United States District Court, D. Rhode Island
DARREN MALLOY HEKKING & SHAUN EGAN HEKKING, on behalf of himself and on behalf of C.H. and B.H., Plaintiffs,
CRAIG ANTONY HEKKING & MOLLY DURANT HEKKING, Defendants.
DECISION AND ORDER
M. LISI, Senior District Judge.
plaintiffs in this longstanding inheritance dispute, Darren
Malloy Hekking ("Darren") and his brother Shaun
Egan Hekking ("Shaun", bringing claims on his own
behalf and that of his two minor children and, together with
Darren, the "Plaintiffs"), have alleged that their
older brother, Craig Antony Hekking ("Craig"), has
systematically depleted and converted their late father's
(Laurie Vonderwind 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 appointed
as the executor of the Estate; he also functioned as the
trustee of the Cego Foundation (the "Foundation"),
a separate trust 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.
case began on June 27, 2014, four years after the
deaths of Laurie and Renate, when Shaun and
Darren brought a seven-count complaint (the
"Complaint") against Craig and Molly (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).
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 his wife - concealed, misrepresented, and
misappropriated assets that rightfully belonged to all three
brothers or that were intended to benefit Craig's 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.
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.
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).
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
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 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
light of the unrefuted evidence presented by the Plaintiffs,
the Court concluded that Craig's representations, both in
his testimony before the Court 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 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).
interim, upon the Plaintiffs' motion to compel discovery
and for sanctions (Dkt. No. 25), Magistrate 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).
the Plaintiffs submitted two reports (Dkt. Nos. 36, 41)
advising the Court that the Defendants continued to 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.
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 her own affairs is hard to
swallow." Id. at 5.
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.
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.
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.
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 non-essential 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.
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
thereafter, both Defendants' counsel 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 the Defendants were advised that
they had to represent themselves unless and until they
engaged successor counsel. Two days later, the Plaintiffs
filed a motion 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
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 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.
on October 6, 2015, the Court conducted a seven-day 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.
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 testify on any
subject to which he had previously invoked his right under
the Fifth Amendment, was successfully objected to by the
Plaintiffs and/or stricken from the record. At that point,
the Defendants rested as well.
parties were ordered to submit post-trial memoranda. As to
the Plaintiffs, they were instructed to address Molly's
liability for the claims made against her, particularly the
aiding and abetting claim, and to support their claim for
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).
presiding over this case for two years, having considered the
testimony of all the witnesses at trial, and having reviewed
the extensive records and materials admitted into evidence,
the Court will now proceed to render a decision.
Standard of Review
Rule 52(a)(1) provides that "[i]n an action tried on the
facts without a jury... the court must find the facts
specially and state its conclusions of law separately. The
findings and conclusions... may appear in an opinion or a
memorandum of decision filed by the court. Judgment must be
entered under Rule 58." Fed.R.Civ.P. 52(a)(1).
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)).
Findings of Fact
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.
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
personalties, lifestyle, and possessions were markedly
consistent with those later provided by his wife Alexandra
and his brother Darren.
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.
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 16:6-17:4.
and his family would spend time with Laurie and Renate two or
three times a year, usually visiting them in Florida. TR I 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.
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.
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 21:13-16.
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. Shaun and Darren left shortly thereafter, while
Craig stayed behind. TR I at 24:24-25:8. Because 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 sons or, in the event any son was
deceased at the time of distribution, that son's share
was to be distributed to his children, per stirpes,
and, if there were no children, to Laurie's other sons or
their children, per stirpes . Ex. 143 at 0021.
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.
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 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.
Pierre condominium was sold in June of 2012 for $1.1 or $1.2
million, of which Shaun recalled receiving approximately
$318, 000. 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.
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
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
36:8-20. In the spring of -, sporadic updates from Craig
about the litigation stopped. E-mail correspondence between
Craig and Cohen & Grigsby reflects that in March -, 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.
last visited his parents in the St. Pierre condominium in
March of 2009. TR I at 39:7-15. According to Shaun, whose
description is consistent with that provided by Darren and
Alexandra, the St. Pierre was Laurie and Renate's
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, 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.
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 Corvettes and a Mercedes S-Class sedan; Renate
drove a Cadillac sedan. TR I at 50:11-13. Laurie also owned a
collection of high-end wines, including such high-priced
wines as Chateau Petrus, which can cost up to $2, 000 to $3,
000 per bottle.
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.
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 52:19-23. 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.
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 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 effects were gone,
and there were "more contemporary and less
high-end" clothes in the bedrooms and dressers. TR I at
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. 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 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
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 JÃ¼rg Reichenbach and at Laurie's recommendation,
Craig and Shaun opened two accounts at the local
Raiffeisenbank. TR I at 72:4-21.
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 "lower-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.
related to Renate's jewelry in the form of
invoices, 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.
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
100:25-101:24. 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.
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 110:10-111:3. 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.
and Renate owned two country club memberships in 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
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 -, 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 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
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 [ZÃ¼rcher 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.
learned of the existence of the Cego Foundation in late May
2010, when Laurie summoned his lawyer JÃ¼rg 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
by Reichenbach and by Antoine Garreau ("Garreau"),
Laurie's private banker at the Swiss bank of E.
Gutzwiller & Cie. ("Gutzwiller"), that there was
money at Gutzwiller for 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
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 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
141:20-23. 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.
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. 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.
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 Shaun's inquiry regarding the status of tuition
payments) that the Winter Group account had been 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
stopped communicating with Craig in October or November -. 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.
cross-examination of Shaun conducted by Craig reconfirmed
much of Shaun's testimony; established no facts
inconsistent with Shaun's prior testimony; and added only
few 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 -, 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 70:13-71:19.
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.
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 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.
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
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 109:10-16.
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 -. 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.
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 116:12-25. 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 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.
learned that Craig had taken Laurie's Mercedes when Craig
drove up in the car while visiting Darren in -. 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.
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
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 the insurance appraisal form. Ex. 156 at 0006. Like Shaun,
Darren saw Molly wearing the engagement ring and Cartier
watch at the family wedding in Florida. TR II at
126:13-127:3. Darren confronted Craig and Molly, asking them
why she was 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
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 was an account at Huntington Bank in
Florida; in response to Darren's questions regarding any
Swiss 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 and the condominium sales,
 Darren received no further money
from the Estate. TR II at 133:1-17.
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.
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 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
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 and Darren. Every spring break (Alexandra is a
teacher), she and her family visited Renate and Laurie 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.
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 Villeroy & Boch china. TR IV at 15:18-16:8.
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