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Navarra v. Marlborough Gallery, Inc.

United States District Court, S.D. New York

April 5, 2017



          HON. KIMBA M. WOOD United States District Judge

         Plaintiffs S.A.R.L. Galerie Enrico Navarra and Enrico Navarra (collectively, "Plaintiffs") filed the above-captioned lawsuit against Marlborough Gallery, Inc. ("Marlborough"), Marlborough's director for Asia, Philippe Koutouzis ("Koutouzis), and Marlborough's president, Pierre Levai ("Levai") (collectively, "Defendants") seeking damages for tortious interference with contract, and aiding and abetting the same.

         Currently before the Court is Koutouzis's motion for summary judgment (Doc. No. 142), as well as Marlborough and Levai's joint motion for summary judgment (Doc. No. 146). For the reasons set forth below, Koutouzis's motion for summary judgment, as well as Marlborough and Levai's motion for summary judgment, are GRANTED. The Court vacates its Order dated March 31, 2017. (Doc. No. 185).

         I. BACKGROUND

         The parties appear to agree on few, if any, of the facts material to this dispute. The following background represents the parties' version of the events based on their Rule 56.1 submissions and the record evidence; the Court endeavors to note where a fact is disputed.

         A. The Production Agreement between Navarra and Mr. Chu

         In 2003, the Chinese-born French artist Chu Teh-Chun ("Mr. Chu") entered into a production agreement (the "Production Agreement") with the S.A.R.L. Galerie Enrico Navarra (the "Navarra Gallery"), and the ceramics factory La Tuilerie, to produce ceramic plates. (Rosberger Dec. Ex. G). Under the Production Agreement, La Tuilerie was to reproduce 24 of Mr. Chu's original designs into limited editions, for a total of 1, 152 ceramic plates (the "Plates"). Mr. Chu hand-painted each of the 24 original designs. (Pis. 56.1 ¶ 18, Defs.' 56.1 ¶ 18). The 1, 152 Plates were to be divided among Mr. Chu, La Tuilerie, and the Navarra Gallery, to be exhibited and sold; Mr. Chu retained ownership of the 24 originals. La Tuilerie was scheduled to produce 240 Plates a year. The Navarra Gallery agreed to pay Mr. Chu a 14% royalty on Plates it sold, based on a minimum agreed-upon price, three times a year.

         Before any of the 24 original plates could be reproduced into editions of 40 Plates, Mr. Chu needed to give his "bons a tirer" which is French for "okay to print"-his approval of the original Plates, that are then ready to be reproduced.

         B. Agreement between Marlborough Gallery and Mr. Chu

         On July 23, 2007, Mr. Chu signed an agreement with the Marlborough Gallery and Sevres, a porcelain factory, to produce 57 hand-painted ceramic vases (the "Vases"). Mr. Chu painted on each of the Vases produced by Sevres. (Pis. 56.1 ¶ 42, Defs.' 56.1 ¶ 42). Plaintiffs first learned of the existence of the Vases from a magazine article in September of 2008. (Defs.' 56.1 ¶ 47).

         C. Alleged Bad Faith Acts

         Plaintiffs allege in the Amended Complaint that Defendants tortiously interfered with the Production Agreement by causing or encouraging Mr. Chu to violate that Agreement. Plaintiffs claim they suffered financial, reputational, and emotional damage as a result. (Amended Complaint ¶ 82).

         During this time, Plaintiffs allege, Defendants engaged in a campaign with Mr. Chu to discredit the Plates. (Defs.' 56.1 ¶ 50). This campaign included four significant actions by Mr. Chu, described more fully below: sending a cease and desist letter, filing a lawsuit, sending an email to the Christie's auction house in Hong Kong, and publishing an advertisement in a widely-read arts journal. Defendants do not contest that the events took place; rather, Defendants deny that they had any involvement in them.

         First, Plaintiffs allege the following regarding the cease and desist letter: Defendant Koutouzis introduced Mr. Chu to William Bourdon, Koutouzis's friend, and, at times, his lawyer. (Defs.' 56.1 ¶ 55; Wallison Aff., Ex. 22 (Bourdon Tr. 54:15-23)). Bourdon sent Plaintiffs a cease and desist letter on or about February 19, 2007 (the "Cease and Desist Letter"). The Cease and Desist Letter states that the Navarra Gallery failed to pay Mr. Chu for the year 2006, failed to submit all the bons a tirer, and failed to produce a minimum number of 240 Plates each year. In the Cease and Desist Letter, Mr. Bourdon asks the Navarra Gallery to cease producing the Plates, cancel current and future exhibitions, and return the Plates that were not yet sold. (Rosberger Decl. Ex. H).

