Michael Anthony Stamathis v.  FLYING J, INCORPORATED, a Delaware Corporation; DAVID L. HANSEN

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 MICHAEL ANTHONY STAMATHIS,
Plaintiff-Appellee,
v. No. 02-2297 
FLYING J, INCORPORATED, a Delaware
Corporation; DAVID L. HANSEN,
Defendants-Appellants. 
Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Samuel G. Wilson, Chief District Judge.
(CA-01-838-7)
Argued: May 7, 2003
Decided: November 10, 2004
Before WIDENER, MICHAEL, and GREGORY, Circuit Judges.
Affirmed by published opinion. Judge Widener wrote the opinion, in
which Judge Michael and Judge Gregory concurred.
COUNSEL
ARGUED: Miguel Angel Estrada, GIBSON, DUNN & CRUT-
CHER, L.L.P., Washington, D.C., for Appellants. Monica Taylor
Monday, GENTRY, LOCKE, RAKES & MOORE, Roanoke, Vir-
ginia, for Appellee. ON BRIEF: F. Joseph Warin, Andrew S. Tulu-
mello, Harry M. Gruber, GIBSON, DUNN & CRUTCHER, L.L.P.,
Washington, D.C.; Kenneth J. Ries, Brian J. Brydges, JOHNSON,

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AYERS & MATTHEWS, Roanoke, Virginia, for Appellants. Paul G.
Klockenbrink, Gregory R. Hunt, GENTRY, LOCKE, RAKES &
MOORE, Roanoke, Virginia, for Appellee.
OPINION
WIDENER, Circuit Judge:
Plaintiff Michael Stamathis brought this action against defendants
Flying J, Inc. and David Hansen, an employee of Flying J, Inc., alleg-
ing defamation, malicious prosecution, tortious interference with
employment, and a claim for punitive damages. A jury found in favor
of the plaintiff on the defamation and malicious prosecution counts
and awarded him compensatory damages in the amount of $250,000,
and punitive damages in the amount of $450,000 against Flying J, Inc.
and $5,000 against David Hansen. The district court subsequently
reduced the punitive damages awarded against David Hansen to $0
and against Flying J, Inc. to $350,000, pursuant to Va. Code Ann.
§ 8.01-38.1 (1996).1 The defendants appealed, asserting that they are
entitled to judgment as a matter of law under Virginia’s merchant’s
immunity statute, Va. Code Ann. § 18.2-105 (1996), and that both the
punitive and compensatory damages awards should be struck down as
excessive.2 For the reasons set forth below, we affirm the judgment
of the district court.
1The maximum possible penalty available under Virginia law for a
punitive damages award is $350,000. See Va. Code Ann. § 8.01-38.1
("In any action accruing on or after July 1, 1988 . . . , the total amount
awarded for punitive damages against all defendants found to be liable
shall be determined by the trier of fact. In no event shall the total amount
awarded for punitive damages exceed $350,000.").
2Three arguments are encompassed in this claim. First, the defendants
assert that the punitive damages award should be set aside because there
is no evidence that Flying J employees acted with "actual malice." Sec-
ond, they contend that the compensatory damages award is exorbitant
because Stamathis’ out-of-pocket damages were limited to $10,000 and
the evidence of his emotional distress was not enough to justify the
remainder of the award. Lastly, they argue that the punitive damages
award was excessive because it was the product of passion and prejudice.
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I.
At the time of this incident, Stamathis was a long-haul truck driver
and had been employed by J-Mar Trucking, Inc. (J-Mar) for three
years. J-Mar paid Stamathis for driving a mileage rate of 30 cents per
mile, and J-Mar furnished Stamathis’ gas by providing him with a "T-
Chek" fuel card, which operates in a similar manner to a credit card.
J-Mar requires its employees to stop at designated fuel stops along the
road, many of which are operated by the defendant, Flying J, Inc. Sta-
mathis made frequent stops at various Flying J gas stations throughout
the country and enrolled in Flying J’s Frequent Fueler Program. He
was issued a card with his name on it and as a member he was entitled
to certain benefits, such as free showers and other catalog gifts.
