328 F.3d 84 (2nd Cir. 2003), 01-7501, Boule v. Hutton
|Citation:||328 F.3d 84|
|Party Name:||Boule v. Hutton|
|Case Date:||April 24, 2003|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Argued: Sept. 5, 2002.
[Copyrighted Material Omitted]
Gerald A. Rosenberg (Stacey B. Creem and David B. Powers, on the brief), Katten, Muchin, Zavis & Rosenman, New York, NY, for Plaintiffs-Appellants.
Martin R. Gold, (Robert P. Mulvey, on the brief), RubinBaum LLP, New York, NY, for Defendants-Appellees Ingrid Hutton and Leonard Hutton Galleries, Inc.
Anastasios Sarikas, Astoria, NY, for Defendants-Appellees Mark Khidekel and Regina Khidekel.
Before: CALABRESI, B.D. PARKER, Circuit Judges, and COTE, District Judge [*].
Judge CALABRESI joins the opinion and concurs in a separate opinion.
COTE, District Judge.
Plaintiffs-appellants René and Claude Boulé ("the Boulés") appeal from the decisions of the district court (1) granting partial summary judgment to defendants-appellees Ingrid Hutton ("Hutton"), the LÀ!rd Hutton Galleries, Inc. ("the Gallery"), Mark Khidekel ("Mark") and Regina Khidekel ("Regina"), (2) finding for defendants on certain of plaintiffs' claims after a bench trial, and (3) denying plaintiffs' motion for relief from judgment under Fed.R.Civ.P. 60(b). For the reasons set forth below, we affirm in part, and vacate in part the decisions of the district court.
At its heart, this is a dispute about the authenticity of works of art (the "Paintings") owned by the Boulés. While the Boulés believe the Paintings to be early works of the Russian Suprematist artist Lazar Khidekel ("Lazar"), Lazar's son Mark and daughter-in-law Regina (collectively, "Khidekels") claim that they are not. The Khidekels are selling their own collection of Lazar's art through Hutton and her Gallery.
The Boulés brought suit under the Lanham Act and state law causes of action to recover for the damage to the value of the Paintings that they assert occurred because of statements made by the defendants. The Honorable Miriam Goldman Cedarbaum held, inter alia, that the Boulés had not carried their burden of showing that the Paintings were authentic,
that is, painted by Lazar. On the other hand, she found that the Khidekels had falsely and in bad faith denied that Mark had given the Boulés certificates acknowledging that at least some of the Paintings were indeed his father's. Applying the special damage rules that pertain to the law of defamation, the district court awarded the Boulés nominal damages. Each of these rulings and others entered by Judge Cedarbaum in her three opinions have been challenged on appeal.
Lazar was born in 1904 in Vitebsk, Russia, and joined the Suprematist school of Russian avant-garde artists in the years following the Russian Revolution. In his youth, Lazar studied with two of the better-known artists of the period, Marc Chagall and Kazmir Malevich, and later in life became a prominent architect. The artworks in his possession upon his death in 1986 became the property of Mark and Regina.
The Boulés are Parisian art collectors who own a number of works from the Russian avant-garde period; in addition, Claude has published a scholarly work on Russian Constructivism. By the late 1980s, the Boulés had acquired 176 works attributed to Lazar. As it was both illegal and dangerous to acquire Russian avant-garde art prior to the fall of the Soviet Union, the majority of the Boulé's pieces were acquired through non-traditional channels.
The Boulés and the Khidekels first encountered each other in Paris in 1988. Over the next few years, the Khidekels and the Boulés developed a friendship, as the Khidekels were pleased to find admirers of Lazar's work in the West, and the Boulés were happy to show their collection to them. They made (ultimately unrealized) plans to pool their collections of Lazar's work for an exhibition in Canada, and, in 1991, in exchange for approximately $8,000, Mark signed certificates of authenticity in Paris for sixteen of the Paintings he selected from the Boulés' collection. The certificates stated: "I, Mark Khidekel, having examined the artwork shown to me ... hereby confirm that it is the work of my father, Lazar Khidekel, and that it can be identified as a study." Boulé v. Hutton, 138 F.Supp.2d 491, 498 (S.D.N.Y.2001).
