Business Monday: Court says insurer doesn’t have to cover Aspen developer in civil case

The 10th Circuit Court of Appeals ruled last week that an insurance carrier does not have to pay for damages related to the civil domestic-violence case of Nikos Hecht, an Aspen hedge-funder and real estate developer.

A 14-page order and judgment issued April 18 said Hecht’s personal and excess liability coverage policies under Great Northern Insurance Co., also known as Chubb, would not cover the monetary settlement agreement he reached with his ex-girlfriend in September 2017. Terms of the settlement were and remain confidential.

After the settlement was made, Hecht sued Chubb in federal court over its refusal to cover the damages. His claims were breach of contract and refusal to defend him in the civil case, as well as denial of payment, among other damages.

The lower court granted summary judgment in favor of Chubb, from which Hecht bought a $35 million policy in September 2014. He then appealed the ruling.

While Hecht’s policies covered personal injuries, the appellate court ruled that Hecht was not covered in the event he committed intentional acts Chubb defined as “arising out of a willful, malicious, fraudulent or dishonest act or any act intended by any covered person to cause personal injury or property damage.”

Hecht’s ex-girlfriend sued him in March 2016, roughly a month after he pleaded guilty to misdemeanor harassment in a domestic violence case from August 2015 involving the woman. She alleged in the suit that Hecht physically and mentally abused her, turned her into a drug addict and manipulated her into having two abortions.

She also alleged Hecht drugged her with fentanyl patches but told her they were “Icy Hot patches.”

The suit came after Pitkin County Judge Erin Fernandez-Ely, in February 2016, sentenced Hecht to two years’ probation in a domestic violence case involving the same victim.

“Hecht pleaded guilty to domestic violence as a consequence of his abuse,” the Court of Appeals’ three-judge panel wrote in last week’s decision. “The exclusion plainly bars coverage for his conduct. To the extent Hecht suggests we should view his false imprisonment separate from his abuse, we agree with the district court’s conclusion that the conduct was inseparably intertwined. There was no duty to defend in this case. Accordingly, the district court was correct to grant judgment in favor of Chubb on all claims.”

Hecht’s attorneys had argued that the allegations against him weren’t sexual in nature, which he claimed did not happen in the cabin where the woman said he abused her. Had they been sexual, then Chubb would not have been obligated to cover Hecht, his attorneys argued.

The Court of Appeals, however, reasoned that the totality of all of the case’s circumstances precluded Chubb from covering Hecht.

“The state court judge presiding over the criminal matter even expressly said that Hecht exhibited abusive conduct,” the appellate court said. “We agree. Nevertheless, undeterred, Hecht attempts to rewrite the policies. He says the exclusion for abuse should be read to exclude not abuse in general, but sexual abuse in particular.”

Hecht’s firm Lewis Roca Rothberger Christie LLP, which has an office in Denver, could not be reached for comment Friday.