Tuesday, May 11, 2010

"Nominal Damages" Really Means Nominal (Roberson and Penhall Co. v. C.P. Allen Construction)

Virtually all jurisdictions provide that if a plaintiff cannot prove actual, recoverable damages for a breach of contract claim, it may still be entitled to receive nominal damages. Outside of triggering fee-shifting, there is really no utility to exploring issuesconcerning nominal damages at all.

Except when a court determines that nominal damages imposed against a dispatcher for violating a non-solicitation covenant should be $25,000.

That non-sensical ruling arose out of an Alabama case involving a breach of an employee non-solicitation agreement. James Roberson solicited his ex-employer's customers in violation of a two-year non-solicitation covenant. The employer had a hard time establishing actual damages - perhaps because the plaintiff's corporate representative admitted at trial that he had "no idea" how much business his company had lost on account of the breach. An admission like this usually means your chances of recovery are slim.

So the court, incredibly, awarded "nominal damages" for the contract breach in the amount of $25,000 against Roberson. The appellate court had little trouble concluding that this amount was not nominal and reversed for entry of a new judgment awarding the plaintiff, if you can believe this, "a minimal amount of nominal damages." Apparently, this is different than a substantial amount of nominal damages.


Court: Court of Civil Appeals of Alabama
Opinion Date: 5/7/10
Cite: Roberson and Penhall Co., Inc. v. C.P. Allen Construction Co., Inc., 50 So. 3d 471 (Ala. Ct. App. 2010)
Favors: Employee
Law: Alabama

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