Hekking et al v. Hekking et al
Filing
170
DECISION AND ORDER. So Ordered by Senior Judge Mary M. Lisi on 6/1/2016. Copies of the Decision and Order forwarded via first class mail to Defendants Craig Anthony Hekking and Molly Durant Hekking.(Feeley, Susan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
DARREN MALLOY HEKKING & SHAUN EGAN
HEKKING, on behalf of himself and
on behalf of C.H. and B.H.,
Plaintiffs,
v.
C.A. No. 14-295-ML
CRAIG ANTONY HEKKING &
MOLLY DURANT HEKKING,
Defendants.
DECISION AND ORDER
The
plaintiffs
Darren Malloy
in
this
longstanding
(“Darren”)1
Hekking
and
inheritance
his
brother
dispute,
Shaun
Egan
Hekking (“Shaun”, bringing claims on his own behalf and that of
his
two
minor
“Plaintiffs”),
Antony
have
Hekking
converted
children
their
and,
alleged
(“Craig”),
late
that
has
father’s
together
their
with
older
brother,
systematically
(Laurie
Darren,
depleted
Vonderwind
the
Craig
and
Hekking,
“Laurie”) and stepmother’s (Renate Danhardt Hekking, “Renate”)
estate (the “Estate”), which was to be equally shared by the
three brothers. By the terms of Laurie’s and Renate’s wills,
Craig
was
functioned
appointed
as
the
as
the
trustee
executor
of
the
of
the
Cego
Estate;
he
Foundation
also
(the
1
Because the parties to this litigation share the same last
name, and for ease of reading, the Court will use first names.
1
“Foundation”), a separate trust2 established by Laurie for the
benefit of Craig’s four and Shaun’s two children to assist in
their education. The Plaintiffs have further alleged that Craig’s
wife, Molly Durant Hekking (“Molly,” together with Craig, the
“Defendants”), has assisted her husband in his schemes and that
she, too, has converted Estate property rightfully belonging to
the Plaintiffs. After a contentious discovery period that was
frequently drawn out by Craig’s delaying tactics and outright
refusals to provide necessary information, the case culminated in
a seven-day bench trial. The case is now ready for a decision.
I. Procedural History3
This case began on June 27, 2014, four years after the
deaths4 of Laurie and Renate, when Shaun and Darren brought a
seven-count complaint (the “Complaint”) against Craig and Molly
2
It was not established with any clarity what became of the
Renate E Hekking Revocable Trust Agreement (the “Trust”)
established by Renate.
3
The lengthy procedural history of this litigation has also
been set forth in two prior Memoranda and Orders (Dkt. Nos. 28, 94)
and two Reports and Recommendations (“R&R”) (Dkt. Nos. 50, 85);
therefore, only an abbreviated summary is provided herein.
4
Renate and Laurie died in Switzerland. Renate died on June 1,
2010; her husband, Laurie, died only eight days later. Both had
made wills that devised their respective personal properties to the
surviving spouse or, if their spouse should predecease them, to the
three Hekking brothers in equal parts. In addition, Renate’s
remaining non-personal property was devised to the Trust.
2
(Dkt. No. 1). The first two claims against Craig allege breach of
fiduciary
duty
as
personal
representative
(Count
I)
and
as
trustee (Count II) under Florida state law, Fla. Stat. §§ 733.609
and
736.0706
et.
seq.
Two
further
claims
assert
breach
of
fiduciary duty (Count III) and fraud (Count IV) under Common Law.
Claims of conversion (Count V) and civil theft (Count VI) are
leveled against both Craig and Molly. Finally, the Complaint
includes a claim of aiding and abetting as to Molly (Count VII).
In essence, the Plaintiffs allege that their older brother
Craig
—
who
was
appointed
as
executor
of
the
Estate
and
functioned as the trustee of the Foundation after the death of
their
father
and
misappropriated
brothers
or
his
wife
—
assets
that
rightfully
that
were
concealed,
intended
to
misrepresented,
belonged
benefit
to
Craig’s
all
and
three
four
and
Shaun’s two minor children. With respect to Molly, the Plaintiffs
allege that she knew of her husband’s fraudulent conduct and that
she
provided
him
with
substantial
assistance
by
concealing
property Craig had converted from the Estate and Foundation.
The Plaintiffs sought compensatory damages of no less than
$2 million, punitive damages, an injunction against Craig to
enjoin him from acting as personal representative or trustee, a
complete accounting of the Estate and Foundation assets, as well
as attorneys’ fees and costs.
3
After
receiving
no
response
to
their
Complaint,
the
Plaintiffs filed a motion for entry of default (Dkt. No. 6) on
July 25, 2014. Shortly thereafter, the Plaintiffs sought an order
to expedite discovery and disclosure of the Estate and Foundation
assets, alleging that Craig had concealed the existence of the
Trust and other valuables in order to misappropriate them. (Dkt.
No. 12). That request having been granted by the Court, the
Defendants
were
required,
inter
alia,
to
provide
complete
financial statements; to allow the Plaintiffs access to records
and
documents;
and
to
authorize
the
Plaintiffs
to
obtain
documents from third parties concerning the Estate assets (Dkt.
No. 12-1).
Default against the Defendants was entered on August 15,
2014 (Dkt. No. 18). The Defendants, however, promptly sought to
remove the default, asserting — notwithstanding the affidavits of
service filed with the Court, which had both been signed by Craig
— that they had never been served with the Complaint (Dkt. No.
14).
In
support
of
their
motion
to
remove
the
default,
the
Defendants also submitted a sworn affidavit executed and signed
by Craig, in which he reiterated that denial.
To resolve the apparent discrepancy and to determine the
Defendants’ motion to set aside the default, the Court conducted
an evidentiary hearing on September 4, 2014. Craig took the stand
4
and, under
oath,
categorically denied
that he
had
ever
been
served, insisting that he and his family had been out of town on
the date when the Plaintiffs maintained service was effected.
Molly elected not to attend the hearing. On their part, the
Plaintiffs offered (1) detailed and highly credible testimony by
Constable James Sylvester of how he had personally served Craig,
and
(2)
the
well-supported
conclusion
by
Document
Examiner
Jeffrey Luber that the signatures on the affidavits of service
belonged to Craig.
In
light
Plaintiffs,
both
in
of
the
his
the
Court
unrefuted
evidence
concluded that
testimony
before
the
presented
Craig’s
Court
by
the
representations,
and
in
two
sworn
affidavits, were blatantly untruthful and perjurious. Memorandum
and
Order
at
15
(Dkt.
No.
28).
Nevertheless,
because
there
appeared to be no real legal prejudice to the Plaintiffs so early
in the litigation, the case was allowed to proceed. As the Court
noted, there was no evidence at that time that the Defendants had
tried to gain an advantage by delaying the retention of counsel
and their failure to provide a responsive pleading. However, the
Court
expressed
its
misgivings
about
the
willfulness
of
the
default and the apparent lack of good faith displayed by Craig.
Accordingly, the Plaintiffs were advised that if it were to be
determined that the delays orchestrated by Defendants were shown
5
to have resulted in a litigation or practical advantage, the
Court
would
reinstate
the
default.
In
addition,
the
Court
required Craig to pay counsel fees and other costs incurred by
the Plaintiffs in connection with the removal of the default. Id.
at 18. On October 2, 2014, the Court ordered the payment of
$30,777 in counsel fees to the Plaintiffs by October 10, 2014,
cautioning that no Estate or Trust funds were to be used therefor
(Dkt. No. 34)5.
In
the
discovery
interim,
and
for
upon
the
sanctions
Plaintiffs’
(Dkt.
No.
25),
motion
to
Magistrate
compel
Judge
Sullivan issued a detailed order (Dkt. No. 32) on September 25,
2014, in which she required the Defendants to provide certain
discovery materials. On September 29, 2014, the parties submitted
a consent order that allowed the Defendants — who had not been
gainfully employed for some time — to use up to $9,000/month for
their living expenses. To show that such sums did not come from
the Estate
or
Trust
assets,
the Defendants
agreed
to
submit
monthly financial statements. (Dkt. No. 33).
Subsequently,
the
Plaintiffs
submitted
two
reports (Dkt.
Nos. 36, 41) advising the Court that the Defendants continued to
5
Subsequently, Molly sought clarification of whether she, too,
was responsible for the $30,777 payment (Dkt. No. 92). The sum has
long since been paid and, in view of the couple’s shared financial
assets and multiple joint accounts, the Court finds that such a
clarification is no longer necessary.
6
violate Court orders; failed to comply with discovery requests;
and continued to dissipate Estate property. The Plaintiffs, who
were forced to obtain discovery documents through third parties,
discovered that the Defendants had withdrawn more than $400,000
since
Craig
had
learned
that
his
brothers
had
begun
an
investigation into his activities, and that the Defendants had
spent or
withdrawn
$195,000
from
the Estate
during
the four
months since the litigation began. In addition, the $30,777 in
counsel fees awarded to the Defendants was nearly a month overdue
at that time.
On November 12, 2014, Craig advised the Court that he agreed
to be removed as trustee/executor. At that time, the Defendants
were separately represented by newly engaged counsel, and Craig
had begun to invoke his rights under the Fifth Amendment in the
course of his deposition. In two detailed and well-supported
R&R’s (Dkt. Nos. 50, 85), the Magistrate Judge recommended, inter
alia, that the default be reinstated against Craig, but not as to
Molly.
With respect to the latter, the Magistrate Judge based
her recommendation on the finding that much of Molly’s failure to
comply with Court orders was due to inability. R&R at 28 (Dkt.
No. 85).
The Magistrate Judge noted, however, that the findings
in her R&R did not relate to the merits of Plaintiffs’ claims
against Molly and that “some of [Molly’s] glaring ignorance of
7
her own affairs is hard to swallow.” Id. at 5.
In the interim, the Defendants filed a number of motions
designed to put a stop to the litigation (Dkt. Nos. 51, 52, 53,
54, 55), including two motions to dismiss the Complaint, in which
the Defendants suggested that their children should be included
as plaintiffs because their interests were not represented (Dkt.
Nos. 53, 54). Craig also objected to the R&R recommending his
default; but he waived any substantive arguments by failing to
address his noncompliance with Court orders or with the September
29, 2014 consent order. (Dkt. No. 58).
Following
an
April
30,
2015
hearing
on
the
Defendants’
various motions and their objections to the two R&R’s issued by
the Magistrate Judge, the Court accepted the Magistrate Judge’s
recommendation that the default not be reinstated against Molly.
The
Court
noted
that
the
recommendation
was
based
on
a
credibility determination made by the Magistrate Judge after she
observed
Molly
testify,
reviewed
the
transcripts
of
Molly’s
deposition testimony, and considered Molly’s efforts to comply
with
Court
orders.
The
Court
also
denied
Craig’s
motion
to
dismiss the case based on the so-called “probate exception” (Dkt.
No. 52). The Defendants’ remaining motions and Craig’s objection
to the R&R recommending reinstatement of the default against him
were taken under consideration.
8
On June 11, 2015, this Court issued a Memorandum and Order
in which it denied the remainder of the Defendants’ motions.
Hekking v. Hekking, C.A. No. 14-295-ML, 2015 WL 3650062 (D.R.I.
Jun. 11, 2015.
In
light
of
Craig’s
conduct
in
the
course
of
this
litigation, which included, inter alia, deliberate and repeated
violations
of
Court
orders;
a
complete
failure
to
provide
discovery materials or to execute necessary documents as he had
repeatedly
promised;
the
provision
of
incomplete
and
false
responses; and Craig’s refusal to participate in his deposition
after initially
agreeing
to
it,
all
the
while
continuing to
dissipate the assets of the Estate and spending money on nonessential items, the Court deemed it appropriate to reenter the
default against Craig. Id. at *7-8. Craig was ordered to provide
a complete and full accounting; he was enjoined from acting as
executor or trustee; and he was ordered to execute all necessary
documents to remove him from those positions. Id. at *8. The
Court scheduled a further hearing on July 16, 2015 to ensure
Craig’s compliance with the Court’s orders. Id. at *9.
At the July 16, 2015 hearing, Craig was given a further
opportunity to provide a complete and accurate accounting in
connection with his fiduciary duties by July 23, 2015. Shortly
9
thereafter, both Defendants’ counsel6 sought to withdraw from
representing Craig and Molly
(Dkt. Nos 97, 100). Following a
hearing on August 17, 2015, counsels’ motions to withdraw were
granted
and
represent
counsel.
the
Defendants
themselves
Two
days
unless
later,
were
and
the
advised
until
that
they
Plaintiffs
they
engaged
filed
had
successor
motion7
a
to
to
adjudge in contempt (Dkt. No. 115), in which they detailed the
numerous deficiencies in the accounting information provided by
Craig, particularly with respect to the whereabouts of large sums
of
cash that
Craig
admitted
to having
withdrawn
from
Estate
and/or Foundation accounts.
After
both
parties
filed
their
respective
pre-trial
memoranda (Dkt. Nos. 123, 126), together with a flurry of motions
in limine (Dkt. Nos. 128, 129, 130, 131, 132, 133), the parties
agreed
to
proceed
to
trial
without
a
jury
(Docket
Entry
09/29/15). On October 5, 2015, one day before the bench trial was
scheduled to begin, the Defendants, pro se, filed a “Motion for
6
The Defendants were initially represented by joint counsel who
withdrew from the case on October 14, 2014, because further
representation had become untenable. (Dkt. No. 31).
7
At that time, the Court had already imposed the extreme
sanction of reinstating the default against Craig; Craig had signed
documents that relieved him of his positions; he had asserted his
Fifth Amendment rights; and the case was poised to proceed to
trial. As the matter has now been decided on the merits, the motion
is moot.
10
Sanctions of Dismissal with Prejudice and Award of Attorney’s
Fees and Costs against Plaintiff’s [sic] and their Counsel for
Fraud on the Court” (Dkt. No. 144), denying all allegations made
against them and suggesting that they had been the target of
“false claims and vexatious litigation stemming from a family
dispute.” Defs.’ Mot. at 2. In light of the findings and rulings
made herein, that motion is denied.
Beginning on October 6, 2015, the Court conducted a sevenday trial without a jury. The Plaintiffs offered the testimony of
(1)
Shaun,
(2)
Darren,
(3)
Molly,
(4)
Alexandra
Hekking
(“Alexandra”), who has been married to Shaun for twenty years and
who
is
the
mother
of
the
two
minor
plaintiffs,
and
(5)
Plaintiffs’ expert witness Joseph DeCusati, a CPA and Certified
Fraud Examiner. With the exception of Molly, who also testified
in the Defendants’ case, each of the Plaintiffs’ witnesses was
subjected to rigorous cross-examination by Craig and/or Molly.
After the Plaintiffs rested their case, Molly testified on
the Defendants’ behalf. Because the Defendants had not succeeded
in engaging new counsel, this took the form of Molly posing and
answering her own questions. The testimony of Craig, who had been
instructed
not
to
previously
invoked
testify
his
on
right
any
under
subject
the
to
Fifth
which
he
had
Amendment,
was
successfully objected to by the Plaintiffs and/or stricken from
11
the record. At that point, the Defendants rested as well.
Both parties were ordered to submit post-trial memoranda.
As to the Plaintiffs, they were instructed to address Molly’s
liability
aiding
for
and
the
claims
abetting
made
claim,
against
and
to
her,
support
particularly
the
their
for
claim
attorney fees as a matter of damages. TR VII 38:19-40:7. The
Plaintiffs
promptly
submitted
their
post-trial
memorandum
on
December 15, 2015 (Dkt. No. 163). The Defendants, after advising
the Clerk on January 14, 2016, the day before their memorandum
was due, that they were unable to deliver their brief to the
Court
and
would
“overnight”
it,
submitted
their
post-trial
memorandum on January 21, 2016 (Dkt. No. 167). In response, the
Plaintiffs submitted a 36-page reply memorandum (Dkt. No. 168).
After
considered
presiding
the
over
testimony
this
of
all
case
the
for
two
witnesses
years,
at
having
trial,
and
having reviewed the extensive records and materials admitted into
evidence, the Court will now proceed to render a decision.
II.
Standard of Review
Federal Rule 52(a)(1) provides that “[i]n an action tried on
the facts without a jury . . .
specially
and
state
its
the court must find the facts
conclusions
of
law
separately.
The
findings and conclusions . . . may appear in an opinion or a
memorandum
of
decision
filed
by
12
the
court.
Judgment
must
be
entered under Rule 58.” Fed. R. Civ. P. 52(a)(1).
As explained by the First Circuit Court of Appeals, “Rule
52(a)(1) is designed to ensure not only that the parties are
adequately
apprised
of
the
district
court's
findings
and
rationale but also that a reviewing court will thereafter be able
to evaluate the bona fides of the district court's decision.”
Valsamis v. Gonzalez-Romero, 748 F.3d 61, 63 (1st Cir. 2014). The
directive
of
Rule
52(a)
“‘impose[s]
on
the
trial
court
an
obligation to ensure that its ratio decidendi is set forth with
enough clarity to enable a reviewing court reliably to perform
its function.’” Sierra Fria Corp. v. Donald J. Evans, P.C., 127
F.3d 175, 180 (1st Cir. 1997)(quoting Touch v. Master Unit Die
Prods., Inc., 43 F.3d 754, 759 (1st Cir. 1995)).
III. Findings of Fact
The
following
constitutes
the
Court’s
findings
of
facts
after considering all the testimony and evidence introduced by
the parties in the course of the seven-day bench trial.
A. Shaun Hekking
Shaun, the youngest of the three Hekking sons, has been
married to Alexandra for more than twenty years. They have two
sons, one of whom has special educational needs for which he
attends a private school. Trial Transcript 10/06/15 (TR I) at
17:9-16. Shaun’s descriptions of Laurie and Renate Hekking, their
13
personalties, lifestyle, and possessions were markedly consistent
with those later provided by his wife Alexandra and his brother
Darren.
