Weaver v. ZeniMax Media, Inc.

Opinion by KENNEY, Judge. Christopher S. Weaver appeals the judgment of the Circuit Court for Montgomery County dismissing his action for declaratory relief and breach of contract against ZeniMax Media, Inc. (“ZeniMax”), the award of attorney’s fees and costs to ZeniMax, and the grant of summary judgment in favor of ZeniMax on its counterclaim for breach of contract. He presents three questions, which we have reordered: I. Did The Trial Court Commit Reversible Error In Dismissing Mr. Weaver’s First Amended Complaint Based On His Pre-Litigation Acts? [II.] Did The Trial Court Commit Reversible Error In Awarding ZeniMax Fees And Costs Pursuant to Rule 1-B41? [III.] Did The Trial Court Commit Reversible Error In Finding That Mr. Weaver’s Pre-Litigation Acts While Employed by ZeniMax Were a Substantial And Material Breach Of His 1999 Agreement Barring Any Recovery By Him of His $1,200,000 Severance Payment? ZeniMax filed a cross-appeal challenging the circuit court’s award of attorney’s fees and grant of summary judgment in favor of Weaver on ZeniMax’s counterclaim for breach of duty ²³ of loyalty.

It presents the following two questions, which we have reordered: Did the trial court abuse its discretion by substantially reducing ZeniMax’s attorneys’ fees award: a. based on the dismissal of Weaver’s claim, where the claim was meritless or at least highly speculative since it had not been tried? b. on the basis that Weaver’s misconduct somehow benefitted ZeniMax, by saving ZeniMax from having to continue to defend Weaver’s baseless lawsuit? c. by eschewing examination of counsel’s hours and rates, instead imposing an admittedly somewhat arbitrary estimate of a reasonable fee? Did the trial court err by granting Weaver summary judgment on breach of fiduciary duty, solely for “lack of remedy,” where Weaver’s disloyal actions were clear and undisputed, and where ZeniMax was entitled to several remedies, including damages incurred in defending this action, disgorgement of Weaver’s salary and benefits, and a declaration that Weaver could not recover contractual severance benefits? For the following reasons, we shall vacate the judgment of the circuit court. FACTUAL AND PROCEDURAL HISTORY Weaver’s Employment Dispute with ZeniMax Weaver is the founder of Bethesda Softworks, which has developed numerous successful computer games.

Weaver and Robert Altman founded ZeniMax, which acquired Bethesda Softworks in 1999. At the founding of ZeniMax, Altman was Chief Executive Officer and Chairman of the Board of Directors; Weaver was Chief Technology Officer and a member of the Board. Altman and Weaver each owned approximately thirty percent of the ZeniMax stock. ZeniMax is a Delaware corporation. ²⁴ Weaver entered into an executive employment agreement with ZeniMax on July 1, 1999.

With respect to Weaver’s period of employment, termination, and renewal, the contract provided: 1. Full-time Employment of Executive. 1.1 Duties and Status. (a) The Company hereby engages the Executive as CHIEF TECHNOLOGY OFFICER for the period (the “Employment Period”) specified in Section 4, and the Executive accepts such employment on the terms and conditions set forth in this Agreement. During the Employment Period, the Executive will exercise such duties as are commensurate with the duties of Chief Technology Officer of the Company and shall report directly to the Chief Executive Officer of the Company or his designee.