On the night of December 18, 2000, Stamathis was en route from
Ohio to Atlanta, Georgia on I-81. At around 8:00 pm, Stamathis
pulled off the interstate to refuel and rest at the Flying J Travel Plaza
near Wytheville, Virginia. The truck stop was particularly busy that
evening and Stamathis had to wait approximately fifteen minutes
before he was able to pull his tractor trailer up to the fuel pump. Once
at the pump, Stamathis inserted his T-Chek fuel card into the card
reader at the fuel pump. In order to monitor their drivers actions, J-
Mar requires drivers to input several pieces of information when
using the fuel card, i.e. driver’s number, trip number, and odometer
reading. This information must be entered before the fuel can be pur-
chased. Stamathis inserted his card, entered his tractor number, his
trip number, his mileage, and his frequent fueler number. The card
reader indicated that he would be ready to fuel, however, when he
attempted to pump the fuel it would not work. Stamathis then picked
up the courtesy phone at the fuel pump and called the Flying J fuel
desk. Stamathis explained the problem to Kristy Bowman, the Flying
J cashier, and, at Bowman’s request, Stamathis provided her with his
company name and tractor number. When Bowman asked Stamathis
for his mileage, however, Stamathis was unable to remember it and
told her that he would have to go get his mileage notebook from
inside his truck cab. Stamathis testified that Bowman told him not to
bother, that he could just bring in his mileage when he entered the
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store. The pump then began operating and Stamathis proceeded to
pump his fuel.3
While his tanks were filling, Stamathis entered the store with his
mileage notebook. Stamathis testified that he approached Kristy Bow-
man to give her the mileage, but that she was busy with another cus-
tomer and told him to come back with his mileage when he was
finished fueling. Stamathis then turned to another clerk and asked him
to take the mileage, but the other clerk also told Stamathis to bring
the mileage into the store later. Following this exchange, Stamathis
went back out to his truck, finished fueling, added fuel additive to his
tanks, cleaned his windows, and then moved his truck forward so that
the truck behind him could begin refueling. Stamathis returned to the
store, and after washing his hands, he approached the fuel desk again.
Defendant David Hansen was the desk manager and was standing
behind Bowman when Stamathis approached the desk the second
time. Stamathis handed Bowman his T-Chek card and his Frequent
Fueler card, but had forgotten his mileage notebook in his truck cab.
After running the cards, Miss Bowman told Stamathis that the trans-
action would not go through because she still needed the mileage. Sta-
mathis then exited the store to get his mileage from inside the truck.
Once Stamathis reached his truck, he heard over his CB radio that
other drivers were complaining that his truck was holding up those
waiting to pump fuel. In response, Stamathis got into his truck and
tried to find a place to park. The Flying J parking lot was full, and
many other truck drivers were circling the lot trying to find parking.
Thus, Stamathis pulled onto the service road, passed the entrance
ramps to I-81, and pulled his truck into the nearby Citgo truck stop
to park.
Hansen and Miss Bowman observed this action from the store and
3It is unclear from the record exactly how this exchange ended. Kristy
Bowman testified that Stamathis told her that he would have to get his
mileage in his cab and that he then hung up the phone. She also stated
that she did not activate his pump, but that she believed that he must
have turned the pump on with his Frequent Fueler card. Defendant David
Hansen, however, testified that Miss Bowman turned on the pump for
him.
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saw Stamathis drive his truck out of the Flying J parking lot and to
the Citgo parking lot, bypassing the ramps to I-81. At that point, Han-
sen told Miss Bowman to call the police while Hansen called his boss,
Ronald Hicks. Mr. Hicks told Hansen to see if Stamathis would pay
for his fuel, but if not, then to have him arrested. Hansen then called
J-Mar, identified Stamathis by name and truck number and said that
Stamathis had driven off the lot without paying for his fuel. The dis-
patcher told Hansen to give her a minute and that she would take care
of it. At that point, however, per Hansen’s instructions, Miss Bowman
had already called the police.
Meanwhile, Stamathis had parked his truck at the Citgo truck stop
and entered the Citgo station to use the bathroom and buy a carton of
Pepsi. When Stamathis began to walk back to his truck, Deputy Sher-
iff Jeffrey Hall stopped Stamathis and told him that Flying J had
reported that he had stolen fuel. Stamathis was trying to explain to the
deputy what happened when Hansen approached the two men with
"the biggest grin on his face." Stamathis said to Hansen, "what the
heck are you doing telling the sheriff that I’m stealing your fuel . . . .
You know that we drivers park over here once your lot fills up." This
angered Hansen. Hansen stated that Stamathis started complaining
about how poorly he had been treated by the Flying J employees, that
Stamathis would not discuss paying for the fuel, and at that point
Hansen said that he did not want to argue with Stamathis anymore
and told the deputy to arrest him. The deputy and Hansen then dis-
cussed the situation privately, at which point Hansen was informed
that Stamathis would not be arrested unless Hansen instructed and
that Hansen would have to travel to the Wytheville Sheriff’s Office,
several miles away, to file a complaint. Hansen agreed.
Deputy Hall took Stamathis into custody at 9:00 pm, and Stamathis
was placed in the patrol car and transported to the Sheriff’s Office.