After Laurie’s divorce from the mother of his three sons in
1983, he married Renate, a citizen of Germany, in 1986; the
couple remained married for 24 years until they died within eight
days of each other in June 2010. Trial Transcript 10/06/15 (TR I)
at 15:1-5. Laurie and Renate first lived in Hamburg, Germany, and
later moved to Erlenbach, Switzerland, just outside of Zurich.
They also kept a separate residence in Naples, Florida. TR I at
16:1-3.
Laurie had worked in the aerospace and defense business,
primarily in the service of the government. Toward the end of his
career,
he
founded
several
companies
in
Europe
involving
aerospace and engineering. TR at 15:12-22. As described by Shaun
and echoed by his brother Darren, Laurie was a bon vivant who
enjoyed the good life and who liked to display his financial
success in his lifestyle. TR I at 16:9-21. At the same time,
Laurie was a very generous man who loved his sons and who,
together with his wife, doted on his grandchildren. TR I at 16:617:4.
Shaun and his family would spend time with Laurie and Renate
two or three times a year, usually visiting them in Florida. TR I
14
at 17:21-18:1. In addition, Laurie and Renate would come to New
York and Connecticut around Christmas and Shaun would see his
father in between business trips. TR I at 18:8. The visits in
Florida included dining out in fine restaurants, taking trips in
Laurie’s
Corvettes,
and
enjoying
Laurie’s
extensive
wine
collection. TR I at 19:1-15.
When Laurie and Renate visited New York, they booked a suite
at the St. Regis luxury hotel. Renate loved to go shopping,
taking Alexandra to her favorite boutiques such as Louis Vuitton,
Bulgari, and Gucci. TR I at 19:16-20:11.
Laurie and Renate owned two condominiums in Naples: the
upscale St. Pierre with a gulf view, and the Breakwater, which
Laurie called his “guesthouse.” TR I at 20:18-21:6. By contrast,
their lakeside apartment in Erlenbach was rented. TR I at 21:1316.
Renate died on June 1, 2010. TR I at 24:22-23. On June 9,
2010, the day of Laurie’s death, all three sons were present in
Switzerland.
Craig
stayed
Shaun
and
behind.
Darren
TR
I
left
at
shortly
thereafter,
24:24-25:8.
Because
while
Renate
predeceased her husband, all her tangible, personal property was
devised to Laurie; her remaining property was devised to the
Trust. Ex. 142 at 0007-0008. Under the terms of Laurie’s will, if
his wife predeceased him, all property was devised to his three
15
sons or,
in
distribution,
children,
per
the event
that
any
son’s
stirpes,
son
share
and,
was
was
if
deceased
to
there
be
at
the
distributed
were
no
time
of
to
his
children,
to
Laurie’s other sons or their children, per stirpes. Ex. 143 at
0021.
Under the terms of both wills, if the spouse was no longer
living, Craig became the personal representative of both estates
(in the event Craig was unable or unwilling to perform the role,
Darren was to be appointed, and after him, Shaun). Ex. 142, 143.
Craig petitioned the Probate Division of the Circuit Court of
Collier
County,
Florida,
to
be
appointed
as
the
personal
representative. Ex. 142 at 0001, Ex. 143 at 0001. Craig also
commenced
probate
and
estate
administration
proceedings
in
Switzerland. Ex. 143 at 0005, TR I at 28:21-29:2. At first,
Craig, the only brother to speak some German, kept his brothers
informed about the administration of the Estate. TR I at 29:3-15.
However,
although
Shaun
repeatedly
made
a
request
for
an
accounting as to the Estate, Craig never provided one, offering a
number of different excuses instead. TR I at 29:18-30:4.
As previously agreed upon by the three brothers, the Florida
condominiums were put up for sale. TR I at 30:9-22. In early July
of 2011, the Breakwater condominium was sold for $495,000 and the
proceeds were split three-ways. TR I at 31:1-19. According to
16
Shaun, he received $141,000 as his share. After the sale, Craig
informed his brothers that the Breakwater condominium was sold
“as is” and that the sale included the personal property that was
inside. Id.
The St. Pierre condominium was sold in June of 2012 for $1.1
or $1.2 million, of which Shaun recalled receiving approximately
$318,000.8 TR I at 32:9-22.
After the St. Pierre condominium had
sold, Craig told his brothers that all its contents had been
included in the sale. TR I at 33:22-25. As Shaun recounted, Craig
had not contacted him prior to the sale to obtain Shaun’s consent
to an “as is” sale. According to Shaun, given the value of the
furnishings in the St. Pierre and of Laurie’s and Renate’s other
belongings — for which no accounting had been provided by Craig —
the inclusion of that personal property made no sense. TR I at
34:8-15. In response, Craig took the position that the contents
of the condominium were not worth that much and he explained that
it had been the best way to get the deal done quickly. TR I at
34:16-21.
Related to the sale of the St. Pierre condominium, Craig
initiated proceedings against the listing agent and engaged the
Florida law firm of Cohen & Grigsby. TR I at 35:2-24. Shaun, upon
8
Instructions for disbursement of funds reflect that Shaun and
Darren received $311,700 each, whereas Craig received $319,700. Ex.
162.
17
request by Craig, gave Craig $7,000 for legal bills. TR I at
36:8-12, 36:25-37:3. When Shaun learned that a settlement was
discussed in the case, he offered to attend related meetings in
Florida, but was dissuaded from doing so by Craig. TR I at 36:820. In the spring of 2013, sporadic updates from Craig about the
litigation stopped. E-mail correspondence between Craig and Cohen
& Grigsby reflects that in March 2013, the law firm wired $62,503
to
Craig
and
charged
$3,496
in
fees.
Ex.
157
at
0012.
A
corresponding transaction detail report shows that $62,503 were
wired to a bank account held jointly by Craig and Molly on March
28, 2013. Ex. 163.
Shaun last visited his parents in the St. Pierre condominium
in March of 2009. TR I at 39:7-15.
description
Alexandra,
is
the
According to Shaun, whose
consistent
with
that
St.
was
Laurie
Pierre
provided
and
by
Darren
Renate’s
and
showplace
where they liked to entertain. TR I at 40:11-19. The condominium
was
lavishly
furnished,
professionally
decorated,
and
it
contained designer furniture, high-end electronics, and artwork.
Id. With the help of eight pictures taken from a real estate
website listing, Ex. 94, Shaun described
the approximately 2,300
square foot, three-bed, three-bath St. Pierre condominium with a
view of the Gulf of Mexico. TR I at 41:4-43:11. Inter alia, Shaun
listed three signed Miro lithographs, two Tiffany candlesticks,
18
three
Eames
chairs,
several
other
Tiffany
items
such
as
silverware and picture frames, as well as high-end electronics,
including two large plasma televisions. TR I at 43:14-45:10.
Shaun also described several furs belonging to Renate, including
a sable, a mink, a “white” one, and a fur-lined jacket. TR I at
45:17-46:3. Renate had a special chest of drawers built for her
jewelry
with
velvet-lined
compartments,
and
she
owned
many
designer clothes, bags, and shoes. TR I at 48:6-21.
The St. Pierre condominium also contained two safes. Shaun
recounted that, on one occasion, his father took him aside and
showed him stacks of banknotes in the larger safe, which Shaun
estimated to be between $100,000 and $150,000. TR I at 49:5-17.
The safe also contained jewelry and a box for one of Laurie’s
Rolex
watches.
TR
I
at
49:21-23.
Laurie
owned
two
vintage
Corvettes9 and a Mercedes S-Class sedan; Renate drove a Cadillac
sedan. TR I at 50:11-13. Laurie also owned a collection of highend wines, including such high-priced wines as Chateau Petrus,
which can cost up to $2,000 to $3,000 per bottle.
When he became terminally ill, Laurie expressed that it was
important for Shaun and Craig to go down to Florida to make sure
everything was accounted for and recovered. TR I at 52:10-18.
9
The Plaintiffs are not seeking recovery for the two Corvettes.
It is unclear what happened to the Corvettes.
19
Shaun next set foot into the St. Pierre condominium in July of
2010, after Laurie’s and Renate’s deaths. TR I at 51:24-52:6.
Shaun and Craig went to the St. Pierre together. TR I at 52:1923. Although most of the condominium looked the same and the
furnishings appeared to be intact, Shaun was surprised to notice
that almost all the clothing was no longer in the closets. TR I
at 53:1-9. Both Laurie’s and Renate’s jewelry containers were
empty. TR I at 53:10-16. Shaun and Craig tried to open the safe
but, although Craig said that he had been given the combination
by Laurie, he was unable to open it. TR I at 53:17-20. Shaun then
discovered a green folder that contained an inventory of Renate’s
jewelry. TR I at 55:11-21. Shaun went through the itemized list
with Craig who admitted that he was in possession of Renate’s
jewelry. TR I at 56:12-57:3.
As to the safe, the brothers were
unable to locate a locksmith who was willing to open the safe on
a Sunday. Craig offered to stay behind and take care of the
matter and Shaun returned to work in New York. TR I at 57:9-23.
The following day, Craig told Shaun that he had found a locksmith
to open the safe, but he contended that the safe had been empty.
TR I at 57:24-58:8.
Shaun and his family vacationed in Naples in the spring of
2012, initially with the intention of staying at the St. Pierre
condominium,
but
they
later
changed
20
their
minds,
feeling
uncomfortable. TR I at 54:2-16. Shaun did visit the condo and
found that, although the furnishings and housewares were still
present, Laurie’s and Renate’s clothes, designer bags, jewelry,
and
other
personal
contemporary
and
effects
less
were
high-end”
gone,
clothes
and
in
there
the
were
“more
bedrooms
and
dressers. TR I at 54:25-55:5.
When Shaun visited his father during Laurie’s final days in
May and June 2010, he and Craig stayed at Laurie and Renate’s
Erlenbach apartment. TR I at 63:16-64:2. According to Shaun, the
Erlenbach apartment was smaller than the St. Pierre condominium,
but it was also elaborately decorated with designer furniture and
artwork. TR I at 64:4-8. Laurie had a Mercedes S-Class sedan in
Switzerland. TR I at 68:20-24.10 Some of Laurie’s watches and his
coin collection were at the apartment, as were much of Renate’s
jewelry, designer clothes, gowns, furs, and handbags. TR I at
65:10-15.
As
Shaun
described
in
some
detail,
Laurie’s
coin
collection consisted of seven or eight large display folders
holding, inter alia, Morgan half-dollars, American gold eagles,
Canadian gold coins, Mexican 50 peso gold coins, Krugerrands from
South Africa, as well as German and old British silver coins. TR
I at 67:6-68:2.
As to Laurie’s watch collection, Shaun recalled
10
According to Shaun, he received $10,000 as his one-third share
of the Mercedes. TR I at 123:20-24. Darren, on the other hand,
received no share from the sale of the car.
21
seeing a gold Hamilton Electric, a Patek Philippe gold watch, a
Rolex Oyster Perpetual gold watch, and a stainless steel Rolex
Daytona Chronograph. TR I at 69:3-12. Laurie was wearing his gold
Rolex Daytona in the hospital and gifted it to Shaun at that
time. TR I at 69:10-18. Shaun never saw any of the watches, the
coin
collection,
or
the
wines
again,
and
Craig
provided
no
accounting or explanation as to what happened to any of these
items. TR I at 70:3-71:10.
During their visit just prior to Laurie’s death, Craig and
Shaun discovered an extensive wine collection in a wine cellar
located
in
a
basement
area
allocated
to
the
apartment.
The
collection included Lafite Rothschild, Mouton Cadet, and at least
one
case
of
Chateu
Petrus.
TR
I
at
65:16-66:11.
They
also
discovered CHF 70,000 [Swiss francs] (approximately $62,000 at
the June 2010 exchange rate) in cash. TR I at 71:11-21. The
following day, with the help of Laurie’s lawyer Jürg Reichenbach
and
at
Laurie’s
recommendation,
Craig
and
Shaun
opened
two
accounts at the local Raiffeisenbank. TR I at 72:4-21.
After Laurie’s death, Shaun asked Craig how the Erlenbach
furnishings would be brought back to the United States and Craig
suggested that those should just be sold in Switzerland. TR I at
73:21-74:3. Shaun also described the jewelry he and Craig found
in the Erlenbach apartment. TR I at 74:20-75:6. Renate’s “lower22
end” jewelry, which included gold necklaces and bracelets, was
kept in an airline flight bag. Renate’s “high-end” jewelry, kept
in
a
jewelry
box,
included two
large
diamond
rings,
diamond
tennis bracelets, diamond necklaces, and Bulgari rings. TR I at
75:7-23.
Craig
and
Shaun
agreed
that
Shaun
should
take
the
jewelry of lesser value, have it appraised in New York City, and
sell it. As to the expensive jewelry, Craig stated that he had
connections in Newport and he offered to have it appraised and
sell it. TR I at 76:14-78:17, 86:16-25, 88:6-16.
Documentation related to Renate’s jewelry in the form of
invoices11, expert and insurance appraisals, and/or certificates
of authenticity or origin was contained in the green folder Shaun
and Craig located in the St. Pierre condominium after Laurie’s
death. Ex. 156, TR I at 80:5-22. Renate’s jewelry included, inter
alia, a yellow diamond ring purchased for $100,000, Ex. 156 A;
her large diamond engagement ring appraised at $73,150, Ex. 156
C; and a diamond necklace appraised at $16,696, Ex. 156 E. Shaun
and Craig went through every item of jewelry on the list and
Craig confirmed that the jewelry was in his possession. TR I at
84:10-24, 94:7-15.
11
Although some of the invoices reflected that jewelry had been
shipped to Craig’s ex-wife, Shaun confirmed that the pieces
actually belonged to Renate and had been worn by her on many
occasions. TR I at 82:8-83:11
23
In August of 2010, after getting an appraisal for the lesser
jewelry
in
New
York,
Shaun
sold
the
jewelry
for
$17,000
or
$18,000 and sent half of the proceeds to Craig. TR I at 100:25101:24.
That
same
month,
Craig
delivered
Renate’s
two
large
diamond rings to Shaun so that Shaun and Alexandra could have
them appraised in New York City as well. TR I at 103:2-104:7. The
rings were appraised at $100,000 and $125,000, respectively. TR I
at
104:18-20.
Ostensibly
unhappy
with
those
numbers,
Craig
retrieved both rings from Shaun and Alexandra’s apartment, with
the stated intent to sell the rings in Newport, together with the
other high-end jewelry. TR I at 105:2-106:24.
At a family wedding in October of 2010, Shaun observed that
Molly was wearing Renate’s engagement ring and Renate’s gold
Cartier wristwatch. TR I at 107:21-108:23, 118:8-119:1. Shaun
confronted Craig and Craig told him that he had not found a buyer
yet and that this was a special occasion. TR I at 109:11-18.
During
a
family
ski
vacation
in
December
2010,
Shaun
again
observed Molly wearing Renate’s engagement ring. TR I at 110:10111:3. As
before,
Shaun
confronted
Craig
about
the
ring and
demanded answers about the ring being sold. Again, Craig told
Shaun not to worry and that he would take care of it. TR I at
111:6-15.
Laurie and Renate owned two country club memberships in
24
Naples. The brothers discussed redeeming the membership interests
in both clubs and dividing the proceeds. TR I at 112:10-113:3.
Craig told his brothers that it would take time and that the
clubs would not provide the equity back. TR I at 113:4-14. Craig
never informed his brothers that he had, indeed, received checks
from both clubs. TR I at 114: 7-10. The evidence submitted at
trial established that on December 30, 2010, a check for $85,065
was issued by Club Pelican Bay to the Estate of Laurie Hekking.
Ex. 28 at 0014. On March 4, 2014, the LaPlaya Beach and Golf
Resort issued a $40,000 check to the Estate of Laurie Hekking and
mailed the check to Craig at his Newport address. Ex. 27 at 0012,
0014. Neither Darren nor Shaun ever received a portion of those
proceeds. TR I at 122:10-13.
In April 2013, Shaun learned that Renate had an account at
the HASPA [Hamburger Sparkasse] in Hamburg, Germany. TR I at
114:18-21. Shaun received a document in German from a German
court. Shaun asked Craig about the document and was told by Craig
that he would take care of it. TR I at 114:23-115:5. In December
2013, Shaun received a second communication from the German court
and took it to the German Consulate in New York City, where it
was translated for him. TR I at 115:8-20. At that time, Shaun
learned
that
Craig
had
petitioned
the
German
court
to
be
appointed as personal representative in order to gain access to
25
Renate’s HASPA account. TR I at 116:1-7. Shaun hired a German law
firm and obtained an injunction against Craig; Shaun and Darren
were eventually appointed personal representatives so that they
could close out the account. Eventually, approximately $40,000
from the HASPA account was remitted to Shaun and Darren. TR I at
116:16-117:10.
Shaun repeatedly asked Craig whether Laurie and Renate had
other foreign bank accounts; Craig told him he didn’t think so
and discouraged Shaun from pursuing it. TR I at 119:2-18.
Upon
Laurie’s directions while they were in Switzerland, Shaun and
Craig went to the ZKB [Zürcher Kantonalbank] to open Laurie’s
safe deposit box. The box contained Laurie’s gold Montblanc pen
and documents in German, which Shaun did not understand. TR I at
120:22-121:1.
Shaun learned of the existence of the Cego Foundation in
late May 2010, when Laurie summoned his lawyer Jürg Reichenbach
(“Reichenbach”) to the hospital. Laurie advised Shaun and Craig
that he was setting up an educational trust through the Winter
Group, one of Laurie’s companies, to provide tuition for Shaun’s
and Craig’s children. TR I at 124:23-125:13. On that occasion,
Shaun and Craig were asked to sign a document written in German
and enter the names of their children as beneficiaries of the
Cego Foundation. TR I at 126:4-18, Ex. 78, 79. Shaun was informed
26
by
Reichenbach
private
banker
(“Gutzwiller”),
and
by
at
the
that
Antoine
Swiss
there
Garreau
bank
was
of
money
(“Garreau”),
E.
at
Laurie’s
Gutzwiller
Cie.
for
Gutzwiller
&
the
education of Shaun’s and Craig’s children. TR I at 133:5-14.
