The opinion of the court was delivered by: Sweet, District Judge.
Defendant the Metropolitan Museum of Art (the "Museum") has
moved pursuant to Rule 56, Fed.R.Civ.P., for summary judgment
of the claims brought against it by Sean and Janet McNally
(the "McNallys") in their defamation action against the Museum
and James Yarnall ("Yarnall"). For the reasons set forth
below, the Museum's motion is granted in part and denied in
The McNallys are residents of the State of New Jersey, and,
for the past fourteen years, have been engaged in the purchase
and sale of the works of the artist John La Farge ("La
Farge"). McNally is also currently writing a book on La Farge
and the history of his works. The McNallys have offered
certain of their art works for sale through the Graham Gallery
in New York City and at an exhibition of La Farge works
sponsored by the William Vareika Fine Arts Gallery ("Vareika")
in Newport, Rhode Island. In the past several years, articles
in The New York Times and in The Los Angeles Times, as well as
Associated Press wire service stories have mentioned or quoted
McNally on the subject of stained glass and notified the public
of upcoming lectures by McNally on La Farge.
Yarnall is a resident of the District of Columbia. An art
historian specializing in the works of La Farge, he holds
Ph.D. and M.A. degrees in art history from the University of
Chicago. Yarnall also has a B.S. Equivalent Certificate of
Accomplishment in computer programming from the Graduate
School of the U.S. Department of Agriculture in Washington,
D.C. Yarnall operates a company called Museum Systems
Enterprises ("MuSE") which provides computer database services
to various museums.
The Museum is a not-for-profit corporation organized under
the laws of the State of New York and located in Manhattan.
The McNallys commenced this defamation and tortious
interference with business relations action in the United
States District Court for the District of New Jersey on
November 27, 1989. By order of April 23, 1990, the New Jersey
District Court transferred the action to the Southern District
of New York pursuant to 28 U.S.C. § 1406(a) in lieu of granting
a motion by Yarnall, a resident of the District of Columbia, to
dismiss as to him for lack of jurisdiction.
On August 2, 1990, the Museum filed its motion for summary
judgment. The parties agreed to an adjournment of the motion
until December 7, 1990 to accommodate the scheduling of
discovery. A subsequent agreement adjourned the return date of
the motion to February 11, 1991, when oral argument was heard.
The motion was considered fully submitted as of that date.
La Farge was an American artist who lived from 1835 to 1910.
He received world renown for his stained glass work, one of
several media in which the artist worked.
1. The Catalogue Raisonne
In 1985, Yarnall was selected to direct the publication of
The Catalogue Raisonne of the Works of John La Farge (the
"Catalogue Raisonne") to be published by Yale University Press.
The late Henry La Farge, grandson of the artist, had started
the Catalogue Raisonne as a compendium of all of La Farge's
known works. From 1983 to 1985, Yarnall had assisted Henry La
Farge with the Catalogue Raisonne. Assisting Yarnall in the
compilation of the Catalogue Raisonne is Catherine Voorsanger
("Voorsanger"), a graduate student at the City University of
New York, where
she is working on her doctoral dissertation on La Farge.
In 1985, the Museum began work on its plan to create the
Henry R. Luce Center for the Study of American Art ("the Study
Center"), which opened in December, 1988. The Museum's purpose
in creating the Study Center was to facilitate and encourage
art historical research by compiling in a computer data base
the existing information relating to the Museum's various
American Wing collections. The Study Center is open to members
of the public as well as to Museum personnel.
In 1985, the Museum retained Yarnall to assist the
Departments of American Art in coordinating the
computerization of information concerning the American Wing
collections. Pursuant to the terms of the contract with
Yarnall into which the Museum entered in 1985 and each
succeeding year through 1989, the Museum paid Yarnall on an
hourly basis for hours actually worked, as determined by
Yarnall, or, in the case of the 1989 contract, at the rate of
$250 a day, not to exceed $5,000 in the aggregate. The Museum
did not withhold taxes or social security contributions from
Yarnall's compensation, and reported his income on IRS Form
1099. Yarnall did not receive the sick leave, vacation, health
insurance or other fringe benefits due other Museum employees.
The contracts described Yarnall's relationship to the Museum
as that of an independent contractor.
Yarnall's duties pursuant to the contract included: (1) the
implementation of a computer program developed for the Museum
by another computer consultant; (2) working with the curators
to develop a thesaurus of cataloguing terms to be used to
retrieve information entered in to the computer database; (3)
the processing of amplified and corrected catalogue
Pursuant to the contract, Yarnall was to confer weekly to
review his progress with Lewis Sharp ("Sharp"), curator and
the administrator of the American Wing as well as with Doreen
Burke, associate curator of American Painting and Sculpture.
