Case Review: Is There HOPE for the Estate of Robert Indiana?
June 9, 2020
By Taylor Barje.
- Lawsuit I: Morgan Art Foundation Ltd. v. McKenzie et al., No. 1:18-cv-04438 (S.D.N.Y. filed on May 18, 2018).
- Lawsuit II: Morgan Art Foundation Ltd. et al. v. James W. Brannan, No. 1:18-cv-08231 (S.D.N.Y. filed on Sept. 10, 2018).
Robert Indiana was one of the most famous pop artists of the late XXth century. He passed away in 2018, without immediate heirs, in Maine, leaving a will indicating his belongings should be donated to a non-profit museum he created, The Star of Hope. When an artist of Indiana’s caliber passes away, the greatest challenge of all is how to preserve the artist’s legacy. Having lived alone except for his caretaker’s presence and having left all his art and archives to The Star of Hope the disposition of the estate has been challenged by The Morgan Art Foundation. The pending lawsuits involving the Estate of Robert Indiana shed light on the burden that falls on the shoulders of an executor of a will, as well as the intricacies of artists entering into contracts that might carry on beyond the artist’s life.
Before his death in 2018 at the age of 89, Robert Indiana lived for decades in seclusion in Vinalhaven, Maine. In the early 1990’s, he was approached by New York art dealer Simon Salama-Caro (“Simon”) on behalf of The Morgan Art Foundation (“MAF”), seeking to help the aging artist reinvigorate his career. At that point, Indiana was in his 60’s; most people knew him for his sculptures and prints of the words LOVE and HOPE. In 1965, LOVE was chosen for the Museum of Modern Art’s Christmas Card. In 1973, it was reprinted on a stamp for the United States Postal Service. Wide acceptance and public recognition boosted Indiana’s career but more judgemental critics considered him a “sell-out,” prompting his move to Vinalhaven. The vast reach of this artwork resonated with so many diverse groups that it became synonymous with modern art and has since been translated into Hebrew and Spanish.
MAF alleges Indiana trusted Simon and MAF, and he signed two initial contracts, whereby Indiana signed over blanket business rights (the right to sell, produce) and virtually all legal control of his intellectual property, including the ability to sue on his behalf. MAF and Indiana agreed to split proceeds from all business transactions 50/50 of net income. MAF, through Simon, represented Robert Indiana worldwide. Between the 1990s and 2000s, MAF and the artist entered into additional limited agreements related to specific works.
In 2006, Indiana made a separate agreement with only Simon, in which Simon agreed to prepare a catalog of Indiana’s art for his complete oeuvre. The agreement also referred to Simon, not MAF, as Indiana’s agent. Simon would later play a role in taking full control and revitalized Indiana’s career. As Indiana grew older, he maintained a small group of people he trusted–including Simon–to work with. Indiana only interacted with his caretaker, his art publisher, and his attorney. Jamie Thomas, his caretaker, oversaw the studio and took care of Indiana. His art publisher, was Michael Mckenzie, who also owned AIA. His attorney James Brannan, who was named the executor of Indiana’s last will and testament (the “Estate”).
MAF accused Thomas and Mckenzie of forging and selling unauthorized Indiana’s work. MAF filed a suit on May 18, 2018 (“Lawsuit I”) against Thomas and McKenzie. Indiana himself was named a party to the suit, as it was commenced one day before his death. When the artist died on May 19, 2018, James Brannan, attorney for the decedent and Executor of the Estate, represented Indiana. The first lawsuit only pertains to the copyright and trademark disputes. The second separate lawsuit, filed on September 10, 2018 by MAF (“Lawsuit II”), alleges elder abuse during Indiana’s life and mismanagement of the Estate after his death. Their argument is based on the caretaker’s and executor’s actions. In return, the Estate alleges MAF “underpaid” Indiana because of how MAF held all his intellectual property rights.