Garreau
advised
Shaun
and
Craig
that
the
quickest
way
to
communicate with him was via Facebook Messenger. TR I at 134:1-4.
At the time of Laurie’s death, the Winter Group account had a
balance
of
$1.147
million.
TR
I
at
136:11-16.
In
2010,
the
$53,000 annual tuition for Shaun’s younger son, who has special
educational needs, and the tuition for Shaun’s older son, who
attends a boarding school, were promptly paid. TR I at 134:14135:19.
The
following
year,
Shaun
notified
Craig
that
tuition
payments needed to be made; he also communicated with Garreau via
Facebook Messenger. TR I at 135:20-136:6. Both responded to Shaun
that there were problems with the account. TR I at 135:7-10.
According to Shaun, he had empowered Craig to deal with the
Gutzwiller account because Craig was frequently in Switzerland,
dealing with the Estate. TR I at 135:21-25. Unable to obtain
further tuition payments, and after communicating with Garreau
for several weeks, Shaun advised Craig and Garreau that he was
coming to Geneva in December of 2012 to pick up the checks or get
the matter settled. TR I at 138:4-24. Although Craig tried to
27
discourage Shaun from the trip because “the funds were blocked
and because we didn’t want any more problems” with the account,
Shaun proceeded to Geneva, where he visited Garreau’s offices at
Gutzwiller with Craig. TR I at 139:2-24. Shaun asked for $30,000
that were needed to keep his younger son in private school. He
was advised by Garreau that the funds were blocked; that there
was trouble with the regulators; and that “we didn’t want to
cause any undue suspicion.” TR I at 140:12-142:3. Instead, Shaun
received CHF 10,000 (about $11,000 at that time). TR I at 141:2023. Craig offered to drive Shaun to the airport and, on the way,
asked his brother to lend him CHF 3,000 for expenses, which Shaun
gave him. TR I at 142:10-21. After this event, Shaun received no
further monies from the Winter Group account. Including the CHF
7,000 he obtained in Geneva, Shaun received $88,000 from the
account, all of which were used for tuition payments. TR I at
143:13-144:11.
In May of 2013, after pressing Garreau for an answer as to
why the tuition payments were not made, Garreau informed Shaun
that the account had been closed and that he should probably talk
to Craig about that. TR I at 144:16-145:1. After a number of
attempts to communicate with Craig, Craig finally admitted to
Shaun that he had a check for CHF 548,000 that constituted the
remaining balance of the Winter Group account. TR I at 145:2-9.
28
Craig explained to Shaun that he was trying to cash the check but
that the funds were blocked domestically. Craig insisted that
this was only a minor hiccup and that, once his bank cashed the
check, the funds would be divided so Shaun could pay for his
children’s education. TR I at 145:25.
Shaun’s testimony regarding these events was corroborated by
online
communications
between
him
and
Garreau,
including
a
message from Garreau dated June 17, 2013, in which he informed
Shaun
(upon
payments)
Shaun’s
that the
inquiry
Winter
regarding
Group
the
account
status
had
of
been
tuition
closed
for
almost five months. Ex. 141 at 0009. Garreau also informed Shaun
that Craig had attempted to cash the check for CHF 548,000 at the
Gutzwiller office in Zurich. TR I at 150:10-15, EX 141 at 0017.
Shaun never received an answer from Craig as to what happened to
the funds in the Winter Group account. TR I at 149:24-150:3.
Shaun
stopped
communicating
with
Craig
in
October
or
November 2013. At the time of trial, he had spent more than
$600,000 on investigators and lawyers in Germany, Switzerland,
and the United States, in order to determine what happened to the
Estate assets. TR I at 153:9-154:3.
The
cross-examination
reconfirmed
much
of
Shaun’s
of
Shaun
testimony;
conducted
established
by
no
Craig
facts
inconsistent with Shaun’s prior testimony; and added only few
29
additional facts that are relevant to the case: Shaun did not
receive a copy of the Purchase and Sales Agreement (“PSA”) or
settlement statement for the sale of the Naples condominiums.
Transcript 10/07/15 (“TR II”) at 13:22-14:16, 15:18-22. Shaun
recalled that Laurie told him that the Tiffany silverware was
worth $15,000. TR II at 23:6-11. Craig sold an Ocelot fur coat
that belonged to Renate while he was in Switzerland. TR II at
82:10-24. In November 2013, Shaun borrowed $30,000 from Craig
because there was a problem with the Winter Group account and
Shaun needed the money to pay his sons’ tuition. TR II at 70:1371:19. The remainder of Craig’s cross-examination of his brother
consisted of attempts to establish that Shaun had no photographic
proof of Estate items that were now unaccounted for; that Shaun
had initially not known about the Winter Group — along with the
suggestion that Shaun had not been as close to Laurie as claimed;
and other lines of questioning that appeared to be more designed
to antagonize Shaun than to extract any relevant information.
B. Darren Hekking
Darren’s testimony regarding the St. Pierre condominium was
consistent
with
that
provided
by
Shaun,
but
included
more
specifics. Darren added that the St. Pierre condominium, where he
visited Laurie and Renate twice a year, was 2600 square feet in
size and contained expensive items such as two Eames chairs with
30
ottomans, a flat screen television, a Bang & Olufsen stereo,
custom-made furniture, fine crystal, lithographs, and other art
objects. TR II at 101:2-103:12.
Darren recounted that his father owned a number of Brioni
suits and Hermes neckties and he confirmed the makes and models
of Laurie’s watches as previously described by Shaun. TR II at
104:15-105:5. As to Renate’s property, Darren recalled her large
diamond engagement ring and gold Cartier watch, as well as a
closet stocked with bags, gowns, dresses, golf wear, and furs. TR
II at 105:8-106:1. In addition to the Miro lithographs, Darren
described a Lalique crystal elephant sculpture Laurie and Renate
had bought in Dubai. TR II at 106:17-20. Darren confirmed that
there was a Mercedes S-500 and a Cadillac STS and a collection of
expensive wines. TR II at 107:3-108:3.
As to the two safes in the St. Pierre condominium, Darren
recounted that, on his April 2009 visit, his father opened both
safes in front of him. The smaller safe contained a gun Laurie
described as “home defense,” and the larger safe contained a
couple of jewelry boxes and was “chock-full” of hundred-dollar
bundles, each with a $10,000 band around it. Laurie told Darren
that it was his “get-out-of-jail” or “kidnap money.” TR II at
109:1-9. Darren did not know the combination for the safe; he was
told by Laurie that Craig knew the combination. TR II at 109:1031
16.
After Laurie died, Darren discussed the Estate with Craig,
who told him that he was working on identifying where everything
was and putting everything together. TR II at 113:1-18. Although
Darren repeatedly requested an accounting from Craig, none was
ever provided. TR II at 113:21-114:11. Like Shaun, Darren stopped
communicating with Craig in November 2013. Darren recounted that
he also received a notice (in German, which Darren does not
speak) from a German court and that, upon asking Craig whether
there was money in Germany, he was told that there was no money,
but that some money might be owed in Germany for Renate’s estate.
TR II at 114:12-115:2.
After
the
Breakwater
condominium
sold
in
2011,
Darren
received his one third share of the sales proceeds. TR II at
115:8-15. Darren was aware that there was a problem with the sale
of the St. Pierre condominium, although the sale did close in
2012. TR II at 115:16-116:5. Like Shaun, Darren was told by Craig
that the St. Pierre condominium had been sold with all contents
and, like Shaun, Darren was “absolutely beside [him]self” because
of the value of the furnishings and other items. TR II at 116:1225. Darren requested the PSA and closing binder from Craig, but
he never received either. TR II at 117:1-15. Darren was aware
that Craig had instituted proceedings against the listing broker
32
related to the broker’s commission for making a sale below asking
price, TR II at 117:16-118:11; however, Darren was never advised
by Craig that he had settled the case on behalf of the Estate and
that $62,500 had been wired to Craig and Molly’s joint account.
TR II at 118:21-119:5.
Darren learned that Craig had taken Laurie’s Mercedes when
Craig drove up in the car while visiting Darren in 2013. When he
questioned Craig about this, Craig told Darren that he had bought
the car from Laurie prior to Laurie’s death for $35,000. TR II at
120:2-121:19. Craig refused to produce any paperwork and Darren
noted that the Mercedes still had Laurie’s Florida vanity plates
on it. TR II at 121:20-25. Darren was also given no accounting
regarding Renate’s Cadillac. TR II at 122:1-3.
Likewise,
Darren
received
no
accounting
regarding
any
personal property in Switzerland. TR II at 122:8-20. As to the
Mercedes S-500 in Switzerland, Craig advised Darren that he had
sold the car and that there would eventually be a reconciliation
of the funds. Darren received no portion of that sale. TR II at
123:9-22.
Darren was aware of the 7.8 carat yellow diamond ring Renate
owned and recalled seeing her frequently wear her 3.75 carat
diamond engagement ring and her gold Cartier watch. TR II at
125:2-16. Darren identified a picture of the engagement ring on
33
the insurance appraisal form. Ex. 156 at 0006. Like Shaun, Darren
saw Molly wearing the engagement ring and Cartier watch at the
family
wedding
confronted
in
Craig
Florida.
and
Molly,
TR
II
asking
at
them
126:13-127:3.
why
she
was
Darren
wearing
jewelry belonging to the Estate. In response, Craig asked Darren
not to make a scene and assured him that the jewelry would be
sold and that there would be an accounting. TR II at 127:4-13. A
second confrontation occurred when Molly was wearing the ring
again at the Vermont ski vacation. TR II at 127:18-10. Molly was
present during both conversations, but “didn’t have much to say.”
TR II at 127:14-17, 128:11-15. Craig confirmed to Darren that he
was in possession of Renate’s jewelry, but he provided no update
regarding its appraisal or sale, nor did he ever inform Darren
what had become of it. TR II at 129:9-24.
Similarly, Craig did not inform Darren that he had received
the redemption checks from the two Florida country clubs. TR II
at 131:11-15. The only bank account Craig identified as belonging
to
Renate
response
was
to
an
account
Darren’s
at
Huntington
questions
regarding
Bank
any
in
Florida;
Swiss
in
accounts,
Craig said that he was looking into it but that there “was not
much there.” TR II at 131:16-132:17. Other than one third of the
proceeds
from
Laurie’s
life
insurance
34
and
the
condominium
sales,12 Darren received no further money from the Estate. TR II
at 133:1-17.
On
cross-examination
by
Craig,
Darren
reconfirmed
that
Laurie owned a number of Brioni suits (conceding that he did not
look at the labels but noting that his father only wore Brioni
suits), as
well
as
various
Hermes
ties, and
specific
luxury
watches. Transcript 10/08/15 (TR III) at 6:13-7:10. Darren also
provided some specific information regarding Laurie’s high-priced
wine collection, TR III at 13:11-14:21, and he reconfirmed seeing
several $10,000 stacks of cash in the safe at the St. Pierre
condominium. TR III at 16:23-17:5.
Darren
explained
that
when
he
visited
his
father
in
Switzerland shortly before Laurie’s death, he stayed at a hotel
because Craig informed him that Laurie did not want anyone at the
Erlenbach
apartment.
TR
III
at
17:11-19,
198:25-19:20.
In
response to a series of questions from Craig, Darren acknowledged
that, although Shaun had told him in the fall of 2010 that he had
sold the “lesser” jewelry, Shaun did not provide Darren with an
accounting of the transaction, nor did he tell Darren until 2011
12
Plaintiffs’ attorney’s reference to the “sales proceeds from the
Club at Pelican Bay,” rather than the St. Pierre condominium,
appears to have been in error. Darren testified that he did receive
his share of the two condominium sales, but was unaware that Craig
had also received two checks for the club redemptions. TR II at
133:6-8.
35
that he had realized about $17,000 or $18,000 from that sale. TR
III at
21:13-25:9.
Darren
again
confirmed
that
he
saw
Molly
wearing Renate’s engagement ring during the Vermont ski vacation.
TR III at 25:24-25:7.
C. Alexandra Hekking
Alexandra has been married to Shaun for twenty years; they
have two children. TR IV at 7:11-17. Alexandra’s description of
her relationship with Renate and Laurie echoes that described by
both
Shaun
teacher),
and
she
Darren.
and
her
Every
family
spring
visited
break
(Alexandra
Renate
and
is
Laurie
a
in
Florida, and her in-laws often came to New York City during the
Christmas season. TR IV at 8:6-21. Alexandra and Renate were
friends; Renate liked to shop for the grandchildren and she liked
to take Alexandra shopping. Alexandra and Renate went to the
beach together and visited museums. Id. at 8:22-9:2. Renate was
extremely close to the children. Id. at 9:3-4.
Alexandra and Shaun stayed at the La Playa beach club when
they visited Florida, but had dinner with Laurie and Renate at
the
St.
Pierre
condominium
most
evenings.
TR
IV
at
9:9-22.
Alexandra provided a description of the layout and furnishings of
the
condominium
consistent
with
that
provided
by
Shaun
and
Darren. TR IV at 10:10-17. She described the Eames chairs and
ottomans, Miro lithographs, Baccarat crystal, Tiffany silver, and
36
Villeroy & Boch china. TR IV at 15:18-16:8.
In addition, Alexandra described the velvet-lined jewelry
compartment Renate had added to the drawers in her closet, which
contained a lot of jewelry. TR IV at 11:6-20. Renate wore a gold
Cartier watch, a gold elephant bracelet, a diamond solitaire
pendant and her engagement ring on a regular basis. TR IV at
12:5-14.
Renate
owned
very
expensive
clothing
and
evening
wear,
including from designers Escada, Pucci, Roberto Cavalli, Badgley
Mischka and Oscar de la Renta. She also owned five fur coats,
including two mink-lined raincoats, a floor-length mink, a long
sable coat and a shorter, light-colored fur coat for the evening.
TR IV at 12:19-13:12. Renate’s closet contained dozens of shoes
and handbags by Louis Vuitton, Chanel, Christian Dior, Stuart
Weitzman,
and
Fendi;
these
items
were
kept
in
special
compartments. TR IV at 13:15-22, 46:10-49:14.
When Shaun returned to New York after Laurie’s and Renate’s
deaths, he brought back some of Renate’s costume jewelry and
smaller
pieces.
TR
IV
at
17:8-14.
Alexandra
took
them
to
a
jeweler on Fifth Avenue in Manhattan to have them appraised. TR
IV at 17:17-20. The jewelry was appraised at $17,000 and, with
Craig’s approval, Shaun and Alexandra sold the costume jewelry.
TR IV at 17:24-20:5.
Later that summer, Craig brought Renate’s
37
two large diamond rings to Shaun and Alexandra’s apartment to
have them appraised by the same jeweler in New York City. TR IV
at 20:6-23.
Shaun and Alexandra took the jewelry to the same appraiser,
who estimated each ring at about $100,000. TR IV at 21:4-15.
Shaun also obtained a second appraisal for the rings. TR IV at
21:16-20. Alexandra and Shaun discussed the matter with Craig,
who told him that he could do better in Newport and that he
already had buyers. TR IV at 22:1-7. After it was decided that
Craig should sell the rings in Newport, Craig returned to the
apartment for a brief visit and picked up the rings from Shaun in
Alexandra’s presence. TR IV at 22:18-23:4. Craig also stated that
he was working on finding buyers for Renate’s other fine jewelry.
TR IV at 23:13-15. Craig never got back to Shaun or Alexandra on
whether he had sold any of the jewelry. TR IV at 23:25-24:2.
In
October
2010,
Alexandra
saw
Molly
wearing
Renate’s
engagement ring, a round solitaire diamond on a platinum band,
and her gold Cartier watch at the family wedding in Florida. TR
IV at 24:3-25:5, 51:8-20. Alexandra asked Molly about the ring
and Molly responded that they hadn’t sold the ring yet and she
was wearing it for a special occasion. TR IV at 25:23-26:7.
During the ski vacation in December of the same year, after
Darren brought it to her attention, Alexandra again observed
38
Molly
wearing
Renate’s
engagement
ring.
TR
IV
at
26:17-19.
Alexandra commented to Molly that she was wearing the ring again,
and Molly stated that they hadn’t sold it yet and that they were
“working on
it.”
TR IV
at 27:15-18:13.
After
December
2010,
Alexandra asked Molly on multiple occasions about the status of
Renate’s jewelry and was told that they were “working on it.” TR
IV at 28:19-20:2.
On occasion, Molly told Alexandra about the overseas trips
she and Craig were taking. When asked how they could afford their
travel, Molly told Alexandra that their jewelry business was
doing well and that they had to hire a baby-sitter because Molly
was so busy. TR IV at 376:22-37:14.
Since 2006, Laurie had been paying a portion of the tuition
costs
for
Shaun
and
Alexandra’s
younger
son,
who
attends
a
special school for children with communication disorders. TR IV
at 62:2-63:2.
Alexandra knew that Laurie had established the
Winter
trust
Group
for
the
purpose
grandchildren. TR IV at 63:3-64:6.
of
educating
his
After Laurie died, tuition
payments from the Winter Group funds continued, at first. TR IV
at
30:4-14.
Less
than
a
year
after
Laurie
died,
however,
Alexandra experienced problems with getting the tuition paid. TR
IV at 31:16-23. Alexandra addressed the issue with Craig, who
told her that he would write a check for the tuition. TR IV at
39
31:25-32:3.
At
a
large
family
gathering
for
Easter
2012,
Alexandra advised Craig (in Molly’s presence) that her child was
in jeopardy of losing his place at the school if she did not get
the tuition payment. In response, Craig told her he would get the
funds
to
her.
communicated
TR
with
IV
at
Craig
32:7-33:3.
via
Although
e-mail
Alexandra
afterwards,
she
still
mostly
communicated with Molly. TR IV at 33:10-16. Alexandra frequently
texted Molly and when she did not receive a response, she called
Molly and told her that she needed the tuition money to keep her
child in school. TR IV at 33:19-25. Molly assured Alexandra that
she would talk to Craig about writing Alexandra a check, but
neither
Molly
nor
Craig
ever
got
back
to
Alexandra
with
a
response. TR IV at 34:17-25.
