A Knoedler Aftershock: Freedman sues for Defamation

September 17, 2013

By Richard A. Altman, Esq., Law Office of Richard A. Altman

For many years, Ann Freedman was the head of Knoedler Gallery, which had a long and celebrated history. In the mid-1990s, Freedman was introduced to Glafira Rosales, an art dealer. Rosales said that she had a collection of around forty previously unknown works by such well-known Abstract Expressionists as Mark Rothko, Robert Motherwell and Barnett Newman. Rosales apparently was selling them on behalf of the son of a collector who had recently died, but who had owned them for decades. The provenance was somewhat murky, but Freedman was excited by the prospect. She called upon her friends and colleagues in the art world to examine the works and provide their opinions as to their authenticity. Their responses were uniformly enthusiastic, if not ecstatic. The experts, many of whom had long careers of intimate familiarity with these masters, were unanimous in their expressions of approval of the works and their quality and authenticity.

Based on this plethora of expert opinions, Knoedler sold the works for Rosales over the next few years to trusting collectors at breathtaking prices. Another Manhattan dealer, Julian Weissman, also sold works for Rosales.  However, beginning in 2011, some of the collectors became suspicious and did forensic testing. The outcome has been devastating to the art world.  It turns out that the artworks are complete fakes, all having been painted in a studio in Queens by a Chinese artist who was apparently paid a few thousand dollars for each one. Knoedler has closed its doors permanently after over 160 years in business. (Read Center for Art Law: Knoedler Under Attack: The Diebenkorn Chapter, and UPDATED: Knoedler & Co: Thanks for ALL the Memories). On September 16, 2013, Rosales, the woman who consigned the paintings to Knoedler, pleaded guilty to federal crimes involving conspiracy and money laundering related to the fake art scheme. Most of the collectors who bought the works have sued Knoedler and Weissman, who have both said repeatedly that they were convinced that the artworks were genuine. The New York Times has reported the stories extensively, saying in one article, “How imitations of the most heralded Abstract Expressionists by a complete unknown could have fooled connoisseurs and clients remains a mystery.”

In an interesting twist, Freedman is now suing for defamation. A recent article about Ms. Freedman in New York magazine (available here) precipitated the defamation suit against another gallery owner quoted in the article. In the article by James Panero, a gallery owner named Marco Grassi is quoted as saying:

This has ruined one of the greatest galleries in the world. It has trashed a lot of people’s money. It seems to me Ms. Freedman was totally irresponsible, and it went on for years,” said Marco Grassi, owner of Grassi Studios gallery on the Upper East Side and a well-known expert on Old Master paintings. “Imagine people coming to someone and saying every painting you sold me is a fake. It is an unthinkable situation. It is completely insane. A gallery person has an absolute responsibility to do due diligence, and I don’t think she did it. The story of the paintings is so totally kooky. I mean, really. It was a great story and she just said, ‘this is great.’

In the complaint, filed last week in New York County Supreme Court, Ms. Freedman describes in great detail the efforts she undertook to establish the authenticity of the Rosales paintings, and she names many of the important art world experts who expressed confidence that the works were genuine. In conclusion, Freedman states that she had no reason to doubt that the works were authentic.

It is an elementary principle of defamation law that for a statement to be actionable, it must be a statement of fact, capable of being proven true or false.  Generally, statements of pure opinion, so long as they are based upon publicly available facts, cannot be the basis of a defamation claim. Moreover, if the plaintiff is a public figure, that is, someone who has taken a position with respect to a matter which is the subject of widespread interest, or who has voluntarily thrust herself into a matter of controversy, then the standard is much higher, because of the First Amendment rights of the speaker. In that case, the plaintiff must prove that the statements were made either with knowledge that they were false, or that the publisher had serious doubts that they were true but went ahead anyway.  This has been settled law ever since the landmark case of New York Times Co. v. Sullivan, 376 U.S. 254 (1964).

Given the controversy which has arisen from the closing of the Knoedler Gallery and the contested multi-million dollar sales, and her prominence in the art world, it is possible that the court would consider Ms. Freedman to be a public figure. However, the court need not reach that issue, because the statements of Mr. Grassi which form the basis of the suit appear to be only his opinion as to the extent of Ms. Freedman’s diligence. Suggestions that someone may have been less than diligent, or was “totally irresponsible” are opinions, not statements of fact. It would seem that the suit has little chance of surviving a motion to dismiss at the pleading stage, whether Ms. Freedman is deemed a public figure or not.

One can easily be sympathetic to Ms. Freedman’s situation. It appears from the public reports of the matter, and the complaint itself, that she was defrauded by her consignor, and that she took significant good-faith steps to establish the authenticity of the paintings. Indeed, the complaint lays out those steps in exhaustive detail. Nonetheless, the grave damage caused by the fake art to the reputations and finances of all those involved is not going to be remedied by a defamation suit as weak as this one. It seems more likely that the suit is more of an attempt by Ms. Freedman to rehabilitate her reputation and set out her extensive efforts in the public record, rather than to seek redress against Mr. Grassi for stating his opinions in relatively innocuous terms. New York magazine, incidentally, is not a party to the suit, although, as the publisher, they would be equally liable for any defamation as Mr. Grassi and surely have considerably deeper pockets. Whatever the basis for the strategic decision to sue Mr. Grassi alone may be, the suit seems more of a non est mea culpa than a legal claim upon which relief can be granted.

About the Author:

Richard A. Altman, Esq. specializes in art law, intellectual property, and defamation.   He may be reached at 212.633.0123 or altmanlaw@earthlink.net.