(b) During the Employment Period, the Executive shall (i) devote his full time and efforts to the business of the Company and will not engage in consulting work or any trade or business for his own account or for or on behalf of any other person, firm or Company which competes or conflicts or interferes with the performance of his duties hereunder in any way and (ii) accept such additional duties as may be assigned, and such additional office or offices to which he may be appointed by the Chief Executive Officer of the Company or his designee, provided that the performance of such additional duties and such additional office or offices shall be reasonably consistent with the scope of the duties described in subparagraph 1.1(a) of this Agreement; provided, however, that Executive may engage in part-time teaching at an accredited high school, college, or university, and that Executive may continue to provide consulting services to the businesses and organizations listed on Schedule A hereto. Notwithstanding anything to the contrary in this Section 1.1(b), upon the prior written approval of the Chief Executive Officer of the Company, Executive shall have the right to engage in other activities during the Employment Period, including without limitation, teaching and consulting, provided that such activities do not conflict ²⁵ with any of the terms or provisions of this Agreement or the Executive’s responsibilities to the Company set forth herein. 4.1 Employment Period. The Employment Period shall commence on the date hereof and shall continue until the earliest of (i) three (3) years from the date hereof (the “Employment Term”); (ii) the Executive’s death or total disability; (iii) a termination by the Company under Section 4.2 or 4.3 hereof; (iv) a resignation under Section 4.5 hereof; or (v) a termination by the Executive under Section 4.6 hereof. 4.2 Termination by the Company with Cause. (a) In the event the Company terminates the Executive’s employment under this Agreement on or before the Employment Term, with Cause, the Executive will be not be [sic] entitled to any further compensation or benefits after the date of termination other than those benefits and payments which have been earned and are payable as of the date of termination or which have been earned and will become payable without regard to future services.

(b) For purposes of this Section 4 “Cause” shall mean (i) the commission of an act involving fraud in the course of the performance of Executive’s duties, (ii) intentional material damage to the property or business of the Company and (x) such damage has not immediately ceased and (y) such damage had not been cured by Executive within twenty-one (21) days following the receipt of written notice by the Executive from the Board of Directors specifying the action causing damage and demanding cessation of such action and cure of such damage, (iii) the conviction of the Executive of a crime constituting a felony, (iv) conduct that constitutes a material breach of this Agreement, subject to the Executive’s right to cure such conduct within twenty-one (21) days following receipt of written notice to the Executive by the Board of Directors specifying such breach, or (v) continuance of failure by the Executive to perform his duties in accordance with this Agreement after receipt of written ²⁶ notice to the Executive by the Board of Directors specifying such failure and such failure has not been cured within twenty-one (21) days following the receipt of such notice by the Executive; provided, however, that in any case such “Cause” shall not be found to exist absent a unanimous vote of the non-interested members of the Board of Directors. 4.3 Termination by the Company without Cause. (a) In the event the Company terminates the Executive’s employment under this Agreement on or before the Employment Term, without Cause, then (i) the Company shall, immediately upon such event, pay to the Executive the sum equal to the greater of four times his then Annual Base Salary or $1,200,000 paid in equal installments over the twelve-month period following such termination and shall thereafter provide to the Executive a continuation of his health and welfare benefits for a period of three (3) years; and (ii) the Executive shall not be obligated to fulfill his obligations hereunder, with the exception of his obligations under Sections 5, 6, 7, 8, 9 and 10, which shall survive any termination of this Agreement. If for any reason the Company is unable to continue health and welfare benefits as required by the preceding sentence, the Company shall either provide equivalent benefits to the Executive or pay to the Executive a lump sum cash payment equal to the value of the benefits which the Company is unable to provide. (b) Termination by the Company without cause shall include, among other reasons, a termination (i) by the Company of the employment of the Executive for any reason other than death or Total Disability of the Executive or Cause; or (ii) the breach by the Company of any other provision of this Agreement. 4.7 Non-Renewal by Company.

Upon any expiration of this Agreement as a result of the determination of the Company not to renew the Executive’s Employment Agreement, upon the effective date of such expiration, the Executive shall be entitled to receive the same payments and benefits as he is entitled to receive following an involuntary termination of his employment by ²⁷ the Company without Cause, as specified in Section 4.3 herein. By late 2001, Weaver’s and Altman’s relationship had deteriorated due to disagreements over Weaver’s performance, his time away from the office teaching, his paid time off, and perquisites of his employment. Nevertheless, in Spring 2002, Weaver informed Altman that he wished to renew his employment agreement with ZeniMax, which was set to expire July 1. Altman responded with a draft employment agreement containing terms different from the 1999 contract.

Dissatisfied with this offer, Weaver replied with a draft contract of his own that he requested Altman present to the Board. Altman informed Weaver that he did not expect the Board to approve the contract presented by Weaver, and that he considered the contract he had presented to Weaver to be a fair offer and one the Board would approve. No agreement was reached prior to the July 1 deadline. Weaver informed ZeniMax that because, in his view, it had failed to renew his employment agreement, he was entitled to the severance package provided for in section 4.3 of the 1999 contract.

