Carter v. Helmsley-Spear, Inc., 94 Civ. 2922 (DNE).

• Decision Date: 31 August 1994
• Docket Number: No. 94 Civ. 2922 (DNE).,94 Civ. 2922 (DNE).
• Citation: 861 F. Supp. 303
• Parties: John CARTER, John Swing and John Veronis, Plaintiffs, v. HELMSLEY-SPEAR, INC. and 474431 Associates, Defendants.
• Court: U.S. District Court — Southern District of New York

861 F. Supp. 303

John CARTER, John Swing and John Veronis, Plaintiffs, v. HELMSLEY-SPEAR, INC. and 474431 Associates, Defendants.

No. 94 Civ. 2922 (DNE).

United States District Court, S.D. New York.

August 31, 1994.

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Richard A. Altman, and Hughes Hubbard & Reed, New York City (Charles Lozow, Daniel H. Weiner, John J. McGreevy, Patrick T. Perkins, of counsel), for plaintiffs.

Davidoff & Malito, New York City (Matthew Feigenbaum, Adrian Zuckerman, Robert C. Boneberg, Jill Rosenthal, John Harris, of counsel), for defendants.

OPINION & ORDER

EDELSTEIN, District Judge:

Plaintiffs bring this action to prevent the alteration or destruction of certain art work installed by them in the lobby of a commercial building located in Queens, New York, and to recover money damages, costs, and attorney's fees. Plaintiffs' first claim seeks relief pursuant to the Visual Artists Rights Act of 1990. This claim raises a number of issues of first impression. Plaintiffs' complaint, as amended by the Joint Pretrial Order ("JPTO")¹ (JPTO, at ¶ 1), also alleges willful infringement of copyright, and raises two supplemental state law claims, tortious interference with contract and unlawful ejection. Defendants raise a single counterclaim alleging waste.

On or around April 21, 1994, plaintiffs brought an order to show cause seeking a temporary restraining order to, among other things, prevent defendants from taking any action to alter, deface, modify, or mutilate plaintiffs' sculptures and installations located at 47-44 31st Street, Queens, New York. On April 25, 1994, this Court heard argument from both plaintiffs and defendants regarding plaintiffs' application for a temporary restraining order. On April 26, 1994, this Court issued a temporary restraining order enjoining defendants from (a) taking any action to alter, deface, modify, or mutilate plaintiffs' sculptures and installations located at 47-44 31st Street, Queens, New York; and (b) denying plaintiffs access to 47-44 31st Street, Queens, New York, Monday through Friday, between the hours of 12:00 p.m. and 5:00 p.m.²

On May 5, 1994, this Court commenced a hearing ("the preliminary injunction hearing") on plaintiffs' motion for a preliminary injunction pursuant to Federal Rule of Civil Procedure ("Rule") 65. Plaintiffs sought an order enjoining defendants, during the pendency of this action, from "(a) taking any action to alter, deface, modify or mutilate plaintiffs' sculptures and installations located at 47-44 31st Street, Queens, New York; (b) taking any action to breach the agreements heretofore entered into between plaintiffs, Sig Management Company and 47-44 31st Association, L.P.; and (c) denying plaintiffs, their employees and invitees such access to the Property as had been enjoyed by them heretofore."

During the course of the preliminary injunction hearing, which commenced on May 5, 1994 and continued through May 13, 1994, this Court heard oral argument and received documentary evidence in support of, and in opposition to, plaintiffs' motion for a preliminary injunction. In addition, plaintiffs and defendants called both expert and fact witnesses. Pursuant to Rule 65(a)(2), all evidence received, and testimony adduced, at the preliminary injunction hearing is part of the record on the trial of this action.

On May 18, 1994, this Court filed an Opinion & Order, see Carter v. Helmsley-Spear, Inc., 852 F.Supp. 228 (S.D.N.Y.1994) ("May 18 Opinion"), granting in part and denying in part plaintiffs' motion for a preliminary injunction. In the May 18 Opinion, this Court ordered, inter alia, that "during the pendency of this action, defendants, their employees, and agents, are enjoined from (a) taking any action to alter, deface, modify, or mutilate plaintiffs' sculptures and installations located at 47-44 31st Street, Queens, New York; and (b) denying plaintiffs and their invitees access, between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday, to the Lobby of 47-44 31st Street, Queens, New York for the purpose of viewing, photographing, or videotaping the Work." Id. at 239.

This Court tried this action without a jury over several days in June and July of this year. Plaintiffs and defendants each called both fact and expert witnesses, and offered into evidence portions of depositions and documentary evidence. Pursuant to Rule 52, this Opinion shall constitute the Court's written findings of fact and conclusions of law.