At that time, the tuition for Alexandra and Shaun’s younger
son was $52,000 per year and the school was refusing to renew the
contract without payment. TR IV at 35:7-16. Alexandra called
Molly again and asked her how things stood with the Winter Group
money for the tuition. TR IV at 35:22-25. Molly advised her that
Garreau would take care of the tuition; that Molly had talked to
him; and that the tuition for Molly and Craig’s daughters was
taken care of. TR IV at 35:25-36:16. Molly did not know what the
holdup was regarding Alexandra’s son; Alexandra asked her to look
into it. Id. at 36:17-21. Shaun then traveled to Switzerland to
40
see what the holdup was, but the issue was not resolved. Id. at
38:4-9. Even
after
Shaun
and
Craig
stopped
speaking
to
each
other, Alexandra continued to appeal to Molly via text to have
the situation resolved. TR IV at 39:1-8. Although Molly appeared
kind and sympathetic as a friend and she promised Alexandra that
she would speak with Craig, she never got back to Alexandra and
told her that she “didn’t want to get in the middle of stuff with
the boys.” Id. at 39:15-21. At some point, after a recurring
discussion
about
the
fact
that
Molly
and
Craig
were
not
responding to Shaun and Alexandra’s phone calls, e-mails, or
texts, there was an abrupt end to the communications between
Molly and Alexandra. TR IV at 29:10-25.
D. Molly Hekking
Molly
assisted
Craig
in
packing
up
the
St.
Pierre
condominium belongings, after which they were put in storage by a
moving
company.
TR
III
at
34:5-8.
In
stark
contrast
to
the
testimony given by Shaun and Darren, Molly explained that she was
not familiar with the “stuff” in the St. Pierre condominium; that
she “didn’t see a thing of value;” and that there were some old
shoes and some golf outfits, and “some old jewelry...trinkets and
whatnot.” TR III at 38:9-25.
Molly was present in Florida when the movers conducted a
final walk-through of the St. Pierre Condominium on May 29, 2012.
41
TR III at 41:22-42:15. The bill by the William C. Huff Moving and
Storage Company (“Huff”) shows a $2,250 charge for “5 men, 9
hours” to “pack, prep, inventory & load to Huff” on that date,
plus a charge of $1,500 for “5 men, 6 hours” to “finish load,
unload.” Together with a flat mileage fee and fee for packing
materials, which included six book crates, two “Queen/King” and
an unspecified number of crates for an additional $230, the total
bill came to $4,447 and was made out to Craig and signed by
Craig. Ex. 26 at 0014
As Molly acknowledged, all of the personal property at the
St. Pierre, except for items donated or sold at the consignment
store,
was
placed
into
storage.
TR
III
46:5-10.
A
2-page
Household Goods Descriptive Inventory includes, inter alia, six
chairs, two “wood-leather” chairs with ottomans, a wooden chest,
two small televisions, a Plasma television, end tables, dishes,
and approximately two dozen boxes of varying sizes. Ex. 26 at
0021-22. An “Interim Storage Space Rental Agreement” between Huff
and Craig indicates that Craig rented four or five storage vaults
to accommodate the items removed from the St. Pierre condominium.
Ex. 26 at 0016. In addition, Craig requested insurance coverage
in the amount of $50,000.
On June 25, 2012, Huff employees (two men) loaded property
from the storage facility and transported it to Rhode Island,
42
where it was delivered to Craig and Molly’s residence at their
Newport
address.
By
his
signature,
Craig
confirmed
that
all
furniture and belongings had been unloaded at that location and
had been received in good condition. Ex. 26 at 0019. According to
Molly,
although
in
June
of
2012
she
lived
at
the
Newport
residence — which is in her name and for which she is the only
borrower — she was not there when the furniture and belongings
were
delivered
to
her
home
and
she
does
not
recall
such
a
delivery. TR III at 48:18-21.
Molly also helped pack up the Erlenbach apartment, which she
visited for the first time a week after Laurie and Renate died;
after that initial visit, she returned several more times. TR III
at 52:7-10, 54:16-55:12. Molly denied all knowledge of Laurie’s
and
Renate’s
personal
items
being
moved
back
to
the
United
States. A payment transfer statement and related e-mail from
Craig to Rene Kurth, the director of the Winter Group, reflects a
balance
due
of
$10,505
for
the
move
of
personal
items
from
Switzerland to the United States. Ex. 152. Molly testified that,
in her opinion, there was nothing of value in the apartment,
“nothing nice. Beat-up ugly shoes, that were all flats, which I
don’t wear; size eight clothing, which I also don’t wear, nothing
I would like.” TR III at 52:11-18. Although she visited Erlenbach
three
or
four
times
and
helped
43
Craig
to
pack
up
all
the
belongings in the apartment, Molly maintained that she did not
take charge, that Craig took care of everything, and that she had
nothing to do with any of it. TR III at 60:2-24.
In 2010, Molly kept a personal checking account at Bank of
America, to which she later added Craig as a signatory. TR III at
63:2-18. Although she periodically checked that account, Molly
testified
that
she
was
unaware
of
the
source
of
an
$80,000
transfer into that account in October of 2010, nor did she ever
ask Craig where the money came from. TR III at 63:19-64:16.
Similarly, Molly maintained that she never asked Craig about the
value of the inheritance and that he told her they were “fine and
taken care of.” TR III at 64:23-65:
As Molly acknowledged, neither she nor Craig have held a
paying job since Laurie died in 2010, and they have earned no
income during
the
four
years
between
Laurie’s
death
and
the
commencement of this litigation or thereafter. TR III at 65:466:3. Sometime in 2011, Craig and Molly started a company called
“Argentiere Luxury,” which had yielded no income by September
2014. TR III at 66:4-10. Every year between 2010 and 2014, Craig
and
Molly
had
home
renovations
performed
on
their
Newport
residence. TR III at 68:11-25. Craig paid for those renovations,
mostly in cash. TR III at 69:1-10. Notwithstanding having to pay
a mortgage, taxes, private school tuition for three children, all
44
while starting a new business, Molly maintained that she asked no
questions about the costs of the renovations, trusting that Craig
knew “what he was doing.” TR III at 69:11-15.
In 2011, Craig and Molly rented a chalet in Chamonix, France
for two
weeks
and
they, together
with
Molly’s
daughter, her
mother, and Craig and Molly’s two children and his two children
from his former marriage, traveled in Business Class. TR III at
4-22. Craig paid for the vacation and Molly did not ask how. TR
III
at
7-11.
Switzerland,
From
where
there,
they
Craig
met
and
with
Molly
Antoine
drove
to
Garreau,
Geneva,
Laurie’s
personal banker. Transcript 10/09/15 (TR IV) at 77:17-78:14. On
another occasion, Garreau and his wife met them in Chamonix. TR
IV at 79:11-22.
Molly and Craig returned to Switzerland twice in 2012, once
for a long ski weekend in the Swiss Alps and once to Zurich. TR
IV at 80:16-82:3. Molly knew that the rent on Laurie’s apartment
continued to be paid for some time from Winter Group funds at the
Gutzwiller bank. TR IV at 82:77-83. In February of 2013, Molly
and Craig returned to Geneva, where they met Rene Kurth at his
office. TR IV at 83:8-22. Molly acknowledged that Craig received
a check for CHF 548,000 from Kurth at that time, but she claims
that she “did not see him physically take a check from Rene.” TR
IV at 84:3-25.
45
In total, Molly made seven trips to France or Switzerland.
On one or two occasions, she returned to the United States by
herself; she claimed not to know whether Craig went to Germany on
those occasions before returning home. TR IV at 85:17-87:12.
Molly flatly and repeatedly denied that Alexandra Hekking
ever approached her about tuition payments from the Winter Group,
although she conceded that Alexandra had called her a few times
and asked if Craig would please call, and that Molly said she
would tell him to do so. TR III at 75:11-24, 85:14-86:7. Molly
stopped speaking to Alexandra after receiving emergency texts
from her.
Id.
Molly
denied
that
anyone
confronted
her
about
wearing Renate’s engagement ring and Cartier gold watch at the
family wedding (although she did not deny wearing them). TR III
at 77:6-78:5. Molly also denied anyone asking her why she was
wearing
Renate’s
Vermont,
engagement
maintaining
that
ring
she
during
was
not
the
ski
wearing
vacation
it
on
in
that
occasion. TR III at 78:6-12.
Regarding her and Craig’s Bank of America (“BoA”) checking
account, Molly acknowledged that prior to October 15, 2010, when
she received an $80,000 deposit, she never received a deposit in
excess of $30,000. TR III at 80:15-81:9.
Prior
to
marrying
Craig
in
2008,
Molly
owned
her
own
business and was a working mother. TR III at 86:23-87:5. Molly,
46
who
graduated
with
a
bachelor
of
arts
degree,
started
two
businesses on her own, both of them art galleries, which she ran
and operated for several years. TR III at 87:6-88:6. In 2003,
Molly
obtained
her
real
estate
license
and
listed
rental
apartments and homes. TR III at 88:7-11. At some point, she and
Craig started a children’s clothing shop, but Molly decided to
shut it down because she did not want to put any more of her
money into the business. TR III at 89:2-90:12. After Laurie died,
Craig and Molly started a new business, Argentiere Luxury. TR III
at 90:13-23. Although Molly was a partner in the business, she
never asked Craig how much money was invested in that business or
what the source of the funds were. TR III at 91:21-92:16. Molly
acknowledged that Argentiere Luxury had yielded no revenue, but
she insisted that she did not ask Craig how much money was
flowing out of the business. TR III at 93:4-15.
In 2011, Craig bought a $56,000 Landrover for Molly. TR III
at 106:10-12. Molly did not question where the money for that
purchase was coming from, as “it seemed everyone was buying a car
around that time.” TR III at 106:16-107:5. At that time, only the
smaller of the two Florida condominiums had sold, yielding a
share of $145,000 for Craig, who was not working. TR III at
108:1-14.
By her own account, Molly considered herself financially
47
secure following Laurie’s death without ever feeling the need to
ask Craig where the money was coming from. TR III at 93:16-94:10.
At
the
same
time,
Molly
sought
a
number
of
need-based
loan
modifications on her house. TR III at 96:6-97:25. A letter dated
August 2, 2010 and signed by both Molly and Craig, sought a loan
modification on Molly’s home loan and explained the hardship that
had caused them to be late with the $4,500 monthly mortgage
payments. Ex. 175. In February 2011, Molly’s lender requested
that she provide additional financial information to establish
her claim of need. TR III at 104:1-8. Ex. 180. According to
Molly, she provided “whatever they asked for, in order to get
into a program,” but did not provide such materials in discovery
in this case because she did “not think [she] had to.” TR III at
104:18-105:12.
A
May 18, 2012 letter to Molly from her mortgage lender
reflects that the loan was in foreclosure at that time. Ex. 182.
Molly
was
program
eventually
which
required
approved
her
to
for
make
a
a
temporary
qualifying
modification
payment
of
$11,356. Ex. 179, TR III at 117:6-16. In a letter acknowledgment
dated August 14, 2013 and signed by Molly, Molly acknowledged
financial hardship, but asserted that she had sufficient income
to make future modified loan payments. Ex. 179 at 0002, TR III at
120:15-121:17. The necessary $11,356 payment was wired to the
48
lender from Craig and Molly’s joint Citizens bank account on
August 30, 2013. TR III at 121:18-24; Ex. 179 at 0006. At that
time, in addition to her BoA account, Molly had a Citizens Circle
Gold account; she was also on the Argentiere Luxury account at
Citizens and on an account at Huntington Bank. TR III at 122:17123:9. Molly had her own bank cards for the Citizens Circle Gold
and Huntington Bank accounts with which she made purchases. TR
III
at
123:17-124:5.
The
Circle
Gold
account
statement
from
July/August 2013 reflects that, only two days before the $11,356
payment
for
the
loan
modification
was
due,
$50,000
was
transferred into the Citizens Circle Gold account; without that
transfer, the balance in the account would have been insufficient
to cover the payment. TR III at 133:2-134:7; Ex. 171 at 159.
As
to her account at Huntington Bank, Molly acknowledged using a
debit card issued by the bank, but claimed not to be aware that
she had made $64,000 worth of purchases within a six-month period
(as established by account statements). TR III at 123:23-127:15.
At
the
time
Molly
entered
into
her
need-based
loan
modification program, Craig and Molly applied, and were accepted,
for membership in the Carnegie Abbey country club. TR III at
136:17-137:8. On August 28, 2013, Molly wrote a check for the
$6,475 membership deposit from the joint Citizens Circle Gold
account. That payment would not have been covered, were it not
49
for the $50,000 wire transfer into the Citizens account on the
same day. Ex. 188-0002; TR III at 137:9-138:16. According to
Molly, although she and Craig discussed in some detail whether to
join the club, they never discussed how they would afford the
fees. TR IV at 89:11-90:1.
After Laurie died, Craig purchased nice things for Molly,
including designer bags, a beautiful ring, shoes, and a car. TR
IV at 90:22-91:11. Molly never asked how Craig could afford these
purchases. Id. After Craig quit his job, the family (apart from
Molly’s daughter from her first marriage) no longer had health
insurance benefits. TR IV at 96:6:19. For the following years,
Molly applied for health insurance for the family through the
State of Rhode Island on the basis that she and Craig had no
income. TR IV94:7-96:19. At the same time, her daughter and her
two children
with
Craig
went
to
private
schools
with
$8,500
annual tuition fees per student. TR IV at 96:20-97:18.
According to Molly, she and Craig “did a lot after Laurie
died. Took vacations, going out to eat,” TR IV at 89:21-22. The
couple
also
underwent
various
cosmetic
procedures,
including
botox, laser hair removal, and “cool sculpting” at a cost of
$2,100-$2,300 for two procedures. TR IV at 97:24-100:10.13
13
As noted by the Magistrate Judge in her March 17, 2015 R&R,
during this time of free spending while neither of them had paid
employment, “Molly procured subsidized health insurance for the
50
Molly
—
who,
like
Craig,
represented
herself
—
also
testified in the Defendants’ case by responding to a number of
questions she had prepared. Molly, who visited the St. Pierre
condominium once before Laurie’s and Renate’s deaths and five
times thereafter, does not recall seeing china, crystal, or gold
silverware
96:20-23.
in
2006.
Transcript
10/14/15
(TR
VI)
at
79:9-23,
She did see a “three-by-three” abstract painting, but
does not know if it was a Miro. TR VI at 97:21-98:2. Molly also
recalls that one of the bedrooms contained “a bed, a dresser, and
a toy chest with a lot of old toys that were outdated from the
kids.” TR VI at 80-7. When she returned in 2010, she looked
through the closets; Molly recalled seeing little plastic bags
with slippers and eye masks given out on premium air travel, fake
floral
arrangements,
and
a
cream-colored
raincoat.
TR
VI
at
80:16-24.
In
Laurie’s
closet,
Molly
saw
shoes,
button
down
polo
shirts, and a “few old luggage bags,” but does not recall seeing
any suits. TR VI at 81-14-19. As to Renate’s closet, Molly saw a
few suits, lots of golf wear, but does not recall seeing anything
children through the State of Rhode Island.” R&R at 8 n. 7 (Dkt.
No. 85. Following entry of the September 29, 2014 consent order,
pursuant to which Craig and Molly were limited to $9,000 in monthly
living expenses, Molly applied for, and began to receive, SNAP
[Supplemental Nutrition Assistance Program] food benefits. Id. at
8.
51
by Louis Vuitton or Channel. TR VI at 81:20-82:2. She recalled a
long, light blue dress, but no other evening gowns and only few
pocketbooks,
one
purchased
in
Portugal
and
a
“fake
Louis
Vuitton.” TR VI at 82:13-20. Molly also described less than two
dozen pairs of shoes, a lot them flat, and all of them worn. TR
VI at 82:21-25.
According to Molly, a large velvet box that
covered most of Renate’s dresser contained only “some trinkets, a
few little silver pieces,” but no “diamonds, gold, anything of
value.” TR at 83:5-11.
Molly visited the Erlenbach apartment for the first time in
2010, shortly after Laurie’s and Renate’s deaths. TR VI at 84:1319. Craig “was there taking care of business” and picked her up
in
Laurie’s
apartment
Mercedes.
was
much
TR
smaller
VI
at
and
84:15-17.
simpler
than
In
general,
the
St.
the
Pierre
condominium and included smaller furnishings. TR VI at 85:186:21. Molly saw fewer clothes and shoes at the apartment and no
jewelry, furs, or designer bags. TR VI at 90:5-8, 93:14-94:11.
Molly described the apartment as bare and not containing anything
nice, although she acknowledged making several trips to help
Craig
pack
up
the
apartment
and
she
asserted
in
a
signed
submission to this Court that at least $6,000 was spend to ship
items from the apartment to the United States. TR VI at 117:5122:25.
52
Molly
acknowledged
making
personal
purchases
from
the
Argentiere Luxury account. Transcript 10/15/15 (TR VII) at 5:226:17; Ex. 115 at 453-455. According to Molly, she was unaware
that she was on the account, and she explains writing a check for
more than $500 from the Argentiere Luxury account by claiming
that the checks looked the same as those from her own Citzens
account and that she “wrote out a check, not paying attention to
what was on the top of it,” i.e. the heading “ARGENTIERE LUXURY
AMERICAS LLC” in prominent font. Ex. 115 at 0478; TR VII at
14:12-15:13.
Molly
also
conceded
that
she
benefitted
from
goods
or
services paid for by Winter Group funds. TR VII at 7:17-8:9.
Although
Molly
was
frequently
present
when
Craig
bought
her
clothes, cosmetics, or other items, she never asked how he was
paying for those purchases, notwithstanding the fact that Craig
had not held a paying job since Laurie died. TR VII at 8:10-24,
9:2-17.
Molly flatly denied ever wearing Renate’s Cartier watch, her
seven-carat yellow diamond ring, or her engagement ring. TR VI at
98:21-99:3.
As
to
Renate’s
clothes,
shoes,
and
bags,
Molly
asserts that she packed up Renate’s belongings, put them in large
black contractor garbage bags and then donated them, but does not
know where the items were dropped off. TR VI at 99:4-16.
