Archives: Litigation Issues

Further to our post below regarding the trial over the authenticity of a painting alleged to have been made by the Scottish painter Peter Doig, some interesting notes regarding the waning days of the trial were captured by artnet.  Among them:

* The lawyers and the Judge differed as to the pronunciation of Doig’s name;

* During cross-examination, the attorney representing the plaintiffs asked whether the work in question was a painted by “Captain Butterknife.”

* The question of whether Doig was incarcerated at Thunder Bay as alleged by the plaintiffs appeared to have been left unanswered.

The final verdict is expected to be given orally in the coming weeks.

Read more here.

By Daniel Schnapp.

Scottish artist Peter Doig claims he didn’t paint the painting depicted below, and now he is forced to prove it at trial.  The New York Times recently reported on this strange case of art authentication, involving Doig’s disavowal of the painting and alleged mistaken identity.  Read full article here.

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Image: WHITTEN SABBATINI/NYT

The owner of the painting is a former corrections officer who alleges that in 1975 he purchased the painting from Doig, who was incarcerated at a Canadian detention facility at that time.  Doig denies having ever been near the detention facility, or ever being incarcerated. The lawsuit is currently pending in the U.S. District Court for the Northern District of Illinois.

The Wall Street Journal recently published an in-depth story on the Goulandris art collection, which is currently in the middle of one of the largest and most complex legal disputes over ownership of art in Europe.

The story involves a private art collection valued as much as $3 billion that has been mostly out of public view over the past two decades, an offshore company used by a secret seller to put up artwork for auction, and a dispute that essentially boils down to a non-existent will and an inscrutable one.

The late Greek shipping mogul Basil Goulandris and his late wife, Elise, amassed one of the world’s most significant private art collections, which included several hundred pieces of treasures by a number of renowned artists such as Picasso, van Gogh, Cezanne, Monet, Degas, Pollock, and Balthus.

For further information on this intriguing saga involving the Goulandris art collection, visit The $3 Billion Family Art Feud.

In recent art world news is a story about a treasured 1918 oil painting by Amedeo Modigliani of a seated chocolate merchant in a hat and tie holding a cane (“Seated Man with a Cane”).  Art dealer and billionaire David Nahmad is principal of the Nahmad holding company (International Art Center) that purchased the work at auction in 1996 and has owned it since then.

The grandson of a Jewish antiques dealer, however, claims that the Modigliani painting is the same work that was stolen from his relative’s shop in Paris during the Nazi occupation and sold off over 70 years ago.

For nearly five years, the grandson, Philippe Maestracci, and the Mondex Corporation, a company specializing in the recovery of looted art on behalf of beneficiaries, have pursued a claim in New York state and federal courts for the work, which was once estimated to be valued at around $25 million.

Nahmad, a scion of a family of international art dealers, remains determined that he will not settle the case.  In support of his position, the art dealer relies on an obscure French court document dated 1947 that he asserts raises doubt as to whether his painting is the same Modigliani painting that antiques dealer, Oscar Stettiner, had tried to recover after the Second World War.  The court document, which was filed in connection with Stettiner’s claim in 1946 to recover the painting, describes the work as a “Modigliani self-portrait” and not as a painting of a chocolate merchant.

Conflicting evidence cited by Maestracci includes the provenance listing when Nahmad’s holding company attempted to sell the disputed painting through Sotheby’s in 2008.  The auction house listed Stettiner as a possible previous owner of the painting and indicated that the painting had been sold anonymously between 1940 and 1945.

Nahmad is determined to fight on in the courts, but has said if it is proven that the painting is looted art by the Nazis, he will return it.

For further information on this prolonged dispute since 2011, see Dealer’s Estate Sues Nahmad Gallery Seeking Return of Modigliani Portrait and The Art of Secrecy.

As an update to an earlier post featured on the Art Law Blog relating to a dispute between the Gagosian Gallery and Qatar Royal Family’s Agent over the ownership of Pablo Picasso’s plaster “Bust of a Woman” sculpture, it has been reported this week that a settlement was reached between the parties.

Details of the settlement were not disclosed in a filing earlier this week in New York federal court, so it remains a secret as to who now owns the 1931 prized Picasso sculpture of the artist’s then French muse/mistress, Marie-Thérèse Walter.

