The opinion of the court was delivered by: CANNELLA
Defendants' motion for judgment notwithstanding the verdict ("judgment n. o. v.") is denied, Fed.R.Civ.P. 50. Defendants' motion in the alternative for a new trial limited to the question of damages is granted, unless plaintiff accepts a remittitur of $ 750,000, thereby reducing the jury's verdict in her favor to $ 938,000. Fed.R.Civ.P. 59.
After a six-day trial, the jury (1) found defendants liable for breach of contract and breach of an implied warranty of title in connection with their sale to plaintiff of Matisse's Portrait on a Yellow Background, and (2) awarded damages in the amount of $ 1,688,000. The jury also found defendants not liable for breach of any express warranties or fraud.
Defendants have moved for a judgment n. o. v., or, alternatively, a new trial limited to the question of damages. Defendants' motion raises several issues which can be summarized into three basic arguments: First, that the Court improperly instructed the jury as to what constitutes a breach of the implied warranty of good title, second, that the Court failed to charge the jury as to the Italian law applicable to the painting in question, and third, that the Court incorrectly decided the proper measure of damages. For the reasons set forth below the Court denies defendants' motion for a judgment n. o. v. but orders a new trial on the question of damages unless plaintiff accepts a reduction in her damage award to $ 938,000.
In deciding whether to grant a judgment n. o. v., the Court is mindful of its obligation to view the evidence adduced at trial in a light most favorable to the non-moving party. In that light, the instant motion should be granted only if
(1) there is a complete absence of probative evidence to support the verdict for the non-movant or (2) the evidence is so strongly and overwhelmingly in favor of the movant that reasonable and fair-minded men in the exercise of impartial judgment could not arrive at a verdict against him.
Unijax, Inc. v. Champion International, Inc., 516 F. Supp. 941, 945 (S.D.N.Y.1981) (quoting Armstrong v. Commerce Tankers Corp., 423 F.2d 957, 959 (2d Cir.), cert. denied, 400 U.S. 833, 91 S. Ct. 67, 27 L. Ed. 2d 65 (1970) (citations omitted)); accord, Mattivi v. South African Marine Corp., 618 F.2d 163, 167 (2d Cir. 1980).
Defendants first object to the Court's charge that an implied warranty of title can be breached if a substantial cloud is cast upon the title to the painting. Defendants contend that absent proof of seizure, confiscation, or forfeiture, the implied warranty of title cannot be breached. The Court, however, agrees with plaintiff that the warranty of title is breached when the plaintiff becomes aware of a claim on title by a third-party. The Official Comments to section 2-312 of New York's Uniform Commercial Code ("UCC") make clear that the purpose of this section is to ensure that a buyer will not be exposed to a lawsuit in order to protect his title. See N.Y. U.C.C. § 2-312 Comment 1 (McKinney 1975).
The Court adopts the view expressed by both the courts of New York
and a number of other states
that the implied warranty of title is breached when the buyer is faced with a claim on title, whether valid or invalid, by a third-party.
Viewing the evidence adduced at trial in a light most favorable to plaintiff, the Court finds that the jury could easily have determined that a third-party, in this case the Italian Government, had made a legitimate claim on the title to the painting.
Therefore, defendants' motion for a judgment n. o. v. on the ground that plaintiff did not produce evidence of a breach of the implied warranty of good title is denied.
Defendants next argue that because the Court did not charge the jury as to the applicable Italian law, plaintiff could not as a matter of law establish either a breach of implied warranty or contract. The Court rejects this contention because the Italian law applicable to this case was in fact explained to the jury without unduly complicating the issues that the jury was required to decide. See Vishipco Line v. Chase Manhattan Bank, 660 F.2d 854, 859 (2d Cir. 1981); Schertenleib v. Traum, 589 F.2d 1156, 1163 (2d Cir. 1978); Panama Processes, S. A. v. Cities Service Co., 500 F. Supp. 787, 796 (S.D.N.Y.1980).
The Court charged the jury as follows:
You have heard testimony about certain Italian customs and laws and regulations, and here I instruct you on the Italian law: There is a legal dispute involving Italian law as to what might happen to the painting if it is ever returned to Italy. A number ...