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Faggionato v. Lerner

March 30, 2007

ANNE FAGGIONATO, PLAINTIFF,
v.
RANDOLPH D. LERNER, DEFENDANT.



The opinion of the court was delivered by: Loretta A. Preska, United States District Judge

MEMORANDUM AND ORDER

Plaintiff Anne Faggionato ("Faggionato") brought the above-captioned action seeking specific performance, damages including lost profit and/or sales commissions and damages for loss of reputation, and costs, of a supposed agreement by Defendant Randolph D. Lerner ("Lerner") to purchase a painting. Lerner now moves to dismiss this action pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction and Rule 12(b)(6) for failure to state a claim upon which relief may be granted. For the following reasons, the motion to dismiss for lack of standing is granted.

BACKGROUND

Faggionato is a citizen of the United Kingdom and a dealer in paintings. (Complaint, filed April 3, 2006 ("Compl.") ¶ 1.) Lerner is a citizen of the United States and a resident of New York City. (Compl. ¶ 2.) This lawsuit alleges the breach of a contract to purchase a painting of a haystack ("meule" in French) by the painter Claude Monet*fn1 (the "Painting") and seeks damages in the sum of $13 million, the alleged sales price of the Painting. (Compl. ¶ 5.) Faggionato alleges that Lerner entered into a binding agreement to purchase the Painting, subject to receiving the customary documentation establishing its authenticity and provenance. (Compl. ¶ 5.) Faggionato asserts that this documentation was supplied to Lerner on or about February 2, 2006, but that Lerner refused to consummate the purchase. (Compl. ¶ 5.)

Lerner maintained a relationship with an established New York art dealer Curt Marcus ("Marcus") and informed Marcus of his desire to purchase a Monet haystack. (Compl. ¶ 9.) In May, 2005, Marcus sought Faggionato's help in locating such a painting. (Compl. ¶ 10.) In November,

2005, Faggionato informed Marcus that she had located an early Monet haystack, the Painting, which had not been included in the Wildenstein Institute's comprehensive catalogue of Monet's works. (Compl. ¶ 11.) The Wildenstin Institute ("Wildenstein") is an expert on Monet paintings and the publisher of the comprehensive catalogue raisonné of Monet's paintings. (Compl. ¶ 12.) A document issued by Wildenstein (often called an "attestation" or "certificate") attesting that a painting is or will be listed in the Wildenstein catalogue raisonné is evidence of a painting's authenticity. (Compl. ¶ 12.)

Between November 30, 2005, and January 10, 2006, Faggionato and Marcus exchanged a series of e-mails concerning the Painting, including Lerner's questions about the Painting. (Compl. ¶ 12.) These questions concerned the authenticity of the Painting, its provenance, condition, ownership, and the reason for its absence from the Wildenstein catalogue raisonné. (Compl. ¶ 14, Declaration of Leonard S. Baum, Esq., dated June 30, 2007, ("Baum Decl."), Ex. B.) On September 8, 2005, the Wildenstein Institute executed an attestation letter stating that the Painting would be included in an upcoming supplement to the catalogue raisonné. (Compl. ¶ 15, Baum Decl., Ex. A.)

On December 22, 2005, Marcus wrote to Faggionato, stating that Lerner sought a confirmed date to view the Painting. (Compl. ¶ 16, Baum Decl., Ex. C.) On December 27, 2005, Marcus wrote to Faggionato, stating that Lerner "has already allocated the money for this purchase" and that "pending the viewing, confirmation of date, as well as condition, he will act fast . . . . His wife approves, his accountant completely approves, the money is sitting and waiting." (Compl. ¶ 17, Baum Decl., Ex. D.)

On January 4, 2006, Faggionato asked Marcus for a document from Lerner's lawyer or banker confirming Lerner's readiness to pay $13 million for the Painting. (Compl. ¶ 18.) Also on January 4, 2006, Douglas C. Jacobs, an accountant for Lerner, executed a "letter of intent" stating that Lerner is, "prepared to purchase the Monet 'Meule' painting in the amount of US $13 Million, subject to his viewing and approval, and the receipt of customary documentation." (Compl. ¶ 18, Baum Decl., Ex. E at 3.)