ZeniMax’s Vice President for Legal Affairs, J. Griffin Lesher, responded that ZeniMax did not consider the nonrenewal provision applicable. ZeniMax took the position that Weaver had rejected its renewal offer. On December 13, 2002, Weaver filed a complaint in the Circuit Court for Montgomery County seeking a declaratory judgment regarding whether he was entitled to the nonrenewal benefits of section 4.3 of the contract. On the same date, he also moved for summary judgment.

Weaver later amended his complaint, adding counts for breach of contract and wage payment. ZeniMax answered Weaver’s complaint on January 17, 2003, and on February 19, 2003, filed a two-count counterclaim for (1) breach of fiduciary duty of care, and (2) breach of contract. ZeniMax alleged that Weaver had mismanaged company projects, claimed paid time off beyond the four weeks of vacation provided by the contract, and received ²⁸ reimbursement of travel and other expenses that were not company-related. Weaver’s Misconduct and the Resulting Sanction In the course of discovery, Weaver produced printouts of certain e-mails between ZeniMax executives.

One of the emails was from Chief Financial Officer Cindy Tallent to Lesher, and appears to have been printed from Lesher’s e-mail account. 1 Four of the e-mails were from Altman to various ZeniMax employees, not including Weaver, and appear to have been printed from Altman’s e-mail account. 2 One of the emails was from Altman to Weaver, but appears to have been printed from Altman’s e-mail account. 3 During Weaver’s deposition on August 27, 2008, counsel for ZeniMax asked him how he had obtained the e-mails. At first, Weaver invoked the Fifth Amendment, but later he revealed that he had, on multiple occasions in 2001 and 2002, used his “master key” to enter Altman’s and Lesher’s offices outside of normal business hours. He used Altman’s computer to log into Altman’s e-mail account and searched for e-mails related to their disagreements and Weaver’s future employment with ZeniMax. Weaver printed the e-mails that he considered relevant to those issues.

In Lesher’s office, Weaver reviewed various documents, including Board meeting minutes and his and other ZeniMax executives’ employment agreements. Weaver also copied and printed other e-mails to which he was not a party without actually logging onto other employees’ computers. His purpose was to investigate whether, as he suspected, certain ZeniMax executives, including Altman and company President Ernest Del, were attempting to force him out of the company. ²⁹ After the deposition, Weaver turned over to ZeniMax numerous other e-mails he had obtained. He also produced a draft of a proposed employment agreement that contained handwritten notes.

He later explained that he had found the draft contract in the trash receptacle in Altman’s office. On October 27, 2003, ZeniMax filed an amended counterclaim, adding a count for breach of fiduciary duty of loyalty based on Weaver’s conduct in obtaining the e-mails and draft contract. On November 12, 2003, ZeniMax filed a motion for sanctions or dismissal of Weaver’s complaint based on his conduct and his initial failure to produce the documents to ZeniMax. On February 27, 2004, the court held a hearing on ZeniMax’s motion for dismissal or sanctions, as well as various other motions. 4 ZeniMax urged the court to first consider its motion to dismiss or for sanctions, arguing that there was a threshold question of whether Weaver had so abused the judicial process that he should not be permitted to go forward with his claims.

The court agreed to consider the motion first and, after hearing argument from both sides, reserved on the motion until after an evidentiary hearing on Weaver’s conduct. The court heard argument on, and granted, Weaver’s motion to strike ZeniMax’s jury demand and claim for punitive damages. Both parties submitted additional memoranda on ZeniMax’s motion to dismiss or for sanctions. The evidentiary hearing took place April 1, 2004 and May 5, 2004.

ZeniMax called Weaver to testify. He stated that in 2001 he had become suspicious that Altman and other corporate executives were ³⁰ planning to oust Mm from the company or limit Ms control. In August or September 2001, he entered Lesher’s office at Mght, without permission, to look through Board meeting minutes for information regarding his right to teach at the Massachusetts Institute of Technology one day a week, a point of contention between Weaver and Altman. Weaver also reviewed Altman’s and Del’s employment agreements, which were kept in binders on a shelf in Lesher’s office.

