Navar, Inc. v. Federal Business Council
291 Va. 338
| Va. | 2016Background
- Defense Threat Reduction Agency issued a five-year set-aside prime contract for event-planning services limited to an Alaska Native Corporation (ANC) eligible prime.
- FBC (domestic events) and Worldwide Solutions (international events) collaborated with Concentric (ANC subsidiary) to prepare a proposal; Concentric later substituted Navar as the eligible prime.
- Plaintiffs (FBC and Worldwide) signed an NDA with Navar; they also signed a Teaming Agreement stating Navar would negotiate in good faith to award subcontracts and that Navar would perform at least 51% of labor hours/dollars.
- Navar was awarded the prime contract in April 2012; subsequent subcontract negotiations failed and Navar awarded no subcontracts to Plaintiffs.
- Plaintiffs sued for breach of the NDA and Teaming Agreement, unjust enrichment/quantum meruit, and trade-secret misappropriation under the Virginia Uniform Trade Secrets Act; jury found breaches of NDA and Teaming Agreement and misappropriation of FBC’s trade secrets, awarding $1.25 million.
- Trial court set aside the verdict on the Teaming Agreement as unenforceable; on appeal the Supreme Court reversed the verdicts on the NDA and trade-secret claim (as insufficient) and affirmed the Teaming Agreement ruling, entering judgment for Navar on Counts I and VI and affirming the trial court’s setting aside of Count II.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Navar breached the NDA by using Plaintiffs’ confidential information to obtain and perform the prime contract without hiring them | NDA was violated because Navar used Plaintiffs’ confidential materials to secure/perform the prime contract and then refused to subcontract | NDA did not obligate Navar to hire Plaintiffs; Plaintiffs produced no specific evidence showing misuse beyond attendance at a joint presentation | Reversed: Plaintiffs failed to prove misuse or causal damages; judgment for Navar on NDA claim |
| Whether Navar misappropriated FBC’s trade secrets in violation of the Virginia Uniform Trade Secrets Act | Navar used Plaintiffs’ trade-secret information to obtain and perform the prime contract, causing damages | No evidence of disclosure or use in violation of the Act; NDA authorized use for evaluation and collaboration | Reversed: Insufficient evidence of misappropriation; judgment for Navar on trade-secret claim |
| Whether the Teaming Agreement was an enforceable contract obligating Navar to award subcontracts/share work | Teaming Agreement and Exhibit A (51% to Navar) created enforceable rights to a 49% workshare and entitlement to subcontract awards | Agreement was an agreement to negotiate in good faith with unspecified terms and no reasonably certain method to determine subcontract compensation/share | Affirmed: Teaming Agreement was an unenforceable agreement to agree; trial court properly set aside verdict on breach of Teaming Agreement |
| Whether plaintiffs proved damages causally linked and calculable for lost profits | Plaintiffs argued lost profits based on industry margins and prime contract value | Plaintiffs offered no expert or reliable method to establish causation or quantify damages | Held: Damages not adequately proven for NDA/trade-secret claims; remittitur issue moot after reversal |
Key Cases Cited
- Saks Fifth Ave., Inc. v. James, Ltd., 272 Va. 177 (trial court review of motion to strike and sufficiency of evidence)
- Ulloa v. QSP, Inc., 271 Va. 72 (elements of breach of contract action)
- Filak v. George, 267 Va. 612 (contract damages principles)
- Allen v. Aetna Casualty & Surety Co., 222 Va. 361 (agreements to agree unenforceable; need mutual assent and reasonably certain terms)
- W.J. Schafer Assocs. v. Cordant, Inc., 254 Va. 514 (teaming agreements construed as unenforceable agreements to agree when terms are indefinite)
- Cyberlock Consulting, Inc. v. Info. Experts, Inc., 939 F. Supp. 2d 572 (E.D. Va. applying Virginia law that agreements to negotiate in good faith are unenforceable)