53
On cross examination, Molly conceded that she took three
“tiny Louis Vuitton bags” from the St. Pierre condominium after
Renate’s death and gave them to her daughters, but claims that
she did so after Alexandra declined them. She also asserted, for
the first time, that she had just learned that one of the bags
was a fake. TR VI at 104:1-23. As was established at trial, Molly
had previously acknowledged in sworn deposition testimony that
there were Eames chairs in the St. Pierre condominium and that
she believed that one of the Miro lithographs was in storage in
Florida. TR IV at 107:3-108:18. Having been to the St. Pierre
condominium five times, in part to help Craig pack up all the
belongings, Molly still insisted that she “did not see anything
of value.” TR IV at 109:22-110:24. When specifically questioned
whether she knew if any items on the mover’s inventory list were
ever delivered to her 4,500 square foot house in Newport, she
carefully responded “I have nothing from the St. Pierre in my
house.” TR VI at 111:8-11. Although Molly signed the Defendants’
joint pretrial memorandum in which they assert that the cost of
shipping the contents of the Erlenbach apartment was $6,000, she
maintained that she “didn’t write that;” that she didn’t ship
anything; that the apartment contents were of minimal value; and
that she knew “nothing.” TR VI at 119:21-122:25.
54
E. Joseph DeCusati
Joseph
DeCusati
(“DeCusati”)
is
a
certified
public
accountant and fraud examiner who was engaged by the Plaintiffs
to assess their damages. Transcript 10/13/16 (TR V) at 4:23-5:5.
Regarding the actual loss of property, cash, and other assets,
DeCusati concluded that the Plaintiffs incurred $2 million in
damages. TR V at 7:24-8:8. In addition, DeCusati calculated the
loss
of
investment
received their
opportunity
rightful
share
to
of
the
Plaintiffs,
the Estate
assets
had
they
within a
reasonable period after Laurie’s death. DeCusati concluded that
the
Plaintiffs
lost
$1,008,000
to
$2,018,000
in
possible
investment gains. TR V at 8:9-21. Finally, DeCusati considered
the legal costs incurred by the Plaintiffs, which he calculated
at $983,853. TR V at 8:22-9:3.
In forming his opinions, DeCusati reviewed a seven-page list
of documents, including bank account statements for varying time
periods
for
over
twenty
accounts.
TR
V
at
11:5-13.
He
also
reviewed the pleadings in this case, deposition transcripts and
exhibits, wills, trust documents, and investigative reports from
investigators in Europe, and he conducted interviews with Shaun,
Darren, and Alexandra. TR V at 11:19-12:21.
To arrive at a calculation of damages, DeCusati analyzed
eleven bank accounts held in Craig’s and/or Molly’s name and
55
reviewed the Defendants’ earnings in the two-and-a-half years
prior to
Laurie’s
and
Renate’s
deaths.
TR V
at
13:17-14:20.
DeCusati then reviewed Craig and Molly’s financial history after
the deaths, analyzing and reconciling funds that were going into
their joint bank accounts. TR V at 14:21-15:2. To make sure there
were no duplicate entries of deposits and withdrawals, DeCusati
traced each transfer of funds between the Defendants’ accounts,
identified both ends of that transaction, and excluded it from
his income calculation. TR V at 15:3-16:15. DeCusati concluded
that $384,684 in funds from unaccounted sources — not otherwise
identified
as
inheritance
—
income
were
or
as
Craig’s
deposited
into
rightful
Molly
and
share
Craig’s
of
the
joint
accounts. TR V at 13:13-14:6. DeCusati’s review established that
$194,023
were
spent
from
two
Citizens
accounts
and
three
Huntington Bank accounts. The Citizens accounts, both in the name
of the Estate of Laurie Hekking were initially funded by deposits
from redeeming the two country club memberships; the funds were
then spent and the accounts closed. TR V at 18:14-20:16. To
calculate what was actually owed to the Plaintiffs, DeCusati
multiplied the sums by two thirds to represent the portion of the
inheritance to which the Plaintiffs were entitled under Laurie’s
will. TR V at 21:5-12.
As to the Winter Group, DeCusati identified two Swiss bank
56
accounts at the time of Laurie’s death: the Gutzwiller account
with a balance of $1,147,174, and a VP Bank account with a
balance of $81,857. TR V at 21:18-23:6. Of those amounts, Shaun’s
children received a total of $94,070. TR V at 23:7-11. Between
August 2, 2011 and December 20, 2012, Craig withdrew $222,577 in
cash from the Gutzwiller account. About a year’s rent on the
Erlenbach apartment was paid after Laurie’s death, and there were
multiple payments made from the account for Craig and Molly’s
vacations and other personal expenses.
TR V at 23:14-24:25.
While the funds in the Gutzwiller account were initially invested
in income generating assets such as equity funds, in May 2011,
the funds were converted to straight cash assets, making them
easier to withdraw.
TR V at 25:1-26:23. The Gutzwiller account
was closed on February 20, 2013, after issuance of a cashier’s
check in the amount of CHF 548,000, made out to the Winter Group.
On the same date, Rene Kurth, the director of the Winter Group,
endorsed the check over to Craig. TR V at 27:4-23. On July 8, the
funds were received into a new Citizens account titled Craig
Antony Hekking, d/b/a The Winter Group Limited (the “d/b/a Winter
Group Account”). Following the conversion into U.S. currency,
that Citizens account was credited with $563,216 on July 15,
2013. TR V at 28:2-29:6. Of that deposit, $228,000 in funds were
directly transferred into Craig and Molly’s joint Circle Gold
57
Citizens account in twenty-two transactions. TR V at 29:8-30:10.
In addition, $74,593 of the d/b/a Winter Group Account funds were
transferred into the Argentiere Luxury America, LLC account, also
held
jointly
by
Craig
and
Molly.
TR
V
at
31:20-7.
Of
the
remaining funds in the d/b/a Winter Group Account, $167,851 were
spent in debit card transactions, including $35,000 in travel
expenses; $18,000 for clothing; restaurants bills in excess of
$10,000; wine and spirits in excess of $5,000; home improvement
costs in excess of $19,000; membership fees to Carnegie Abbey
Club for $8,000; home goods for $6,000; food bills for $6,000;
entertainment
costs
of
$4,500;
vehicle
expenses
and
gas
for
$5,500; utilities and cable bills for $6,000; and monies to a
gambling casino in excess of $6,000. None of the funds were spent
on private schools for Craig’s children. TR V at 34:5-25; Ex.
170.
Based
on
his
financial
review
and
analysis,
DeCusati
concluded that the Plaintiffs were owed $520,445 from the Winter
Group,
$239,122
from
unknown
sources,
$129,348
spent
from
Laurie’s and Renate’s checking accounts, and $26,350 from a ZKB
account, for a total of $915,268.
TR V at 36:3-38:11. With
respect to the HASPA account, DeCusati explained that, based on
Craig’s own testimony, there were approximately EUR 60,000 on
deposit at Laurie’s death. By the time the Plaintiffs received
58
the funds, the amount had dwindled to only EUR 34,870. TR V at
41:4-42:16.
DeCusati
concluded
that
the
Plaintiffs
sustained
about
$150,000 in damages from the Erlenbach personal property, based
on interviews he conducted with Shaun and Alexandra. TR V at
44:7-25. Shaun, in particular, described the contents of the
apartment to DeCusati; in addition, Shaun provided him with a
$8,000 invoice for cleaning Renate’s furs at the end of the
season, details of Laurie’s coin collection, pictures of watches
identical to those worn by Laurie, and an extensive list of
luggage, shoes, and clothing owned by Laurie or Renate. TR V at
46:4-48:22.
With
respect
to
two
art
prints
of
Paris
street
scenes, DeCusati based his value estimate of $40,000 to $45,000
on pictures of similar art from a website. TR V at 47:25-49:4.
DeCusati’s valuation also included furniture as described to him
by Shaun, and Laurie’s extensive collection of high-priced wines.
TR V at 49:9-52:12-53. Approximate values of Laurie’s Brioni
suits
and
Bruno
Magli
shoes
(on
the
secondary
market)
were
provided to him by Shaun; DeCusati conceded that he did not see
any of this property and, in great part, he relied on Shaun’s
evaluation. TR V at 53:15-54:9.
Similarly, DeCusati relied on detailed descriptions provided
by Shaun and Alexandra for his evaluation of the St. Pierre
59
condominium furnishings and other contents. TR V at 54:17-56:14.
In essence, DeCusati was advised of the items that had been in
the condominium; with respect to some items, he was provided with
specific brand or model information, or with pictures of similar
items from web sites that also provided a monetary value of such
items. TR V at 55:3-61:12. For Laurie’s watches alone, DeCusati
assigned a conservative value of more than $100,000. TR V at
62:23-63:65. As to the cash which both Darren and Shaun had seen
in Laurie’s safe, DeCusati estimated a value of $100,000. TR V at
61:13-62:8. In total, DeCusati assigned a value of $200,000 to
$300,000 to the personal property in the St. Pierre condominium.
TR V at 62:7-11. As DeCusati pointed out, he never saw any
accounting from Craig as to the Estate property. TR V at 62:1216.
DeCusati assessed Renate’s jewelry at $300,000, noting that
he
was
provided
with
documentation
evidencing
a
value
of
$246,000, but that there were a number of pieces for which there
was no backup documentation. TR V at 65:15-66:21. One such item
was
Renate’s
gold
Cartier
watch,
for
which
there
was
no
documentation; however, the precise watch which Renate was said
to have owned was valued in excess of $50,000. TR V at 66:2267:7. DeCusati also saw a picture of Renate wearing the watch.
Transcript 10/14/15 (“TR VI”) at 71:9-15.
60
DeCusati made similar assessments with respect to Renate’s
fur coats, designer bags, designer shoes, and other personal
items, arriving at an estimated value of approximately $250,000.
DeCusati based that evaluation on descriptions of those items by
Shaun and Alexandra, supported by information regarding the make
and model, where applicable. DeCusati then verified the assessed
value by consulting secondary market web sites, acknowledging,
however, that he never saw the items and could not be sure of
their age and condition. TR V at 67:12-68:28, 71:20-73:11.
DeCusati estimated a combined value of $50,000 for Laurie’s
and Renate’s cars in Florida, based on the model, year, and
equipment.
TR
V
at
73:23-75:7.
DeCusati
did
not
include
the
Mercedes which was kept in Switzerland. TR V at 75:9. Based on
Craig’s
own
assessed
deposition
$50,000
Switzerland,
for
noting
testimony
funds
that
in
Craig
and
court
an
had
filings,
Alpine
not
Bank
supplied
DeCusati
account
any
of
in
the
banking information requested by the Plaintiffs. TR V at 75:1076:15.
Based
conducted
on
sworn
interviews
reports
with
accountants,
DeCusati
also
200,000 for
deposits
at
by
private
Laurie’s
assessed
UBP
investigators,
banker,
combined
[Union Bancaire
lawyer,
who
and
balances
of
CHF
Privee]
and
ZKB
[Zürcher Kantonalbank]. TR V at 76:16-77:25. He noted that, with
respect
to
those
accounts,
he
61
also
received
no
backup
information,
although
such
information
had
been
repeatedly
requested by the Plaintiffs. TR V at 77:23-78:8.
DeCusati identified specifically accounted for assets for a
total value of $915,268, and added to that the midpoint of the
value range of assets he had to assess through other means for a
total
value
of
$1,066,603,
for
a
total
economic
loss
of
$1,981,871. TR V at 78:9-22. In addition, DeCusati explained that
he
calculated
a
$1,008,000
“deprived
investment
return”
loss
which the Plaintiffs suffered by not receiving proper and timely
distribution of their inheritance. TR V 78:23-80:22. DeCusati’s
final
damages
category
involved
the
costs
incurred
by
the
Plaintiffs in investigating this matter and in prosecuting this
litigation.
TR
V
at
80:23-81-8.
Inter
alia,
the
Plaintiffs
incurred a total of $983,853 in investigation and legal costs, of
which they had paid $527,374, with $436,479 still outstanding. TR
V at 81-85:23.
On cross examination, DeCusati acknowledged that, on October
1, 2013 and November 7, 2013, Shaun received two loans for $8,000
and $30,000, respectively, from the Citizens account held jointly
by Craig and Molly. TR V at 98:22-100:18. DeCusati confirmed that
a total of $358,684 flowed into Molly and Craig’s accounts from
unidentified sources. TR V at 105:20-107:6. Apart from $8,614 in
condo fees—which were paid out of the two Citizens accounts Craig
62
had
opened
with
the
$125,000
in
receipts
from
the
two
club
memberships— no other funds were used for estate administration
expenses. TR V at 108:1-20.
The Winter Group assets, held in two separate accounts,
contained approximately $1,229,03 at the time of Laurie’s death.
TR V at 110:20-13. To calculate the loss to Shaun’s children,
DeCusati allocated to them 50% of the total funds, and reduced
that amount by $94,070, which had been paid for the education of
Shaun’s children, for a total loss of $520,455. TR V at 111:1-22.
DeCusati’s assumption that half of the educational funds belonged
to Shaun’s children was based on his understanding of the Cego
Foundation
provisions.
TR
V
at
111:23-16.
Based
on
the
information available to DeCusati, he confirmed that only $94,070
were paid from the Gutzwiller account for the benefit of Shaun’s
children and that Shaun advised him that he did not convert the
equities in the Winter Group funds into cash. TR V at 122:12123:25. As previously noted, EU34,870 were paid to the Plaintiffs
from the HASPA account in Hamburg, Germany. TR V at 124:10-15. As
DeCusati confirmed, he did not receive bank statements regarding
that account, but he relied on correspondence related to it. TR V
at 127:12-21.
On cross-examination, DeCusati acknowledged that he is not a
certified gemologist, nor is he certified or accredited in the
63
appraisal of furniture, furs, or real estate. TR V at 131:13-25.
DeCusati confirmed that his assessment of the coin collection,
the expensive wines, and the furnishings and personal items in
the Erlenbach apartment were based on descriptions by Shaun,
which DeCusati then sought to verify by investigating the value
of comparable items. TR V at 138:6-139:3, 143:1-144:22, 148:24151:3. Similarly, DeCusati relied on Alexandra’s description of
Renate’s evening
linens
in
the
gowns,
St.
as
Pierre
well
as
the
condominium.
flatware,
As
china,
DeCusati
and
pointedly
noted, Craig, as the executor of the estate, did not provide any
accounting of the condominium’s contents. TR VI at 3:21-9:3.
DeCusati confirmed that he received descriptions of, inter alia,
expensive
evening
gowns,
a
large
humidor,
three
large
televisions, patio furniture, two firearms, and two signed Miro
lithographs. TR VI at 13:8-16:14. As to the firearms at the St.
Pierre, DeCusati explained that he did not include their value in
estimating
the
minimum
loss
to
the
Plaintiffs,
but
that
he
included them in the range of loss he assessed. TR VI at 16:417:5.
When pressed by Craig on how he could make an accurate value
determination as to the content of the St. Pierre condominium,
DeCusati explained that ordinarily, his primary source would be a
complete accounting by the executor:
64
“So, absent that in this case, I interviewed
individuals
who
would
be
owners
or
potential
beneficiaries. I asked them for details of what
existed. I was provided reasonable detail. They
provided, I believe, some support for that number. And
I used the most conservative amount total in deriving
the range. So I think that’s, in my opinion, the best
evidence I could have in this case.” TR VI at 21:10-18.
Although
DeCusati
conceded
that
he
was
not
provided
sufficient detail to make a determination of precise values, he
used what he had available. TR VI at 22:1-6. For his evaluation
of Laurie’s watches, DeCusati provided a range of values based on
the information provided to him by Shaun and Alexandra as to the
exact make and model. DeCusati verified their value estimates
independently and then used a conservative estimate to arrive at
a range of values. TR VI at 24:5-28:4. As to Renate’s jewelry,
DeCusati noted that the Plaintiffs valued the jewelry at between
$300,000 and $500,000, which included specifically identified and
evaluated pieces from the inventory list provided to DeCusati
and,
at
least
in
part,
items
verified
by
invoices
and/or
insurance appraisals. TR VI at 28:11-29:15. For the evaluation of
other pieces, DeCusati relied on the description and estimates
provided by Shaun and Alexandra, because he had no pictures,
invoices, or other means of independent verification. TR V at
32:1-33:15. Likewise, with respect to the $80,000 assessed for
shoes, DeCusati depended on a description and evaluation provided
by Alexandra. TR VI at 42:11-43:8.
65
DeCusati assessed a value of $50,000 for Renate’s Cadillac
STS, which was about a year old and which, according to Shaun,
cost
about
$85,000
new.
No
value
was
assessed
for
Laurie’s
Mercedes taken by Craig, because its value was unknown (apart
from Craig’s assertion to Darren that he had paid Laurie $35,000
for it). TR VI at 43:25-46:1.
In his assessment of the net loss suffered by the Plaintiffs
(and to assess the legitimate income of the Defendants), DeCusati
excluded the sales proceeds from the two Florida condominiums and
the proceeds from Laurie’s life insurance policy, the latter of
which had yielded $208,000 for each brother. TR VI at 47:1748:24. As Craig took great pains to establish in his crossexamination, DeCusati did not know where the personal items from
Laurie’s and Renate’s estate were at present, nor was he provided
any “documentary evidence such as family photographs, personal
photographs, anything that would validate their existence in the
first place.” TR VI at 51:3-52:8.
F. Craig Hekking
Because he had previously invoked his rights against selfincrimination under the Fifth Amendment, both specifically and
generally, Craig was precluded from answering the majority of
questions he had prepared for himself. TR VII at 19:7-31:11.