         The parties dispute whether or not Defendants played any role in sending the Cease and Desist Letter. (Pis. 56.1 ¶ 60, Defs.' 56.1 ¶ 60). They disagree on whether Mr. Chu had legitimate concerns over the Navarra Gallery's performance under the Agreement, and whether Koutouzis introduced Bourdon to Mr. Chu in order to interfere with the Agreement. (Pis.' 56.1 ¶¶ 363-64).

         Second, in April of 2007, Bourdon's law firm filed a lawsuit against the Navarra Gallery in France (the "French Lawsuit"), on behalf of Mr. Chu, alleging the Gallery's failure to perform its obligations under the Production Agreement. (Amended Complaint ¶ 71). The lawsuit made allegations similar to those stated in the Cease and Desist Letter, and sought judicial termination of the Production Agreement and damages for Plaintiffs' alleged breach. (Id.; Defs.' 56.1 ¶ 54). The Navarra Gallery responded to the French Lawsuit, arguing that it was frivolous, because the Gallery had complied with its obligations under the Production Agreement. The District Court of Paris issued a decision on March 30, 2012, holding that the Navarra Gallery was not at fault for its delay in paying royalties, in light of to Mr. Chu's eight-month delay in creating the artwork for the Plates.

         Third, on May 16, 2008, Bourdon sent an email to the Hong Kong Christie's auction house (the "Christie's Email"), informing Christie's of the ongoing legal proceedings against Navarra. The Christie's Email claimed that certain plates were unauthorized, or perhaps inauthentic, [1] and demanded the removal of the 12 plates set to be auctioned on May 25, 2008. Christie's canceled the sale of the Plates. Defendants deny any involvement in prompting Bourdon to send the Christie's Email. (Defs.' 56.1 ¶ 68).

         Finally, from October 3 through 16, 2008, an advertisement appeared in he Journal des Arts, a trade publication for the European art world, questioning the authenticity of the Plates (the "Journal Ad").[2] Entitled "Warning from M. Chu Teh-Chun, " the Journal Ad alerts readers to the French Lawsuit and the withdrawal of the Plates from Christie's in Hong Kong, due to a question of authenticity. (Pis.' 56.1 ¶ 290). The Journal Ad also warns any owners or sellers of the Plates to be suspicious of their authenticity. (Id.). Navarra described the effect of the Journal Ad as "disastrous, " and stated that it rendered the Plates "unsalable." (Navarra Tr. 230:5-8; Amended Complaint ¶¶ 109, 117).

         In the French Lawsuit, Plaintiffs brought counterclaims against Mr. Chu for disparagement, based on the Christie's Email and the Journal Ad. The District Court of Paris denied these counterclaims in its March 30, 2012 decision, and held that Plaintiffs had not shown a campaign of disparagement. (Rosberger Dec. Ex. Z). The Plaintiffs appealed the decision. The Court of Appeals of Paris affirmed the lower court's decision, and held, in part, that Mr. Chu could not be accused of disparagement; therefore, the disparagement claim was rightfully dismissed. (Id. Ex. BB).

         In January of 2009, Mr. Chu suffered a stroke, and became unable to communicate. He died on March 26, 2014.

         D. Procedural History

         On October 4, 2010, Plaintiffs filed a Complaint in this Court against Marlborough Gallery, claiming attempted monopolization, false advertising and trade disparagement, defamation, product disparagement, and tortious interference with contract.[3] The Complaint was dismissed on June 21, 2011, for failure to state a claim of monopolization under the Sherman Act, failure to state a claim of false advertising and trade disparagement under the Lanham Act, and failure allege wrongdoing sufficient to support the ten claims under state law. Navarra v. Marlborough Gallery, Inc., 820 F.Supp.2d 477 (S.D.N.Y. 2011) (Jones, J.). The Court held that Plaintiffs had not pled a false statement or any wrongdoing by Marlborough to sustain a claim of defamation or product disparagement. The Court also held that Plaintiffs had not pled an underlying tort to sustain a claim of tortious interference with contract. Id. at 489.

         On April 18, 2012, Plaintiffs filed the Amended Complaint in this action against Marlborough and also Koutouzis and Levai, (see Doc. 30), alleging (1) common law tortious interference with contract, and (2) aiding and abetting tortious interference with contract. Koutouzis argued that the claims were time-barred, and contested being added to the Amended Complaint. The Marlborough Gallery and Levai moved for a Judgment on the Pleadings, incorporating the arguments Koutouzis made in his Motion to Dismiss. On March 26, 2013, Koutouzis's Motion to Dismiss and Marlborough ...

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