A judge has dismissed seven of the 11 claims in a lawsuit the granddaughter of Aspen legends Art and Betty Pfister brought against the head of an Aspen law firm she says defrauded her out of millions of dollars.
Andrew Hecht’s attorney praised the ruling by Judge Chris Seldin. But the judge also found that Juliana Pfister has raised at least one plausible basis that Hecht engaged in self-dealing and had a conflict of interest in the handling of family legal trusts, and her attorney likewise said he was pleased.
The rulings, one in the lawsuit and the other in a probate case, came in November but were made public only in January. The cases since have been consolidated into one probate matter.
That the rulings are even public — probate cases are sealed — underscores the unusually acerbic and lengthy legal fight between Pfister’s attorney, David Bovino of Aspen, and Andrew Hecht, cofounder and principal at Garfield and Hecht, and his son Nikos Hecht, a local developer and hedge-fund manager.
Pfister wants Andrew Hecht removed as the trustee handling four trusts of the estate that are believed to be worth $4 million. She also wants accounting records, a review of Hecht’s conduct and compensation, and the “immediate final distribution of trust assets.”
Seldin concluded that Juliana Pfister “has at least raised sufficient allegations to shift the burden to [Andrew Hecht] to show his service … was fair and reasonable.”
The probate and lawsuit rulings were added as an exhibit in January by lawyers for Bovino, who is being sued in a separate case for libel by Nikos Hecht. Bovino has sued the younger Hecht twice in federal court on behalf of two women, one of whom is Hecht’s ex-girlfriend. The sides in that case reached a confidential settlement, while Hecht prevailed in the other after a jury heard a sexual-assault allegation from the other woman. Hecht vehemently denied the accusation, and jurors ruled that she had not proven her case, though it is under appeal.
In November, Nikos Hecht filed the libel lawsuit. Bovino has denied any wrongdoing. Also that month, Bovino sued Andrew Hecht over the trustee allegations.
The probate petition, which Seldin summed up, echoes the lawsuit’s allegations. The filing says Art and Betty Pfister, cofounders of the Buttermilk Ski Area and the Maroon Creek Club, amassed a substantial amount of wealth. Their primary goal was to pass on the money to their children and other descendants, including Juliana.
Andrew Hecht played a fundamental role in the planning and management of the Pfisters’ estate plan and legacy, the judge wrote, preparing documents for the couple as early as 1989.
“A.H. was a trusted advisor for Art and Betty, and immersed himself in their personal and financial affairs,” the petition says.
The lawsuit alleges that Andrew Hecht used his control of the trusts to sell part of a private retreat near Ruedi Reservoir to his son for significantly less than its worth and did the same with another developer involving two Buttermilk lots. These alleged dealings cost Juliana Pfister millions of dollars, according to court documents.
Pfister, through Bovino, also claims that Andrew Hecht, who apparently holds two seats on the Maroon Creek Club board of directors, has withheld millions in annual earnings that were supposed to go into one of the trusts. In the probate ruling, Seldin upheld that claim.
“Given that A.H. has personal interests in Maroon Creek, and also in his capacity as trustee takes action on Maroon Creek’s board on behalf of the trusts, the court concludes that a threshold showing of a potential conflict has been established … ,” the ruling says. “By alleging that A.H. wears two hats on the Maroon Creek board, Juliana has alleged at least a plausible basis for concerns over self-dealing …
“Whether or not this claim will ultimately amount to anything is a different question, but the court concludes Juliana has at least raised sufficient allegations to shift the burden to A.H. to show his service in these dual roles was fair and reasonable.”
Starkly different opinions
from sides’ lawyers
Bovino said last week that he was pleased with the probate ruling.
“That was a really good order for us,” he said. “Juliana had essentially proven a presumption of a fiduciary breach, and it’s no longer her duty to prove it.”
But Andrew Hecht’s attorney, Dan Reilly of Denver, said such a judicial finding is common in a case’s early stages because, under the law, a plaintiff’s claims have to be accepted as true. He also pointed to Seldin’s dismissal of seven of the 11 claims in the lawsuit.
“These rulings are huge wins for Andy Hecht,” Reilly said. “The rulings were a devastating blow to the plaintiff right out of the box.
“I estimate they lost 70 percent of their case in the first two minutes of the game.”
Among the dismissed claims were: fraudulent concealment, breach of fiduciary duty, professional negligence, unjust enrichment, civil conspiracy and conversion/civil theft. The Garfield and Hecht law firm, which was another defendant, was dismissed from the case, as well. (Reilly said his clients will pursue attorney fees in light of that.)
The judge also ruled that Pfister cannot pursue claims under the Colorado Organized Crime Control Act, which stem from her allegation that the Hechts engaged in theft and forgery, though Bovino said the ruling allows his client to amend the lawsuit to provide a “more definite statement” on that and the other remaining claims. Another claim he declined to dismiss was interference with inheritance. This stemmed from Seldin’s finding that Pfister has alleged plausibly that she would have received more money from the sale of the property near Ruedi had it been sold for market value. Pfister also can pursue claims for constructive fraud.
Bovino said the upheld claims are the largest and most important aspects of the case.
“Andy and Nikos Hecht sought to shield their misconduct from any scrutiny by moving to dismiss the entire civil case,” he said in an email. “Contrary to Dan Reilly’s comments, the orders were a devastating blow for the defendants, not the plaintiff. Now, for example, Juliana gets to investigate why Andy Hecht sold Pfister family assets to his own son for below fair market value.”
The court order specifically grants Pfister the right to amend the lawsuit to reinstate claims that were dismissed, Bovino said.
Reilly disputed that, pointing to a part of the ruling that he said was damning.
Seldin wrote that while the lawsuit provides significant detail, “it does nothing to connect the facts alleged generally to the claims for relief themselves, which are threadbare. … The defendants and the court should not be left to guess as to what facts Juliana believes support each claim.”
And given that the case is moving forward on the remaining claims, the judge wrote that it was not clear to him that “re-pleading dismissed claims at this stage of the case will optimize use of the court’s and the parties’ resources.” Seldin, though, declined to rule on that issue, writing that it merited further discussion.