      Batzli    knew   this     error     resulted     in    significant

financial and personal costs for Mr. Chasen.                      Batzli knew Mr.

Chasen    believed     the   20%    interest      was    worth      $440,000.       In

addition to the monetary value, Batzli also knew how important

it was to Mr. Chasen’s business that he receive Ms. Chasen’s 20%

interest.       Without that 20% interest, Mr. Chasen stood to lose

control    of    Chasen   Properties,      LLC.         Mr.     Chasen     explicitly

expressed this concern to Batzli in a letter, writing:

     [W]ith only a 20% ownership on my part, it would be
     easy   for  her   and  the  kids   to  remove  me  as
     director/manager of chasen properties [sic]. If I own

                                        38
      at least 34% . . . it is more difficult for them to
      remove me form [sic] that roll [sic] and Karen [Ms.
      Chasen] can have no part of the process.   I just can
      not [sic] have Karen owning part of any entity that I
      am part of . . . much less part of my business
      location!

(J.A. 461.)      Furthermore, in a letter to Batzli’s law partner,

who worked on the case with Batzli, Mr. Chasen wrote that he was

“still in shock that the appeal [to correct the error] failed on

all   fronts,”    (J.A.   551)   and     Mr.    Chasen   did   not     respond   to

Batzli’s request for payment of the attorneys’ fees incurred in

the state court action.          Against this factual backdrop, Batzli

should have known that his error would support a demand for

damages. *

      Despite     these   facts,       the    majority     concludes    there    is

sufficient      support   for    the     jury    verdict     based     largely   on

evidence that addresses the merits of Mr. Chasen’s malpractice

claim.    Such evidence is irrelevant as to whether a reasonable

lawyer could expect a demand for damages.                The liability policy

requires only that the insured report an act, error, or omission



      *
       The majority asserts that Batzli could not reasonably
expect a claim for damages because Mr. Chasen had suffered no
damages.   To the contrary, Mr. Chasen was damaged.   Mr. Chasen
agreed to the settlement with the understanding that he would be
receiving Ms. Chasen’s 20% interest in Chasen Properties, LLC.
Therefore, Mr. Chasen’s damages are – at a minimum – the
difference between what Mr. Chasen paid for the Agreement and
what he would have paid for a settlement that did not contain
Ms. Chasen’s 20% interest.



                                         39
that would support a demand for damages, not that such a demand

would ultimately be successful.

     The majority believes that testimony by Ms. Chasen that she

would never have relinquished her 20% interest supports the jury

verdict.     The majority reasons that Mr. Chasen was not damaged

because in a divorce action, Mr. Chasen was not legally entitled

to   have    this      non-marital     asset      included       in   a    settlement.

However,     Ms.       Chasen’s     testimony         actually     underscores      the

materiality of Batzli’s admitted error.                      Because the divorce

court did not have jurisdiction over and could not award Ms.

Chasen’s 20% interest through a court order, the only way Mr.

Chasen    could     have    received   her      20%     interest   was    through   the

Agreement, which Batzli failed to properly draft.

     Additionally, as support for the jury verdict, the majority

relies upon the fact that Mr. Chasen did not want to set aside

the Agreement.         This fact, as well, is irrelevant as to whether

Batzli should have known if Mr. Chasen would have a claim for

damages.         Mr.   Chasen     negotiated      the    Agreement    to    receive   a

number of assets, including Ms. Chasen’s 20% interest in Chasen

Properties, LLC.           The fact that Mr. Chasen wanted to keep what

he actually received in the otherwise favorable Agreement is

irrelevant in determining whether he was entitled to what he

thought     he   had    also    received     --   Ms.     Chasen’s    20%    interest.

Therefore, Batzli should have known that his error would support

                                           40
a   claim    for     damages    despite        the    fact    that    Mr.    Chasen    was,

overall, satisfied with the Property Settlement.                             See 17A Am.

Jur. 2d Contracts § 708 (“As a general rule, upon the breach of

a   contract,      the   injured       party    may,    by    election,      rescind    and

recover the value of any performance, or stand by the contract

and recover damages for the breach.”); Richmond v. Hall, 466

S.E.2d 103, 107 (Va. 1996) (recognizing that rescission and a

suit for damages are alternate contractual remedies).

      In sum, the evidence in this case clearly establishes that

Batzli      should    have     known    that     he    made    an    error    that    would

support a demand for damages and failed to report this error to

the insurance company.             Pursuant to the plain language of the

liability policy, this claim was not covered and, therefore, the

insurance company did not have a duty to defend or indemnify

Batzli against Mr. Chasen’s malpractice claim.                        For this reason,

I would reverse the judgment of the district court and enter

judgment in favor of Minnesota Lawyers Mutual.




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