Craig testified that, on December 24, 2010, he purchased a one66
carat princess cut diamond ring for Molly and a larger diamond
ring
with
a
three-and-a-half
carat
antique
cut
with
a
halo
setting in white gold. TR VII at 26:1-16. According to Craig, he
gave the larger ring to Molly for Christmas and the smaller one
for her birthday during the family vacation in Vermont. TR VI
26:17-27:2. In support, Craig sought to submit a photograph14 of
the smaller ring which he purportedly took immediately after
purchasing it. TR VII at 29:18-30:8. Upon cross-examination by
Molly, Craig asserted that he had never involved Molly or had her
sign or do anything in regards to his fiduciary responsibilities.
TR VII at 33:15-19. Following this presentation, the Defendants
rested. TR VII at 37:1-12.
IV.
Discussion
A.
Liability
1.
Craig Hekking
For reasons set forth in detail in this Court’s June 11,
2015 Memorandum and Order (Dkt. No. 94), the Court deemed it
appropriate and necessary to impose the most severe of sanctions
and
to
question
reinstate
of
the
liability
default
in
against
Counts
I-VI
Craig.
of
the
Therefore,
the
Complaint
was
14
The photograph was not provided in discovery, despite the
Plaintiffs’ explicit request for all documents concerning the
Defendants’ jewelry. Ex. 24 at 19; TR VII at 33:23-34:24.
Accordingly, the Court denied its submission as a full exhibit.
67
resolved in favor of the Plaintiffs as to Craig. Accordingly,
“‘the factual allegations of the complaint, except those relating
to
the
amount
of
damages,
will
be
taken
as
true.’”
Montblanc-Simplo GmbH v. Colibri Corp., 692 F.Supp.2d 245, 253
(E.D.N.Y.2010)(quoting Geddes v. United Fin. Group, 559 F.2d 557,
560 (9th Cir.1977) (citing Pope v. United States, 323 U.S. 1, 12,
65 S.Ct. 16, 89 L.Ed. 3 (1944)); see also City of New York v.
Mickalis Pawn Shop, LLC, 645 F.3d 114, 128 (2d Cir. 2011)(“The
entry of a default, while establishing liability, ‘is not an
admission of damages.’”•(quoting Finkel v. Romanowicz, 577 F.3d
79, 83 n. 6 (2d Cir.2009)).
In addition, the claims raised by the Plaintiffs against
Craig
were
amply
supported
by
the
testimony
and
evidence
submitted at trial. It is abundantly clear that, from the moment
Craig
took
over
the
positions
of
executor
and
personal
representative entrusted to him by Laurie and Renate, he failed
to inform his brothers about many of the assets he discovered, in
order to keep those assets for himself. Even the division of some
of the assets that were known to Shaun and Darren — like the two
Florida condominiums — was manipulated by Craig. Although the
purchase price was divided in approximately equal shares, Craig
withheld any proceeds he obtained from settling the lawsuit on
behalf of the Estate. Craig’s representation that all contents
68
and furnishings were included in the St. Pierre sale was belied
by the evidence. Instead, it was revealed that Craig, with the
assistance of Molly, packed up the valuable contents of the St.
Pierre condominium and had them shipped to his Newport residence.
Other assets simply disappeared without a trace, such as Renate’s
considerable jewelry collection, Laurie’s coin collection, two
luxury cars — as Molly candidly admitted, Craig took Laurie’s
Mercedes from Florida —
and a large collection of high-priced
wines. The evidence also established that Craig and Molly packed
up the contents of the Erlenbach apartment and that a shipment to
the United States was arranged.15 The whereabouts
fate of the contents shipped
and eventual
from Switzerland to the United
states are unknown and unaccounted for. As described in some
detail
by
both
Shaun
and
Darren,
Laurie’s
personal
effects
included a number of valuable watches, as well as an extensive
coin collection, none of which have been accounted for by Craig.
As noted by Darren, he observed Craig wearing one of Laurie’s
watches on at least one occasion.
In
addition
to
cashing
the
settlement
check
from
the
15
It is noted that Craig and Molly do not dispute that such a
shipment occurred, they merely maintain in their joint pretrial
memorandum that the shipping costs were only $6,000, not $16,000.
However, the 01/01/09 - 12/31/13 Gutzwiller account statement for
the
Winter
Group
reflects
a
payment
of
$5,599
for
packaging/moving/shipping efforts, Ex. 150 at 0005, and $10,527 for
the transfer from Zurich to the United States, Ex. 150 at 0008.
69
litigation Craig brought on behalf of the Estate, Craig kept the
proceeds from both country club membership redemptions, without
ever advising his brothers of any of these funds. As documented
by the statements of Craig and Molly’s joint Huntingon account
and the two Citizens accounts Craig opened in the name of the
Estate, with the exception of $8,614 in condominium fees, none of
those funds were used for estate administration. Instead, the
funds were used entirely for Craig and Molly’s personal benefit.
Notwithstanding Molly’s steadfast denial at trial that she
ever wore Renate’s engagement ring and gold Cartier watch, the
testimony by Alexandra, Darren, and Shaun indicates otherwise.
All three observed Molly wearing those items on two separate
occasions and one or more of them confronted Craig directly, in
Molly’s presence, about her wearing Renate’s jewelry. The value
of
at
least
some
of
Renate’s
jewelry
is
well-documented
by
invoices, certificates of authenticity, and insurance appraisals.
As Alexandra and Shaun described in some detail, Craig had taken
on the task of selling the larger pieces, provided the two larger
rings to them for assessment, and then promptly recovered both
rings under the guise of being able to yield a better result. The
whereabouts of those rings, with a total worth between $175,000
and $225,000, is also unknown.
As to the Winter Group funds, intended for the education of
70
Laurie’s grandchildren, it was clearly established that, with the
exception of a limited amount paid for the education of Shaun’s
sons, those funds were completely withdrawn by Craig and spent by
Craig
and
Molly
for
their
own
purposes.
At
first,
with
the
exception of making some initial payments for the education of
Shaun’s
sons,
the
$1,147,174
Winter
Group
assets
in
the
Gutzwiller account were used to fund Craig and Molly’s lavish
vacations;
to
continue
rental
payments
on
the
Erlenbach
apartment, which they visited repeatedly; to make several large
cash
withdrawals
amounting
to
$222,577;
and
to
deplete
the
account completely by making a final CHF 548,396 withdrawal.
Prior to
making
the
cash
withdrawals,
Craig
had
arranged
to
convert the income producing equity index fund in the Winter
Group
fund
into
straight
cash
assets,
thus
facilitating
the
process of depleting the funds. In addition, the Winter Group had
$81,857 in a VP Bank account, the existence of which Craig kept
hidden from his brothers. Those funds were depleted as well.
In sum, Craig deliberately, and with much cunning, violated
the trust of all three generations of his family: (1) that of his
hardworking father, who had built up considerable wealth over
many years, and of his stepmother who had generously provided for
her
husband’s
children
and
grandchildren;
(2)
that
of
his
brothers, who believed that Craig would fairly and equitably deal
71
with the considerable assets left to all three of them; and (3)
most incredibly, that of the six minor children, including his
own four, who stood to have their education secured by a wellfunded trust of more than $1.2 million.
Throughout
this
process,
Craig
obfuscated
the
facts,
presented his brothers with lies and excuses, and kept delaying
the inevitable discovery of his misconduct. Even after Shaun and
Darren began
to
discover
the
extent
of
Craig’s
betrayal
and
brought suit against him and Molly in this Court, Craig continued
his strategy of hiding his misdeeds and delaying the course of
justice, all the while he and Molly continued to deplete the
remaining assets of the Estate.
Craig’s
liability
in
this
matter,
although
legally
established by the default reinstated against him, was factually
supported and defined by the incontrovertible evidence against
him.
The
Court
found
the
testimony
of
Shaun,
Darren,
and
Alexandra credible in its consistency and detail. Craig’s crossexamination, which frequently appeared to be designed solely to
antagonize the Plaintiffs and to play his brothers against one
another, only served to establish how thoroughly he had attempted
to hide the truth from his brothers and how extensive his fraud
and conversion had been.
72
2.
Molly Hekking
a. The Allegations
The Plaintiffs have asserted claims of Conversion (Count V),
Civil
Theft
against
(Count
Molly.
VI)
and
Specifically,
Aiding
the
and
Abetting
Complaint
(Count
asserts
VII)
that
the
Plaintiffs were the beneficial owners of the property contained
in
Laurie’s
and
Renate’s
estates
and
it
alleges
that
Molly
knowingly and deliberately converted those assets, obtained them
for her personal use, and deprived the Plaintiffs accordingly.
Regarding the claim of aiding and abetting, the Plaintiffs assert
that Molly knew of Craig’s fraudulent conduct, his breach of
fiduciary duty, and the concealment of estate assets, and that
she knowingly and deliberately aided and abetted Craig in his
conduct.
In order to prove an action for conversion, the Plaintiffs
must show that they were “in possession of the personalty, or
entitled
to
possession
of
the
personalty,
at
the
time
of
conversion.” Narragansett Elec. Co. v. Carbone, 898 A.2d 87, 97
(R.I.2006)(emphasis added) (citing Montecalvo v. Mandarelli, 682
A.2d 918, 928 (R.I.1996)). The essence of conversion is “the
defendant's taking the plaintiff's personalty without consent and
exercising dominion over it inconsistent with the plaintiff's
right to possession.” Fuscellaro v. Industrial National Corp.,
73
117 R.I. 558, 560, 368 A.2d 1227, 1230 (1977). Conversion “may be
consummated without any intent to keep and without any wrongful
taking,
where
the
initial
possession
by
the
converter
was
entirely lawful.” Morrisette v. United States, 342 U.S. 246, 272,
72 S.Ct. 240, 96 L.Ed.288 (1952)(noting that “[p]robably, every
stealing
is
conversion,
but
certainly
not
every
knowing
conversion is a stealing”).
As to aiding and abetting, the Plaintiffs must show that
“the alleged aider and abettor share[d] in the criminal intent of
the principal, and second, that there exist[ed] a community of
unlawful
purpose.”
Curtin
v.
Lataille,
527
A.2d
1130,
1132
(citing
State v. Gazerro, 420 A.2d 816, 828 (R.I. 1980) and
noting that applying Rhode Island’s criminal test of aiding and
abetting to a civil action is consistent with the test set forth
in
4
Restatement
(Second)
Torts
§
876(b)(1979)).
Although
“[p]resence at the scene alone will not support a conviction for
aiding and abetting...it is a factor that must be considered in
the determination of guilt.” Curtin v. Lataille, 527 A.2d at
1132.
Other
factors
include
the
association
or
relationship
between the principal and the alleged aider and abettor and the
knowledge that an unlawful act was to be committed. Id.
Because this is a civil case, the Plaintiffs bear the burden
to prove their allegations by a preponderance of the evidence,
74
i.e., they must convince the Court that the facts they have
asserted are “more probably true than false.” Narragansett Elec.
Co. v. Carbone, 898 A.2d at 99-100.
b. Molly’s Version
As
Judge’s
noted,
this
Court
recommendation
not
previously
to
accepted
reinstate
the
the
Magistrate
default
against
Molly. The Court has now had the opportunity to listen to Molly’s
testimony at trial and to consider her statements in light of the
uncontroverted documentary evidence submitted by the Plaintiffs
and against the testimony of Shaun, Darren, and Alexandra.
Given what the Court has learned about the background and
lifestyle of Laurie and Renate, as well as that of Craig and
Molly,
very
little
of
Molly’s
testimony
rang
true.
It
is
undisputed that Laurie and Renate had considerable assets and
that
they
enjoyed
displaying
their
wealth
and
exhibiting
a
certain lifestyle. Inter alia, they owned two (apparently debtfree) condominiums in Naples, Florida, with a total value of $1.6
million; they lived in a $78,349 per year rent lakeside apartment
in Switzerland, where they kept one of their three luxury cars.
They belonged to two exclusive country clubs in Florida; they
also loved to entertain in their lavishly appointed condominium.
Renate owned valuable jewelry for a documented value of at least
$264,100; even her “costume jewelry” yielded as much as $17,000
75
or $18,000 on the secondary market. Laurie had a corresponding
collection of luxury watches, and he collected valuable coins as
well
as
high-priced
wines.
In
addition
to
enjoying
their
property, they also provided for Laurie’s sons and grandchildren.
Laurie
maintained
established
a
a
$600,000
million-dollar
life
trust
insurance
for
the
policy
education
and
he
of
his
grandchildren.
Even
generous.
in
life,
Shaun
the
elder
acknowledged
Hekkings
that
Laurie
appear
to
gave
him
have
money
been
for
tuition payments; Renate took Alexandra shopping and doted on the
grandchildren; and even Molly recounted that Laurie had given her
money for her older daughter. In sum, the value of Laurie’s and
Renate’s condominiums, Renate’s jewelry, their club memberships,
cars,
and
their
generally
luxurious
lifestyle
was
well
established by the evidence and confirmed by the detailed and
consistent testimony provided by Shaun, Darren, and Alexandra.
In
stark
contrast
thereto,
Molly’s
descriptions
of
the
furnishings and personal belongings of the elder Hekkings were
entirely dismissive and, at times, outright contemptuous. During
her testimony, Molly paid close attention to the questions posed
to her and she was able to answer certain questions with precise
detail. Although she maintained that she was entirely ignorant of
her family’s finances, she was clearly knowledgeable when it
76
suited her. In sum, she was not the naive ingenue she has sought
to portray throughout this litigation. At times carefully evasive
and overly literal, Molly kept repeating that she simply did not
see
anything
she
considered
“nice”
in
either
of
the
two
residences where she spent days helping Craig to pack up.
Inter alia, Molly would have this Court believe that Renate,
a woman with jewelry valued in excess of $250,000, a luxury car,
and
two
country
club
memberships,
who
lived
in
high-priced
residences, traveled extensively, and stayed in Manhattan luxury
hotels, would only have old shoes and some unremarkable golfing
outfits. Molly claimed that Renate’s clothing was put in large
garbage bags and donated. TR VI at 99:12-16. As to Renate’s furs,
bags, shoes, and gowns, Molly declared she did not recall any
designers and that, in general, she didn’t see anything nice or
anything
she
liked.
Notwithstanding
that
declaration,
she
admitted that she did take three small Louis Vuitton bags to give
to her girls.
Molly also acknowledged that she made numerous trips to
Switzerland and Florida to help Craig pack up Laurie and Renate’s
belongings and personal property, although she did not recall
seeing anything of value. This testimony is incredible as well,
given the undisputable evidence that items were shipped back from
Switzerland to the United States at a cost of $16,000, and that a
77
large
load
condominium
of
furnishings
and,
after
was
months
removed
of
from
temporary
the
St.
storage
Pierre
incurring
significant fees, delivered to Molly and Craig’s home address for
another $6,447 in total moving expenses. Ex. 26. Although Molly
admitted that she was present when the movers came to the St.
Pierre condominium, she maintains that she did not know items
were moved to her house, a claim which is entirely implausible.
Molly
acknowledged
at
her
deposition
that
the
Naples
condominium held Eames chairs; however, at trial, she claimed not
to know what they were. After previously acknowledging that there
was at least one Miro at the St. Pierre condominium, at trial she
described it as “looked like a kid was swiping...it wasn’t a
scene, if that’s what you’re asking.” TR VI at 97:1-7. She also
suggested, for the first time, that one of the Louis Vuitton bags
was a fake.
Molly’s insistence that she was completely in the dark about
her family’s personal finances and the source of the considerable
funds suddenly appearing in several of her joint accounts after
Laurie’s death is unconvincing as well. By her own account, Molly
graduated from college; prior to meeting Craig, she obtained a
real estate license, started and ran two separate businesses;
later,
she
started
and
ran
a
children’s
clothing
business
together with Craig; and, finally, she became a participant in
78
the “Argentiere Luxury” venture.
Prior to her marriage to Craig, Molly purchased a 4,500
square foot house in Newport; later, that house became the family
residence with Molly as the sole title and mortgage holder. In
connection with her home, Molly sought repeatedly to reconfigure
her mortgage payment, ostensibly based on financial hardship;
although, at that time, Craig had already quit his job and they
were living on funds received as part of Craig’s inheritance (and
well beyond).
Although
Molly
suggested
that
this was
only a
temporary and long-planned modification, her signed application
shows otherwise and is also inconsistent with Molly’s statements
that she felt financially comfortable during that same time span.
Molly
account
and
spent
the
freely
from
Huntington
the
account
joint
Citizen
($64,000
in
Circle
six
Gold
months),
contending that she was unaware of the sources that kept funding
her considerable expenditures. She also wrote a check from the
Argentiere
Luxury
account
for
personal
expenses,
which
she
understood to be a business account. Ex. 115 at 478. Molly’s
insistence that she never asked Craig about the size of his
inheritance and that she never questioned how they could afford
paying the considerable mortgage on their home, flying business
class to France, making extensive home renovations, buying a
$56,000 Landrover, and joining an exclusive country club, while
79
both
of
them
had
been
unemployed
for
years,
is
simply
not
credible. It is telling that in August 2013, at the same time
Molly was seeking a need-based home loan modification, she also
sought to join the Carnegie Abbey country club. Just in time to
make the required $11,356 payment to her mortgage lender and the
$6,475 membership payment to the country club, $50,000 in Winter
Group funds were transferred to the joint Circle Gold account,
which would have had insufficient funds otherwise. It defies
belief that the sudden infusion of cash should have been entirely
fortuitous and that Molly would have made such payments without
first ascertaining that the requisite funds were available.
c. Plaintiffs’ Entitlement to the Estate
It is undisputed that Shaun and Darren were each entitled to
a one third share of Laurie’s estate and, as this Court has
concluded,
see
infra,
that each
of
Shaun’s
two
children
was
entitled to one sixth of the educational fund. As the evidence
demonstrated,
apart
from
the
life
insurance
benefits,
the
proceeds from the two condominiums, and a half share of the HASPA
account,
Darren received no further portion of the inheritance;
Shaun also received half of CHF 70,000 he and Craig found in the
Erlenbach apartment, half the sales proceeds of Renate’s costume
jewelry,
and
a
one
third
share
of
the
Mercedes
sold
in
Switzerland. Shaun’s sons received $94,070 from the educational
80
fund which, at Laurie’s death, had a balance of $1,229,031. All
other
cash,
proceeds
furnishings,
from
litigation
cars,
on
jewelry,
behalf
of
personal
Laurie’s
effects,
estate,
and
payments for the club membership redemption have disappeared and
are, for the most part, unaccounted for.
d. Molly’s Role in the Conversion
Based
on
the
testimony
and
evidence
in
this
case,
the
Plaintiffs have offered ample evidence to establish that Molly
was often present when Craig appropriated items that rightfully
belonged to the Estate. On at least two occasions, Molly herself
was in possession of Renate’s engagement ring and gold Cartier
watch. On both occasions, Molly was also present when Craig was
confronted about this fact by his brothers and when he assured
them that he was making efforts to sell the valuables. In other
words, Molly was clearly made aware that Craig was not entitled
to keep these items or to dispose of them for his sole benefit.