This complicated and emotional dispute was filed as two separate federal lawsuits pending before the Southern District of New York, one case concerning copyright and trademark infringement and the other pertaining to a contract dispute. Both lawsuits are before the Hon. Barbra Moses, and the parties are represented by the same sets of lawyers. There is an ongoing third lawsuit in Maine between the Estate and the caretaker over legal fees.
Lawsuit I – Morgan Art Foundation v. McKenzie et al.: Copyright Infringement
Lawsuit I was filed initially for copyright and other infringements. MAF (“Plaintiff”) essentially holds all of Robert Indiana’s copyrights exclusively, per the 1990s contracts. MAF sued Indiana’s art dealer (“McKenzie”), American Image Art (“AIA,” the organization using unauthorized works), Indiana, his caretaker Jamie Thomas, and eventually James Brannan, his executor (collectively referred to as the “Defendants”).
In the complaint filed on May 18, 2018, MAF alleged on multiple accounts that the forgeries and inauthentic Indiana works in the market traced back to Thomas, McKenzie, and AIA, which was producing art under an agreement between Indiana and McKenzie. Since MAF owns the copyrights, it was partially deprived of income that would have gone back into their accounting for the Estate.
In the most recent amendment to McKenzie and AIA’s answer submitted on April 27, 2020, Defendants are currently alleging fraud. They are claiming the iconic “LOVE” and “USA FUN” are in the public domain. Their theory rests on the fact that Indiana created “LOVE” and “USA FUN” before 1965, falling under the purview of the 1909 Copyright Act requiring authors to affix to a notice of Copyright prior to publication, or abandon the intellectual property rights. AIA argues that Indiana failed to do so and the LOVE sculpture is thus in the public domain, making the 1999 assignment and subsequent licensing invalid. The co-defendants allege the contracts between Indiana and McKenzie have arbitration clauses. Therefore, in the alternative, if the court deemed the contracts enforceable, the Defendants argue the dispute should be resolved through arbitration. The parties are scheduled to proceed with discovery over Summer of 2020, while a second lawsuit is ongoing, stemming from the initial suit and brought by MAF for the rights given by Indiana.
Lawsuit II – Morgan Art Foundation et al. v. The Estate: Contract Claims
On September 10, 2018, a second lawsuit was filed by MAF; Simon Salama-Caro; Shearbrook (US), LLC; Figure 5 Art LLC; and RI Catalogue Raisonne LLC (the “Plaintiffs”) against James W. Brannan, attorney and estate executor (the “Defendant”). Lawsuit II arose from the signed agreements between Indiana and Simon, either personally or on behalf of the MAF.
MAF alleges the Estate undermined the contracts and what Indiana would have wanted. They claim the contracts are valid and enforceable under the law and that the Estate should abide by them. If these contracts are unenforceable, MAF loses the rights they hold in Indiana’s work.
In response, the Estate alleges these contracts are unenforceable on multiple theories. The court has been unsympathetic to many of these claims. The only claim that survived a motion to dismiss was the claim that Simon, acting as a double agent for both Indiana and MAF, had Potentially breached his fiduciary duty for his actions in self-dealing. As of now, the court is treating the contracts as enforceable and binding after Indiana’s death. This suit is currently on the same schedule as Lawsuit I; a trial will not likely take place before the Fall, unless a settlement is reached.
Takeaways: A Cautionary Tale for Artists Planning Their Estate
This series of lawsuits is a cautionary tale to learn from in Estate Planning. It is essential for artists to find someone with some familiarity and understanding of what the Estate would entail, because art will outlive the artist.
During the process of writing a will and setting up an estate, the first step is to create a record or archive of all the pieces and appropriate documentation with photos if possible. This process ultimately will help artists obtain an overview of the extent of their collection and decide what they wish to do with it.
Rather than leaving the collection to the estate, the executor of which will have to decide what to do with it according to the decedent’s wishes, one option is to sell the collection during the artist’s life, giving the artist control over the disposition of the art. An artist in this position also has the ability to state how much the collection is actually worth: in the event of the artist’s passing, the estate will not lose value at auction. A further consideration for selling the collection is that art and collectibles have the highest capital gains tax of at least 28% according to the IRS.
