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Diana L. Courson

Virginia Supreme Court Upholds $5.3 Million Jury Verdict Won by Zuckerman Spaeder LLP on Behalf of Former Online Resources CEO

May 16, 2013

Zuckerman Spaeder LLP successfully defended on appeal the 2011 $5.3 million jury verdict it won on behalf of Matthew Lawlor, the founder and former CEO of Online Resources Corp. The firm represented Mr. Lawlor in his suit in 2010 against Online Resources, when the company refused to honor his severance agreement. Mr. Lawlor was represented before the Supreme Court of Virginia by partners Graeme W. Bush, Ellen D. Marcus, and Jason M. Knott; associate Steven N. Herman; and George Somerville from the Richmond office of Troutman Sanders LLP.

The Supreme Court of Virginia upheld the 2011 Fairfax County Circuit Court trial verdict in full. The court held that the evidence supported both the finding that the company breached Mr. Lawlor's severance agreement, which required Online Resources to pay him benefits if he was terminated following a change in control, and the finding that the company was unjustly enriched by cutting Mr. Lawlor's pay for his work in 2009. The court also rejected the company’s challenge to the jury’s measure of damages.

“We are very pleased that the court upheld the jury’s verdict that, based on the evidence at trial, Online Resources breached Mr. Lawlor’s severance agreement, when he was terminated following a change in control and the company refused to pay him benefits,” said Mr. Bush. “It is gratifying that after two decades leading the company and three years in court, Mr. Lawlor has been vindicated and his contributions to Online Resources and credibility have been affirmed.”

Mr. Lawlor sued Online Resources in 2010 after he was forced out of his position as CEO in December 2009. He alleged that after a large investor in the company gained a seat on its board of directors, the company forced him out as CEO. Online Resources refused to pay him severance, claiming his termination was based on performance, despite the fact that Online Resources’ year-to-date core earnings-per-share were up 50 percent in 2009 in the midst of a national recession. Zuckerman Spaeder filed an action in Fairfax Circuit Court, where, after a three-week trial in 2011, a jury found in Mr. Lawlor’s favor on four of the five claims he made against the company. The result was featured as one of “Virginia’s Largest Verdicts of 2011” by Virginia Lawyers Weekly.

The court remanded the award of attorneys' fees for further consideration by the trial court. Shortly after the remand, Zuckerman Spaeder negotiated a favorable settlement for Mr. Lawlor, under which Mr. Lawlor recovered all of the fees and expenses that had been awarded before the appeal.

Online Resources was founded in 1989 and was the first Internet banking services provider. The company grew into a leading online payments processor with more than 15 million end-users, and was recently acquired by ACI Worldwide.