The sculpture was considered a treasured possession of Picasso’s daughter, Maya Widmaier Picasso, who was born from the artist’s affair with Walter.

As blog readers may recall, prominent New York art gallery owner Larry Gagosian claimed that he had agreed to purchase the sculpture for $106 million in 2015 to resell it to a then undisclosed New York art collector who has since been identified as New York billionaire Leon Black.  However, an agent for the Qatar Royal Family claimed that they had already consummated a deal in 2014 to purchase the sculpture for 38 million euros (about $47.4 million at time of sale) from Widmaier Picasso through a transaction that was negotiated by her son.

Both sides had filed lawsuits earlier this year in New York federal court in Manhattan.  In a three-paragraph order that had issued on Monday, the U.S. District Judge William Pauley ruled:  “It having been reported to this court that these actions have been or will be settled, these actions are discontinued without costs to any party.”  Pursuant to the order, either party can request the court to reopen the dispute within 30 days.

The cases are Gagosian Gallery Inc. v. Pelham Europe Ltd., and Pelham Europe Ltd. v. Gagosian, 16-cv-00214 U.S. District Court, Southern District of New York (Manhattan).

Richard Prince continues to push the boundaries of copyright law, if not the art world.

In 2014 he exhibited dozens of inkjet prints on canvas–Instagram posts that the artist had commented on, then enlarged and printed out on canvas–at the Gagosian Gallery in New York City. Collector Daily‘s review lauded his appropriations, declaring that they break down “our new way of communicating” and rebuild it into a vehicle for social satire: “While we may think that the images we post online are ‘secure’ or ‘ours’ in some manner, his pictures quickly undermine that outdated fantasy.”

Others disagree. The photographer of one of the images quickly registered his copyright, complained and recently sued.

What do you think? Were Richard Prince’ s changes transformative and so a fair use? The changes were:

  • A comment on the Instagram feed featuring the photograph: “Canal Zinian de lam jam (emoji)”.
  • Cropping of the bottom and top portions of the photograph and adding elements of the Instagram graphic user interface (this happens automatically by using a cell phone screen print feature).
  • Enlarging the screen print and printing it on to a different medium (canvas).

(images are here)

Does your answer change if you review the Second Circuit’s 2013 decision finding that 25 out of 30 of his works qualified as non-infringing fair use? (Richard Prince argues “This lawsuit reflects an attempt to essentially re-litigate Cariou and should be dismissed with prejudice.”)

Tattoo artists recently demanded more than $1.1M for infringing their copyrights.  Not from the tattoo-ees, basketball stars LeBron James, Kobe Bryant and others, but from the distributor of video games incorporating their inked avatars. The tattoos were “completed/published” in 2000-2006. The tattoo artists licensed them to the plaintiff in 2012. And, as is often the case, the copyrights were registered in 2015, just before the lawsuit was filed.

(See also Fox Rothschild’s earlier post on our Sports Law Scoreboard blog)

In recent art world news this week, Spain’s National Court has ruled that Jesus Angel Bergantinos Diaz, alleged partner of Glafira Rosales in her sale of a number of counterfeit paintings through the former Knoedler Gallery (“Knoedler”), can be extradited from Spain to the United States.  This means that various charges, including wire fraud, conspiracy to commit wire fraud, and money laundering, can be brought against Diaz in New York for assisting former art dealer Rosales in selling dozens of fake paintings through Knoedler over a 15 year period.

As set forth in a related blog post below, Rosales allegedly had a reputation for selling paintings by famous Abstract Expressionist artists, including Mark Rothko, Willem de Kooning, and Jackson Pollock, but in fact the paintings were actually forgeries made in Queens, New York, by Pei-Shen Qian, who has since fled to China amidst various charges of conspiracy, fraud and making false statements.

According to a grand jury indictment filed in March 2014, Diaz, his brother Jose (an alleged co-conspirator who had asked to be tried in Spain, as reported by the AP), and Rosales had taken in more than $33 million from the scheme.  The Diaz brothers were arrested in Seville, Spain in April 2014.