Another option would be an artist leaving their collection to an LLC: for artists with more extensive collections, this option allows multiple people to be in charge of the fate of the collection. But the beneficiaries of the estate would not own the art itself; they would hold an interest created by the LLC, which means they would have to share anything sold according to the company’s Articles of Incorporation and bylaws. A thought to keep in mind is that an artist may need to leave sufficient funds to the LLC in order to cover maintenance costs and insurance of the art while it is in the LLC’s possession.
Finally, many artists choose to donate to museums. The most significant benefit of this is a tax deduction for the estate upon delivery.
These are generally options artists and collectors have and are aware of. There is no right or wrong way, nor is this an exhaustive list. But this is also a fatal flaw in why Robert Indiana’s estate is struggling. In his will he did not do any of these things: “Indiana represents the unusual case where an artist entrusts his works to a museum to be created in his honor, but his estate lacks the liquidity necessary to fulfill his wishes.” Indiana did not leave enough liquid assets when he passed to fulfill his wishes, ignoring the fact organizations require money to function and for maintenance––setting up a museum is no exception. “Indiana’s wish to benefit the general public with the display of his artwork is an honorable one, and the difficulties surrounding his estate administration can serve as an exemplar for other art-rich, cash-poor estates on how to maximize public benefit without unduly burdening estate resources.” His estate would have fared much better by a direct donation to an existing museum.
Another lesson from the ongoing lawsuit is Indiana’s will did not provide for alternative plans in the event of changed circumstances. “By doing so, [the Estate] will exercise the necessary foresight Indiana lacked, as he provided no alternatives should the museum be impracticable to establish.”
In the will, Indiana left all his art to a museum to be built in his home, an old mansion in Maine. But he did not repair his home, an old mansion in Vinalhaven, before passing.  He named Brannan and Thomas to be on the board of directors for The Star Of Hope. Both of them do not have a background in art. Their skillset is not ideal, especially in a low cash situation. Indiana intended all the money and profits from the rights in his work be directed into the Star Of Hope. But because of the agreements between Indiana and MAF, the latter holds all the rights to many of his pieces. Therefore, Indiana may not have been able to transfer these interests to the Estate in the way he intended without first speaking to MAF When Indiana rewrote his will, both Brannan and Thomas were aware of the agreements between Indiana and MAF.
There are two examples of this occurring in the past: the Barnes Estate and the Estate of Mark Rothko. Barnes is factually more similar because of how the wills are written whereas Rothko demonstrates that even a good idea might not work out the way it had intended be.
- Albert C. Barnes was not an artist, but a chemist and avid art collector in the early 1900’s who loved art. Barnes’s collection was preserved by the creation of a foundation in his will. The Foundation was to be built in his home, in a suburb outside of Philadelphia. It was not a major tourist destination because of the distance from Philadelphia. The house was already dilapidated and cash flow was even lower due partly to the location and strict requests in the will. The Estate requested a modification or relief from the terms of the original will. Like the Indiana Estate, the Barnes Estate struggled with impossible requests. The Barnes Estate was to maintain the foundation in Barnes’ home which was nearly impossible because of how expensive upkeep was due to the house not being renovated before his passing. Indiana wanted his home to be turned into the museum. Barnes and Indiana both chose locations that were not necessarily convenient. These locations are not ideal for bringing in more cash to help run the museums. The Indiana Estate can follow the Barnes Estate’s lead and be moved to Farnsworth or elsewhere.