On January 7, 2006, Marcus wrote to Faggionato stating that he had two questions: "1. Was the painting originally purchased from the artist or through a dealer? 2. Will my client receive a bill of sale from the owner? Will we know the original owners [sic] identity?" (Compl. ¶ 21, Baum Decl., Ex. H at 1.) Faggionato responded that the first purchase would be "disclosed in 'Provenance' and can be checked in due course (through Wildenstein Institute)." (Compl. ¶ 21, Baum Decl., Ex. H at 2.) However, as to the second question, Faggionato replied that Lerner would not receive a bill of sale from the owner, but would learn of his identity "in due course." (Compl. ¶ 21, Baum Decl., Ex. H at 2.) Also on January 7, 2006, Marcus wrote to Faggionato expressing Lerner's concern "as to what recourse he would have, should he receive a letter one day from a collector in Paraguay stating that they are the actual owners . . . if he does not have a bill of sale from either the owners/seller or from a company that traditionally deals with this kind of transaction/money." (Compl. ¶ 22, Baum Decl., Ex. I at 1.) Faggionato replied, "Fret not my friend[] the painting has been in the same family for the last 100 years, Art [L]oss Register ha[s] no record, I am working on the disclosure issue and the pigment analysis has already been done." (Compl. ¶ 22, Baum Decl., Ex. I at 3.)

Kendris Private is a prominent wealth management firm in Europe and a manager of Nouvelle Société Anonyme des Arts, the company with which Faggionato was working in implementing the sale. (Compl. ¶ 18.) On January 8, 2006, Lerner's assistant, Kim Lazzara, wrote to Kendris Private stating that she would wire a 10% refundable deposit on January 9, for the Painting that Lerner would be viewing in Paris on January 10. (Compl. ¶ 25.) On January 8, 2006, Faggionato wrote to Marcus, "On [T]uesday [m]orning [January 10], I will produce 3 copies of a file containing: description of the painting[,] copy of the Certificate[,] copy of the Passport[,] copy of both condition reports[,] copy of the search result in the Art Loss Register[,] and and any other relevant documents." (Compl. ¶ 24, Baum Decl., Ex. J.) Faggionato alleges that on January 9 or 10, she delivered copies of those documents, including the [Wildenstein] certificate, two condition reports, and search results from the Art Loss Register, but not the export license for the Painting (the "Passport.")*fn2 (Compl. ¶ 24.) In her originally filed Complaint, Faggionato claims to have delivered the Art Loss Register report on January 9 or 10, but later notes in the annotated Complaint submitted in the Baum Declaration dated June 30, 2007, that "it appears that the Art Loss Register was issued January 17, 2006" but does not explain this inconsistency with the allegation in the Complaint. (Compl. ¶ 24, Baum Decl., Annotated Complaint, filed June 30, 2007, ¶¶ 19, 24.) On January 9, 2006, Lerner's lawyer, Joseph DeCampo wrote to Marcus describing the type of documentation De Campo wanted but also noting that if Lerner liked the Painting, the "next step would be to document the sale either in the form of a sales contract or bill of sale which we assume would be a direct contract between the sellers and our client, individually. It is this document that the seller will make various representations and warranties." (Compl. ¶ 26, Baum Decl., Ex. L.)

On January 10, 2006, Lerner inspected the Painting at the offices of Art Transit in Paris. (Compl. ¶ 27.) That day, Lerner asked Faggionato for the Painting's provenance. (Compl. ¶ 28.) Faggionato replied that "she could not guarantee that she could convince the owners to reveal their identities on official documents." (Compl. ¶ 28.) Faggionato claims that on January 10, 2006, at 5:00 pm, Lerner orally announced to Faggionato and Marcus, "I have made my decision. I am buying the painting." (Compl. ¶ 29.) Faggionato asserts that Lerner requested no payment terms but stated that as soon as the paperwork was finished, he would pay the $13 million purchase price. (Compl. ¶ 30.) Faggionato alleges that she then said to Lerner "that this was good news because it would assist her in convincing the French owners to disclose their identities on the written provenance." (Compl. ¶ 30.) Faggionato claims that based on Lerner's agreement to purchase the Painting, and the terms of sale, she advised the owner's representative that the painting had been sold and she discontinued any further effort to sell the painting. (Compl. ¶ 31.)

