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SERE v. McNALLY INTERNATIONAL CORP.

United States District Court, S.D. New York


January 22, 2004.

CLAUDE SERE, Plaintiff against McNALLY INTERNATIONAL CORP., Defendant

The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge

MEMORANDUM and ORDER

I. INTRODUCTION

Before the Court is the defendant's post-trial motion for judgment as a matter of law, made pursuant to Fed R. Civ. P. 50. Alternatively, the defendant has requested that the Court direct that a new trial be held pursuant to Fed.R.Civ.P. 59.

  II. BACKGROUND

  In 1971, Claude Sere ("Sere") purchased a six-panel art deco screen named St. Gilda that was created by the Swiss artist Jean Dunand ("Dunand"). The screen, which has six panels, was made of wood that was lacquered and encrusted with egg shells across its top. The edges of the screen were black, so as to resemble ebony. According to Sere, the screen was in good condition; it did not have any scratches. Sere had the screen photographed. After the screen was purchased, Sere kept it in the sitting room of his Paris home. It remained there for approximately ten (10) years until Sere moved to a new home. The screen was kept in that home until approximately 1982. At that time, Sere sent the screen and other artwork he owned via ship to New York, where he hoped to acquire an apartment. Page 2

  Based on the recommendation of a friend, Sere stored the works of art he shipped to New York in a storage facility owned and operated by the Bowling Green Warehouse Company ("Bowling Green") located in Yonkers, New York. While Sere's artwork was stored at Bowling Green's facility, he inspected it three times. Although Sere remembered seeing the Dunand screen at Bowling Green's facility when he inspected his property, he could not recall the precise date on which he last viewed the screen at Bowling Green's warehouse.

  There came a time when Sere returned to Europe all the artwork he had stored with Bowling Green, except for the Dunand screen. Sere explained that he did not return the screen to Europe because he had other furniture in New York which the screen would compliment.

  In 1993, Bowling Green was having financial difficulties. That same year, the defendant, McNally International Corporation ("McNally"), purchased Bowling Green's largest asset, its storage contracts. In the eight months that followed that acquisition, McNally did not remove any property from Bowling Green's Yonkers facility to its own facility. It determined not to do so even though it was aware that Bowling Green was having problems keeping personnel at the warehouse. In fact, within two months of McNally's purchase of Bowling Green's storage contracts, Bowling Green did not have any employees at its Yonkers facility on a full-time basis; a lone Bowling Green employee would visit the Yonkers warehouse approximately twice weekly.

  Eight months after McNally acquired Bowling Green's storage contracts, it moved all the items it had allowed to remain in Yonkers to a facility it maintained in Brooklyn, New York. Thereafter, McNally transported those items to its New Jersey warehouse. The items removed from Bowling Green's facility were housed in 400 cargo shipping containers. McNally never unpacked the containers to ascertain what was in them or to inventory the items it received from Page 3 Bowling Green. According to McNally's president, McNally found the task of going through 400 shipping containers too onerous. He also explained that the property within the containers would be put at risk for damage while it was being handled by anyone who might unpack the containers to inventory their contents. Therefore, McNally determined to rely upon Bowling Green's records concerning the items stored in the containers; however, Bowling Green's records were incomplete.

  After the shipping containers were removed from Brooklyn to McNally's New Jersey facility, McNally's president directed the company's bookkeeper to send all former Bowling Green clients a New Jersey warehouse receipt and contract for storage. McNally's president explained that these documents were dispatched to Bowling Green's former clients in accordance with his company's routine practice and custom and pursuant to New Jersey law. Under the terms of the New Jersey warehouse receipt and contract for storage, McNally's liability for loss or damage to property it stored was limited to $.60 per pound, per article stored, or $2,000 in the aggregate for all items stored, unless the owner of the property: (a) declared to McNally that the property's value exceeded $2,000; and (b) agreed to pay McNally higher storage fees that were keyed to the declared value of the goods stored. Sere's agent, who handled all of Sere's transactions with McNally, denied ever receiving a warehouse receipt and contract for storage from McNally, and McNally's records do not contain a copy of a New Jersey warehouse receipt and contract for storage signed by the plaintiff.