- Dissimilar from Barnes, Rothko himself was an artist. Even with the best intentions for his estate, the executors were a problem. Rothko chose three friends to be the executors of his will: a painter, an anthropologist, and an accountant, thinking the diversity of their professions would protect his estate and legacy. After the Estate entered into an agreement with a gallery, it was revealed two out of the three executors had economic ties to the gallery and stood to benefit from the agreement. Similarly to the Rothko Estate, Indiana’s executor faces accusations that his decisions thus far have not been entirely ethically appropriate, and he lacks background in art. Ironically, the Estate feels as though Simon is the one who breached his fiduciary duty to Indiana.
Only time can tell whether the costly litigation against the Estate of Robert Indiana will allow the museum to see the light of day. With little cash flow and expensive, time consuming litigation, the Estate is unlikely to come out of the other side with enough to “keep their collections in the public eye and provide long-lasting public benefit.”
- Figure5 Art LCC, Biography, Robert Indiana, http://robertindiana.com/biography/ (last visited May 27, 2020). ↑
- Id. ↑
- Complaint at 10, Morgan Art Found. v. Brannan, No. 1:18-cv-08231, 2020 U.S. Dist. LEXIS 14043 (S.D.N.Y. Jan. 28, 2020) [hereinafter Complaint for Lawsuit II]. ↑
- Id. at 11 – 16. ↑
- Complaint at 17, Morgan Art Found. v. McKenzie, No. 1:18-cv-04438, 2019 U.S. Dist. LEXIS 109997 (S.D.N.Y.July 1, 2019)[hereinafter Complaint for Lawsuit I]. ↑
- Complaint for Lawsuit I, at 19 – 21. ↑
- (Proposed) Verified Fourth Amended Answer, Counter-Claims, and Cross- Claims of Michael Mckenzie and American Image Art at 2, Morgan Art Found. v. McKenzie, No. 1:18-cv-04438 (S.D.N.Y.Apr. 27, 2020) [hereinafter Verified Amended Answer, Counter-Claims, and Cross Claims for Lawsuit I]. ↑
- Helen Homes, Robert Indiana’s Disputed Estate Now Estimated To Be Worth Over $100 Million, The Observer (Dec. 4, 2019), https://observer.com/2019/12/robert-indiana-estate-value-100-million/. ↑
- Morgan Art Found. v. McKenzie, No. 1:18-cv-04438, 2019 U.S. Dist. LEXIS 109997, at *2 (S.D.N.Y. July 1, 2019). ↑
- The Associated Press, Robert Indiana’s Caretaker Sues For Cost Of Legal Defense, WGME (July 2, 2019), https://wgme.com/news/local/robert-indianas-caretaker-sues-for-cost-of-legal-defense. ↑
- Complaint for Lawsuit I, at 3 – 4. ↑
- Proposed Amended Answer, Counter-Claims, and Cross-Claims for Lawsuit I, at 18. ↑
- Complaint for Lawsuit II. ↑
- Morgan Art Found. v. McKenzie, No. 1:18-cv-04438 (S.D.N.Y. Apr. 15, 2020) (order extending pre-trial deadlines). ↑
- Heather DeSerio, WYWH Introduction To Estate Planning For Your Artist in “Your Art Will Outlive You”, Ctr. Art L. (Feb. 10, 2017).https://itsartlaw.org/2017/02/10/wywh-introduction-to-estate-planning-for-artists-in-your-art-will-outlive-you. ↑
- How To Create An Estate Plan For Your Art Collection, Artwork Archive, https://www.artworkarchive.com/blog/how-to-create-an-estate-plan-for-your-art-collection (last visited May 27, 2020). ↑
- IRS, Topic No. 409 Capital Gains And Losses, (Feb. 11, 2020),https://www.irs.gov/taxtopics/tc409. ↑
