Reid v. Boyle

• Decision Date: 03 March 2000
• Docket Number: Record No. 990769,Record No. 990780.
• Citation: 259 Va. 356,527 S.E.2d 137
• Parties: A. William REID and Rising Tide Productions, Inc. v. John J. BOYLE, et al. John J. Boyle, et al. v. A. William Reid.
• Court: Virginia Supreme Court

527 S.E.2d 137

259 Va. 356

A. William REID and Rising Tide Productions, Inc. v. John J. BOYLE, et al.

John J. Boyle, et al. v. A. William Reid.

Record Nos. 990769, 990780.

Supreme Court of Virginia.

March 3, 2000.

Kevin E. Martingayle (Moody E. Stallings, Jr.; Glenn R. Croshaw; Stallings & Richardson; Willcox & Savage, on briefs), Virginia Beach, for A. William Reid and Rising Tide Productions, Inc.

Glenn R. Croshaw (Moody E. Stallings, Jr.; Kevin E. Martingayle; Stallings & Richardson; Willcox & Savage, on brief), Virginia Beach, for A. William Reid.

Craig T. Merritt (Michael W. Smith; Roman Lifson, Richmond; Joseph L. Lyle, Jr., Virginia Beach; Christian & Barton, Richmond, Kaufman & Canoles, Virginia Beach, on brief), for John J. Boyle, et al.

Present: CARRICO, C.J., COMPTON,¹ LACY, HASSELL, KEENAN, KOONTZ, and KINSER, JJ.

HASSELL, Justice.

I.

In these appeals of judgments entered by the chancellor, we consider, among other things: whether the plaintiff established by clear and convincing evidence that he owned an interest in a leasehold; whether the plaintiff proved with reasonable certainty damages he incurred as a result of the defendants' breach of contract; and whether the plaintiff proved a cause of action under the Virginia Antitrust Act.

II. PROCEEDINGS

Angas William Reid filed an amended bill of complaint against John J. Boyle, Cellar Door Venues, Inc. (Cellar Door Venues), and Cellar Door Productions of Virginia, Inc. (Cellar Door Productions). Reid asserted that he owned one-third of Cellar Door Venues' leasehold interest in an "[a]mphitheater project" in Virginia Beach. He pled causes of action for breach of contract, "unjust enrichment," and fraud. Reid also filed a motion for judgment against Cellar Door Productions. Reid alleged that Cellar Door Productions breached its employment contract with him.

Rising Tide Productions, Inc., a Virginia corporation founded by Reid, and Reid filed a separate bill of complaint against Boyle, Kenneth A. MacDonald, Mike Tabor, The Boathouse Food Service Company, Cellar Door Productions, and Cellar Door Venues. Reid and Rising Tide Productions alleged in this proceeding that these defendants violated the Virginia Antitrust Act, Code § 59.1-9.1, et seq. The chancellor transferred the law action to the equity side of the court and consolidated the proceedings.

At the conclusion of an ore tenus hearing, the chancellor held that Cellar Door Productions breached its contract with Reid and that it was indebted to Reid in the amount of $333,325.67. The chancellor held that Reid owned a one-third interest in the net value of Cellar Door Venues' leasehold interest and that Reid's interest had a value of $3,566,343. The chancellor entered a judgment in favor of Reid for that amount against John J. Boyle and Cellar Door Venues, jointly and severally. The chancellor held that Reid and Rising Tide Productions failed to prove that the defendants in the antitrust proceeding had violated the Virginia Antitrust Act, and he entered a judgment in favor of those defendants. The defendants appeal the judgments adverse to them, and Reid and Rising Tide Productions appeal the judgment entered in the antitrust case.

III. FACTS

A.

When the chancellor hears evidence ore tenus, his decree is entitled to the same weight as a jury verdict, and we are bound by the chancellor's findings of fact unless they are plainly wrong or without evidence to support them. Prospect Development Co. v. Bershader, 258 Va. 75, 80, 515 S.E.2d 291, 294 (1999); Rash v. Hilb, Rogal & Hamilton Co., 251 Va. 281, 283, 467 S.E.2d 791, 793 (1996). Also, we will review the evidence and all reasonable inferences fairly deducible therefrom in the light most favorable to Reid in the two appeals of judgments in favor of Reid. Bershader, 258 Va. at 80, 515 S.E.2d at 294.

B.

Reid began to work for Cellar Door Productions in 1981 as a "talent middle agent." He made arrangements for bands to perform at colleges, and he received a commission for his services. In 1982, Reid was promoted to the position of president of Cellar Door Productions. In that capacity, he continued to "[sell] talent" to colleges, and he "book[ed]" music concerts at facilities such as the Hampton Coliseum and the Norfolk Scope, as well as clubs. He also managed Cellar Door Productions' office.

