A federal appellate court on Thursday upheld a ruling against Aspen developer Nikos Hecht after he sued an insurance company to pay for his legal defense from litigation brought by his former girlfriend.
Hecht had a $35.5 million coverage policy with the Great Northern Insurance Co., which does business as Chubb, when the woman sued him in federal court in 2016 for assault and false imprisonment. The lawsuit, which eventually led to an undisclosed settlement between Hecht and the plaintiff, followed him pleading guilty in Pitkin County Court to a misdemeanor charge of harassment involving domestic violence and the same woman earlier in 2016.
The woman, who the Aspen Daily News is not naming because she is a victim of domestic violence, accused Hecht of assault and false imprisonment. She said Hecht, amid an argument, refused to let her leave his Owl Creek mansion.
What happened next is disputed: Hecht maintained in the federal lawsuit, as he did during the county criminal case, that he merely grabbed her purse as she was trying to leave, which may have bruised her arm. Hecht’s legal team said she fell as he was trying to stop her from taking valuable items (a counterclaim filing by him cited a $1.3 million diamond ring and three Rolex watches).
But the woman said Hecht grabbed her purse strap and pulled her violently to the floor, where she struck her head on concrete. She also alleged that Hecht choked her; kept her confined in the home after the altercation; and later threatened her and her friends and family after she went back to police to say he forced her to recant her story.
In sentencing him to two years of probation, Judge Erin Fernandez-Ely of Pitkin County Court said she believed Hecht put the victim through a “night of terror.” The federal appellate court took note of that in its ruling about whether Chubb was right to deny Hecht’s bid for insurance coverage of his legal expenses.
Fernandez-Ely, who presided over the criminal matter, “even expressly said that Hecht exhibited abusive conduct. We agree,” the federal appellate ruling says.
Chubb acknowledged that, under the terms of the policies, “the injuries alleged by [Hecht’s ex-girlfriend] do qualify as personal injury …” However, Chubb concluded there was no duty to defend or indemnify because the ex-girlfriend’s allegations were within policy exclusions for “intentional acts” and “molestation, misconduct or abuse.”
“Nevertheless, undeterred, Hecht attempts to rewrite the [insurance] policies. He says the exclusion for abuse should be read to exclude not abuse in general, but sexual abuse in particular,” the federal court ruling says.
“Pointing to the other provisions of the [insurance] exclusion that refer to ‘sexual molestation’ and ‘sexual misconduct,’ Hecht argues we should similarly interpret ‘abuse’ to mean ‘sex abuse,’ which he points out the [woman’s] complaint does not allege occurred at” Hecht’s Owl Creek home.
But the appellate court observed that because “abuse, when the issue is an intentional restraint of another, necessarily, or at least virtually always, includes unwanted physical restraint … we need not dwell on the possibility of a false imprisonment without abuse, however, because the [former girlfriend’s] complaint unmistakably alleges abuse.”
Language in the insurance contract says Hecht was insured by Chubb under two policies providing personal and excess liability coverage. He submitted his ex-girlfriend’s lawsuit to Chubb for legal defense costs.
Hecht then sued the insurer for breach of contract for its refusal to provide such payment.
Chubb answered the complaint and sought a ruling declaring “it owed no coverage to Hecht because the [victim’s] complaint included allegations of criminal and intentionally tortious conduct for which there was no duty to defend or indemnify,” the Tenth Circuit ruling says.
A message left Friday with an attorney for Hecht was not returned.