Hansen arrived and swore out a criminal complaint against Stamathis,
and at 9:34 pm, Stamathis was booked for petit larceny in violation
of Va. Code Ann. § 18.2-96. Stamathis appeared before a magistrate
judge, posted a $1,000 bond, and was released on his own recogni-
zance at 9:44 pm. Following his release, Stamathis returned to the
Flying J in a taxicab, and on the advice of a J-Mar dispatcher, went
into the Flying J to ensure that his fuel was paid for. He arrived at the
Flying J at approximately 11:00 pm to ensure that the transaction had
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been completed. Afraid that Hansen would have him arrested again,
Stamathis tried to have a manager from the adjacent restaurant
accompany him, but was informed that the restaurant and the fuel
desk were separate. Hansen was behind the desk when Stamathis
arrived, and Stamathis testified that Hansen looked as if "he was get-
ting ready to jump [over the counter]." Stamathis gave his T-Chek
and Frequent Fueler cards to Bowman, who carried the cards to Han-
sen, who then proceeded to imprint the T-Chek card and complete the
transaction. During this exchange, no one asked Stamathis for his
mileage. Documentation from T-Chek, the fuel card company, indi-
cates that Stamathis’ fuel transaction was processed at 9:16 pm, Cen-
tral Standard Time. On March 21, 2001, Stamathis appeared in Wythe
County General District Court for his criminal trial on the larceny
charge, but the prosecutor moved that the case be nolle prosed, and
the charges against Stamathis were so dismissed. Stamathis was
unable to work for J-Mar while the charges were pending because he
was concerned that he would be out of the area and unavailable to
appear in court on his trial date. Stamathis no longer works for J-Mar.4
On October 23, 2001, Stamathis filed this complaint against Flying
J, Inc. and Hansen, claiming defamation, malicious prosecution, tor-
tious interference with employment, and punitive damages. The com-
plaint sought $250,000 in compensatory damages and $350,000 in
punitive damages. Defendants moved for summary judgment on all
claims, arguing that they were immune from liability under Va. Code
Ann. § 18.2-105 because probable cause existed to believe that Sta-
mathis was committing larceny. In addition, the defendants argued
that there was not sufficient evidence to support a finding that defen-
dant Hansen knew his allegedly defamatory statements were false,
that the defendants were motivated by actual malice to support the
punitive damages claim, and that Stamathis had failed to establish the
necessary elements of a tortious interference claim.
On July 9, 2002, the district court denied the motion, finding that
"there is evidence from which a jury could reasonably find that at the
time of Stamathis’ detention and arrest, Hansen neither believed nor
4It is not clear from the record whether Stamathis voluntarily quit his
job or whether the defendants’ statements to J-Mar and prosecution of
the larceny charge resulted in his leaving J-Mar.
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had probable cause to believe that Stamathis had shoplifted fuel," and
therefore, the section 18.2-105 immunity would not apply. Stamathis
v. Flying J, Inc., No. 7:01cv00838, 2002 U.S. Dist. LEXIS 12398,
*17 (W.D.Va. July 9, 2002). Additionally, the court found there was
sufficient evidence to withstand summary judgment regarding the def-
amation claim, to support a jury finding of actual malice for the puni-
tive damages claim, and to conclude that the defendants used
improper methods to interfere with Stamathis’ employment. Sta-
mathis, at *17-19.
The case proceeded to a two-day jury trial on July 15 and 17, 2002.5
At the close of Stamathis’ case, the defendants moved for judgment
as a matter of law on all claims. The district court dismissed Sta-
mathis’ tortious interference claim, but denied the motion with respect
to the other claims. The defendants renewed their motion for judg-
ment as a matter of law at the close of all the evidence, but the district
court again denied the motion.
On July 17, 2002, the jury returned a verdict in favor of Stamathis
on both the defamation and malicious prosecution claims. Following,
in the damages phase, the jury awarded compensatory damages in the
amount of $250,000 and punitive damages in the amount of $450,000
against Flying J and $5,000 against David Hansen. The district court
later reduced the punitive damages award to $350,000 against Flying
J only, pursuant to Va. Code Ann. § 8.01-38.1. The defendants
appeal, and we affirm.
II.
We review de novo a district court’s denial of a motion for judg-
ment as a matter of law. See Austin v. Paramount Parks, Inc., 195
F.3d 715, 727 (4th Cir. 1999). A district court’s denial for a request
for a new trial or request for a remittitur rests with the sound discre-
tion of the trial judge and will not be reversed absent an abuse of dis-
cretion. See Konkel v. Bob Evans Farms, Inc., 165 F.3d 275, 279 (4th
Cir. 1999), cert. denied, 528 U.S. 877 (1999). Applying this standard,
this court has established that a jury verdict is "permitted to stand
5The case was divided into liability and damage phases, and decided
on special verdicts the form of which is not objected to.
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unless, under Rule 50(b), no substantial evidence is presented to sup-
port the award . . . or, under Rule 59, the verdict is ‘against the clear
weight of the evidence, or is based upon evidence which is false, or
will result in a miscarriage of justice.’ " Mattison v. Dallas Carrier
Corp., 947 F.2d 95, 100 (4th Cir. 1991) (citations omitted).
