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Waldman v. Escobar

March 27, 2009

DAVID WALDMAN AND DIANE WALDMAN, PLAINTIFFS,
v.
MARISOL ESCOBAR, DEFENDANT.



The opinion of the court was delivered by: Frank Maas, United States Magistrate Judge.

MEMORANDUM DECISION AND ORDER

ELECTRONICALLY FILED

I. Introduction

This diversity action brought by plaintiffs David and Diane Waldman (the "Waldmans") arises out of their purchase of two sculptures in 2002 from defendant Marisol Escobar ("Escobar"). The Waldmans allege that Escobar induced them to renounce their interest in one of the sculptures by fraudulently representing that it was damaged beyond repair and therefore unavailable for sale. On September 18, 2008, the parties consented to my exercise of jurisdiction over this case for all purposes pursuant to 28 U.S.C. § 636(c). (Docket No. 5). Thereafter, Escobar moved to dismiss the complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. (Docket No. 10).

For the reasons set forth below, Escobar's motion is granted in part and denied in part.

II. Background

Construing the Waldmans' amended complaint (Docket No. 9 ("Complaint" or "AC")) and the exhibits thereto in the light most favorable to them, the relevant facts may be summarized as follows:

In October 2002, the Waldmans agreed to purchase from Escobar two sculptures known as "Mimi" and "Magritte" after viewing them in a Marlborough Gallery catalogue. (AC ¶¶ 6, 7). At her studio, Escobar gave the Waldmans two signed invoices, dated October 18, 2002, reflecting prices of $35,000 for Mimi and $25,000 for Magritte. (Id. ¶ 8, 10 & Ex. A). Escobar arrived at these valuations by halving the retail prices sought by the gallery, where her work previously had been on display. (Id. ¶¶ 6, 9). That same day, the Waldmans issued Escobar a check in the amount of $60,000 for both sculptures. (Id. ¶ 11 & Ex. A). Subsequently, in November 2002, they added the pieces to the coverage under their insurance policy. (Id. ¶ 12).

Only one of the sculptures, Magritte, was delivered to the Waldmans. (Id. ¶ 13). Escobar initially told the Waldmans that Mimi would not be available for several months because she had a prior commitment to show it at the gallery. (Id. ¶ 14). Nevertheless, on January 13, 2003, Escobar deposited the Waldmans' check for both sculptures. (Id. ¶ 15).

In mid-February 2003, Escobar informed the Waldmans that Mimi had been irreparably damaged and would be impossible to replace. (Id. ¶ 16). Relying on this representation, the Waldmans accepted from Escobar a refund check, dated February 23, 2003, in the amount of $35,000. (Id. ¶ 17). In March 2008, however, the Waldmans saw a picture of an apparently-undamaged Mimi in that month's issue of Art in America, which described it as one of the works that Escobar "had saved for herself." (Id. ¶¶ 19, 20). The Waldmans therefore sent Escobar two letters, dated April 7 and 20, 2008, demanding that she complete the sale of Mimi for the 2002 contract price. (Id. ¶ 21). Escobar refused to give the Waldmans the sculpture, which had been offered for sale by the gallery in 2002 for $70,000 and currently is worth at least $75,000. (Id. ¶¶ 22, 23)

The Waldmans commenced this action on July 17, 2008. (Docket No. 1). After an October 28, 2008, telephone conference during which defense counsel raised jurisdictional issues, the Waldmans amended their complaint on November 18, 2008, alleging claims of (a) breach of contract, (b) unjust enrichment, and (c) fraud. (AC ¶¶ 24-35). Escobar then filed her motion to dismiss on December 8, 2008. (Docket No. 10).

III. Discussion

A. Standard of Review

Under Rule 12(b)(1), a complaint must be dismissed if there is no subject matter jurisdiction over the claim. Under Rule 12(b)(6), a complaint is subject to dismissal if it fails to state a claim upon which relief can be granted. In deciding either type of motion, a court must accept the material factual allegations of the complaint as true and draw all reasonable inferences in the plaintiff's favor. See Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. ...


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