The Museum selected Yarnall for the Study Center project in
part on the basis of his previous experience as coordinator of
a similar database at the Office of Research Support of the
National Museum of American Art, part of the Smithsonian
While working on the Study Center project, Yarnall set his
own hours, commuting to the Museum from his home in
Washington, D.C. for a two day stint each week. He also worked
on the project at home. The Museum provided him with an office
and telephone, as well as with the use of Museum stationery.
On January 25, 1989, Yarnall entered into another
relationship with the Museum, that of a "Richard J. Schwartz
Research Associate." Mr. and Mrs. Richard J. Schwartz (the
"Schwartzes") are collectors of art and benefactors of the
Museum. During the previous year, the Schwartzes provided the
Museum with a $60,000 research grant for the purpose of
enabling Yarnall and Voorsanger to continue their work on
Volume II of the Catalogue Raisonne. At the Schwartzes'
request, none of the funds was allocated to cover the Museum's
overhead or other administrative expenses.
Most of the terms of the contract were identical to the
terms of Yarnall's Study Center contracts, with the exception
that Yarnall's work under the Schwartz grant was described as
During the contract period, it is expected that
you will research the murals of John La Farge
executed between 1875 and 1910, as well as
stained glass executed between 1886 and 1910.
This research is in preparation for your
contribution to the Catalogue Raisonne of the
Work of John La Farge, to be published by Yale
University Press, which will be dedicated to La
Farge's work in all media.
In a letter of January 25, 1990, the Museum renewed its
contract with Yarnall relating to the Schwartz Grant for a
further six month period ending June 30, 1990. Pursuant to the
renewal, Yarnall received $5,000 upon signing and $5,000 on
May 1, 1990, without deductions for taxes or social security
Yarnall's Alleged Statements
In early 1988, Richard J. Schwartz ("Schwartz") told the
Museum that he was interested in acquiring a stained glass
window by La Farge. Alice Frelinghuysen ("Frelinghuysen"), the
associate curator in the Museum's department of American
Decorative Arts, asked Yarnall if he knew about any La Farge
windows on the market, and Yarnall responded that such a
window (the "Moon Window") by La Farge was for sale.
Frelinghuysen relayed this information to Schwartz.
Schwartz asked Frelinghuysen and Sharp to attend a viewing
of the Moon Window at the Museum. The Museum often
accommodates such requests from benefactors to review works of
art, but it is the Museum's policy not to render an opinion
involving a valuation of such works.
Present at the viewing in the office of John K. Howat
("Howat"), the Lawrence A. Fleischman Chairman of the
Departments of American Art, were Schwartz, Frelinghuysen,
Sharp, as well as Yarnall and Voorsanger, whom Sharp and
Frelinghuysen had invited to attend. Lawrence J. Zinsi
("Zinsi"), the owner of the window, and Vincent Mancuso
("Mancuso"), Zinsi's agent, waited in another room during the
During the viewing, there was a general discussion of the
Moon Window, although Schwartz did not ask any one present for
an opinion on the monetary value of the work. Yarnall stated
his belief that based on a drawing of the window with which he
was familiar, La Farge designed the window in the 1880's.
After the viewing, Schwartz conferred separately with Zinsi
and Mancuso concerning the window's price. Schwartz did not
talk about the price with Yarnall or with any one else except
Zinsi. Schwartz subsequently bought the Moon Window for his
personal collection for $165,000.
Some time before Schwartz's purchase of the Moon Window,
McNally had an opportunity to view the window. McNally
expressed the opinion that while the Moon Window was designed
by La Farge, it is unlikely that La Farge himself executed the
design. Based on this opinion, McNally valued the Moon Window
at approximately $20,000.
Shortly after Schwartz's purchase of the Moon Window, a
supposed "companion window" to the Moon Window sold at auction
at Christie's for $14,200 (the "Christie's Window").
McNally believed that the Christie's Window was likely the
companion to the Moon Window, based on dating, motif and
Vareika offered the Christie's Window for sale at his 1989
La Farge exhibition in Newport, Rhode Island at a price of
In late November, 1988, McNally consigned for sale to the
Graham Gallery (the "Gallery") in Manhattan a stained glass
window by La Farge known as "Garland of Fruit and Flowers"
(the "Garland Window"). The asking price for the Garland
Window was $150,000.
In early December 1988, Robin Graham ("Graham"), president
and co-owner of the Gallery, contacted the Schwartzes and told
them that the Garland Window was available for sale. The
Schwartzes expressed interest in the Garland Window, ...