Since the closing of its operations in 2011, Knoedler has entered into settlements with a number of art collectors who had purchased fake paintings from the former gallery.  Last week, Domenico and Eleanore De Sole, the first art collectors who went to trial over the purchase of a fake Mark Rothko from Knoedler for $8.3 million in 2004, settled with both the gallery (including its parent company, 8-31 Holdings), and its former director, Ann Freedman, for an undisclosed amount after nearly three weeks of damaging testimony that focused on the fake painting. 

As observed in our recent blog post below, the Knoedler litigation places a spot light on the issue of caveat emptor/buyer beware and when there can be reasonable reliance on a dealer’s purported expertise and his or her representations regarding the authentication of a work.

 

The once renowned art gallery – the Knoedler Gallery – is embroiled in lengthy litigation out of the district court for the Southern District of New York involving an alleged forgery conspiracy. The Knoedler litigation places a spot light on the issue of caveat emptor/buyer beware and when there can be reasonable reliance on a dealer’s purported expertise and their representations regarding the authentication of a work.

In a recent twist, Ann Freedman, the gallery’s former director/president and defendant in the actions, has reached a settlement agreement with two of the plaintiffs, Domenico De Sole (the Chairman of Sotheby’s) and his wife, Eleanore, who purchased a fake Mark Rothko painting from Knoedler for $8.3 million in 2004. The De Sole action centers on, among other things, to what extent Freedman and others at Knoedler were aware of the suspicious provenance of the work. As a result of the undisclosed settlement agreement, it is expected that the De Sole action against Freedman will be dismissed. It has been reported that Freedman continues to maintain that she was fooled by the forged paintings.

The Knoedler Gallery (formerly known as Knoedler & Company), which operated in Manhattan from 1846 until its closure in 2011, was one of New York City’s most venerable and respected art galleries. A family business, the gallery was purchased by Armand Hammer, the grandfather of Michael Hammer (a defendant noted below) in 1971, and was operated by the Hammer family until it closed. Although a New York institution, Knoedler Gallery LLC, the gallery’s current legal entity, was formed in 2001 as a Delaware limited liability company.

Dating back to multiple complaints filed in 2012, the various actions involve a number of defendants associated with Knoedler, including:

  1. Knoedler Gallery, LLC (“Knoedler”);
  2. 8-31 Holdings, Inc., Knoedler’s sole member;
  3. Michael Hammer, Knoedler’s managing member and sole owner of 8-31 Holdings, Inc.;
  4. Ann Freedman, Knoedler’s former president (and director of gallery’s predecessor prior to 1994);
  5. Jaime Andrade, a former Knoedler employee who introduced Rosales to Knoedler;
  6. Glafira Rosales, art dealer and alleged supplier of forged art (default judgment has been entered in civil action)(Rosales was charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, money laundering, subscribing to false tax returns, and failing to file reports of foreign bank and financial accounts. United States v. Rosales, 13 Cr. 518 (KPF) (S.D.N.Y.); and
  7. Jose Carlos Bergantinos Diaz, supplier of forged art (default judgment has been entered in civil action).

The various actions assert a variety of claims including, inter alia:

  1. Racketeer Influenced and Corrupt Organizations Act (“RICO”);
  2. fraud;
  3. fraudulent concealment;
  4. aiding and abetting fraud;
  5. conspiracy to commit fraud;
  6. breach of warranty;
  7. unilateral and mutual mistake; and
  8. alter ego.

By way of background, Knoedler acquired paintings from Glafira Rosales, a Long Island art dealer who allegedly had a reputation for selling Abstract Expressionist artists including Mark Rothko, Willem de Kooning, and Jackson Pollock.  Over a fifteen year relationship, Rosales provided Knoedler with forged art under the guise that the works were previously “unknown” works by famous artists. However, the art was actually forgeries made in Queens, New York, by Pei-Shen Qian, who has fled to China amidst charges of conspiracy, fraud and making false statements.  Based on misstatements from Rosales, Knoedler allegedly fabricated misleading provenance information on invoices. For example it has been reported that one invoice stated as follows:

Provenance & Exhibition History
Acquired directly from the Artist in the early 1960’s.
Private Collection, Mexico and Switzerland.

