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Itakura v. Primavera Galleries Inc.

June 30, 2009

RYOKO ITAKURA PLAINTIFF,
v.
PRIMAVERA GALLERIES INC., AND AUDREY FRIEDMAN DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION & ORDER

Twenty years ago Plaintiff Ryoko Itakura spent $95,000 to purchase two chairs from Defendant Primavera Galleries, Inc. ("Primavera") and its owner Audrey Friedman ("Friedman"), allegedly after the Defendants represented that the chairs were the work of the designer and architect Pierre Chareau. Plaintiff alleges that it was not until she attempted to sell the chairs at auction 2007 that they were discovered to be fakes. In her initial complaint, Plaintiff asserted the following claims against Defendants: (i) breach of contract; (ii) false designation of origin under Section 43 of the Lanham Act, 15 U.S.C. §1125(a); (iii) common law palming off; (iv) and unjust enrichment. Defendants moved to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), contending that Plaintiff's claims are barred by the applicable statutes of limitation and that she does not have standing to assert unfair competition claims. In connection with her opposition to Defendants' motion, Plaintiff moved to amend her complaint, submitting to the Court a proposed amended complaint that added a new claim of fraudulent inducement and, as part of her unjust enrichment claim, new allegations that Defendants violated Section 13.01 of Title C of the New York Arts and Cultural Affairs Law. For the reasons that follow, Defendants' motion to dismiss is GRANTED in part andDENIED in part. Plaintiff's motion to amend the complaint is GRANTED with respect to her claim of fraudulent inducement, but DENIED with respect to all her other claims because such an amendment would be futile.

I. BACKGROUND

The facts of this case are straightforward. In her verified complaint Plaintiff alleges that she and her brother visited the Defendants' gallery, were shown the chairs at issue, and told they were the work of the French designer and architect Pierre Chareau. Complaint at ¶¶7-8. On the basis of this representation, Plaintiff purchased the chairs for $95,000. Id. at ¶9. The transaction was documented by a bill of sale, which recites that the chairs were Chareaus. Id. at ¶19. The complaint does not allege when the transaction took place, but the bill of sale reveals that Plaintiff paid for the chairs on June 6, 1989. Affidavit of Audrey Friedman, ("Friedman Aff."), Ex. 2 ("Bill of Sale").

According to Plaintiff, she first learned that the chairs were counterfeits when she had them appraised by Christie's in New York in 2007. Complaint at ¶14. She immediately asked the Defendants for a refund but her request was refused. Id. at ¶15. This litigation ensued.

II. LEGAL STANDARDS

A. Motion to Dismiss

Under Rule 12(b)(6), a complaint will be dismissed if there is a "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true. Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007); see also ATSI Communications, Inc. v. Shaar Fund Ltd., 493 F.3d 87 (2d Cir. 2007). The Court must read the complaint generously, accepting the truth of and drawing all reasonable inferences from well-pleaded factual allegations. Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007); York v. Ass'n of Bar of City of New York, 286 F.3d 122, 125 (2d Cir. 2002). However, the pleader may have to "amplify a claim with some factual allegations where such amplification is needed to render the claim plausible." Iqbal v. Hasty, 490 F.3d 143, 158 (2d Cir. 2007). Bald assertions and legal conclusions, or legal conclusions masquerading as facts need not be accepted as true by the Court. Twombly, 127 S.Ct. at 1966.

B. Motion to Amend Complaint

According to Fed. R. Civ. P. 15(a), a plaintiff may amend her complaint "once as a matter of course before a responsive pleading is served." Otherwise, a plaintiff may do so only with leave of court or consent of the adverse party, but "the court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a). However, "'[w]here the proposed amended complaint would not withstand a motion to dismiss, the granting of leave to amend would be futile, and hence the motion [to amend] should be denied.'" Howard v. City of New York 2006 WL 2597857, *8 (S.D.N.Y. 2006) (quoting In re Winstar Commcn's v. Rouhana, No. 01 CV 3014, 2006 WL 473885, at *1 (S.D.N.Y. Feb. 27, 2006)); see also Lucente v. International Business Machines Corp., 310 F.3d 243, 258 (2d Cir. 2002) ("An amendment to a pleading is futile if the proposed claim could not withstand a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).") Because the standard for determining whether a proposed amendment would be futile is the same as that which applies to a motion to dismiss under Rule 12(b)(6), and in their reply memorandum Defendants argue for dismissal of the proposed amended complaint, I will grant Plaintiff leave to amend her complaint only to the extent the claims alleged therein withstand Defendants' motion to dismiss.

III. DISCUSSION

A. Breach of Contract

Plaintiff's breach of contract claim is subject to a four year statute of limitations that accrues when the breach occurs "regardless of the aggrieved party's lack of knowledge of the breach. N.Y. U.C.C. §2-725(1). In Rosen v. Spanierman, 894 F.2d 28, 34 (2d Cir. 1990), the Second Circuit found untimely a breach of warranty claim based on facts substantially similar to those alleged by Plaintiff here. In Rosen, the plaintiff purchased a painting in 1968, which was sold with a signed warranty that it was the work of John Singer Seargent. Id. at 30. When the buyer discovered the work to be a fake in 1987 and sued, the district court granted summary judgment on the plaintiff's breach of warranty claims because the statute of limitations set by N.Y. U.C.C. ยง2-275 barred the suit as untimely. Id. at 30-31.The Second Circuit affirmed. Id. at 34. The same result obtains here. Because Plaintiff's breach of contract claim is barred by the statute of limitations, ...


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