  In late 1996, Sere, through his agent, directed McNally to return the Dunand screen to him. McNally attempted to locate the screen in its warehouse. However, in 1998, after searching all the items transferred from Bowling Green to McNally, McNally informed the plaintiff, Page 4 through his agent, that the Dunand screen could not be located; the instant litigation ensued.

  At the trial, both parties presented opinion evidence from art appraisers respecting the value of Sere's screen. Neither of the expert witnesses had examined the Dunand screen because McNally could not locate it. Plaintiff's expert witness testified*fn1 that she examined under a magnifying glass, two photographs of the Dunand screen provided to her by the plaintiff; through that examination, she detected that the screen had not been damaged. In addition, plaintiff's expert witness stated that she searched auction house catalogues and the Internet for comparable works of art by Dunand and, based upon her research, concluded that the fair market or auction house value for Sere's Dunand screen is in the range of $80,000 to $200,000. However, she noted that if, at auction, the screen yielded only $50,000-$70,000, its replacement value would be approximately $120,000. Her valuation, the jurors were told, assumed that the screen was authentic and that it was in good condition. The jurors also learned that such assumptions are routinely made and disclosed by art appraisers, in accordance with the Uniform Standards of Professional Appraisal Practice, when they are asked to value a piece of art which is not available to them for physical inspection.

  The defendant's expert witness questioned the authenticity of the Dunand screen at issue. He did so because the bill of sale for the screen: (1) did not identify the screen by name; (2) failed to contain the signature of the person who sold it to Sere; and (3) did not state how payment for the screen was effected. In addition, the defendant's expert witness explained that he had consulted the Marcilhac Catalogue of Dunand's work, a reference source that both parties Page 5 conceded was the definitive source listing all Dunand's works. The defendant's expert witness informed the jury that the description in the Marcilhac Catalogue of the St. Gilda screen did not contain any mention of egg shells. Since the Marcilhac Catalogue did not corroborate the plaintiff's claim that his screen was encrusted along its top with egg shells, this, too, led the defendant's expert to question the authenticity of Sere's screen.

  The defendant's expert witness also questioned whether the screen was in good condition. He testified that storing the screen for ten years in a warehouse facility that was not designed specifically to house artwork, and whose temperature and humidity were unregulated, would affect the screen adversely. As a consequence, the defendant's expert witness valued Sere's screen at less than $40,000. However, he also stated that, assuming good condition and authenticity, the screen would be worth $40,000 at the time of its reported loss, 1996.

  The jury rejected the defendant's claim that its liability to Sere should be limited by the terms and conditions of the New Jersey warehouse receipt and contract for sale that it claimed to have sent to Sere, and awarded the plaintiff $120,000 in damages for the Dunand screen McNally lost. The instant motion followed.

  McNally contends that it is entitled to judgment as a matter of law, pursuant to Fed.R.Civ.P. 50, because the plaintiff failed to establish that his screen was authentic and in good condition at the time of its loss. McNally claims that the testimony given by plaintiff's expert witness concerning the value of Sere's screen was "rank" speculation because it was predicated on assumptions she made regarding the screen's authenticity and its condition at the time of its loss. McNally maintains that such speculative testimony did not provide an adequate basis upon which the jury could rely in reaching a verdict that awarded damages to Sere. Page 6

  McNally also urges the Court to grant its Fed.R.Civ.P. 50 motion because there was uncontradicted evidence in the record that a New Jersey warehouse receipt and contract for storage was sent to the plaintiff and that he failed to respond to it. Therefore, McNally believes that it is entitled to the benefit of the limited liability provisions contained in that document.

  As an alternative for relief, McNally requests that a new trial be held. McNally makes that request because, after it acquired Bowling Green's storage contracts, it never inspected the shipping containers in which Bowling Green kept its customers' property. Instead, McNally relied upon Bowling Green's storage records and, while Bowling Green acknowledged receipt and continued possession of Sere's screen, McNally never knowingly and affirmatively did so. In addition, McNally contends that the record evidence demonstrated that it employed proper security safeguards to ensure that the property it held in storage would not be susceptible to fires, burglaries, thefts or acts of dishonesty by its employees. Therefore, irrespective of how the screen was lost, McNally maintains that the loss was not due to its breach of a contract of bailment and/or to negligence on its part. Consequently, in McNally's view, the jury's verdict on the issue of liability was against the weight of the evidence.

