Attorney Jeffery Robinson in court Wednesday explaining the legal principal that netted editor Tony Hopfinger almost $1 million/Craig Medred photo
This is a developing story
After deliberating for less than a day, an Anchorage Superior Court jury has decided that failed Alaska Dispatch News owner Alice Rogoff needs to pay up on a $1 million, napkin promise to former editor Tony Hopfinger.
“Vindication” was the word Hopfinger used to describe his feeling after the verdict. But, he added, “this never had to get to this point. We should have never gotten to this point.
“I’m just happy that 12 people found in favor of me. It wasn’t just 10.”
A jury of nine men and three women needed 10 votes to act on any of the claims in front of them. The jury rejected the idea that the napkin had formed a binding contract, although both Hopfinger and Rogoff had testified they thought they had an agreement.
Hopfinger co-founded the now-gone, online-newsite Alaska Dispatch in 2008. Millionaire East Coast socialite Rogoff, who was moving to Alaska, bought a 90 percent interest in 2009 and pumped in millions of dollars to try to build a news organization to challenge the Anchorage Daily News, the state’s long-dominant newspaper.
Within four years – as Alaska Dispatch online traffic steadily climbed from nothing to within sight of that of the Daily New/ADN.com, The McClatchy Company met with Rogoff and Hopfinger in the company’s Sacramento, Calif. offices to talk about some sort of deal for its only Alaska publication.
At the time, the Dispatch was still only about a third the size of ADN, but McClatchy profit margins at the newspaper were in a downward trend, and the company was saddled with massive debt.
When McClatchy got Rogoff to bite on a $34 million price tag – those party to the negotiations said Rogoff showed little interest in actually negotiating – McClatchy moved quickly to close the deal.
As that was underway, Rogoff told Hopfinger the plan was to drain his old company of assets and roll them into a new entity – the Alaska Dispatch News/ADN.com. She asked him to help as president and executive editor of the new newspaper/online news organization, and offered him stock in the company.
He declined that offer and said that what he wanted was compensation for the soon-to-be-dead operation he’d built at Dispatch. Rogoff asked him to set a price. He offered $1.3 million. She countered with $1 million and $300,000 worth of stock. He agreed.
He later got a little nervous about the deal and said he wanted to get a contract done before Rogoff closed with McClatchy. Rogoff and her lawyers said they couldn’t do that because Alaska’s Northrim Bank, which had loaned Rogoff $13 million, was preventing her from doing any deals over $50,000 without bank approval.
Rogoff’s solution to the problem was to hand write a $1 million promise on a napkin in the conference room of the Anchorage law firm Birch, Horton, Bitney & Cherot. She then signed and dated the napkin.
It promised Hopfinger $100,000 a year for 10 years.
At trial, she argued the promise was intended as a form of incentive compensation to keep Hopfinger anchored in Alaska for a decade, though no evidence was presented to support that claim other than Rogoff’s many assertions of what was “in my mind.”
Susan Alexander, a Birch-Horton attorney working with Rogoff and Hopfinger at the time the note was signed, testified under oath that she didn’t remember seeing it signed and might have been out of the conference room or off in a corner.
It was a big conference room, she said. But she did admit to covering her ears at one point during the meeting and going “naw, naw, naw” because Rogoff and Hopfinger insisted on discussing a buyout of his interest in Dispatch instead of the employment contract she was supposed to draft.
The five-year employment contract Hopfinger eventually signed made mention of potential bonuses, but contained no provisions hinting at a guarantee of an extra $100,000 per year for 10 years if he stayed in Alaska. The contract also allowed him to exit from the job with 30 days notice.
Hopfinger went into court with a long paper trail of emails with Birch-Horton attorneys showing them trying to finalize an agreement on a buyout, and one email from Rogoff saying the Northrim restriction was out of the way, and they could at last officially do the deal.
On the stand, she testified, she didn’t see the Birch-Horton email outlining the buyout and couldn’t remember hearing anyone talking about it or, if she did, she didn’t understand what they were saying because “in my mind” the deal was always for incentive pay.
She made a $100,000 payment on the deal in January 2015.
With the deadline for the second payment approaching in 2016, she and Hopfinger had a big falling out about his decision to move to Chicago where his wife had taken a university teaching job. Rogoff testified the last straw was when she found out Hopfinger had sold his Anchorage home without telling her.
Up until then, she’d believed, “in my mind” that Hopfinger might be returning to Alaska even though he said he was moving. When she found out he wasn’t, in fact, coming back, she refused to make any of the remaining payments.
The jury awarded Hopfinger $852,752.45, a number calculated by an accountant working for his side. The number was based on what the $900,000 Rogoff owed Hopfinger over nine years would be worth as a lump sump payment today.
The jury also found that Rogoff, as the majority partner in the Alaska Dispatch Publishing LLC (limited liability company), had violated her fiduciary responsibility to keep Hopfinger informed of exactly what she was doing with his old company.
That decision exposed her to potential punitive damages, but the jury chose not to award them.
Under Alaska law, Hopfinger can seek compensation from Rogoff for “reasonable attorney fees and costs.” Hopfinger did not say how much those might be, but they are believed to top $100,000, and could be well more than that.
Hopfinger tried to settle the case out-of court, but got nowhere. An effort to settle the case after it was filed was likewise rebuffed by Rogoff and her attorneys.
It is unkown at this time whether Rogoff will appeal.
At a pretrial hearing, David Gross – Rogoff’s trial attorney – argued that Bill Bittner, a principal at Birch Horton and a close friend of Rogoff’s for years – might have gone “rogue” in the negotiations with Hopfinger. The judge on the case, Andrew Guidi, said at trial that argument would not be used, and it would be accepted that what a lawyer does is in line with the wishes of the client.
Bittner was at the courthouse during the trail, and he and Rogoff appear to be still on good terms. Gross, a Birch-Horton attorney, represented her throughout the proceedings.