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June 25, 2002


The opinion of the court was delivered by: Marrero, District Judge.

Plaintiff John T. Mickle ("Mickle") brought this action alleging that defendant Christie's, Inc. ("Christie's") committed breach of contract, of fiduciary duties and of implied duties of good faith and fair dealing, all in connection with Christie's cancellation and rescission of the sale of a work of art owned by Mickle and his sister, Diana J. Mickle (collectively, the "Mickles"), and consigned to Christie's for auction. Christie's, asserting that it rescinded the sale after questions arose concerning the authenticity of the painting, responded with counterclaims for fraud, misrepresentation and declaratory relief, as well as with a motion requesting summary judgment dismissing the complaint. For the reasons discussed below, Christie's motion is GRANTED.


In early 1999, the Mickles, who assert that they have no formal training in art, consigned to Christie's for auction a painting they represented they co-owned, having inherited it from their grandmother. The painting, known as "Billy Bowlegs" ("the Painting"), is an unsigned work, which the Mickles attributed to the noted 19th century American painter, Carl Wimar ("Wimar"). Christie's, in order to verify that the Painting was by Wimar prior to entering into an auction agreement with the Mickles, contacted by telephone Joseph D. Ketner ("Ketner"), coauthor of a 1991 book on Wimar, entitled Carl Wimar, Chronicler of the Missouri River Frontier, that lists the Painting among Wimar's works. Christie's asserts that on that occasion Ketner confirmed his attribution of the Painting to Wimar.*fn2 Based on information provided by the Mickles, Ketner's opinion and the assessments of its own staff, Christie's concluded that the Painting was properly attributed to Wimar.

On February 16, 1999, the Mickles entered into a Consignment Agreement with Christie's for the auction sale of the Painting. (Affidavit of Paul R. Provost, sworn to on February 19, 2002 ("Provost Aff."), Ex. C.) Two provisions of that agreement are central to the dispute at hand. Paragraph 8(b) states:

Non-Payment by Buyer. Christie's shall have no obligation to enforce payment by the buyer. However, in the event of non-payment by the buyer, Christie's in our sole discretion, as Consignor's agent or on our own behalf, may cancel the sale and return the Property to Consignor, enforce payment by the buyer or take any other actions permitted by law. Christie's shall not, under any circumstances, be liable for any consequential damages to Consignor as a result of non-payment of the buyer.

Paragraph 8(c) provides:

Rescission of Sale. Christie's, as Consignor's agent, is authorized to accept the return and rescind the sale of any lot of Property at any time if Christie's in our sole judgment determines that the offering for sale of any Property has subjected or may subject Christie's and/or Consignor to any liability. . . .

Prior to an auction scheduled for May 26, 1999, Christie's exhibited the Painting in its galleries and listed the work in its catalogue in a lot entitled "Important American Paintings, Drawings and Sculpture" ("the Catalogue"). (Provost Aff., Ex. D.) The Catalogue attributed the work to Carl Wimar. (Id.) The Catalogue also contained a section entitled "Conditions of Sale and Limited Warranty" to which the artwork's consignment and auction sale, pursuant to Paragraph 1 of the Consignment Agreement, were subject. (Provost Aff., Ex. D.) The Limited Warranty stated in part:

The buyer's sole and exclusive remedy against Christie's and the consignor under this warranty shall be rescission of the sale and refund of the purchase price paid for the lot. . . . It is Christie's general policy, and Christie's shall have the right, to have the buyer obtain, at the buyer's expense, the opinion of two recognized experts in the field, mutually acceptable to Christie's and the buyer, before Christie's determines whether to rescind a sale under the above warranty. If the buyer requests, Christie's will provide, the buyer with the names of experts acceptable to it.

The auction was held on May 26, 1999. The highest bidder, for a price of $750,000, was the Schwarz Gallery (the "Gallery"). Subsequent to the auction, the Gallery, allegedly based on negative reports circulating among members of the trade raising doubts about the attribution of the Painting to Wimar, refused to make payment and requested that Christie's rescind the sale. Christie's reaffirmed the attribution of the Painting to Wimar and demanded payment. In letters dated July 1 and July 11, 1999 Christie's wrote that it stood by the attribution, and that the negative hearsay the Gallery had reported did not constitute grounds for rescission. Reminding the Gallery that the transaction was subject to the Catalogue's Conditions of Sale, Christie's noted that it would consider rescinding the sale only if the Gallery followed those rules. The procedures required the buyer to obtain the written opinions of two mutually acceptable experts stating that the work was not that of Wimar.