Weaver was incensed to learn that Altman’s and Del’s contracts provided more generous terms than his. Weaver photocopied the contracts and took the copies. A short time later, Weaver entered Altman’s office on a weekend. He testified that he logged into Altman’s e-mail account using Altman’s password. 5 He searched Altman’s email account for e-mails including Weaver’s name or imtials and printed those that appeared relevant.

Weaver entered Altman’s office for the same purpose on between two and five other occasions. According to Weaver, on one occasion when he was in Altman’s office (he testified that he does not remember exactly why he was there), he noticed a document in Altman’s trash receptacle that included handwritten notes. Weaver retrieved the document and discovered that it was a printed copy of his 1999 employment agreement with handwritten changes — an apparent working draft of his proposed new employment agreement. Weaver either took the document or photocopied it and took the copy.

Weaver testified that he took one or two e-mails from Tallent’s office. He stated that he did not log into her e-mail account, but that her computer was on and he noticed on the screen an open e-mail regarding his teacMng responsibilities and his right to paid time off, which he printed. Weaver also obtained other e-mails by copying documents that had been printed from the “common printer,” i.e., a printer in a common area that was connected to multiple company computers. ³¹ In addition to the documents he took from the ZeniMax offices, Weaver stated that there were numerous e-mails that he reviewed but did not print or copy. He estimated that he had printed or copied only a small percentage of the e-mails he had read or skimmed.

Weaver testified that he had often entered, without prior permission, other executives’ offices when they were not present. For example, he stated that he frequently entered Altman’s office to obtain drinks from Altman’s refrigerator. He stated that he had entered Lesher’s office to review corporate documents, including Board meeting minutes. He had often entered those and other offices as necessary to obtain or drop off papers.

Nevertheless, Weaver acknowledged that he had conducted his investigations at night and on weekends to hide his activities from ZeniMax. He conceded that he had lied to other ZeniMax employees about his actions 6 and that he had initially lied in his deposition. He also stated that, as Chief Technology Officer, he had “administrator rights” to access other employees’ computers, but acknowledged that if he had done so, there would have been a record of such activities. Weaver conceded that, shortly after he began his investigations, he hired counsel.

In preparation for his deposition, he reviewed the various documents he had obtained. He had planned to reveal them to his counsel after Altman was deposed. He stated that he expected Altman to lie in his deposition and that the documents could be used as evidence of Altman’s false testimony. He maintained that he had always intended to reveal the documents and produce them to ZeniMax.

ZeniMax called Weaver’s counsel, Ronald Early, to testify. ZeniMax examined Early extensively regarding what he knew and when he knew it. Early repeatedly asserted Weaver’s ³² attorney-client privilege, but he maintained that he found out about Weaver’s activities at the same time as ZeniMax— during Weaver’s deposition. Thereafter, Early insisted that Weaver had turned over all requested documents that were in his possession.

ZeniMax also called Lesher to testify. Lesher stated that he kept files in his office containing numerous corporate documents, that he locked his office every time he left it, and that he was unaware that Weaver had ever been in his office without permission. He stated that he never showed Weaver the binders in his office containing the Board meeting minutes and the executive employment contracts. Lesher testified that he recognized the document Weaver says he found in Altman’s trash as a draft employment contract containing Altman’s handwritten edits.

Lesher said that he remembered last seeing the document in Weaver’s employment file in Lesher’s office and that he does not know how Weaver obtained it. Weaver’s counsel cross-examined Lesher regarding various documents that ZeniMax asserted were privileged in an attempt to show that ZeniMax had suffered little prejudice as a result of Weaver’s conduct. The court took the matter under advisement, and issued an opinion on September 23, 2004, granting ZeniMax’s motion to dismiss. The court noted that Weaver had read hundreds of e-mails and printed and copied some of them: During his incursions into [Altman’s, Lesher’s, Tallent’s], and possibly other offices, Weaver scanned, at a minimum, hundreds of emails.

While the Court finds his testimony highly self-serving and altogether unreliable, it does accept his admission that he did not copy or print out every message or file that he accessed. Nevertheless, the documents he eventually produced in discovery amount to nearly an entire ream of paper. The Court does acknowledge that some of these documents are duplicates of other messages contained within the collection itself. Rather than mitigate his conduct, the Court finds these duplicates merely underscore the diligence with which he pursued his goal of seeking all information which pertained to his personal ³³ situation.