Molly
also
knew
about
the
Winter
Group
in
Switzerland
and,
although she insisted that she never reviewed the statements from
the Citizens
account
into
which
those
funds
had
flowed,
she
conceded that she had been present on many occasions when Craig
had purchased “nice things” for her with funds from that account.
TR VII at 7:17-8:18.
Molly’s denial that Alexandra made urgent appeals to her
81
regarding tuition payments for her younger son is not believable.
Molly herself admitted that Alexandra repeatedly called her to
ask for a return call from Craig and that Molly promised to do
so. According to Molly,
“she called after that with like a 911. I
something was wrong with the kids. She did it
time, and then I stopped speaking with her
getting 911 calls and people having children
not something that’s cool.” TR III at 75:18-24.
thought
another
because
is just
Upon the Court’s inquiry about the “911,” Molly explained
that it was “[l]ike a 911 text, like emergency.” TR III at 75:2576:1.
In
other
words,
Molly
was
well
aware
of
the
urgency
Alexandra was trying to convey to her, despite claiming complete
ignorance on the matter. As Alexandra — whose testimony the Court
found straightforward, consistent, and helpful in its descriptive
details — recounted, Molly assured her that Garreau would take
care of the tuition payments and noted that her own daughters’
private school tuition was taken care of.
Alexandra also confirmed that both Craig and Molly were
confronted at two family gatherings about Molly’s wearing of
Renate’s engagement ring and Cartier watch and that both of them
replied that it was a special occasion and that a buyer had not
been
found
just
yet.
Finally,
Alexandra
related
that
Molly
volunteered information about her frequent trips to Europe and
that, when asked by Alexandra how they could afford that, Molly
82
advised her that the new jewelry business was doing so well, so
busy, that they had to hire a sitter. As Molly herself admitted,
however, the jewelry business never resulted in any earnings at
all.
In sum, Molly’s testimony, which was entirely self-serving
and implausible, contradicted not only the testimony of Shaun,
Darren, and Alexandra, it also conflicted with the unrefuted
facts and, at times, with Molly’s own prior statements. Given the
undisputable evidence in this case, as supported with testimony
by the other witnesses, the Court is of the opinion that the
Plaintiffs
have
furnished
sufficient
proof
to
support
their
claims of civil theft and conversion, as well as that of aiding
and
abetting.
property
that
Molly
should
knew
that
have
been
Craig
was
withholding
rightfully
shared
estate
with
his
brothers and she knowingly and deliberately assisted him in doing
so
and
in
delaying
the
discovery
of
the
extent
of
that
resulting
from
conversion.
B.
Damages
Ascertaining
the
extent
of
the
damages
Craig’s raiding of the Estate with which he was entrusted by
Laurie and Renate is fraught with some difficulty because not
only were the assets wrongfully taken by the Defendants, they
were then transferred, disposed of, or depleted. For the most
83
part, there appears to have been no organized record keeping by
Craig;
nothing
useful
was
provided
by
the
Defendants
in
discovery; and the Plaintiffs had to obtain any available records
from third parties. Craig, as the person with access to all
records and accounts and any effects left by Laurie and Renate,
was in the perfect position to control all the assets and then
cover up his tracks. Even after litigation against him and Molly
had commenced, Craig managed to delay the process by refusing to
provide
documentation
in
discovery,
all
while
continuing
to
deplete the family inheritance. The Plaintiffs, at great expense,
managed to launch an investigation both in Europe and stateside
and to obtain considerable, if incomplete, information from third
parties.
Nevertheless,
it
is
likely
that
the
value
and
whereabouts of some of the assets will remain unknown.
Given
that
this
is
a
civil
proceeding,
the
Court
is
permitted to draw a negative inference from Craig’s invocation of
his Fifth Amendment right. Baxter v. Palmigiano, 425 U.S. 308,
318, 96 S.Ct. 1551, 47 L.Ed.2d 810 (1976); In re Carp, 340 F.3d
15, 23 (1st Cir. 2003)(“[I]n a civil proceeding, the drawing of a
negative inference is a permissible, but not an ineluctable,
concomitant
of
a
party's
invocation
of
the
Fifth
Amendment.”)(citing Mulero-Rodriguez v. Ponte, Inc., 98 F.3d 670,
678 (1st Cir.1996)).
Although
this
84
is
generally
a
matter
of
discretion by the trial court, see In re Carp, 340 F.3d at 23-24,
the First Circuit has instructed that the trial court should
“strive
to
accommodate
a
party's
Fifth
Amendment
interests,”
while at the same time, ensure that “the opposing party is not
unduly disadvantaged.” Serafino v. Hasbro, Inc., 82 F.3d 515, 518
(1st
Cir.1996).
balancing
test
In
to
other
ensure
words,
that
the
the
Court
Fifth
must
Amendment
conduct
right
a
is
safeguarded, while preventing an undue disadvantage against the
opposing party. Serafino v. Hasbro, Inc., 82 F.3d at 518 (noting
that “in the civil context, [where] the parties are on a somewhat
equal footing, one party's assertion of his constitutional right
should
not
obliterate
another
party's
right
to
a
fair
proceeding.”).
In this case, where it has not only been established that
Craig, with the assistance of Molly, diverted a large portion of
his father’s and stepmother’s Estate for his and Molly’s benefit,
but also that he actively engaged in structuring the depletion of
accounts and hiding documentation and records that would have
disclosed the extent of his misappropriation, the Court is of the
opinion that it is necessary and appropriate to draw a negative
inference
against Craig
on
the
basis
of
his
Fifth
Amendment
invocation. Without Craig’s cooperation, the Plaintiffs were at a
serious disadvantage, and they had to incur significant expense,
85
to retrieve at least some of the information to which Craig had
unfettered access and which he determinedly refused to divulge.
To
be
sure,
the
Plaintiffs’
expert
was
placed
at
a
considerable disadvantage in this case, as he was attempting to
determine the value of an estate where the individual responsible
for
providing
accurate
records
had
removed
most
of
the
considerable holdings for himself while, at the same time, doing
his utmost to hide the assets’ whereabouts. Craig’s depletion of
Laurie’s
and
Renate’s
estate
has
been
established
by
the
reinstatement of the default against him, as well as by the
evidence presented by the Plaintiffs. Nevertheless, the Court
must base its determination of damages incurred by the Plaintiffs
on the evidence they were able to obtain, to the extent that such
evidence
provided
Plaintiffs’
asserted
claims.
by
the
sufficient
For
some
Plaintiffs,
and
of
the
reliable
the
proof
proof
categories
of
the
for
of
the
damages
existence
and
depletion of various assets was contained in financial records
and other documentation. Other categories, however, although the
Plaintiffs may well be right in suspecting that Craig and/or
Molly
obtained
brothers,
could
assets
only
that
be
rightfully
inferred
by
belonged
pointing
to
all
out
three
certain
financial discrepancies that could not be readily explained. To
strike a balance that does not result in an outright injustice to
86
either of the parties, the Court has limited its determination of
the Plaintiffs’ damages to those categories that were clearly
supported by the testimony and evidence offered at trial.
1. The Winter Group
The Court notes that, at the April 30, 2015 hearing on
Craig’s
and
Molly’s
indispensable
plaintiffs
that—should
motions
parties
against
any
of
to
(i.e.,
their
the
dismiss
include
parents),
Winter
Group
for
their
the
failure
own
be
join
children
Plaintiffs
funds
to
as
conceded
recovered—they
should be distributed to all six children on an equal basis.
Although the Plaintiffs maintain in their post-trial memorandum
that the Cego Foundation by-laws “are clear that the distribution
of the Cego Foundation’s education funds were to be apportioned
50% - 50% between the children of Craig and Shaun,” Def.’s Mem.
(Dkt. No. 163), a thorough review of that document does not
support their contention.16 The document, as a whole, clearly
indicates that the fund was established for the training and
education of the “Nachkommen” [descendants], further defined as
the children of Craig and Shaun, the “Nachfahren” [successors].
Notwithstanding
the
translator’s
subsequent
use
of
the
term
16
The Plaintiffs assert in their post-trial memorandum that “the
original document [was] translated into English without objection.”
However, the Defendants have always strenuously objected to the
suggested 50/50 allocation; moreover, the Plaintiffs did waive
their own interpretation in open Court. Ex. 78, 79.
87
“successors,” the terms in the original document provide that it
is the “Nachkommen” [descendants, or children] who are to be
treated equally, not Craig and Shaun. In other words, all six
children, for whose sole benefit the fund was established, were
to receive equal shares of the Cego Foundation funds.
To
be
clear,
limiting
the
Plaintiffs’
damages
from
the
depletion of the million-dollar-plus Winter Group assets to one
third does
not
indicate
that
Craig
was
entitled
to
withdraw
and/or spend two thirds of that fund for any purpose other than
paying
for
the
education
of
his
children.
Rather,
the
sole
intended beneficiaries of that fund were Craig’s four and Shaun’s
two children, for whom the considerable fund would have secured
an
education.
entitled
to
In
other
words,
one
sixth
of
the
each
of
fund
Craig’s
children
established
by
is
their
grandfather, minus any tuition or other educational expenses that
were spent from that fund on the respective child.
At the time of Laurie’s death, the combined Winter Group
funds, on deposit in two separate accounts at the Gutzwiller Bank
and the VP Bank, amounted to $1,229,031. As explained above,
Shaun’s children were entitled to one third of this amount, or
$409,677. Shaun received $94,070 from those funds, after which
his sons would have been due another $315,607. However, as was
established by the evidence, the entire remainder of the Winter
88
Group
funds,
grandchildren,
earmarked
was
spent
for
or
the
education
withdrawn
by
of
Craig
the
for
six
his
and
Molly’s personal benefit and enjoyment.
The Plaintiffs suggest that, in addition to the actual loss
of those educational funds, they have also suffered an economic
loss of any gains, had the funds remained invested. While that
may well be true, it does not appear to take into consideration
that, at least in Shaun’s case, he needed to withdraw large sums
of the fund on an annual basis to pay for the tuition of both of
his sons. At more than $50,000 annual tuition for Shaun and
Alexandra’s younger son, the Plaintiffs’ share of the Winter
Group funds would have been exhausted in about five years,17
rendering
a
long-term
economic
loss
analysis
more
than
speculative. Undoubtedly, the more egregious injury inflicted on
the Plaintiffs is the potential loss of a much needed educational
opportunity for the younger son, of which Craig, the child’s
godfather, was well aware. Because the exact losses incurred
through
the
misappropriation
of
the
Winter
Group
cannot
be
determined with greater accuracy, the Court finds that Shaun, on
behalf of his two minor children, is entitled to $315,607.
17
It is noted that this calculation does not take into account
the exact distribution of the funds to Shaun’s children who,
according to the terms of the Cego Foundation, were to be treated
equally.
89
2.
Club Membership Redemption
Craig redeemed the two Florida country club memberships for
a total of $125,065. He used the funds to open two separate bank
accounts, which he subsequently depleted and closed. Of those
funds, $8,614 were spent on condominium fees. Accordingly, the
Court finds that both Shaun and Darren are each owed $38,817
(($125,065 - $8,614) ÷ 3).
3.
On
Condominium Litigation
behalf
of
Laurie’s
estate,
Craig
brought
a
case
in
connection with the sale of the St. Pierre condominium. Following
a
settlement,
$62,500
was
paid
to
Craig
and
Molly’s
joint
account. The Court finds that Shaun and Darren are each owed
$20,833 ($62,500 ÷ 3).18
4.
Renate’s Jewelry
The documented value of Renate’s fine jewelry, as supported
by invoices, insurance assessments, and other appraisals, totaled
$246,100. In addition, Renate owned a number of other valuable
pieces, including the gold Cartier watch, which are listed on the
inventory sheet found at the St. Pierre condominium, but for
18
The Court notes that Craig asked for, and received from Shaun,
$7,000 for related legal fees. As Craig never submitted any
accounting for fees related to that litigation or, in fact, for any
legitimate costs he may have incurred in attempting to administer
the estate, the Court will not make a separate determination
regarding that transaction.
90
which no further documentation was available. Based on detailed
descriptions provided by the Plaintiffs, which he then sought to
verify, DeCusati estimated the total value of Renate’s jewelry
collection at $300,000. Given the high value of the pieces for
which a value could be established with some certainty, the Court
considers that to be a reasonable estimate. As DeCusati pointed
out in his testimony, he was at a considerable disadvantage to
provide an assessment for items that were known to exist but had
been
deliberately
might
have
removed,
established
along
their
with
precise
any
documentation
value.
Craig
had
that
every
opportunity to provide an accurate accounting of the property
that belonged to the Estate. Accordingly, the Court finds that
Darren is owed $106,000 and Shaun is owed $97,000 (having already
received a half share of the $18,000 from the sale of Renate’s
“costume jewelry”).
5.
Contents of the St. Pierre Condominium
The Court finds that Craig’s representation that the St.
Pierre Condominium was sold with all its contents is completely
untruthful. Instead, the evidence showed that, after Craig and
Molly packed up the contents and removed or disposed of any
personal items as they saw fit, a large amount of furnishings was
moved to a storage facility, from which a considerable list of
items was eventually shipped to Craig and Molly’s residence in
91
Newport. As documented in the various invoices by the William C.
Huff moving company, it took five men nine hours to pack, prep,
inventory and load the contents of the St. Pierre condominium,
and
it
took
“Warehouse
them
six
Valuation”
hours
shows
to
that
unload
Craig
it.
Ex.
acquired
26-0014.
$50,000
The
in
insurance coverage for the stored furnishings. Ex. 26-0015, 0018.
The storage of the items required four separate vaults. Ex. 260016. The relocating of most of the furnishings to Craig and
Molly’s
Newport
residence,
specified
on
a
two-page
inventory
list, Ex. 26-0021-0022,19 required two men to load, drive, and
deliver, resulting in moving expenses of $2,000. Ex. 26-00190020. As noted, supra, Craig confirmed with his signature that he
had received the shipment at his home address and that the items
included, inter alia, two plasma and two small televisions, two
leather chairs with ottomans, six other chairs, numerous tables,
patio furniture, and a large number of boxes.
Because none of these items are accounted for and a precise
19
Subsequent account records from William C. Huff reveal that
some items were apparently left in storage, for which Craig simply
discontinued to pay the monthly storage fee. Ex. 26-31. Eventually,
after some resistance, Craig allowed access to Shaun and Darren,
who, after payment of the late fees, discovered that nothing of
value had been left at the unit.
92
assessment was made impossible by Craig’s obstructive actions,20
DeCusati, assisted by the descriptions provided to him by Shaun
and Alexandra, and supported by his research into the value of
comparable items, assessed the St. Pierre condominium contents at
$200,000-$300,000. A baseline valuation was set by Craig himself,
who obtained insurance for $50,000. Given the description of some
of the items, and considering the value assessed on some of the
items as well as the value of the condominium itself, the Court
finds that the contents are reasonably evaluated at $200,000.
Accordingly, Darren and Shaun are both awarded $66,666 each.
Regarding the contents of the larger safe in the St. Pierre
condominium, both Shaun and Darren described in some detail that,
in addition to a handgun, Laurie kept several bundles of cash,
each bound with a $10,000 wrapper. Both agreed that Laurie liked
to impress others with his belongings and that such a showing
would be in character. Although Craig acknowledged to Shaun (and
Darren
was
told
by
Laurie)
that
Craig
had
been
given
the
combination to the safe, he purportedly was unable to open it
during a visit he and Shaun paid to the St. Pierre in July 2010.
20
Molly’s carefully worded response that none of the St. Pierre
condominium contents were inside her 4,500 square foot house (which
also includes a barn that she never enters) sheds no light on their
actual whereabouts. However, her contention that she was unaware
that a truckload of furniture was delivered to the residence where
she lived can only be described as a deliberate falsehood.
93
As is apparent from Shaun’s testimony, he left Craig alone during
those attempts, on which occasion Shaun discovered a green folder
with an inventory of Renate’s jewelry. After an unsuccessful
search for a locksmith who would open the safe on a Sunday, Craig
offered to stay and “get it taken care of.” TR I at 57:16-23. On
the following day, Craig advised Shaun that he had obtained the
services of a locksmith early that morning, and that the safe had
been completely empty. TR I at 57:24-58:8.
Here, there is the consistent and detailed testimony of
Darren
and
Shaun
regarding
the
bundles
of
cash
in
the
safe
against Craig’s statement to Shaun that the safe was empty. When
viewed against the assertion that Craig, who had been given all
authority and detailed information by Laurie to access the entire
Estate, including the combination to the safe, could now (while
Shaun was in another room) not open the safe, and in absence of
any
evidence
to
support
Craig’s
story
(e.g.
a
bill
for
the
locksmith, or a statement by the same), Craig’s version can only
be
considered
another
falsehood.
Moreover,
it
has
been
established that Laurie kept as much as CHF 70,000 (at the time,
approximately $62,000) in cash in an unsecured envelope at the
Erlenbach apartment, lending more credence to the observation
that Laurie kept at least an equivalent cash reserve at his
Florida residence.
Accordingly, the Court finds that it is more
94
likely than not that the safe in Florida contained $62,000 in
cash. Together, each of the brothers was entitled to a $41,333
share of the combined cash reserves. As Craig and Shaun already
divided
the
Erlenbach
$41,333
($124,000
÷
cash
3),
between
whereas
them,
Shaun
Darren
is
is
awarded
awarded
$10,333
($41,333-$31,000).