During this period, although the Khidekels were surprised that a collection of Lazar's work existed in Paris, and told the Boulés that some of the pieces they owned were different from those of Lazar's works that the Khidekels possessed, Mark and Regina never expressed to the Boulés any reservations about the legitimacy of the collection. As the district court found at trial, "Mark noted some differences between the Boulés' collection and his collection, and commented that the bulk of the Boulés' collection was created when Lazar Khidekel was a very young student--possibly as early as 1920." Id.
The Boulés exhibited the Paintings at the Joliette Museum of Art in Montreal, Canada in 1992, and galleries in Canada over the course of the months that followed. Although Mark expressed an interest in lecturing at the Joliette Museum in conjunction with the exhibition of the Paintings, the Khidekels ultimately did not participate.
The Khidekels began an association with Hutton in 1992, and moved to New York in 1993. Hutton is a prominent dealer of art of the Russian avant-garde, which has a small but global market. Boulé v. Hutton, 70 F.Supp.2d 378, 388 (S.D.N.Y.1999). The Khidekels soon entered into a consignment agreement with Hutton to facilitate the sale of their collection of Lazar's work.
In 1995, the Gallery exhibited works from the Khidekel's collection. The exhibition catalogue noted that it represented the first-ever display of Lazar's work, despite the earlier show at the Joliette Museum in Canada that had included works from the Boulés' collection. 1 In late 1995 and early 1996, the Khidekels and Hutton sent a jointly-signed letter to at least twenty-five art galleries around the world (the "Repudiation Letter"), repudiating the Paintings that had been loaned by the Boulés and attributed to Lazar in the Canadian exhibition. 2
In 1996, after being approached by a reporter, Hutton arranged for the Khidekels to be interviewed for an article in ART news, a leading industry publication, entitled "The Betrayal of the Russian Avant-Garde." The article discussed the entry of "thousands" of fraudulent artworks into galleries, museums and private collections. The Khidekels were quoted in the article as stating that the Paintings were not Lazar's work, and as so advising the Boulés when they had initially viewed the Boulés' collection. 3 An article that appeared shortly thereafter in Le Devoir, a Montreal publication, contained a quotation from Regina specifically denying that she or Mark had ever authenticated any portion of the Boulés' collection. 4
The Boulés brought suit in 1997, alleging that defendants' statements in the Gallery catalogue, the Repudiation Letter, ART news, and in Le Devoir, and other statements to art dealers and journalists violated the Lanham Act. They further
alleged that the statements violated the New York General Business Law, and state law causes of action against disparagement, defamation, tortious interference with business relationships, unfair competition, unjust enrichment and breach of contract.
A. The summary judgment rulings
Defendants moved for summary judgment on many of the claims arising under the Lanham Act. 5 In a decision of October 12, 1999, the district court dismissed all of the Lanham Act claims addressed by the motion except for the claim based on the statements in the Gallery catalogue. Boulé, 70 F.Supp.2d at 390. The Boulés have appealed the dismissal of only two of their Lanham Act claims: the claims based on the statements in the Repudiation Letter and in ART news.
The district court found that the statements in the Repudiation Letter were not actionable because they could not be considered a "representation of fact" within the meaning of the Lanham Act. Id. at 388-89. The claim pertaining to the statements to ART news was dismissed because the district court held that a response to an unsolicited inquiry from a reporter on a topic of public concern--fraud in the Russian avant-garde art market--was not a statement made "in commercial advertising or promotion." Id. at 390.
B. The trial
A bench trial on the remaining causes of action was held from September 27 through October 6, 2000. The district court found for the defendants on the remaining Lanham Act claim. The district court ruled that to recover on the Lanham Act claim, the plaintiffs had to show that the statements in the Gallery catalogue impugning the authenticity of the Boulés' Paintings were false statements and therefore that they bore the burden of showing that the Paintings were authentic. Boulé, 138 F.Supp.2d at 501. The district court found, however, that the evidence on authenticity was in equipoise. The inability of...
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