The Gallery, however, continued to refuse to pay for the Painting, which remained in Christie's custody. At that point, Christie's again contacted Ketner by telephone in order to confirm his attribution of the Painting. According to Christie's account of the conversation, Ketner said that he was not then confident of the attribution, although he had been sure of it at the time he had written the Wimar book. When Christie's offered to arrange a viewing of the Painting in order for him to confirm his opinion, Ketner declined.*fn3

The Mickles assert that shortly after the sale Ketner also spoke with Robert Schwarz, owner of the Gallery, and allegedly said that, having consulted more than 20 persons on the matter, he was "100% sure [the Painting] is a Wimar" and congratulated Schwarz for having "bought one of the most important Wimar to come on the market in recent years." (Pl.'s 56.1 Statement, at ¶ 9.) The Mickles contend that Christie's was aware of this statement by Ketner no less than one month before its rescission of the sale.

The Mickles then commenced an action in New York state court against the Gallery and Christie's in September 1999 (the "State Action") seeking to enforce the sale and obtain payment for the Painting. In January 2001, the Mickles stipulated to a dismissal of the State Action as to Christie's without prejudice to renew.

During the course of the state litigation, at the Gallery's request, Dr. William H. Truettner ("Truettner"), a senior curator at the National Museum of American Art, Smithsonian Institution, examined the Painting at Christie's offices. Truettner, who had played a role in an exhibit of Wimar works at the Amon Carter Museum in 1991, was acknowledged as an official consultant to Ketner's book. Truettner's viewing of the Painting, which occurred on May 5, 2000, was attended by attorneys or representatives for the Mickles, the Gallery and Christie's. According to Christie's, several weeks after his examination, Truettner, by telephone conference call with representatives and counsel for the Mickles, the Gallery and Christie's, expressed his opinion that the Painting was not the work of Wimar. Five months later, in November 2000, Christie's responded to interrogatories from the Gallery asking Christie's views concerning the attribution of the Painting and then asserted that "Christie's currently takes no position as to whether the Painting is by Carl Wimar." (Def.'s 56.1 Statement, at 5.).

Christie's states that in January 2001, representatives of Christie's and the Gallery met, at which occasion the Gallery again demanded that Christie's rescind the sale because there was no support for the Wimar attribution. According to Christie's, the Gallery then provided Christie's with copies of certain materials obtained in discovery in the State Action that the Gallery reportedly claimed demonstrated that the Mickles must have known, from their prior consultations with various museums and knowledgeable persons, that the Painting could not be attributed to Wimar. Christie's also contends that over a twenty-year period the Mickles and their agents, Frank and Julia D'Arista, had attempted to auction or privately sell the Painting and were unsuccessful allegedly because of problems with its attribution to Wimar. These disclosures allegedly included efforts on two occasions to consign the painting to the Sotheby's auction house and the unwillingness of the New Britain Museum of Art and the Gerald Peters Gallery to attribute the Painting to Wimar.

Christie's contends that the Mickles failed to fully reveal the Painting's prior history to Christie's, despite the warranty clause contained in the Consignment Agreement stating that the consignor "had no reason to believe that any lot of Property is not authentic or is counterfeit." (Consignment Agreement ¶ 5(a).) Christie's adds that a list of places where the Mickles claimed the Painting had been on loan for exhibition or research was inaccurate and misleading.

Following the January 19, 2001 meeting with the Gallery, and by reason of Christie's continued refusal to rescind the sale at that time, the Gallery requested that Christie's supply it with a list of acceptable experts to view the Painting and determine its authenticity, as provided for in the Catalogue's Limited Warranty and Conditions of Sale. Christie's asserts that it then compiled a list of experts it considered qualified to make such a determination, and sent the names to the Gallery and to the attorney for the Mickles in February 2001. By Christie's account, from that list, the Gallery selected Thomas Nygard ("Nygard"), owner of the Thomas Nygard Gallery, to view the Painting. On April 6, 2001, in the presence of attorneys for the Mickles, the Gallery and Christie's, Nygard examined the Painting. By letter dated April 13, 2001, Nygard informed the parties of his opinion that the Painting was not by Wimar.