  The plaintiff opposes the defendant's motion for judgment as a matter of law. He contends that the record evidence established that Dunand made a screen that resembled the screen depicted in the photographs that plaintiff commissioned and provided to his expert witness for examination. Furthermore, the jury heard evidence from plaintiff's expert witness that no forgeries of Dunand's screens were reported to have reached the marketplace at or about the time Sere acquired his Dunand screen. In addition, no evidence was presented to the jury that established that an original of the screen was possessed by someone other than Sere. Page 7 Furthermore, the plaintiff maintains that the defendant ignored evidence in the trial record that established, not only that his expert witness could perceive no damage to the screen upon examining photographs of it, but, more importantly, that Sere inspected the screen while it was in storage and found no cracks in the lacquer or damage to the edges of the screen. Therefore, according to Sere, the jurors received evidence that the conditions under which the screen was stored had no adverse effect on it. As a result of the evidence he presented at the trial, the plaintiff contends that the defendant is wrong when it claims that findings made by the jury, concerning the authenticity of the Dunand screen he possessed, and its condition at the time of loss, were predicated solely upon an expert witness' "speculations."

  With respect to the defendant's claim that its liability should have been limited, based upon the terms and conditions of the New Jersey warehouse receipt and contract for storage that it sent to Sere, the plaintiff contends that the jury rejected that claim reasonably based upon the record evidence. In support of this contention, Sere points to the testimony of McNally's president that he directed his sister to send all of Bowling Green's former customers a copy of the New Jersey warehouse receipt and contract for storage. However, McNally's president stated that he had no direct knowledge that such documents were ever sent to Sere or to any of Bowling Green's other former customers. In addition, Sere contends that the record evidence shows that his agent searched her files and did not find a copy of the warehouse receipt and storage contract that McNally claimed to have sent Sere. Moreover, McNally's president testified that his company's records do not contain a copy of that document signed by Sere. Based on those facts, Sere maintains that the jury could reasonably conclude that: (i) no such document was ever sent Page 8 to Sere; and (ii) McNally was not entitled to enforce the liability limitation provision in that document against the plaintiff.

  Sere demands that the Court deny McNally's alternative request for relief, that a new trial be ordered. He contends that the jury's verdict was not against the weight of the evidence. In support of that contention, Sere points out that when a bailor fails to return property upon demand, the loss of the property is presumed to be based upon the bailor's negligence. Sere maintains that McNally's attempt to beat back this presumption by relying upon its president's trial testimony concerning the security measures employed at McNally's storage facilities is of little import. Sere alleges that McNally's reliance upon testimony concerning its security measures is misplaced because it ignores the fact that for eight months after McNally acquired Bowling Green's storage contracts, it failed to remove any property from Bowling Green's facility to one of its own even though McNally was aware that Bowling Green was in financial distress and that it was experiencing difficulties employing or retaining personnel.

  Sere maintains that under these circumstances, and in the absence of any evidence from McNally concerning how the Dunand screen was in fact lost, McNally failed to rebut the presumption of negligence that attaches when a bailor fails to return property upon demand. Thus, according to Sere, the jury's finding was warranted and no new trial should be held.

  III. DISCUSSION

  Rule 50, of the Federal Rules of Civil Procedure, provides as follows:

  If, during a trial by jury, a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may determine the issue against the party and may grant a motion for judgment as a matter of law against that party with respect to a claim Page 9 or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue.

 Fed.R.Civ.P. 50(a)

  Fed.R.Civ.P. 50(b) permits a party that has not prevailed on a motion made pursuant to Fed.R.Civ.P. 50(a) at the close of all the evidence presented at a trial to renew its request in a post-trial motion made not later than ten days after the entry of judgment. In the case at bar, the defendant made a timely motion under Fed.R.Civ.P. 50(b).