BACKGROUND

Plaintiff John Meade Swing is a sculptor and an artist who has held public exhibitions of his original works of art since 1984. (HTr.³, at 18-19; UF⁴ 1). Mr. Swing is also licensed by the City of New York as a structural steel welder. (HTr., at 21; UF 1). Plaintiff John James Veronis, Jr. is an artist and a sculptor who supports himself through his artistic endeavors. (HTr., at 30; UF 2). Plaintiff John Francis Carter also is a professional artist and sculptor. (HTr., at 37, 39; UF 3). Plaintiffs work as partners to create sculptures and other works of art. Collectively, plaintiffs are known as the "Three-Js," or "Jx3." (HTr., at 60; UF 4).

Defendant 474431 Associates ("Associates") is the owner of a building located at 47-44 31st Street, Queens, New York ("the Property"). Associates has owned the Property since June 1978. (UF 5). The General Partners of Associates are Alvin Schwartz and Supervisory Management Corp. (UF 5). All of the shares of Supervisory Management Corp. are owned by Helmsley Enterprises, Inc. (UF 5). Defendant Helmsley-Spear, Inc. became the managing agent of the Property for its disclosed principal, Associates, on April 6, 1994. (UF 6). Alvin Schwartz is, and during all periods of time relevant to this action has been, an employee of Helmsley-Spear, Inc. (UF 6). Thomas Schwartz is, and during all periods of time relevant to this action has been, an employee and officer of Helmsley-Spear, Inc. (UF 6; TTr., at 222).

On February 1, 1990, 47-44 31st Street Associates, L.P. ("the Limited Partnership") entered into a net lease agreement ("the Net Lease") with Associates to lease the Property. (JPTO, at ¶ 5(d); DExh.⁵ BBB). From February 1, 1990 until June 1993, Irvin Cohen, or an entity controlled by him, was the general partner of the Limited Partnership. (UF 9). During this period, Corporate Life Insurance Company ("Corporate Life") was a limited partner in the Limited Partnership. (UF 10). From February 1, 1990 to June 1993, Sig Management Company ("Sig") was the managing agent of the Property for the Limited Partnership. (UF 16). Mr. Cohen controlled Sig and personally was responsible for managing the Property on behalf of Sig and the Limited Partnership from February 1, 1990 until June 1993. (UF 16).

By an agreement dated December 16, 1991 ("the Contract"), plaintiffs contracted with Sig "to design, create and install sculpture and other permanent installations" in the lobby ("the Lobby") and other areas of a building located at 47-44 31st Street, Queens, New York. (DExh. NN; UF 21-27). Under the terms of the Contract, Sig granted plaintiffs "full authority in design, color and style" of the art work to be installed, but retained the authority to direct the location of the installations within the confines of the Property. The Contract provides that plaintiffs are entitled to "receive design credit" for their sculptures and installations and own the copyright to the these sculptures and installations. (DExh. NN; UF 26). Sig was to receive fifty percent of any proceeds earned from the exploitation of this copyright. (DExh. NN). On January 20, 1993, Sig and plaintiffs signed an agreement that extended the duration of the Contract, without material alteration, for an additional year. (DExh. OO).

In or around June 1993, Corporate Life became the general partner of the Limited Partnership. (UF 12). From June 1993 until April 6, 1994 Corporate Life acted as managing agent for the Property and Theodore Nearing of Corporate Life assumed Mr. Cohen's responsibility for managing the Property. (UF 17). In July 1993, the Limited Partnership assumed the Contract, as extended. (UF 116).

On December 29, 1993, Mr. Nearing transmitted a letter to plaintiffs that, with the exception of discontinuing the provision of certain benefits, once again extended the Contract without material alteration. (DExh. B; JPTO, at ¶ 5(h)).

Pursuant to the Contract and subsequent extensions thereof, plaintiffs were each paid $1,000 weekly by Sig from December 1991 until July 1993. (HTr., at 27; UF 29, 30). From July 1993 until April 6, 1994, plaintiffs were each paid $1,000 weekly by the Limited Partnership. (HTr., at 28; UF 31, 32). Throughout this period, plaintiffs continually created art work in the Lobby. (HTr., at 34).

The Net Lease was terminated on March 31, 1994 (UF 19), and the Limited Partnership filed for protection under Chapter 7 of the United States Bankruptcy Code on April 8, 1994 (UF 14). On April 7, 1994, defendants' agents ordered plaintiffs to leave the Property and told plaintiffs that they would be deemed trespassers if plaintiffs subsequently returned to the Property. (UF 109; TTr., at 245-46). At this time, defendants' agents also made certain statements that led plaintiffs to believe that defendants intended to alter or remove the art work installed in the Lobby. Thereafter, this action commenced.

DISCUSSION

I. PLAINTIFFS' FIRST CLAIM FOR RELIEF: THE VISUAL ARTISTS RIGHTS ACT OF 1990

Plaintiffs' first claim for relief is based upon the Visual Artists Rights Act of 1990 ("VARA"), 17 U.S.C. § 101 et seq. (JPTO, at ¶ 4(a)(1)). VARA amends the Copyright Act. In passing VARA, Congress for the first time provided for protection of artists' "moral rights" under the Copyright Act. See Jane C. Ginsburg, Copyright in the 101st Congress: Commentary on the...