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BOULÉ v. HUTTON

June 1, 2004.

RENÉ BOULÉ and CLAUDE BOULE, Plaintiffs, -against- INGRID HUTTON, LEONARD HUTTON GALLERIES, INC., MARK KHIDEKEL and REGINA KHIDEKEL, Defendants


The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge

OPINION

The parties to this action dispute whether plaintiffs Claude and René Boulé have proved the elements of their claims under N.Y. Gen. Bus. L. § 349 and their claims of common law unfair competition by business disparagement. These claims were dismissed after a bench trial, see Boulé v. Hutton, 138 F. Supp.2d 491 (S.D.N.Y. 2001), but remanded by the Second Circuit for further consideration, see Boulé v. Hutton, 328 F.3d 84 (2d Cir. 2003). For the following reasons, plaintiffs have failed to prove their § 349 claims but have proven all of the elements of their claims of business disparagement.

  BACKGROUND

  Plaintiffs are Parisian art collectors who own a number of works attributed to Lazar Khidekel, a Russian artist associated with the Suprematist Movement. Claude BoulÉ is also an art historian specializing in Russian Constructivism, which, like Suprematism, is a branch of Russian Futurism. The Boules filed this action against Mark and Regina Khidekel, a son and daughter-in-law of Lazar Khidekel, and against Ingrid Hutton and the Leonard Hutton Galleries, Inc. ("Hutton Galleries"), the art dealer and art gallery that exhibited and offered for sale a collection of Khidekel works that Mark and Regina inherited from the artist. The Boules sued under the Lanham Act, 15 U.S.C. § 1125(a), claiming that defendants falsely disparaged the authenticity of the Boulés' collection in order to promote the sale of the Khidekel artworks at the Hutton Galleries. The Boules also asserted pendent state law claims, including violations of N.Y. Gen. Bus. L. § 349, breach of contract, product disparagement, defamation, tortious interference with business relationships, common law unfair competition, unjust enrichment, common law fraud, prima facie tort, and the tort of "false light." After partial summary judgment was granted in favor of defendants on all but one of the Lanham Act claims, see Boulé v. Hutton et al., 70 F. Supp.2d 378 (S.D.N.Y. 1999), a bench trial was held from September 27 through October 6, 2000.

  The following evidence, relevant to the remanded claims, was presented during the trial. The Boules paid approximately 1.5 million French Francs ("FF") for 176 works on paper attributed to Khidekel. They bought the works over a four-year period, beginning in 1984, from a private dealer named Vladmir Tsarenkov. Tsarenkov did not provide the provenance of any of the works that he sold to the Boules. In 1991, the Boules also purchased an oil painting attributed to Khidekel from an auction in England.

  The Boules were introduced to Mark Khidekel in 1988 at their home in Paris. They showed Mark some of the Khidekels in their collection, and he expressed no skepticism about the authenticity of the works. The Boules and the Khidekels subsequently met several times at the Boulés' home, and the Khidekels never expressed any reservations about the Boulé collection. During a meeting in 1991, Mark agreed to sign certificates of authenticity for 16 of the Boulés' Khidekels, for 2,500 FF per certificate.

  Plaintiffs presented evidence that defendants later made several statements disparaging the BoulÉs' collection of Khidekels. A curator, Yvette Moch, testified that in October 1994, she approached Hutton in order to show her the catalogue of an exhibition in Tanlay, France, which had featured Khidekels from the Boulé collection. Upon seeing reproductions of those works in the catalogue, Hutton commented, "that is no good."

  Upon visiting Hutton in late 1995 in order to borrow works for a proposed art exhibition at the University of Iowa, another curator, Patricia Railing, was told by Hutton that she would only lend works to the exhibition if she could first see the complete list of works to be included. Hutton stated that she did not "want [her] works contaminated with fakes in an exhibition in which there are fakes." Railing understood Hutton to be commenting on the authenticity of the Boulé collection. The Khidekels later informed Railing that the BoulÉ collection was "not by my father, they're fakes."

  In the catalogue for the Hutton Galleries' February and March 1995 show of Khidekels owned by Mark and Regina, Hutton wrote: "We present for the first time anywhere the work of Lazar Markovich Khidekel. . . . In his lifetime [Lazar Khidekel] never had a solo show, nor did he or his family ever sell or part with any of his works."

  In January 1996, Mark, Regina, and Hutton sent a letter on the letterhead of the Hutton Galleries to at least twenty-five museums worldwide. The letter informed its recipients that the writers repudiated the catalogue of an exhibition of Boulé Khidekels held at the Musée d'art de Joliette, Quebec, Canada in 1992, and that the writers would not permit those works to be cited in connection with any works by Khidekel coming from the Khidekel family or from the Hutton Galleries.

  In its February 1996 issue, ARTnews published a 13-page article entitled, "The Betrayal of the Russian Avant Garde." The article reported on the prevalence of incorrectly attributed works and forgeries in Russian avant-garde art and discussed works by several artists, including Khidekel. Regina was quoted in the article as follows:
When [Mark and Regina] finally saw the works, which belong to Paris collectors Claude and RenÉ Boulé, they were . . . puzzled. "I don't know whether they're fakes or works of somebody else," says Regina. "I only know and we are absolutely sure, that they have nothing to do with Khidekel."
  In a February 23, 1996 article in the Montreal publication Le Devoir, Regina is quoted as saying, "I am categorical: these works are not by Khidekel." In the February 22-28, 1996 issue of the Montreal periodical Voir, Mark and Regina are quoted as saying that the works in the BoulÉs' collection are "not those of Khidekel." The Voir article also republished one of Regina's statements in the ARTnews article.

  Mark and Regina also made statements in which they denied that they had initially endorsed the BoulÉ Khidekels. In the ARTnews article, Mark and Regina are quoted as saying that upon seeing the Boulé collection at the Boulés' Paris home for the first time, "they told the Boules the works were not Khidekels."

  In the February 23, 1996 Le Devoir article, Regina is quoted as saying that "neither she nor her husband ever `authenticated' anything and that fake certificates were forged."

  The majority of plaintiffs' claims required them to prove the falsity of defendants' statements. But plaintiffs were unable to establish by a preponderance of the evidence that the Khidekels in their collection were authentic. Accordingly, they could not prove that defendants' statements that impugned the authenticity of the collection were false. See Boulé, 138 F. Supp.2d at 503-04. However, plaintiffs did prove both that the Khidekels expressed no skepticism upon first viewing the BoulÉ collection and that Mark Khidekel ...


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