  "Judgment as a matter of law may not properly be granted under Rule 50 unless the evidence, viewed in the light most favorable to the opposing party, is insufficient to permit a reasonable juror to find in her favor." Galdieri-Ambrosini v. National Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998). "In ruling on a motion for judgment as a matter of law, the court may not itself weigh credibility or otherwise consider the weight of the evidence; rather, it must defer to the credibility assessments that may have been made by the jury and the reasonable factual inferences that may have been drawn by the jury." Williams v. County of Westchester, 171 F.3d 98, 101 (2d Cir. 1999). Accordingly, a court should grant an application for judgment as a matter of law only in those circumstances where "(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [it]." Cruz v. Local Union Number 3 of the Int'l Brotherhood of Elec. Workers, 34 F.3d 1148, 1154 (2d Cir. 1994)(citations omitted). Page 10

  In the case at bar, the defendant contends that it is entitled to judgment as a matter of law because the evidence offered by plaintiff's expert witness, relating to the authenticity of Sere's Dunand screen, was "rank" speculation and, further, her testimony concerning the condition of the screen was no more than an assumption based upon a review of photographs through a magnifying glass.

  As noted above, in ruling on a motion, made pursuant to Fed.R.Civ.P. 50, a court may not itself weigh credibility or otherwise consider the weight to be accorded to the evidence presented to the trial jury; it must defer to the credibility assessments made by the jury and to the reasonable factual inferences drawn by the jury. Through its motion, the defendant invites the Court to do that which it should not do: weigh the evidence offered by plaintiff's expert witness and reach conclusions about the credibility of her testimony. The Court cannot accept the defendant's invitation.

  In any event, the Court, like the plaintiff, finds that the defendant has overlooked evidence in the record beyond the testimony of plaintiff's expert witness from which the jurors could reasonably have found that the Dunand screen possessed by Sere was authentic and that its condition was good at the time plaintiff suffered its loss. In particular, there was evidence in the record that the Dunand screen Sere possessed, the St. Gilda, was mentioned in the Marcilhac Catalogue, the authoritative work listing Dunand's creations. The plaintiff's expert witness testified that her investigation did not uncover any reports that forgeries of Dunand screens were being offered for sale in the art market at or about the time that Sere testified that he purchased his Dunand screen. The expert witness' testimony on that score was uncontroverted. Page 11

  In addition, the jury learned about the condition of the Dunand screen from the plaintiff. Sere testified that he inspected his screen while it was in storage and did not observe any cracks or other evidence of deterioration in the lacquer screen. Therefore, the jury did not have to rely solely upon the expert witness' testimony concerning her examination of photographs of the screen in reaching a conclusion about the condition of the artwork at issue. From the testimony it heard from Sere and his expert witness, the jury could reasonably have concluded that, notwithstanding the screen's storage in a facility not designed principally to store artworks, such storage did not have an adverse effect on the screen.

  Furthermore, although plaintiff's expert witness testified that, in placing a value on the screen, she assumed it was in good condition and assumed it was authentic, she explained that such assumptions are routinely made by those in the art appraisal profession when a work of art is unavailable to them for personal, physical inspection. Moreover, she testified that the Uniform Standards of Professional Appraisal Practice permit appraisals to be made under such conditions if the appraiser discloses that assumptions respecting authenticity and condition have been made. This testimony also was uncontroverted.

  Under these circumstances, the Court finds that the conclusions the jury reached, concerning the authenticity, condition and value of the Dunand screen that Sere owned, were not based on conjecture and speculation but, rather, were reasonable conclusions based upon credibility determinations it was called upon to make after assessing the testimony of lay and expert witnesses.

  The Court finds that the same is true with respect to the conclusion the jury reached on the defendant's argument that its liability was limited by the terms and conditions of the New Page 12 Jersey warehouse receipt and contract for storage that it claimed it sent to the plaintiff for execution. The jury heard testimony from McNally's president concerning its routine practice of dispatching warehouse receipts and storage contract forms when it takes on the obligation of storing a customer's property. However, the jury also heard that McNally's files did not contain a warehouse receipt that was signed by Sere. The jury was free to find that the absence from McNally's files of a warehouse receipt and storage contract signed by Sere, made credible Sere's denial, communicated through his agent, that such a document was ever received by him.

  Having viewed the evidence in the light most favorable to the plaintiff, the nonmoving party, the Court finds that the relief sought by the defendant, through its application for judgment as a matter of law, pursuant to Fed.R.Civ.P. 50, is not warranted. Therefore, the Court will allow the judgment to stand.

  IV. CONCLUSION

  Having determined that granting the defendant's motion for judgment as a matter of law is inappropriate, the Court finds that there is no basis for granting the defendant's alternative motion for a new trial. Consequently, it is denied.

  SO ORDERED


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