Further, in court pleadings it has been noted that one of the invoices even stated that the Rothko is “[t]o be included in the forthcoming catalogue raisonne: Mark Rothko: Works on Paper, by David Anfam, (London: Yale University Press).” However, as it has now been revealed, none of this information was accurate.

In a 2015 memorandum opinion and order [S.D.N.Y. Case No. 1:12-cv-02313-PGG, Docket No. 262; filed 10/09/15], the district court noted that it was an undisputed fact that all of the paintings Rosales brought to Knoedler were forgeries.  Specifically, in a footnote the district court noted that the undisputed facts were derived in part from the parties’ Local Rule 56.1 statements because the opposing party had either not disputed those facts or had not done so with citations to admissible evidence. See Giannullo v. City of New York, 322 F.3d 139, 140 (2d Cir. 2003) (“If the opposing party . . . fails to controvert a fact so set forth in the moving party’s Rule 56.1 statement, that fact will be deemed admitted.”) (citations omitted). The court further noted that where the plaintiffs disagree with defendants’ characterizations of the cited evidence, and have presented an evidentiary basis for doing so, the court relied on the plaintiffs’ characterization of the evidence. See Cifra v. Gen. Elec. Co., 252 F.3d 205, 216 (2d Cir. 2001) (court must draw all rational factual inferences in non-movant’s favor in deciding summary judgment motion).

The plaintiffs maintain that the Knoedler defendants had reason to doubt the authenticity of the Rosales Paintings. Further, the plaintiffs allege that despite knowledge of the fraud, the Knoedler defendants continued to sell the Rosales Paintings to unsuspecting clients until 2008. Each defendant’s state of mind, knowledge, and intent are questions to be determined by a jury.  However, after lengthy testimony on Tuesday regarding the lavish spending of Knoedler owner, Michael Hammer, the trial was paused amid speculation that a potential global settlement may have been reached. The trial has included testimony of a number of renowned art experts and has demonstrated the importance of expert witnesses in art litigation.  It will be interesting to see whether the jury will make its determination or if settlement discussions will halt this process.

As recently reported by the International New York Times, prominent art dealer Larry Gagosian of the Gagosian Gallery and the royal family of Qatar’s agent, Pelham Europe, Ltd. (run by Guy Bennett), each claim that they purchased Pablo Picasso’s work of a 1931 plaster bust of his French muse/mistress Marie-Thérèse Walter, which is currently featured in the Museum of Modern Art’s (“MoMA”) Picasso Sculpture exhibition running through February 7, 2016.  In each case, Picasso’s daughter Maya Widmaier-Picasso was the seller.

The sculpture is considered a significant work from a highly creative time in Picasso’s life in which the “evolution of a new erotic style of curves and exaggerated forms” were inspired by his muse/mistress Walter.

Earlier this week, the Gagosian Gallery filed a lawsuit in federal court in Manhattan against Pelham Europe, Ltd. claiming that Gagosian purchased the bust in May 2015 for about $106 million from Widmaier-Picasso, and in turn sold it to a non-disclosed New York art collector who is expecting to receive the bust after the close of MoMA’s “Picasso Sculpture” exhibition in early February.

However, in its court documents, Pelham Europe, Ltd. claims that it secured an agreement with Widmaier-Picasso to purchase the bust in November 2014 for about $42 million.

The conflict reveals the

stubbornly elusive nature of an increasingly competitive art market, in which deals are made behind closed doors and ownership can be ambiguous.”

The case is reportedly complicated by the nature of Picasso’s family, which includes a number of family members (i.e., wives, muses, children and grandchildren) who have fought over the famed artist’s valuable works, and on a number of occasions sold off the works, throughout the years.

According to Artnet, Picasso’s total fine art sales in 2015 were over $652 million and surpassed Andy Warhol for the year.

In the recently filed suit, the Gagosian Gallery is requesting a judge to “quiet” any challenges or claims to its title of the bust and declare it the rightful owner.

Experts remark that this dispute between a dealer and a collector “casts a shadow over a prized piece of art history.”

For further background on the dispute, click here.

[The suit is Gagosian Gallery, Inc. v. Pelham Europe, Ltd., Case No. 1:2016cv00214, U.S. District Court, Southern District of New York (Manhattan)].