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HARTMAN v. HARRIS

December 16, 1992

ROLAND HARTMAN, Plaintiff,
v.
ROBERT HARRIS and DONALD HARTMAN, Defendants, RENEE HARTMAN, Intervenor.



The opinion of the court was delivered by: ROBERT L. CARTER

 ROBERT L. CARTER, District Judge

 Plaintiff Roland Hartman ("Roland") brings this diversity action against his son, Donald Hartman ("Donald") and Robert Harris ("Harris"), for breach of contract and fraud. *fn1" The defendants have moved, under Rule 56, F.R.Civ.P., for summary judgment on each cause of action, contending that plaintiff's claims are invalid because they are based on an illegal contract.

 I.

 The undisputed facts are as follows. On August 14, 1964, a rare 17th century bronze statue crafted in Benin was stolen from a New York art gallery. Plaintiff, then an art and antiquities dealer living in New York, acquired the bronze in 1965 for approximately $ 50,000 in cash and merchandise from a fellow art dealer. After possessing the piece for some years, plaintiff was informed by Oscar flyer, another art dealer, that the statue was a stolen figure. Although plaintiff admits that he "took Myer's word," *fn2" he never reported it to any law enforcement agency. Instead, he placed the statue in storage until 1976, when he and Donald, also an art dealer, moved to California and brought the sculpture with them.

 In 1980, plaintiff alleges that he entered into an oral agreement (the "agreement") with Donald for Donald to take the bronze to New York, make it marketable, and sell it. Father and son were to share the profits from the sale. In November, 1986, the statue was sold at Sotheby's in New York for $ 720,000. Plaintiff alleges that Donald informed him of the sale, but told him that the proceeds would be held in escrow for three years due to questions regarding the title. Roland now believes that Sotheby's paid the sale proceeds to Harris as Donald's agent.

 Undeterred by his own iniquitous behavior, plaintiff petitions this court for relief against his deceitful offspring. His first and second claims (the "contract claims") allege that defendants breached the agreement by failing to remit to him any of the proceeds from the sale. Plaintiff's third cause of action alleges that Donald committed fraud based on his 1986 statement regarding escrow.

 II.

 In order to prevail on their summary judgment motion, defendants must show that "there is no genuine issue as to any material fact and that [they are] entitled to a judgment as a matter of law." Rule 56, F.R.Civ.P.. The court is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue" which must be reserved for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 A.

 Defendants contend that summary judgment is warranted oil the contract claims because performance of the agreement violated several criminal statutes. It is well settled under New York law *fn3" that a contract to perform illegal acts is void and unenforceable. See, e.g., Riggs v. Palmer, 115 N.Y. 506, 511-512, 22 N.E. 188 (1889); Barker v. Kallash, 91 A.D.2d 372, 459 N.Y.S.2d 296 (2d Dep't 1983). However, the illegality of the contract must be determined based on the laws of each jurisdiction wherein acts related to the contract were performed. See Restatement (Second) of Conflict of Laws § 202 cmt. c (1971).

 Defendants maintain that Roland and Donald violated the following laws: (1) a California stolen goods statute, Cal. Penal Code § 496(1) (West 1988), *fn4" by failing to report the statue as stolen when it was located in that state; (2) a federal stolen goods statute, 18 U.S.C. § 2314 (1990), *fn5" by transporting the statue from California to New York to be sold; and (3) a New York stolen property statute, N.Y. Penal Law § 165.50 (McKinney 1988) *fn6" by failing to report the bronze as stolen when Donald returned to New York. *fn7" However, knowledge of the stolen nature of the property is a necessary element of all these crimes, See United States v. Wallach, 935 F.2d 445, 466 (2d Cir. 1991) (federal statute); People v. Rodriguez, 177 Cal. App. 3d 174, 222 Cal. Rptr. 809, 812 (Ct.App. 1986) (California statute); People v. Smith, 116 A.D.2d 819, 496 N.Y.S.2d 852 (3d Dep't 1986) (New York statute); and plaintiff argues that he did not know at the time of the agreement that the statue was stolen. Since Roland does not otherwise contest that the contract's performance was in violation of these statutes, a finding that he possessed the requisite knowledge would establish the illegality of the contract and bar this lawsuit.

 According to plaintiff, he remained unsure whether the bronze was stolen until the time of his deposition in the case, when a New York Times article on the statue's theft was presented to him. He cites the following testimony from the deposition to support his position:

 Q: As you sit here today, sir, is there any question in your mind about the fact that this piece was a stolen ...


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