He quite clearly used similar if not exact search terms in his computer assisted scanning of the email caches of each of his colleagues during each of his illicit incursions .... The court found that Weaver undertook his investigation for the purpose of preparing for litigation, and therefore the fact that it took place prior to the onset of litigation was irrelevant: There is no dispute that Weaver’s conduct began during his employment and prior to the filing of his suit. The Court, however, is not convinced that this fact alone magically transforms this matter into a case of purely pre-litigation conduct. In fact, the Court is persuaded by the evidence that Weaver continued his course of illicit conduct specifically with the aim of obtaining materials that would be useful to him in future litigation with ZeniMax.

From the evidence presented at the hearings the Court believes that Weaver fully anticipated filing suit against ZeniMax as early as October 2001 if his employment demands were not met____This is quite simply civil vigilantism regardless of when the conduct began. It is the act alone that offends justice and the Court cannot rationalize such a perversion of its process because the initial actions first occurred prior to the filing of a suit. The Court finds the plaintiff engaged in a systematic, calculated, and months-long scheme to obtain an advantage in a litigation that he planned to file and pursue.... ... [Weaver] admitted to reviewing [the documents he had printed] prior to his deposition and to planning to use them at a later date against Altman to gain a strategic litigation advantage. It is also clear to the Court that Weaver, in spite of his rationalizations to himself and to this Court, was in fact aware that his conduct was wrongful....

Lastly, at least one of the documents improperly viewed and retained by Weaver was relevant to the underlying litigation and would likely have been appropriately deemed ³⁴ privileged, but for its disclosure through the plaintiffs illicit and improper actions. The document to which we refer is a copy of Weaver’s employment contract with hand-written marginalia authored by Mr. Altman. At the hearing Weaver testified that he took this document from the trash can in Altman’s office, though his assertions specifically regarding this document have been particularly prone to reassessment and rationalization. The comments written on the contract copy relate to the clauses that Altman believed should be changed in Weaver’s upcoming contract.

As the underlying matter in this litigation would revolve on the correct interpretation of Weaver’s employment contract, Altman’s notes and conclusions as the CEO would be highly probative of ZeniMax’s position regarding key contract language...... [T]his document ought to have remained confidential and likely would have but for the wrongful conduct of Mr. Weaver. The court recognized that no rule or statute gave it authority to sanction Weaver’s actions. Nevertheless, the court asserted that it had inherent authority, in “extraordinary circumstances,” to sanction such conduct: “As the defendant in this case asks the Court to act in this matter outside of the constraints of binding common or statutory law, the Court must initially reach the conclusion that such extraordinary circumstances are present which warrant the exercise of the Court’s inherent authority to safeguard the integrity of its judicial process.” The court found that Weaver’s conduct constituted extraordinary circumstances: [T]he Court unequivocally finds the plaintiffs conduct in this matter rises to the level of extraordinary circumstances. It is, thankfully, rare that a court confronts facts similar to the one at bar.

Even viewed in a light most favorable to the plaintiff, Weaver’s conduct clearly constitutes an unauthorized and improper intrusion into the offices, computers, files, email accounts, and trash bins of at least three ZeniMax employees. Alone this improper access would be extraordinary enough, but plaintiff compounded his error by printing, copying, and retaining a voluminous number of ³⁵ these documents, and by referring to his ill-gotten gains both before and during the course of this litigation. To determine the proper sanction for Weaver’s extraordinary conduct, the court analyzed that conduct under a five-part framework: I. Did the plaintiff act willfully, wrongly, and in bad faith? Yes, the Court finds the plaintiff acted willfully, wrongly and in bad faith.

II

Does an adequate nexus exist between the misconduct precipitating the motion for the dismissal sanction and the matters in controversy in the case? Yes, the Court finds Weaver’s conduct was specifically motivated by his misguided desire to protect himself from any potential impropriety by ZeniMax and/or Mr. Altman in a litigation that at the time had not even been filed. To achieve this aim, Weaver sought to uncover damaging evidence which would provide him a strategic advantage in litigation. He attempted to unearth this information through his illicit incursions and improper acquisitions of hundreds of documents.

