Opinion ID: 2334962
Heading Depth: 2
Heading Rank: 3

Heading: What About WestWind?

Text: On either March 4th or March 5th, Spitz telephoned Insignia to discuss the fact that he expected to receive a proposal from WestWind. [8] According to Insignia, Spitz indicated . . . that he wanted to discuss our fee as related to WestWind and suggest[ed] that he was going to break our contract. In response, and in anticipation of him breaking our contract, Insignia suggested they could somehow negotiate or compromise to a reduced fee in order to make the transaction fly with WestWind. It appears that both parties agreed to think about a possible compromise but that none was reached at that time. However, on March 5, 2003, Spitz sent a new version of the engagement letter to Insignia (the March 5th Letter). The Developers cite this response as evidence that no agreement had been reached; Insignia maintains that Spitz was simply attempting to modify the terms of their previous agreement. The two letters are largely the same, but the March 5th Letter attempted to carve out WestWind, and thus to limit Insignia's compensation in a manner central to this dispute. It stated that, [s]hould Owner complete a transaction with WestWind, Insignia will not be due a fee but will be reimbursed for its time in preparing the Offering Memorandum and all reasonable out of pocket third party costs. In addition, this version of the letter now explicitly referenced a sale to WestWind as a potential outcome. [9] Insignia asserts that it assumed Spitz's March 5th Letter was a signed and executed copy of Insignia's February 20th Letter, and filed it away without reading Spitz's substantive changes. [10] The next day, March 6, 2003, Insignia replied to Spitz's e-mail, not realizing that he had changed the letter, and suggested a compromise for the WestWind situation. [11] Insignia wrote: We need to get a break-up fee if [WestWind] does the deal. How about 1 point on the equity. It appears that Spitz did not respond to this e-mail and it was not until April 9, 2003, when Insignia reviewed the compensation terms in the March 5th Letter and WestWind's Letter of Intent, that the issue resurfaced. On April 9, 2003, Insignia e-mailed Spitz complaining that the compensation terms listed in some of the documents were inconsistent with their verbal agreement as it relates to Westwind. This new development led to further exchanges about how 1899 LLC would compensate Insignia should a transaction with WestWind occur. The various terms discussed included a one percent fee, a $200,000 fee, or simply a reimbursement of expenses. The parties dispute whether they ever reached an agreement on that issue. The parties also dispute whether the Developers used the Offering Memorandum in their solicitation of and negotiations with WestWind. The record suggests, however, that during March and April 2003, the Developers sent WestWind electronic copies of the Offering Memorandum and brought hard copies of it to a meeting with WestWind in Austria. In addition, when presented with multiple copies of the Offering Memorandum during his deposition, WestWind's Stephen McCarthy identified his handwriting on some and testified that others came from WestWind files.