Cellar Door Productions, acting through its sole shareholder, John J. Boyle, entered into an oral employment contract with Reid in 1983. Boyle is the majority shareholder of numerous entertainment-related companies that form a "family of companies" described as the Cellar Door Companies. These corporations include Cellar Door Productions and Cellar Door Venues. Boyle exercised virtually absolute control of these corporations and directed their offices and employees. Boyle conducted the financial affairs of these corporations with "an air of informality."

Pursuant to the terms of the oral contract, Reid's compensation was calculated by determining Cellar Door Productions' annual revenue, deducting expenses and any advancements of income to Reid or Boyle, and "split[ting]" the profit "50/50" between Reid and Boyle.

In December 1992, Reid signed a written employment contract with Cellar Door Productions. In 1993, Reid signed a subsequent written employment contract with Cellar Door Productions. Even though the 1993 contract contained a specific methodology by which Reid would be compensated, Reid and Cellar Door Productions ignored the prescribed method of compensation. Reid testified that "[n]othing changed" regarding his method of compensation. In response to the question: "[How] [w]ere you paid under [the] contract?", Reid stated:

"You know what, I don't know if I was paid under a contract. I know how I was paid.... A.J. Wasson [Boyle's chief financial officer] would come in at the end of the year. We would take all the available cash that was in the account. All the expenses were taken out mutually between Jack Boyle and myself, and we split the difference. And we split what was there. So that was — it's not exactly how it was calculated in the contract. If you read that contract, it says all kinds of tax stuff and deferred this and deferred that.... I don't think anyone could explain the computation as it exists in that contract.

"We split the profit 50/50, and we did it from `83 or `84, and it was done that way every year as it relates to Cellar Door Productions."

Wasson initially testified that when determining Reid's compensation, Wasson adhered to the terms of the written contract. However, during cross-examination, Wasson admitted that he had not taken into consideration the various tax adjustments contained in the written contract. Finally, in response to the court's question, "[y]ou all had a very informal arrangement where they figured out available cash and they split it," Wasson responded, "That's right, except for the tax adjustment." David H. Williams, the chief operating officer for all of the Cellar Door Companies, testified that Reid had a compensation agreement with Cellar Door Productions, and he received 50% of the profits generated by that corporation.

In the early 1990s, Reid conceived the idea of the creation of an amphitheater located in the City of Virginia Beach. The amphitheater would have a capacity of 20,000 seats. Reid believed that the amphitheater could attract major bands because it would be larger than existing concert facilities in Virginia. Reid testified: "Bands play where they can make the most money. It's called venue driven. The higher the capacity, the more tickets they can sell, the more money they can make, and hence, the more money a promoter [such as Cellar Door Productions] can make." Reid, who had "a little bit of experience working on" the development of the Classic Amphitheater in Richmond, approached Boyle and said: "[W]e need to have an amphitheater here." Boyle responded: "[A]s he said many times ... Bill Reid, if you pull this off, you get half." Reid did not, however, memorialize this agreement in writing.

Reid undertook extensive efforts to develop an amphitheater in Virginia Beach. He had meetings with Virginia Beach city officials, including City Council members. The City retained a consulting company to advise the City about the feasibility of construction of an amphitheater. During the ensuing three years, Reid served as president of Cellar Door Productions and also pursued the creation of an amphitheater in Virginia Beach. Boyle continued to encourage Reid to pursue the development of an amphitheater, and Boyle told Reid: "This is your future. This is your future. This is your kids' college education."

Subsequently, the City decided to participate in the construction of an amphitheater and to invest its financial resources in the project. The City of Virginia Beach Development Authority (also referred to as the City) ultimately executed an agreement with Cellar Door Venues, a Florida corporation which is primarily owned and exclusively controlled by Boyle. Pursuant to the terms of this agreement, Cellar Door Venues acquired a leasehold interest in the GTE Virginia Beach Amphitheater and served as operator of the amphitheater.

Initially, the City agreed to contribute $7,000,000 of the construction costs of the amphitheater, and Boyle, through companies that he controlled, agreed to contribute $5,000,000. After a site for the amphitheater was selected, the City learned that there were problems with the soil conditions and, therefore, the cost of construction would be higher than had been anticipated. City officials scheduled a meeting that was attended by Reid, Boyle, and Richard Rosenbaum, who was described as "Boyle's personal attorney." During the meeting, the City officials informed Boyle that the City expected him to increase his contribution to the project to help pay for the increased cost of construction associated with the soil conditions.

After the meeting with...