At that time, the Gallery renewed its demand that Christie's rescind the sale in accordance with the Catalogue's Conditions of Sale. Christie's maintains that, following its receipt of Nygard's letter, it concluded that it no longer held good faith grounds to sell the Painting as a Wimar. Based on its then having received the contrary views of two recognized authorities, Ketner's refusal to confirm his earlier opinion and the information regarding the Mickles' unsuccessful efforts to authenticate and sell the Painting as a Wimar, Christie's asserts it feared that it or the Mickles could have been subjected to liability unless Christie's rescinded the sale.

The Mickles challenge Christie's assertion in this regard. They point out that the Painting had been accepted for exhibition with an attribution to Wimar at several prominent Museums between 1982 and 1999 and was on display at Christie's galleries for no less than two months prior to the May 26, 1999 auction. Nonetheless, on May 1, 2001, Christie's informed the Mickles of its intention to cancel and rescind the sale. The letter stated that "Christie's may be subject to liability under the warranty it provides to [the Gallery] if the sale of [the Painting] were enforced." (Provost Aff.Ex. N.)

Mickle then, by order to show cause filed in this Court on May 10, 2001, sought a preliminary injunction and temporary restraining order to prevent Christie's from rescinding the sale. The Court denied Mickle's motion.

On May 11, 2001, Christie's cancelled and rescinded the sale of the Painting. Christie's notes that the Gallery never paid for the Painting and that by reason of the rescission of the sale Christie's forfeited commissions to which it was entitled under the Consignment Agreement that would have totaled $122,500.

Christie's later answered the complaint in this action and filed counterclaims against the Mickles alleging fraud, misrepresentation, breach of contract and breach of warranty. It sought indemnity and declaratory relief with regard to its rescission. Plaintiff Diana J. Mickle filed her own counterclaim asserting essentially the same allegations contained in Mickle's complaint. The case was placed on the Court's suspense docket pending a determination of the State Action.

Following Christie's rescission of the sale, the Gallery moved for summary judgment in the State Action. It argued that in view of Christie's action and the withdrawal of its warranty of authenticity, the case should be dismissed. In response, the Mickles countered that the cancellation and rescission of the sale were invalid on the ground that Christie's lacked justification, and therefore the Gallery was not relieved of its obligation to pay for the Painting. The Mickles, reflecting the arguments they later raised in the case at hand, alleged that Christie's action was unwarranted because: (1) Christie's, under applicable agency law principles, owed the Mickles a fiduciary duty and did not act in good faith in rescinding the sale; (2) Christie's did not face any real risk of liability; and (3) the Gallery had not obtained the expert opinions in a timely fashion.


In considering a motion for summary judgment, a court may grant the motion only if, on the basis of the record of the pleadings, depositions, answers to interrogatories and admissions, together with any affidavits filed, it concludes that there is no genuine dispute as to any material fact and that, based on the undisputed facts, the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Whidbee v. Garzarelli Food Specialties, Inc., 223 F.3d 62, 68 (2d Cir. 2000). The role of the court in ruling on such a motion "is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987).

The moving party bears the initial burden of establishing the basis for the motion and identifying those portions of the materials on the record that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Koch v. Town of Brattleboro, Vermont, 287 F.3d 162, 165 (2d Cir. 2002). In this regard, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In weighing whether the movant has satisfied this threshold, the court must view the record as a whole in the light most favorable to the opponent of the motion. See id. at 255, 106 S.Ct. 2505. The movant may meet this initial burden by demonstrating the absence of evidence sufficient to support an essential element of the opponent's underlying claim. See LaBounty v. Coughlin, 137 F.3d 68, 73 (2d Cir. 1998).

If the court finds that the moving party has satisfied his initial burden of persuasion, the opponent must then demonstrate the existence of a genuine issue of material fact. See Goenaga v. March of Dimes, 51 F.3d 14, 18 (2d Cir. 1995). The opposing party must also "do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). To this end, the opponent "may not rely on conclusory allegations or unsubstantiated speculation." Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). Rather, he must support ...

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