In Mandarin Trading Ltd. v. Wildenstein, --- N.Y.S.2d ---, 2009 WL 2497306 (1st Dept. August 18, 2009) New York's Appellate Division first department struggled with the question of whether a purchaser of a painting may rely on an expert appraisal commissioned by an intermediary in an art transaction. The plaintiff Mandarin purchased Gauguin's Paysage aux trois arbres. According to the complaint, the defendant Wildenstein had ownership interests in the painting, yet issued an expert appraisal with an inflated value, knowing that Mandarin would rely on it.
The Supreme Court judge (in New York this is the trial level judge) tossed the case out on a pre-answer motion, finding that there was no privity between Wildenstein and Mandarin and that the appraisal contained non-actionable opinion.
Two dissenters (Justice Tom and Justice Nardelli) balked. Tom believed that the complaint stated a claim in equity for unjust enrichment. In a very well-reasoned dissent, Justice Nardelli found that the majority had made numerous factual findings unsupported by the record, which on a pre-answer motion is to be construed in favor of the plaintiff. Also Justice Nardelli found that fraudulent misrepresentation, negligent misrepresentation, third-party beneficiary (contract), and unjust enrichment were all well-pleaded claims.
When there are two dissenters at the Appellate Division, one may take an appeal to the New York Court of Appeals "as of right".
If art dealers can write bogus "appraisals" for works in which they have an ownership interest, it really taints the market and encourages fraud. Many art transactions are concluded through intermediaries for perfectly legitimate reasons. Justice Nardelli's dissent is compelling and appears to be a correct statement of the law.
Saturday, August 22, 2009
When Buying A Painting Can You Rely on an Expert Appraisal You Didn't Personally Commission?
Labels: appeals as of right, appellate division, art fraud, art purchase, expert appraisal, fraudulent misrepresentation, gauguin, New York Court of Appeals, third party beneficiary, unjust enrichment, wildenstein
Partner in Manhattan law firm Dunnington Bartholow & Miller LLP in New York City litigating in federal and state courts and arbitrations. Experienced trial and appellate practitioner. Author: Copyright Litigation Handbook (Thomson Reuters 2015-2016). The New York Law Journal called it "an indispensable guide". Serve on the Board of Directors of the Federal Bar Association, served as Chair of the Circuit Vice Presidents, Vice President for the Second Circuit and General Counsel. Member Board of Governors, National Arts Club. President, Network of Bar Leaders (2013-2014). Attorney advertising disclaimer - prior results do not guarantee success. The statements and opinions voiced here are my own and not of my law firm.