6. The Vehicles
It
is
undisputed
that
Laurie
owned
a
Mercedes
in
Switzerland. According to Shaun, he received $10,000 as his onethird share of that car. Because Darren did not receive his
portion related to the car, he is awarded $10,000. As to the
Mercedes Laurie owned in Florida, it is undisputed that Craig
took the car and that it has been at his residence ever since.
When questioned about the car by Darren, Craig explained that he
had bought the car from Laurie for $35,000 prior to Laurie’s
death. As late as 2013, Craig was still driving the Mercedes with
Florida “LH” vanity plates and there has been no evidence of a
sale from Laurie to Craig. Taken the purported sales price stated
by Craig himself as a reasonable value assessment, and in the
absence of any support of Craig’s representation that he paid for
the
car,
Darren
Renate’s then
remains
and
one
unaccounted
Shaun
year
for
old
and
are
each
Cadillac
which,
95
awarded
STS
$11,666.
luxury
according
to
As
sedan,
Shaun,
to
which
cost
$85,000 when new, the Court finds that DeCusati’s appraisal of
$50,000
is
a
reasonable
estimate
of
its
value
in
2010.
Accordingly, Darren and Shaun are awarded $16,666 each for that
car as well.
7.
Renate’s Personal Effects
Based on the detailed descriptions by Alexandra and Shaun,
DeCusati assessed the value of Renate’s furs, designer bags,
shoes, gowns, and other clothing at $250,000. Given that there is
no information available regarding the age or condition of those
items, it is extremely difficult to assess the value of Renate’s
possessions with some degree of accuracy. To be sure, this is
entirely due to the thoroughness of Craig and Molly, who removed
those effects without a trace and without any accounting as to
what
happened
to
them.
As
Renate’s
jewelry
collection
was
assessed by this Court at $300,000, it would not be unreasonable
to conclude that her entire wardrobe, shoes, bags, and luggage
included,
was
worth
the
$250,000
value
assigned
to
it
by
DeCusati. Accordingly, the Court finds that those items were
worth $250,000 and that Darren and Shaun are awarded $83,333
each. To the extent this results in an overvaluation, Craig had
ample opportunity and, in fact, a fiduciary duty, to account for
the actual value of those items. However, it is likely that a
more conservative estimate would result in an injustice to the
96
Plaintiffs, who were entirely deprived of the opportunity to
learn of the true extent of their inheritance.
8.
Laurie’s Watch Collection
Both Darren and Shaun described several of Laurie’s watches,
including a Hamilton of lesser value, a Patek Philip, a Rolex
Oyster, a stainless steel Rolex Daytona, and solid gold Rolex
Daytona. As to the last, Laurie gifted it to Shaun for his sons
during a hospital visit. As to the stainless steel Rolex Daytona,
Darren noted that Craig was wearing it as he dropped by Darren’s
residence in Laurie’s Mercedes. DeCusati estimated the value of
the watches, which also disappeared and for which no accounting
was ever provided, at $100,000. The Court accepts DeCusati’s
opinion. Accordingly, Darren and Shaun are awarded $33,333 each.
9.
Contents of the Erlenbach Apartment
As the evidence established, Craig and Molly packed up the
contents of the Erlenbach apartment over several visits. Those
contents were then shipped to the United States around October
2011 at a cost of $16,000; their whereabouts are unknown and
unaccounted for. DeCusati estimated the value of the Erlenbach
contents
at
$150,000;
this
estimate
included
Laurie’s
coin
collection, which Darren and Shaun described as being held in
seven or eight folders, and which Craig agreed to ship back to
the United States, as well as the large collection of valuable
97
wines. Of all the various categories of Laurie’s and Renate’s
belongings, this is one of the more difficult ones to assess. The
Erlenbach apartment, although smaller and apparently furnished
less opulently than the St. Pierre condominium, was located on
Lake Zurich and rented for CHF 6,090 (at a varying
rate,
anywhere
Notwithstanding
between
Molly’s
$5,900
and
dismissive
$6,700)
testimony,
per
and
exchange
month.
considering
that the apartment’s contents were apparently worth being packed
up over several visits and then shipped to the United States, the
Court is more inclined to believe Shaun’s description of a wellappointed
residence
with
artwork
and
designer
furniture.
The
Court believes that $90,000 is a reasonable estimate for the
Erlenbach apartment contents. In light of the undisputed fact
that those contents existed and that they were removed and sent
stateside
at
considerable
expense,
and
in
view
of
Craig’s
persistent perjury and Molly’s untruthful testimony, to demand
more proof of the exact value of the contents would result in an
injustice to the Plaintiffs. Accordingly, Darren and Craig are
awarded $24,666 each (($90,000 - $16,000)÷ 3).
10. Laurie’s and Renate’s Bank Accounts
According to DeCusati’s testimony, he was able to establish
that Laurie’s ZKB account held CHF 45,719 ($39,352) on deposit as
of April 30, 2010. TR V at 36:20-38:11. Although Plaintiffs have
98
repeatedly, and for months, requested that the Defendants produce
bank statements from ZKB and any other Swiss bank accounts, no
such information was provided until after DeCusati had already
issued his report. DeCusati did not consider any unauthenticated
documents provided by Craig and Molly just before trial. TR V at
38:12-39:11. Shaun and Darren maintain that they did not receive
any benefit from the ZKB account and, in the absence of any
reliable evidence to the contrary, the Court finds that Shaun and
Darren
were
each
entitled
to
a
third
share
of
those
funds.
However, as it was established that they already received 100% of
the remaining funds held in the HASPA account21, no further award
will be made as to the ZKB account.
As to any funds held in the
UBP account, no evidence to support the Plaintiffs’ claims was
submitted and DeCusati acknowledged that he relied primarily on
“sworn testimony through private investigators” to arrive at his
estimate of approximately $200,000 in combined total funds in the
ZKB and UBP accounts. The Court considers that
assessment to be
too unreliable and uncertain to arrive at a finding with any
confidence.
Accordingly,
no
further
awards
are
made
to
the
21
The Court notes that the HASPA funds may have been reduced by
fees related to Craig’s efforts to gain unfettered access to the
account, as well as by losses in equity based funds. However,
without a more reliable analysis to calculate the exact
diminishment in value, the Court finds that allocating the HASPA
funds to the Plaintiffs in their entirety gives some measure of
compensation for their loss.
99
Plaintiffs related to the UBP account.
DeCusati explained, in some detail, that he reviewed the
Defendants’
financial
deaths
order
in
history
to
prior
determine
to
Laurie’s
whether
Craig
and
Renate’s
and/or
Molly
subsequently received funds from unknown sources that could not
be explained by Craig’s rightful share of his inheritance. Based
on his conclusion that $358,684 flowed into Craig and Molly’s
joint accounts from unaccounted for sources, DeCusati calculated
$239,122 in damages to the Plaintiffs. TR V at 17:13-20. He added
$129,348
in
damages
for
$194,023
Craig
and
Molly
spent
from
Laurie’s and Renate’s account, or from their estate accounts. TR
V at 18:11-23. In other words, DeCusati assumed that any funds
that flowed into Craig and Molly’s accounts (or that were spent
from
those
accounts)
in
excess
of
the
approximately
$700,000
Craig received as his share of the condominium sales proceeds and
the
life
insurance
Estate.
As
DeCusati
included
items
such
benefits,
further
as
the
must
have
explained,
settlement
originated
from
the
however,
that
sum
proceeds
from
Cohen
&
Grigsby and the two Citizens accounts funded by the redemption of
the two Florida country club memberships, which have already been
considered by the Court in its damages calculation. Accordingly,
the Court is not in a position to determine the extent to which
the $358,684 from unaccounted sources and the $194,023 from other
100
accounts include sums already included in the general damages
calculation.
11. Loss of Investment Opportunity
As
with
the
loss
of
the
Winter
Group
funds,
DeCusati
conducted an analysis of the financial position the Plaintiffs
would have been in, had they received their rightful shares of
the entire inheritance promptly, and had they invested the funds
resulting from a liquidation of all estate assets. DeCusati makes
a
number
of
assumptions
to
arrive
at
his
conclusions,
which
include, inter alia, that the Plaintiffs would have liquidated
all assets and would have invested the proceeds, subsequently
reinvesting any gains from their investment returns. For the same
reasons
already
explained
in
connection
with
the
possible
investment of Winter Group funds, see Subsection A. herein, the
Court deems that analysis too speculative and too reliant on
unsupported assumptions to make a reasonable determination as to
what additional damages may have resulted from Craig and Molly’s
conversion of those Estate assets.
12.
Litigation Expenses
As part of their damages, the Plaintiffs seek $983,853 in
attorney’s fees and costs; nearly three quarters of this amount
was spent on pursuing the litigation. The Plaintiffs assert that
they incurred significant costs hiring investigators, in
101
this
country
and
abroad,
to
locate
assets
and
financial
records
related to the Estate; they also spent money on translations and
on the services of financial experts.
At
the
conclusion
of
the
trial,
the
Court
advised
the
Plaintiffs that, ordinarily, costs are taxed against the losing
party, but are not included in the damages calculation. TR VII at
39:10-17.
The
Court
Plaintiffs
advise
the
then
specifically
Court
which
requested
statute
or
case
that
law
the
would
support the award of counsel fees (or the cost of investigators
and/or counsel in Europe) as a measure of damages. TR VII at
39:17-40:7.
Notwithstanding the Court’s direction, the Plaintiffs do not
specifically discuss litigation costs as damages in their posttrial memorandum (Dkt. No. 163). Instead, the Plaintiffs support
their request for costs and attorneys’ fees by relying on Florida
Statute Section 733.609, pursuant to which such costs may be
awarded in cases of fiduciary breach, as well as on two related
Florida cases. The Plaintiffs also point out that Laurie’s and
Renate’s
wills
provide
for
Florida
choice
of
law22
and
were
22
That assertion appears to be mistaken. Neither Renate’s nor
Laurie’s will contains a choice of law provision (Dkt. No. 69-1 at
13-20, 40-44.
102
probated
in
Florida.23
Section
733.609
provides,
in
pertinent
part:
A personal representative's fiduciary duty is the same
as the fiduciary duty of a trustee of an express trust,
and a personal representative is liable to interested
persons for damage or loss resulting from the breach of
this duty. In all actions for breach of fiduciary duty
or challenging the exercise of or failure to exercise a
personal representative's powers, the court shall award
taxable costs as in chancery actions, including
attorney's fees. § 733.609(1), Fla. Stat.
Count I of the Complaint asserts a breach of fiduciary duty
as
personal
representative
under
Fla.
Stat.
§
733.609
as
to
Craig; Count II asserts a breach of fiduciary duty as trustee
under Fla. Stat. §§ 736.0706 et al as to Craig.24 Because the
Court has reinstated the default against Craig, Craig’s liability
as to those two counts has been established. In addition, the
extent of Craig’s breach of fiduciary duty relative to Laurie’s
and Renate’s estates probated in Florida was further established
by the evidence and testimony presented at trial.
Accordingly, the Plaintiffs have prevailed on those claims
23
The Florida probate proceedings for both Renate’s and Laurie’s
estates were terminated on April 9, 2014 and April 10, 2014,
respectively, because the cases had been inactive since August 31,
2012 (Dkt. No. 69-1).
24
It is noted that this claim relates to the Renate E. Hekking
Revocable Trust; however, neither party presented any documentary
evidence or testimony as to the provisions of the Trust. According
to the Complaint, Craig never informed his brothers that the Trust
even existed. Complaint at ¶ 134.
103
and, under Section 733.609 of the Florida Statutes, they are
entitled to an award of costs and attorney’s fees in connection
with the Florida probate proceedings. In re Estate of Simon, 549
So. 2d 210 (Fla. 3d DCA 1989), rev. denied, 560 So.2d 788 (Fla.
1990)(allowing attorney’s fees where beneficiaries prevailed on
claim against personal representative for
breach of fiduciary
duty).
Craig, as the fiduciary of Renate’s and Laurie’s estates,
included in the petitions for Florida probate the two Naples
condominiums (which have long since been sold and the proceeds of
which have been equitably divided) and tangible personal property
of only $10,000 each. As was established at trial, however, the
assets
in
Florida
were
far
more
valuable
and
included
club
memberships, furnishings, personal effects, and cash. None of
those assets were ever disclosed by Craig to the Florida probate
court, and all of them were eventually converted by Craig without
providing any accounting to his brothers or providing them a
share of the proceeds.
The Court is mindful of the fact that Craig — who was at all
times in possession of the necessary information, records, and
documentation
that
Plaintiffs —
conducted himself in a completely obstructionist
manner,
which
was
he
should
designed
have
to
104
rightfully
preclude
the
shared
with
Plaintiffs
the
from
learning the extent of his conversion, to delay this litigation,
and to continue the depletion of Estate assets. As a result, the
Plaintiffs’ costs of litigation, including attorneys’ fees, were
considerably increased. However, there has been no assertion that
the assets of the Cego Foundation or the Estate assets located in
Switzerland
or
Germany
were
part
of
the
Florida
probate
proceedings and, therefore, subject to the imposition of costs
pursuant to Section 733.609.
To the extent the Plaintiffs are able to specify which of
the costs and attorneys’ fees they incurred in this litigation
resulted from Craig’s breach of fiduciary duty in the Florida
probate
proceedings,
the
Court
will
consider
making
an
award
pursuant to Section 733.609.
13.
Punitive damages
In their Complaint, the Plaintiffs seek an award of punitive
damages;
in
their
post-trial
memorandum,
they
rely
on
Rhode
Island law to support that request. Complaint at 34 (Dkt. No.1),
Pltfs.’ Post-trial Mem. at 35 (Dkt. No. 163). As the Supreme
Court of Rhode Island has noted, “[p]unitive damages are awarded,
not to compensate a plaintiff for his or her injuries, but rather
to
‘punish
the
offender
and
to
deter
future
misconduct.’”
Carrozza v. Voccola, 90 A.3d 142, 166 (R.I. 2014)(citing Greater
Providence
Deposit
Corp.
v.
Jenison,
105
485
A.2d
1242,
1244
(R.I.1984)). The Court has consistently held
that “‘punitive
damages are proper only in situations in which the defendant's
actions are so willful, reckless, or wicked that they amount to
criminality.’”
Carrozza
v.
Voccola,
90
A.3d
at
166
(quoting
Sherman v. McDermott, 114 R.I. 107, 109, 329 A.2d 195, 196–97
(1974)).
The
party
seeking
punitive
damages
must
establish
“‘evidence of such willfulness, recklessness or wickedness, on
the part of the party at fault, as amount[s] to criminality,
which for the good of society and warning to the individual,
ought to be punished.’” Palmisano v. Toth, 624 A.2d 314, 318
(R.I.1993)(quoting Sherman v. McDermott, 329 A.2d at 196)); Morin
v. Aetna Cas. and Sur. Co., 478 A.2d 964, 967.
The Rhode Island Supreme Court has also noted that, although
a
defendant's
ability
to
pay
may
well
play
a
role
in
the
estimation of the amount of damages to award, “a punitive award
is
not
per
se
void
because
such
evidence
is
not
present.”
Castellucci v. Battista, 847 A.2d 243, 248 (R.I. 2004).
It is
well established that plaintiffs must show that the actions of
defendants
merit
punitive
damages;
however,
Rhode
Island
law
“does not require a further demonstration of the depth of the
reservoir
from
which
resources
could
be
drawn
to
satisfy
a
punitive damage award.” Carrozza v. Voccola, 90 A.3d at 168.
As set forth in some detail in this Decision and Order, the
106
conduct of both Defendants before and after commencement of this
litigation has all the elements required for the imposition of
punitive
damages.
Defendants,
their
Based
lack
on
of
the
financial
gainful
history
employment
during
of
the
the
last
half-decade, and their extravagant spending habits, the Court
holds some doubt that they will be able to pay even the ordered
compensatory
damages
and
costs
of
litigation.
However,
under
Rhode Island law, the ability to pay is not a precondition for
the
imposition
encompassed
assets
of
the
betrayal
earmarked
including
punitive
for
of
the
the
Defendant’s
reprehensible,
perjurious,
these
proceedings,
the
damages.
family
education
own;
and
as
In
trust;
this
the
of
six
well
as
case,
conversion
minor
the
contemptuous
conduct
finds
Court
the
punitive damages is appropriate.
that
which
of
children,
Defendants’
throughout
imposition
of
Because there has never been a
complete accounting for the considerable assets of Laurie’s and
Renate’s estates, it is conceivable that some assets have not yet
been spent by the Defendants. Accordingly, the Court finds that
punitive damages of $300,000 are an appropriate measure to send a
clear message and to prevent further misconduct.
Conclusion
For
the
reasons
set
forth
following findings:
107
herein,
the
Court
makes
the
I.
Molly is liable on Counts V-VII for conversion, civil theft,
and aiding and abetting;
II.
The Court holds the Defendants jointly and severally liable
for compensatory damages in the total amount of $1,172,233,
to be divided among the Plaintiffs as follows:
1. Shaun, on behalf of his sons C.H. and B.H, is awarded
compensatory damages of $315,607, to be divided between C.H.
and
B.H.
in
accordance
with
the
provisions
of
the
Cego
Foundation by-laws.
2. Shaun, on his own behalf, is awarded compensatory damages
of $403,313.
3. Darren is awarded compensatory damages of 453,313.
III. The
Court
imposes
punitive
damages
on
the
Defendants,
jointly and severally, in the amount of $300,000, to be
divided equally between Darren and Shaun.
IV.
The Plaintiffs are directed to submit, within fourteen (14)
days of this Decision and Order, a detailed accounting of
the costs, including attorneys’ fees, which they incurred in
this litigation as the result of Craig’s breach of fiduciary
duty
in
the
Florida
probate
proceedings.
The
Defendants
shall have fourteen (14) days thereafter to file a response.
108
SO ORDERED.
/s/ Mary M. Lisi
Mary M. Lisi
Senior United States District Judge
June 1, 2016
109
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