On appeal, the defendants argue that the district court erred in
denying the defendants’ motion for judgment as a matter of law under
Va. Code Ann. § 18.2-105. Section 18.2-105, in pertinent part, pro-
vides,
A merchant, agent or employee of the merchant, who causes
the arrest or detention of any person pursuant to the [petit
larceny statute] shall not be held civilly liable for unlawful
detention . . . provided that, in causing the arrest or deten-
tion of such person, the merchant, agent or employee of the
merchant, had at the time of such arrest or detention proba-
ble cause to believe that the person had shoplifted or com-
mitted willful concealment of goods or merchandise.6
Thus, whether the district court’s denial of the defendants’ motion for
judgment as a matter of law was in error rests on whether the jury
could reasonably conclude that the defendants did not have probable
cause to believe that Stamathis had shoplifted. Because we believe
that there was sufficient evidence for the jury to come to this conclu-
sion, we affirm the decision of the district court.
Under Virginia law, "probable cause is defined as knowledge of
such facts and circumstances to raise the belief in a reasonable mind,
acting on those facts and circumstances, that the plaintiff is guilty of
the crime of which he is suspected." Stanley v. Webber, 260 Va. 90,
96 (2000) (citing Lee v. Southland Corp., 219 Va. 23, 26 (1978); Bain
v. Phillips, 217 Va. 387, 394 (1976); Gaut v. Pyles, 212 Va. 39, 41
(1971)). Thus, in order to establish merchant immunity in this case,
a jury would have to find that the defendants had probable cause to
6Va. Code Ann. § 18.2-105 (1996) is the statute in effect at all times
relevant to this case. § 18.2-105 was since repealed and, with no change
pertinent here, reenacted as part of Va. Code Ann. § 8.01-226.9 (2004)
by Acts 2004 c. 462.
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believe that (1) Stamathis removed Flying J’s fuel from the Flying J
premises, (2) without the consent of Flying J, and (3) with the inten-
tion of depriving Flying J of its fuel permanently. See Bright v. Com-
monwealth, 356 S.E.2d 443, 444 (Va. Ct. App. 1987) (citing
Dunlavey v. Commonwealth, 184 Va. 521, 524 (1945)). The defen-
dant bears the burden of proving probable cause as an affirmative
defense under Section 18.2-105.
There is no question but that the jury was properly instructed as to
the meaning of probable cause and the elements of petit larceny, to
which instructions exception is not taken.7 The claims of malicious
prosecution and defamation were submitted to the jury with special
interrogatories, to which the defendants had no objection. The first
question of the special interrogatory read as follows:
Have the defendants proven by a preponderance of the evi-
dence at the time of Stamathis’ arrest, defendants had proba-
ble cause to believe that Stamathis was guilty of larceny;
that is, that he had stolen fuel?
The jury responded "no" to this question, establishing that they
believed that the defendants did not have probable cause to believe
that Stamathis was guilty of larceny. We are of opinion that there was
sufficient evidence to support this finding.
It is apparent from the record that Stamathis repeatedly tried to pay
for his fuel and that Hansen saw this and knew that Stamathis had
7The jury was instructed as follows:
In order to have probable cause to believe that Stamathis was
guilty of larceny, defendants must have had probable cause to
believe that, one, Stamathis removed fuel from Flying J prem-
ises; two, without the consent of Flying J, and three, with the
purpose or intent of not paying the purchase price of the fuel.
Probable cause is knowledge of facts and circumstances that
would reasonably induce the belief in the mind of an ordinarily
prudent person that Stamathis was guilty of larceny.
In determining probable cause, you must view the facts and cir-
cumstances as they reasonably appear to the defendants.
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come into the store "to pay for his fuel." Stamathis gave his T-Chek
and Frequent Fueler cards to Miss Bowman twice (once in the store
and once on the phone), which contained his name and enabled Flying
J to access other identifying information about him. Both Hansen and
Miss Bowman knew that Stamathis was a driver for J-Mar and that
all of the information necessary to complete the transaction, minus the
mileage, was already in the computer. Stamathis tried on several
occasions to give his mileage to Miss Bowman in order to complete
the transaction, and was not trying to withhold or conceal this infor-
mation from her.