As the matters in controversy in this case relate to a dispute over his personal employment contract, Weaver’s very act of seeking such an advantage by illicit actions outside of the normal discovery procedures constitutes an adequate nexus over which the Court may exercise its inherent authority.

III

Is the risk of prejudice to the party seeking sanctions impossible to discount absolutely or, alternatively is the taint this evidence would impart to the judicial process impossible to remove if permitted to be included in the plaintiffs case? Yes. In circumstances like these where the defendant has shown the plaintiff has engaged in improper conduct and gained access to confidential and possibly privileged materials and the precise scope of knowledge acquired by the plaintiffs improper conduct is not determinable, this Court believes prejudice must be presumed. Although ³⁶ Weaver had an opportunity to overcome this presumption, we find he has failed to so.

It is impossible to rule out completely the risk of prejudice to the defendant, because no one but Weaver knows for certain what information he has improperly reviewed and may still retain in his memory. He has admitted that the materials he has turned over to opposing counsel do not encompass everything he saw, reviewed, or accessed, as he only copied or printed select materials. Thus, this Court can never know the extent to which the evidence in this case has been tainted by his illicit actions. Without being able to assess how and to what extent evidence at trial would be tainted, this Court cannot craft a means to remove such taint at trial.

IV

In the absence of sanctions would the promotion and safeguarding of the efficient and orderly administration of civil disputes be irrevocably undermined by the public policy favoring disposition of cases on their merits? Yes. Our judicial system is predicated upon the basis that disputes will be decided fairly and impartially, and that in general, decisions will be reached on the merits of the cases presented to the tribunal. While public policy strongly favors deciding cases on their merits rather than arriving at a final disposition on another basis, this Court cannot disregard the fact that Mr. Weaver by his actions consciously attempted to tamper with the efficient and orderly administration of this dispute.

He now seeks to access this forum and requests the opportunity to present evidence to the fact finder. This Court, however, is unable to ignore the incongruity of permitting a litigant, who has attempted to thwart the fair and efficient administration of justice to further his own purposes, to seek to vindicate his interests in the same forum he has attempted to undermine. We find that sanctions in this matter are not only appropriate, but imperative to ensure the legitimacy and fairness of this Court’s processes. V. Do no other lesser sanctions exist to account for and to deter this type of unilateral, self-help, and lawless behavior? ³⁷ Yes.

This Court has concluded no sanction but dismissal exists to account for and deter the sort of premeditated, prolonged, and egregious conduct in which Mr. Weaver has engaged. In response to the Court’s inquiry regarding lesser sanctions, the plaintiff has advanced two alternatives. “One is to bar Mr. Weaver from utilizing some or all of the privileged documents which he obtained from Mr. Altman’s computer. The other would be a monetary sanction. We believe any monetary sanction should be nominal under the circumstances of this case.” The Court finds both of these proposals inadequate.

Plaintiffs first suggested alternative only addresses the materials that Weaver has so far turned over to opposing counsel. It fails to remedy or protect against any taint in these proceedings stemming from information that Weaver may have seen but not hard copied. This remedy also fails to account for information that Weaver may have retained in his memory, from which he presumably could continue to benefit were the case to come to trial on the merits. Plaintiffs second alternative completely fails to address the taint.

Furthermore, it incredibly suggests that one could buy himself out of the consequences of deliberate interference and subversion of the judicial process with a “nominal” sum. ... Dismissal of this action is the only means at the disposal of this Court which adequately addresses the injury to both the defendant and to the integrity of judicial process itself which has been exacted by plaintiffs deliberate, lawless, and unilateral actions. (Footnotes omitted.) The court issued an order dismissing Weaver’s complaint with prejudice on September 23, 2004. ZeniMax’s Claim for Fees and Expenses Following the dismissal of Weaver’s action, ZeniMax sought attorney’s fees and litigation expenses based on discovery abuses by Weaver and bad faith litigation.

The court held a hearing on May 5, 2005. On July 26, 2005, the court granted ³⁸ attorney’s fees to ZeniMax in the amount of $75,000, and expenses in the amount of $1,849.44, explaining: This Court’s basis for imposition of sanctions has been fully stated. It remains for the Court to decide what, in addition to the dismissal of Weaver’s claim, is necessary for remediation. The claim brought by Weaver, if fully proven without misconduct, could have resulted in a verdict of approximately $3,750,000.00.

