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William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh

New York Court of Appeals

December 17, 2013

William J. Jenack Estate Appraisers and Auctioneers, Inc., Appellant,
Albert Rabizadeh, Respondent.

Benjamin Ostrer, for appellant.

Michael S. Winokur, for respondent.

Sotheby's, Inc. et al., amici curiae.


William J. Jenack Estate Appraisers and Auctioneers, Inc. ("Jenack") appeals from an order of the Appellate Division granting defendant Albert Rabizadeh ("Rabizadeh") summary judgment, and dismissing the complaint in its entirety. We reverse because the Appellate Division erred in concluding that Jenack failed to comply with the statutory requirement of a writing in support of its breach of contract claim.

Jenack sells fine art and antiques at public auctions. The underlying dispute arises from Jenack's claim for damages resulting from Rabizadeh's failure to pay for an item offered at a Jenack public auction. The central issue in contention between the parties is whether the sale of the auction item to Rabizadeh is memorialized in a writing that satisfies the Statute of Frauds.

As is common practice in public auction houses, Jenack permits bidding online and by telephone, or "absentee bidding", in addition to traditional in-person bidding, for items numbered and described on its website and in its published auction catalogue. At all times relevant to this appeal, Jenack's website set forth information about the auction process, as well as terms of sales for absentee bidders. The website stated, under the subsection titled "Bid Forms", that "If you are unable to attend the auction in person, and wish to place absentee bids we will be happy to bid on your behalf, according to the Terms & Conditions of sale." It further stated that "Your credit card guarantees the good will of your bidding!" It informed any and all prospective bidders of payment obligation by stating "if your bid is successful you are legally responsible to make payment according to the terms set forth here."

To facilitate absentee bidding, and in order for Jenack to serve on behalf of an absentee customer, Jenack required the prospective bidder to submit in advance an "Absentee Bid Form" posted on the website. At the top of the form, Jenack notified bidders that payment was due within five days of a successful bid. Directly above the signature line, the form included a preprinted notification that "Bids will not be executed without signature. Signature denotes that you agree to our terms."

Several days prior to a September 21, 2008 auction, Rabizadeh submitted a signed, absentee bidder form wherein he provided, as required by Jenack, his name, e-mail address, telephone numbers, fax number, address, credit card number, and a list of items that Rabizadeh intended to bid on by telephone. Rabizadeh's list included the item at issue in this case, designated by Jenack as "Item 193", and described in the online and printed catalogue as a "Fine Russian silver/enamel covered box with gilt interior, signed I.P. Khlebnikov, 19th Century Height 11/2 top 1/2 x 3 ⅝ (Estimate $4000-$6000)." Upon receipt of this form, Jenack assigned bidder number 305 to Rabizadeh, and included this number on the top of the form.

At the September auction, Rabizadeh submitted a $400, 000 bid on item 193, and successfully outbid a competing bidder. At the close of the bidding for this item, the chief clerk recorded the winning bid on Jenack's "clerking sheet". This clerking sheet sets forth in a preprinted tabulated column format, a running list of the items presented at the public auction, with a separate line for each item that includes the item's lot number, catalogue description, and the number assigned by Jenack to the consignor. At the top of the clerking sheet Jenack's name and title are set forth as "William J. Jenack Appraisers/Auctioneers". On the line for item 193, the chief clerk filled in Rabizadeh's previously assigned bidding number to reflect him as the buyer, and the amount of his winning bid, $400, 000.

Shortly after the auction, Jenack, who was in possession of item 193, sent Rabizadeh an invoice for $497, 398, which reflected the bidding price, the 15% "buyer's premium" and applicable taxes. When Rabizadeh failed to pay, Jenack commenced this action for breach of contract, seeking damages, including the bid price and buyer's premium.

Rabizadeh moved for summary judgment claiming, as relevant here, that he was not liable for any monies to Jenack related to the auction because there was no writing memorializing any contract between Jenack and Rabizadeh, as required by the Statute of Frauds. Jenack responded by cross moving for summary judgment, asserting that the clerking sheet and related bidding documents complied with General Obligations Law ("GOL") § 5-701(a)(6). Supreme Court denied Rabizadeh's motion and granted Jenack summary judgment on liability. After a non-jury trial on the issue of damages, Supreme Court entered judgment in favor of Jenack for the principal sum of $402, 398.

Rabizadeh appealed. The Appellate Division, Second Department, reversed, concluding that Rabizadeh demonstrated prima facie that Jenack failed to comply with GOL § 5-701(a)(6) because the clerking sheet did not include "the name of the person on whose account the sale is made", as required by the statute, and Jenack failed to raise a triable issue as to this matter (99 A.D.3d 271, 278). This Court granted Jenack leave to appeal.

On appeal, Jenack contends that there was a bid agreement between the parties, pursuant to that agreement Rabizadeh submitted the winning bid at the September auction and that the documents related to Rabizadeh's $400, 000 bid satisfy the Statute of Frauds. Jenack and Rabizadeh dispute whether the clerking sheet constitutes the writing required by GOL ยง ...

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