In addition to Stamathis’ repeated attempts to pay for the fuel and
his offering of identifying information to Flying J ( i.e. T-Chek card,
Frequent Fueler Card, employer, truck number), it was a very busy
night and the Flying J employees had to have been aware that there
was minimal parking and extensive line-ups for fuel. Hansen knew
that when the Flying J parking lot was full, truckers would use the
Citgo lot to park. Thus, Stamathis parking at the other lot would not
have been extraordinary. When Stamathis was moving his truck to
make room for other truckers wishing to fuel, he drove slowly out of
the parking lot, by-passing the ramps to the interstate, and parked his
truck at the neighboring Citgo lot. Both Miss Bowman and Hansen
saw this and knew that he was at the Citgo lot. In addition, upon
directing the deputy to have Stamathis arrested and when swearing
out the warrant, there was testimony that Hansen did not explain that
Stamathis had repeatedly tried to pay for the fuel.8
Taking into account all of the facts and circumstances presented to
the jury, we conclude that the jury was quite justified in finding that
Flying J and Hansen did not prove by a preponderance of the evi-
dence that there was probable cause to believe that Stamathis intended
to steal the fuel and that he was guilty of larceny. Accordingly, we
8Indeed, even the statement Hansen signed on the criminal complaint
may be construed to support Stamathis’ version of what happened:
Called in to get fuel cashier ask him for info said he would bring
in the info came in cashier said needed mileage he get mad
walked out and drove off lot with fuel went to sent[r]y station &
parked told me he was finding a place to park got smart to dep-
uty to arrest him.
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affirm the district court in its finding that Section 18.2-105 does not
provide defendants with immunity as a matter of law.
III.
The defendants’ remaining issues relate to the amount of compen-
satory and punitive damages that the jury awarded.
A.
With respect to compensatory damages, the defendants contend
that the award was excessive in light of Stamathis’ actual out-of-
pocket expenses. Whether this verdict should be set aside as excessive
is a matter of Virginia law. Gasperini v. Center for Humanities, 518
U.S. 415, 438 (1996). The Virginia Supreme Court has held:
When a verdict is challenged on the basis of alleged exces-
siveness, a trial court is compelled to set it aside "if the
amount awarded is so great as to shock the conscience of the
court and to create the impression that the jury has been
motivated by passion, corruption or prejudice, or has mis-
conceived or misconstrued the facts or the law, or if the
award is so out of proportion to the injuries suffered as to
suggest that it is not the product of a fair and impartial deci-
sion."
Shepard v. Capitol Foundry of Va., Inc., 262 Va. 715, 720-21 (2001)
(quoting Edmiston v. Kupsenel, 205 Va. 198, 202 (1964)). Because
setting aside a verdict as excessive is within the discretion of the trial
court, we review for abuse of discretion. See Shepard, 262 Va. at 720-
21 (citing Poulston v. Rock, 251 Va. 254, 258-59 (1996)); see also
Gasperini at 438.
The defendants argue that because Stamathis submitted evidence of
only approximately $10,000 in actual out-of-pocket expenses and loss
that the jury award of $250,000 is unsupported. While the defendants
are correct that Stamathis submitted evidence of his loss of income
and his necessary expenses that amounted to approximately $10,000,
this is not to say that Stamathis did not introduce evidence that sup-
ported the remaining portions of the award.
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The jury in this case was properly instructed, without objection,
what they should consider in arriving at compensatory damages. The
district court instructed the jury, "In determining damages to which
Mr. Stamathis is entitled, you should consider any of the following
which you believe by the greater weight of the evidence was caused
by the defendant’s wrongful conduct: One, loss of income; two, nec-
essary expenses; three, insult; four, pain; and five, mental suffering.
Your verdict shall be for such sum as will fully and fairly compensate
Mr. Stamathis for damages sustained as a result of the wrongful con-
duct." Thus, when considering the award in this case, the jury consid-
ered not only the $10,000 of actual out-of-pocket loss and expenses,
but also Stamathis’ insult, pain, and mental suffering. Given the facts
of this case, we are of opinion that the award is not so great that it
shocks the conscience of the court, suggests unfairness, is motivated
by passion, corruption or prejudice, is based on misconception, or is
so out of proportion as to suggest unfairness.
Stamathis was arrested, taken into custody, and booked for petit
larceny. In addition to the humiliation and embarrassment Stamathis
suffered just from these events, he faced further insult with respect to
his relationship with his employer. Hansen had called Stamathis’
employer prior to Stamathis’ arrest and told them that Stamathis had
driven off without paying for fuel, thereby jeopardizing his future
employment with the company. Not only was Stamathis’ employer
made aware of the incident, Stamathis lost 93 days of work to attend
to his state court appearances for the larceny charge. His employer
made no allowance for his time off from work, contributing to his
emotional distress. Additionally, Stamathis testified how badly the
entire incident had affected him, had "eaten him up inside" and
caused him to lose sleep. Furthermore, the defendants did not present
any witnesses during the damages phase of the trial to rebut Sta-
mathis’ testimony regarding his insult, pain, and mental suffering.
In consideration of all the evidence and in view of the conse-
quences that this incident had on Stamathis’ livelihood and reputation,
we are of opinion and hold that the compensatory damages award of
$250,000 was justified in this case. In that respect, we note that the
jury was not instructed on the theory that the charge of petit larceny
in the discharge of the duties of Stamathis were defamatory words
which are actionable per se under the law of Virginia: words which
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impute to a person unfitness to perform the duties of an office or
employment of profit, or want of integrity in the discharge of the
duties of such an office or employment. See Fleming v. Moore, 221
Va. 884, 888-89 (1981). The critical distinction between defamation
per se and other actions for defamation is that a person so defamed
is presumed to have suffered general damages, and any absence of
actual injury is considered only in diminution of damages. While no
point is made on appeal of this rule, and was not made below, it is
mentioned to show the extent to which Virginia law protects a person
in his employment from such slanderous charges as affected Sta-
mathis.