- Hanna K. Feldman, Preserving the Artistic Afterlife: The Challenges in Fulfilling Testator Wishes in ArtRich, Cash-Poor Estates, 30 Fordham Intell. Prop. Media & Ent. L.J. 223 (2019). Available at: https://ir.lawnet.fordham.edu/iplj/vol30/iss1/5. ↑
- Id. at 225. ↑
- Id. at 256. ↑
- Anny Shaw &Jillian Steinhauer, Will Robert Indiana’s Legacy Get Stuck In A Legal Battle, Art Newspaper (July 19, 2018), https://www.theartnewspaper.com/news/will-robert-indiana-s-legacy-get-stuck-in-a-legal-battle. ↑
- Robert Indiana and the Importance of a Will, Freeman’s (last visited May 27, 2020), https://www.free mansauction.com/news/robert-indiana-and-importance-will. ↑
- In re Barnes Found., 683 A.2d 894 (Pa. Super. Ct. 1996). ↑
- Id. ↑
- Shaw &Steinhauer, supra note 21. ↑
- In re Rothko, 84 Misc. 2d 830, 379 N.Y.S.2d 923 (Sur. Ct. 1975), modified, 56 A.D.2d 499, 392 N.Y.S.2d 870 (1st Dep’t), aff’d, 43 N.Y.2d 305,372 N.E.2d 291, 401 N.Y.S.2d 449 (1977); on remand, 95 Misc. 2d 492, 407 N.Y.S. 2d 955 (NY Sur. Ct. 1978). ↑
- Id. ↑
- Graham Bowley, His Art, Their Ideas: Did Robert Indiana Lose Control of His Work?, New York Times (Jan. 18, 2019), https://www.nytimes.com/2019/01/18/arts/design/robert-indiana-artist-legal-dispute.html.
- Avery Day, The Last Will And Testament of Robert Indiana, Stevens Day Law (Aug. 6, 2028), https://stevensdaylaw.com/maine-probate-law-robert-indiana-blog/,
- Wold, Keens & Company, Inc, A Visual Artist’s Guide to Estate Planning, Pittsburg Arts Council (2018), https://www.pittsburghartscouncil.org/storage/documents/visual_artists_estate_plan.pdf.
- Kathy Battista (ed.), Creative Legacies: Critical Issues for Artists’ Estates, Ashgate Publishing (July 24, 2020), https://www.barnesandnoble.com/w/creative-legacies-kathy-battista/1133202454?ean=9781848223523.
About the Author: Taylor Barje is in the class of 2022 at New York Law School and she received her undergraduate degrees in Arts Management and Legal Studies from State University of New York at Purchase.
|Lawsuit I||Lawsuit II||Lawsuit III|
|Plaintiffs||Morgan Art Foundation Ltd.||Morgan Art Foundation Ltd. Simon Salama-Caro Shearbrook (US), LLC Figure 5 Art LLC RI Catalogue Raisonne LLC||James W. Brannan: attorney & estate executor (i.e. Estate)|
|Defendants||Michael McKenzie: art dealer his company American Image Art (AIA) Jamie L. Thomas: Indiana’s caretaker in Vinalhaven, ME; James W. Brannan: attorney & estate executor||James W. Brannan: attorney & estate executor (i.e. Estate)||Jamie L. Thomas: former caretaker|
|Case Citation||Morgan Art Foundation Limited v. McKenzie et al.||Morgan Art Foundation Limited et al. v. Brannan||Thomas v. Brannan|
|Court||S.D.N.Y.||S.D.N.Y.||Maine Superior Court, Knox County|
|Cause of action||Copyright & trademark infringement based on contracts entered into by Indiana’s Estate & MAF’s advisor, Simon Salama-Caro||Breach of contract and unjust enrichment by the Estate||Estate & elder abuse: claim that the artist’s former caretaker failed in his task and cover JWB’s $2 million legal fees (ArtNet News)|
|Link to Complaint||Here||Here|
|Procedure||Counterclaims: MAF failed to fully pay Indiana royalties and fabricated unauthorized reproductions of his famous sculptures. On July 1, 2019, the SDNY dismissed counterclaims (artnet News)||Counterclaims: the contracts are unenforceable upon the artists’ death. On Jan. 28, 2020, the SDNY dismissed in part Brannan’s counterclaims (opinion) ArtNews|