The striking of the claim constitutes a significant benefit and remediation to ZeniMax. It is purely speculative to guess at the potential outcome of a lawsuit for which there has been no evidentiary hearing. The dismissal o[f] Weaver’s claim, without it being fully litigated, represents a significant benefit to ZeniMax, whether or not attorney fees are even awarded. This action eliminates the necessity of ZeniMax to bear the cost of defending a claim, which on its face, was colorable.

Thus in determining the amount of attorney fees expended on the sanctioned conduct, this Court should take into account the required expenditure of time and effort occasioned by the wrongful conduct and balance this factor against that which might have been expended had the wrongful conduct never occurred. ... [T]he sanctioned conduct was discovered early, thereby undoubtedly forestalling much that would otherwise have been required in preparation for trial. Consequently, it is arguable that ZeniMax saved expenses that it would otherwise have incurred by the misconduct of Weaver. * * * ... While the gravity of the conduct and the uniqueness of the issue are important, it is this Court’s belief that a conservative, remedial award of attorney fees should be $75,000.00 from Weaver to ZeniMax. In addition to those fees, ZeniMax should be awarded further the sum of $1,849.44 for expenses.

Summary Judgment on ZeniMax’s Counterclaims ZeniMax’s counterclaims remained before the court. ZeniMax voluntarily dismissed count 1 of its counterclaim, breach ³⁹ of fiduciary duty of care. Count 2 was for breach of contract. In its amended counterclaim, ZeniMax alleged that Weaver had breached the employment agreement by (1) failing to devote his full time and effort to the company, (2) taking vacation time in excess of that allowed by the contract, (3) wrongly receiving payment for time in which he did not work, (4) surreptitiously entering ZeniMax offices and obtaining confidential information, and (5) attempting to solicit another ZeniMax employee to leave the company and start a new, competing business.

ZeniMax sought “damages (including interest and applicable taxes) sustained by it resulting from Weaver’s breach of contract[ ], including a recovery of salary and all benefits paid to Weaver after his first breach.” Both parties moved for summary judgment on count 2. The court held a hearing January 13, 2005. In support of its motion for summary judgment, ZeniMax asserted that the facts of Weaver’s conduct in entering other executives’ offices and obtaining confidential information were undisputed. ZeniMax argued that Weaver’s conduct constituted “the commission of an act involving fraud in the course of the performance of Executive’s duties” under section 4.2(b)(i) of the employment agreement, and made him subject to termination for cause.

ZeniMax also mentioned that Weaver’s actions were in violation of section 1.1 of the agreement, which required that he “devote his full time and efforts to the business of the Company.” Weaver argued that he could not be subject to disgorgement of compensation based on “after-acquired evidence” of terminable conduct when he had not actually been terminated for violations under section 4.3. He further contended that his actions did not constitute “fraud,” nor were they “in the course of the performance of [his] duties.” The circuit court found Weaver breached the contract: As to Count 2, I totally disagree with plaintiffs position. It is the Court’s belief that the conduct of the plaintiff is such that it was violative of his agreement of employment. And by breaching his agreement of employment, he is not ⁴⁰ entitled to recover.

So I grant defendant’s, as a matter of law, the defendant’s motion under Count 2. In an order dated August 26, 2005, the court denied Weaver’s motion for partial summary judgment on count 2, and granted ZeniMax’s motion for summary judgment on that count. The court further ordered that Weaver “therefore was not entitled to recover any further payments under his Executive Employment Agreement after the termination of his employment.” As for count 3, ZeniMax alleged in its amended counterclaim that Weaver’s conduct constituted a violation of his fiduciary duty of loyalty to the corporation. According to ZeniMax, ‘Weaver used his corporate office for personal gain and betrayed the trust of his fellow ZeniMax officers and the Company.” ZeniMax averred that Weaver, by his conduct, breached his employment agreement and committed criminal violations.

ZeniMax reasoned that, had Weaver been caught after his first act, he would have been terminated and could not have brought the present actions. Thus, ZeniMax suffered damages by having to defend against Weaver’s suit. ZeniMax sought recovery