B.
With respect to punitive damages, the defendants assert three
errors. First, the defendants argue that the punitive damages award
must be reversed because Stamathis did not introduce any evidence
that Flying J acted with actual malice. Second, the defendants contend
that Virginia law requires reversal because the excessive punitive
damages award was the product of passion and prejudice. Lastly, the
defendants argue that under BMW of North America, Inc. v. Gore, 517
U.S. 559 (1996) the punitive damages award was unlawful and did
not provide the defendants with fair notice of the penalty to which
they would be subject. We will address each argument in turn.
In cases involving malicious prosecution or defamation claims,
punitive damages may be awarded if the defendant demonstrates, by
clear and convincing evidence, that the defendant acted with actual or
express malice. See Williams v. Garraghty, 249 Va. 224, 236 (1999).9
Actual malice is defined as "conduct which is in conscious disregard
of the rights of others and is wanton and oppressive." Nat’l Carload-
ing Corp. v. Astro Van Lines, Inc., 593 F.2d 559, 565 (4th Cir. 1979).
9We note that this is the standard generally applied to an award of
punitive damages. At trial, the jury was not instructed as to the clear and
convincing evidence standard. The defendants did not then raise this
objection to the jury instructions, and do not raise it now, however.
Regardless, we find it unnecessary to determine whether a clear and con-
vincing standard was waived because we find that there were sufficient
facts shown with which a jury could reasonably find that actual malice
was shown by clear and convincing evidence.
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We point out first that the jury, without objection, was properly
instructed on the necessity of finding actual malice in order to award
punitive damages. The court instructed,
[Y]ou have discretion to award punitive damages if you
find, one, that defendant acted for the purpose of causing
injury to plaintiff, or, two, the defendant acted in deliberate
disregard for plaintiff’s rights.10
The defendants raised no objection to this instruction, which was
approved in substantially the same form in Williams, 249 Va. at 236.
We are of opinion and decide that the jury could find that the defen-
dants acted with actual malice as instructed.
The district court addressed this issue in deciding post-trial motions
and concluded:
The matter is no more complicated than this: a jury could
reasonably conclude that defendants acted without probable
or reasonable cause and with actual malice. A jury could
have reasonably concluded that defendant, David L. Hansen,
clearly understood that plaintiff had no intention of stealing
fuel, and yet because Hansen became angry he directed a
local deputy sheriff to arrest Stamathis, directions that the
local deputy sheriff blindly followed. Defendants then pur-
sued Stamathis criminally, not in the interest of justice, but
rather to protect themselves from liability.
We agree with the district court. We have held above that there was
sufficient evidence to find that Hansen did not have probable cause
to believe that Stamathis was stealing fuel. While we acknowledge
that lack of probable cause alone does not infer actual malice, see
Pigg, 207 Va. 679, 686 (1967), it does lend support to a finding that
the defendants acted with actual malice. The defendants knew that
Stamathis had tried to pay for his gas three times while parked in the
Flying J lot, and also knew a significant amount of information about
Stamathis from his Frequent Fueler and T-Chek cards. Hansen and
10See the complete instruction at n.13, infra.
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Miss Bowman saw Stamathis bypass the freeway entrance and park
his truck at the neighboring lot, thus removing doubt that Stamathis
had planned to just fuel up and proceed down the highway. Yet,
despite any lingering questions that the defendants may have had as
to whether Stamathis intended to pay, they called the police and Sta-
mathis’ employer, stating that Stamathis had in fact driven off without
paying for fuel. The charges were pressed even after a dispatcher
from J-Mar assured Hansen that she would get the situation taken care
of, if given a minute, thereby indicating that J-Mar would pay Flying
J for Stamathis’ fuel.11 But Hansen pressed charges, nevertheless, and
had Stamathis arrested.
The jury also heard evidence that Hansen was angry because Sta-
mathis was complaining and arguing with him, and Hansen told the
deputy to arrest Stamathis because he did not want to argue with Sta-
mathis anymore. Hansen was well aware that Stamathis was not going
to be arrested absent Hansen’s directive, yet Hansen requested Sta-
mathis’ arrest and proceeded to swear out a criminal complaint
against him. There was also evidence that Hansen did not tell Deputy
Hall or the magistrate about Stamathis’ attempts to pay for the fuel,
but rather indicated that Stamathis had tried to pay with some form
of payment that Flying J would not accept.
