Your Browser Does Not Support JavaScript. Please Update Your Browser and reload page. Have a nice day! From the December 2020 Newsletter – Center for Art Law

United States

U.S. v. Harold Gordon, No. 3:19-cr-00028 (D. Conn. Sept. 30, 2020). Art and antiquities dealer Harold Gordon, has pleaded guilty to crafting a forgery of a civil war era desk, with immaculate skill that duped experts for years. He was charged with wire fraud for receiving money for the forged desk and forged provenance. He has since confessed to the forgery and will be placed on probation for 5 years, with special conditions served in the district of Massachusetts. Gordon was ordered to pay $100 immediately and then, over time,  pay back the price he sold the desk for: $84,500.

Cosimo Cavallaro v. SLSCO, LTD, No. 1:20-cv-2157 (S.D. Cal. filed Nov. 4, 2020). Artist and Sculptor Cosimo Cavallaro is suing the construction company hired by the federal government that destroyed the cheese wall he made on a separate and private plot of land 10 yards away from the US/Mexico steel border wall in San Diego. Cavallaro’s claim is grounded in the Visual Artist Right’s Act and trespass to private property. Cavallaro used over 400 blocks of Cotija, a hard Mexican cheese, molded into blocks, to build this wall. In November 2019, without it being completed, nor allowing the use and enjoyment of the art piece, it is alleged that the subcontractor SLSCO destroyed the sculpture by bulldozing the blocks into the ground and otherwise destroying the blocks. The sculpture was on private property leased by non-profit Art Above Ground, for the purpose of the sculpture and later bronze casts of the sculpture to be displayed in museums.

People v. Sotheby’s, No. 452192/2020 (N.Y. Sup. Ct. filed Nov. 6, 2020). Sotheby’s is being sued by the Attorney General of New York for allegedly allowing a customer to avoid sales tax, by approving forms for the collector as if he was an art dealer. A purchaser may be exempt from the payment of sales tax where he is purchasing tangible personal property solely for resale, in the normal course of business. This generally includes art galleries and art dealers who are in the resale business. The complaint herein alleges that Sotheby’s forms close relationships with their clients, in order to gain trust and their business. The collector’s key client manager (“KCM”), as well as many other employees knew that he was using the paintings only as personal property in his New York apartment, and was not in the business of resale; the collector was in the shipping business. In 2018, Porsal Equities reached a settlement with the Office of the Attorney General, in which it admitted that it and the collector used false resale certificates, primarily at Sotheby’s, in violation of the New York False Claims Act. Porsal Equities, of which the collector is president, secretary and owner, admitted that it and the collector falsely certified they were purchasing artwork and other goods for resale, but in fact, were actually purchasing solely for personal use, and paid a portion of the liabilities incurred with respect to these sales. The People of New York allege that they are well within their rights to sue Sotheby’s, as the KCM was acting within her employment to facilitate these fraudulent “resale certificates,” and that Sotheby’s did not have a proper mechanism that allowed client accounting and KCMs to have adequate information about the resale exemptions and forms. A copy of the complaint can be found here.

Canilao v. City Commercial Investments, No. 3:20-cv-08030 (N.D. Cal. filed Nov. 13, 2020). Plaintiffs, a group of widely known muralists, are suing the new owners of an LGBTQ bar in San Francisco for white-washing the paintings they had done on the bar’s exterior. In 2017, Plaintiffs each contributed a mural to the exterior of the Stud— San Francisco’s oldest continuously operating queer bar—located at 399 9th St., in the South of Market neighborhood. Because of the pandemic, the Stud had to shut down, and the new owners, the Defendants, did not heed the call of the community to leave the murals in place. On June 20th, 2020, Defendants began painting over the murals during pride week and, by mid-week, they were covered. Plaintiffs are suing under the Visual Artists Rights Act, for destruction of their work. They claim the Defendants intentionally and with notice destroyed the work that has been owned by them for years and that they are of a recognized stature. Plaintiffs are also claiming intentional destruction of fine art and negligence.

Steinhardt v. Hisrchl & Adler Galleries, No. 159990/2020, (N.Y. Sup. Ct. filed Nov. 18, 2020). Michael Steinhardt, well-known Jewish philanthropist, bought a historic portrait of George Washington known as “Munro-Lenox,” created by artist Gilbert Charles Stuart, from the New York Public Library in 2006.  When it was time to resell, in 2017, he turned to the experts in 19th century American Paintings at Hirschl & Adler. Mr. Steinhard is alleging that, in this “net to you” $10 million consignment contract with Hirschl & Adler, the gallery made a hidden commission of 17%, or $2 million. Mr. Steinhardt is claiming that the gallery purposely undervalued the portrait, so that they could claim a windfall when it sold for more. He explains that the contract did not state that if the portrait sold for above $10 million, the gallery would keep the remainder, and claims that this is in violation of its ethical and fiduciary obligations as a member of Art Dealers Association of America. Mr. Steinhardt only found about this $2 million difference when he ran into the portrait’s buyer, Leonard Stern. Mr. Steinhardt claims this “net to you” contract explicitly violates the code from the Art Dealers Association and that these types of contracts are even outlawed in the UK. His claims are grounded in fraud, breach of fiduciary duty, and unjust enrichment.

Cohen, et al., v. G&M Realty, L.P., et al., No. 13-CV-5612 and Castillo, et al., v. G&M Realty, L.P., et al., No. 15-CV-3230 (E.D.N.Y. Nov. 25, 2020). The 5Pointz case keeps on giving, which the US Supreme Court declined to hear in October 2020. Back on remand before Judge Block at the E.D.N.Y., the parties argued over attorneys’ fees after the Second Circuit confirmed the lower court decision that Gerald Wolkoff had intentionally whitewashed over 40 artworks lawfully created on his LIC-property and violated the Visual Artists Rights Act (1990). On top of the $6.75 million in damages, the developer must now pay over $2 million in attorney fees.


France | The story of Camille Pissarro’s “Shepherdess Bringing in Sheep” is far from over. In 2016, the Oklahoma University’s art museum and the heirs of the Meyer family agreed to shared custody of the painting, which had been taken by the Nazis during WWII and bought in good faith by the Weitzenhoffer family, who donated it to the museum. Now, Leone Meyer is back before the French courts, arguing that there has been a change in the law about restitution of art stolen by the Nazis and that she is unable to find a French museum to take the painting who would also agree to shipping it back to Oklahoma every three years, as per the agreement. The painting will be remitted to a French Court on Dec. 8, and arguments will be heard in January 2021.

UK | In December 2019, a London High Court ruled that the consignor of a Frans Hal painting, the company Fairlight Art Ventures, owes Sotheby’s repayment for offering it, because it was deemed a forgery. Sotheby’s paid the buyer back the full $11.75 million and the court ruled that Fairlight had to pay back Sotheby’s $5.3 million; however, Fairlight is appealing the decision. The painting was consigned in partnership with Mark Weiss, a London art dealer and, in this appeal, Fairlight is claiming that it was no more than a “financier” and not a partner with Mr. Weiss, so there was no contract binding their involvement in the transaction. Mr. Weiss had previously settled outside of the litigation for $4.2 million.

UK | The legal dispute over the estate of late British-Iraqi architect Zaha Hadid was resolved in court after four years of battle over control of the estate. Hadid’s business partner sought to be named the sole executor, which revealed allegations of sexual misconduct against him, and the judge ruled against his request. The trustees agreed that the majority of Hadid’s assets will go to her charity, the Zaha Hadid Foundation, to establish a museum and award Arab women architectural education scholarships.