Minnesota Lawyers Mutual Insurance v. Batzli, 442 F. App'x 40

Batzli Wood & Stiles represented Richard Chasen in a Virginia divorce; dispute over Karen Chasen’s 20% interest in Chasen Properties and related assets; drafting error left interest in Chasen Properties omitted from the Agreement.
The scrivener’s error motion was filed in state court to reform the Agreement to reflect that Karen’s and Richard’s interests were transferred; Virginia courts denied reform and held no meeting of the minds.
Minnesota Lawyers Mutual issued a professional liability policy covering acts during the policy period (with a prior acts retroactive date) and requiring immediate written notice of a claim; notice was required to trigger coverage.
Richard Chasen filed a malpractice suit against Batzli in 2009; Batzli notified Minnesota Mutual first upon learning of the suit and again after formal service; Minnesota Mutual denied coverage for late notice.
District court denied JMOL to Minnesota Mutual; trial proceeded March 1, 2010; jury awarded Batzli $8,400 for breach of contract; district court later granted nominal damages; Minnesota Mutual appealed and Batzli cross-appealed.
Fourth Circuit affirmed denial of Rule 50(b) motions, ruling there was a legally sufficient evidentiary basis for breach and that nominal damages could satisfy the damages element; dissent argued the record showed Batzli knew or reasonably should have known of damages.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Minnesota Mutual breached by denying defense for late notice	Batzli gave notice when the suit was filed and after service; evidence supports reasonable belief damages would follow	Notice occurred too late under the policy’s condition to cover; no coverage for late notice	Yes, the evidence supported breach; denial affirmed; insurer obligated to defend
Whether nominal damages satisfy the damages element	Nominal damages permitted where breach vindicates legal rights despite lack of proven actual loss	Nominal damages insufficient without proof of actual damages	Nominal damages were sufficient to satisfy the damages element under Virginia law
Whether the district court properly denied the Rule 50(b) motions on damages and notice	There was evidence supporting reasonableness of fees and proper notice; jury could find damages	Insufficient evidence of reasonable attorney’s fees; improper notice evidence	Yes, the district court correctly denied the Rule 50(b) motions; verdict upholds breach and cross-claim
Whether the cross-appeal on attorney’s fees was properly resolved	Evidence supported the damages recovery; fees reasonable	No adequate proof of reasonable attorney’s fees; trial court erred	District court’s treatment of damages and fees affirmed; nominal damages upheld on appeal

Dan River, Inc. v. Commercial Union Ins. Co., 227 Va. 485 (Va. 1984) (notice must be objective; insured must notify when policy may be implicated)
Hunt & Calderone, P.C. v. Commercial Union Ins. Co., 261 Va. 38 (Va. 2001) (notify when capable of supporting a claim; objective standard)
Orebaugh v. Antonious, 190 Va. 829 (Va. 1950) (nominal damages not always sufficient; context matters for contract damages)
Crist v. Metropolitan Mortg. Fund, Inc., 231 Va. 190 (Va. 1986) (nominal damages can affirm when compensatory damages unavailable)