In light of all the evidence, we do not agree with the defendants’
contention that Stamathis failed to introduce any evidence of actual
malice. On the contrary, we are of opinion there was sufficient evi-
dence for the jury to come to the conclusion that the defendants acted
with malice as defined, without objection, in the jury instructions.
Additionally, we disagree with the defendants’ position that this case
is indistinguishable from Pigg, 207 Va. at 686, and from F.B.C.
Stores, Inc. v. Duncan, 214 Va. 246 (1973). Pigg affirmed a trial court
which, in its discretion, had set aside an award of punitive damages,
and Duncan affirmed a trial court ruling that there was no evidence
to support a claim of punitive damages.
11We must reiterate that J-Mar paid for Stamathis’ fuel. Therefore, J-
Mar was going to pay the bill regardless. Once Hansen spoke with J-Mar
and the dispatcher assured Hansen that she would take care of the situa-
tion, it seems apparent that, at the very least, Flying J did not need to fear
not getting paid for the fuel.
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We now turn to whether the punitive damages award was unlawful
under Virginia law because it was the product of passion and preju-
dice. "[A] jury’s award of damages may not be set aside by a trial
court . . . unless the damages are so excessive . . . as . . . to create
the impression that the jury has been influenced by passion or preju-
dice or has in some way misconceived or misunderstood the facts or
the law . . . ." Downer v. CSX Transportation, Inc., 256 Va. 590, 594
(1998). That being said, "a trial court will not set aside a verdict either
as inadequate or as excessive merely because the court may have
awarded a larger or smaller sum had it been the trier of fact." Downer,
256 Va. at 594 (citing Reel v. Ramirez, 243 Va. 463, 467-68 (1992)).
The action of the trial court is reviewed for abuse of discretion. See
Reel at 467.
In support of their contention that the jury’s verdict was based on
improper considerations, the defendants claim that plaintiff’s counsel
portrayed Stamathis in a manner designed to evoke sympathy from
the jury and that he unlawfully made appeals to the jury’s regional
biases by emphasizing Flying J’s net worth and the fact that it is an
out-of-state corporation. While plaintiff’s counsel argued the fact of
Flying J’s financial status and also mentioned that Flying J is an out-
of-state corporation,12 we are of opinion that, read in context, the
comments were not so egregious, even if any, as to be considered
designed to inflame the jury.
First, a defendant’s financial position is a proper consideration in
assessing punitive damages, see Pacific Mut. Life Ins. Co. v. Haslip,
499 U.S. 1, 22 (1991). Thus, it was not error to comment on Flying
J’s net worth. Even when read in conjunction with statements pertain-
ing to where the defendant’s corporate headquarters were based, we
do not feel that counsel’s statements rose to a level that they preju-
diced the jury. Rather, we feel plaintiff’s attorney’s argument went no
further than to stress to the jury that the defendants’ behavior was
egregious and necessitated punishment, and that the punishment
should be such that it would deter the defendants and others like them
from doing this again. Indeed, the jury was instructed, "the law allows
but does not require the jury to award punitive damages. The purpose
12The fact that Flying J’s headquarters are in Ogden, Utah was a fact
in evidence.
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of punitive damages is, one, to punish a wrongdoer for extraordinary
misconduct and, two, to warn others against doing the same."13 Thus,
the jury was aware of the requirements for awarding punitive dam-
ages and the purpose therefor. A jury is presumed to follow the
instructions of the court. See Richardson v. Marsh, 481 U.S. 200, 211
(1987); Nichols v. Ashland Hosp. Corp., 251 F.3d 496, 501 (4th Cir.
2001). Accordingly, we hold that the district court did not abuse its
discretion in refusing to set aside the punitive damages award based
on improper considerations.
Finally, the defendants contend that the punitive damage award
must be reversed because they did not receive fair notice, under
BMW, that a penalty of this amount could be awarded. See BMW, 517
U.S. at 574 (stating that fairness dictates that persons should receive
"fair notice not only of the conduct that will subject him to punish-
ment, but also of the severity of the penalty that a State may impose").
In BMW, the Supreme Court established that courts should look to
three factors in assessing whether a punitive damages award violates
due process: (1) the reprehensibility of the conduct; (2) the ratio
between the punitive damages awarded and the harm likely to result,
as well as the harm that actually has occurred; and (3) the difference
between the punitive damages awarded and the civil or criminal pen-
13The jury was fully instructed on the requirements of punitive dam-
ages and when punitive damages are appropriate. The entire instruction
follows, to which the defendants did not object:
In this case, you have discretion to award punitive damages if
you find, one, that defendant acted for the purpose of causing
injury to plaintiff, or, two, the defendant acted in deliberate dis-
regard for plaintiff’s rights.
You may award an amount of punitive damages which all jurors
agree is proper. In fixing the amount, you should consider the
following questions: One, how offensive was the conduct; two,
what amount is needed to prevent repetition in light of defen-
dants’ financial condition; and three, has the amount a reason-
able relationship to actual damages awarded?
