A civil jury trial that began Monday in Aspen involving two longtime residents veered quite close at times to becoming uncivil, with the defendant, Doug Wilson, accusing plaintiff Dana Knight of threatening his life after Wilson allegedly accessed Knight’s retirement accounts without his knowledge and lost over $37,000 in high-risk investments.
On the stand in Pitkin County District Court, Knight laughed off the accusation that he had threatened Wilson, who is representing himself. Wilson contended, during cross examination of Knight, that he acted only on the plaintiff’s instructions. He also said he was the victim of a long-standing conspiracy to drive him out of town, a scheme supposedly involving Knight, his neighbors — some of whom have taken out restraining orders against Wilson — and Pitkin County Sheriff Joe DiSalvo. Wilson may call DiSalvo to testify today.
The trial’s first day offered a bit of a history lesson in Aspen and its characters, both renowned and infamous.
Knight sued Wilson in 2016 on claims including breach of fiduciary duty; fraud; negligence; breach of covenant of good faith and fair dealing; breach of contract; and negligent misrepresentation. Nearly $35,000 in Knight’s and his wife’s retirement accounts were lost, including one account that dwindled from over $26,000 to $1,842, the lawsuit claims.
Under questioning by his attorney, Joe Krabacher of Aspen, Knight testified that Wilson still took $300 to $400 to pay himself from the withered retirement account.
He said he told Wilson he had a “$2,000 gamble” for him to invest and that he wasn’t intending to give him full control of the accounts. Krabacher went through the forms he signed, documents such as account transfer authorization, advisory fees and portfolio balances. Knight told the jury of four men and three women that he didn’t read the paperwork closely.
“I trusted Doug,” he said, adding that Wilson never explained what he was signing.
Krabacher asked why he would risk any money. Knight, a mechanic, said he got to know Wilson while he worked on the defendant’s vehicles at the Smuggler Mine. He mentioned he had an IRA retirement account that was a dud, and Wilson persuaded him that money in the account could be getting better returns. Knight insisted that he believed Wilson would only be using $2,000.
He described his relationship with Stefan Albouy, the former majority owner of the mine who purchased it in the early 1980s from the descendants of David Hyman, one of Aspen’s founding fathers.
Knight said he spent many hours underground with Albouy, doing manual labor involving rails and ties for no pay. Some rails were obtained from a mine on Aspen Mountain after they got a tip from Jim Blanning, who killed himself after planting crude bombs around town on New Year’s Eve 2008 (he had engaged in public feuds with elected officials over mining claims which he attempted to take over and later served time in prison).
Albouy committed suicide in 1992, and Knight eventually became one of seven co-owners of the mine. Under questioning from Wilson, he acknowledged he earned roughly $1 million when the mine property was sold in 2015 for $7.5 million.
In his opening statement, Wilson said he first met Knight at a party in 1968 in Aspen (John Wayne attended, he said) held by the late legendary Aspenite Ed Smart. Wilson described Knight as a real estate developer, something the plaintiff also disputed (Knight also said he would have been 8 years old at the time of the party and never attended such a fete at Smart’s home).
“Securities law is incredibly simple,” Wilson told jurors. “He wanted to be an aggressive trader. There was about $39,000 in the accounts, [and] I didn’t think Dana had the appetite to be an aggressive trader.
“I had nothing to do with the decisions that caused the losses in the account.”
He said that “Dana is a bad client” who insisted that Wilson “double down” on investments in a Leadville-area mining firm that was about to go bankrupt.
When that move lost even more money, Knight went “berserk” and threatened his life, including tampering with the brakes on one of his vehicles.
Knight testified that he has never threatened anyone and that Wilson “never explained anything” about the investment process.
During cross examination, Judge Chris Seldin told Knight that his statements amounted to testimony and to ask questions. The judge also ordered both men to stop talking over one another.
The trial resumes today.