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SERE v. McNALLY INTERNATIONAL CORP.

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 ...


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