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