On January 11, 2006, Marcus wrote to Faggionato that "Randy [Lerner] put many wheels in motion based on our initial suggestion of urgency" and also reported on his conversation with DeCampo "to reiterate" that they now needed more time "to get the documents reviewed and confirmed once they are all in hand." (Compl. ¶ 34.) On January 13, 2006, Marcus e-mailed Faggionato a series of "concerns about a number of points of authenticity" that Lerner had raised, including asking for the owners' name to be placed on the Certificate of Authenticity (issued by Wildenstein), were there other interested parties, and whether Lerner could hire another expert to view the Painting. (Compl. ¶ 37, Baum Decl., Ex. Q.) On January 14, 2006, Faggionato answered Lerner's questions, explaining that she had not encountered a false or revoked Certificate of Authority; that she would ask whether the owners' names could be listed in the upcoming supplement to the catalogue raisonné; that Wildenstein had originally been contacted by the owners and that Wildenstein had tried to buy the painting in the past and might try again and that the Baltimore Museum had learned of the painting through Wildenstein. (Compl. ¶ 39, Baum Decl., Ex. R.) Also, Faggionato explained that if Lerner were to proceed with a new expert viewing the Painting, it could "suggest to the sellers a wavering by Lerner with uncertain results." (Compl. ¶ 39, Baum Decl., Ex. R.)

On January 17, 2006, Marcus wrote to Faggionato that Lerner did not have the "comfort level" that he had requested to proceed with an immediate deposit and desired further proof. (Compl. ¶ 41, Baum Decl., Ex. T.) On January 21, 2006, Marcus advised Faggionato that Lerner continued to love the painting but did not like buying it without "more transparency" and was seeking more documentation and clarity. (Compl. ¶ 43, Baum Decl., Ex. V.)

On February 2, 2006, Faggionato wrote to Marcus stating that the Painting "finally has a full set of documents," alleging that the conditions Lerner had requested in terms of documentation had been met. (Compl. ¶ 45, Baum Decl., Ex. X.) Marcus replied that day to Faggionato commenting on the "terrific news" but also reminding Faggionato that there were documents that Lerner had still requested for full documentation of the Painting, including a written bill of sale. (See Compl. ¶ 46, Baum Decl., Ex. X at 2.) On February 4, 2006, Marcus wrote an email to Faggionato expressing Lerner's concerns, stating that part of the difficulty was that "you represent the owner and know his identity, while my client and I do not" and reiterating that there was still a pending list of required information made by Lerner and his lawyer. (Baum Decl., Ex. Y at 1.)

On February 6, 2006, Marcus reported to Faggionato that Lerner had chosen not to purchase the Painting in part because "we were not forthcoming with his requests [for documents] and the lawyers needs." (Compl. ¶ 49, Baum. Decl., Ex. Z.) On February 9, 2006, Faggionato sent the full provenance of the Painting to Marcus. (Compl. ¶ 51, Baum Decl., Ex. BB, Declaration of Benito Romano, Esq., dated May 16, 2006, ("Romano Decl."), Ex. Q.)*fn3

On February 10, 2006, Kendris Private caused an invoice for $13 million, the Painting's Passport, an Art Loss Register document, and the provenance of the Painting to be sent to DeCampo. (Compl. ΒΆ 51, Baum Decl., Ex. BB.) On February 13, 2006, DeCampo wrote to Kendris Private rejecting the sale documents and stating, "Mr. Lerner had abandoned any attempt to purchase this painting several weeks ...


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