If you do award punitive damages, you should fix the amount
using calm discretion and sound reason. You must not be influ-
enced by sympathy for or dislike of any party in the case.
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alties that could be imposed for comparable conduct. BMW, 517 U.S.
at 574-75.
First, as to the reprehensibility of the act, we cannot ignore that the
jury found that the defendants did not have probable cause. Thus, the
defendants had Stamathis arrested, booked for petit larceny, and
pushed for prosecution when they did not have probable cause to
believe that Stamathis had actually stolen fuel. Not only was Sta-
mathis deprived of his liberty in being taken into custody and booked,
but the humiliation and stigma and expense that accompany a crimi-
nal arrest are significant. Before the police had even arrived to make
a determination regarding Stamathis’ actions, Hansen had called Sta-
mathis’ employer and told them that Stamathis had stolen fuel,
thereby damaging his reputation and trust with his employer. Sta-
mathis was forced to absent himself from his job for some three
months in order to accommodate his court appearance and faced up
to a year in prison and a fine of $2,500. See Va. Code Ann. § 18.2-
96 (classifying petit larceny as a Class 1 misdemeanor); § 18.2-11
(providing that a Class 1 misdemeanor carries a maximum sentence
of confinement in jail for not more than twelve months and a fine of
not more than $2,500). The fact that the defendants continued to press
charges against Stamathis, although he was visible in a nearby park-
ing lot and had attempted to pay for his gas three times, indicates that
their actions were sufficiently reprehensible in this case to justify the
award.
As to the ratio between the actual harm inflicted on Stamathis to
the amount of the punitive damages award, any difference is recon-
ciled without difficulty. The defendants contend that Stamathis’
actual harm is solely his out-of-pocket damages amounting to just
over $10,000, which is 1/35 the amount of the punitive damages
award. We think that the defendants are confusing Stamathis’ out-of-
pocket expenses with his damages. The jury awarded Stamathis
$250,000 in compensatory damages for his loss of income and atten-
dant expenses, and also for his insult, pain, and mental suffering we
have discussed above. This amount is more than half of the jury
award and only $100,000 less than the punitive damages awarded in
this case, which is below the ratios that have been viewed as adequate
in the past under English statutes. BMW, 517 at 580-81 (stating that
for years "double, treble, or quadruple damages" have been represen-
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tative of sufficient punishment). Thus, we decide that the ratio
between the punitive and compensatory damages was not excessive.
Finally, we are asked to compare the punitive damages award to
the civil or criminal penalties that could be imposed. There are no
statutory civil penalties imposed under Virginia law, however, Sec-
tion 18.2-105 does provide a merchant with notice of possible actions
that might lie should a merchant unlawfully detain someone. In this
case, the defendants were on notice that should they not have proba-
ble cause for the arrest, they faced civil liability for unlawful deten-
tion, slander, malicious prosecution, false imprisonment, false arrest,
or assault and battery. See Va. Code Ann. § 18.2-105. The defendants
were also well aware that in such civil actions, it would be possible
for a plaintiff to present evidence sufficient to justify an award of
punitive damages and that the cap of a punitive damages award in
Virginia is $350,000. Va. Code Ann. § 8.01-38.1.
With respect to any criminal penalties, the Virginia Criminal Code
provides that, in proper circumstances, defendant Hansen could be
found to have violated Section 18.2-461, which makes it unlawful to
give a false report on the commission of any crime to any law-
enforcement official with intent to mislead or without just cause. Va.
Code Ann. § 18.2-461. The jury found that Hansen lacked probable
cause to believe that Stamathis was indeed stealing the fuel. Thus, the
report that Hansen made to the police officer indicating that Stamathis
stole the fuel might be a false report under § 461. As this crime is
classified as a Class 1 misdemeanor, Hansen could have faced up to
a year in jail for his actions, along with the fine, and a conviction on
his record.14 In addition, Flying J was on notice of all applicable civil
actions it could face for detention without probable cause. While the
applicable civil and criminal penalties are difficult to compare to a
monetary value, it seems that the award in this case was not grossly
disproportionate to any comparable civil and criminal penalties that
Flying J and Hansen might face.
Thus, examining the three BMW guideposts, we feel that the defen-
dants had adequate notice of the possible penalties that they could
14Hansen was apparently not prosecuted and was promoted and trans-
ferred to Casper, Wyoming.
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face and that the punitive damages award in this case satisfied due
process concerns. Accordingly, we affirm the punitive damages award
because we are of opinion and decide it does not violate either Vir-
ginia or federal law.
In conclusion, we find that there was sufficient evidence for the
jury to conclude that the defendants lacked probable cause, and there-
fore, were not immune from liability. With respect to the compensa-
tory and punitive damages, we are of opinion that the district court
did not abuse its discretion in allowing the award of damages to stand.
Accordingly, the judgment of the district court is
AFFIRMED.
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