Lang v. Tharpe
| Decision Date | 19 May 2022 |
| Docket Number | 18-cv-1077-pp |
| Parties | ROBERT LANG, and SUSANNE LANG, Plaintiffs, v. DONALD R. THARPE, DONALD R. THARPE TRUST, and PETER COLASANTE, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO TRANSFER VENUE (DKT. NO. 106) ABSTAINING FROM RULING ON DEFENDANT COLASANTE'S MOTION TO DISMISS (DKT. NO. 117) AND GRANTING IN PART AND DENYING IN PART THARPE DEFENDANTS' MOTION TO DISMISS (DKT. NO 119)
On October 16, 2020, the plaintiffs filed their second amended complaint. Dkt. No. 112. Prior to doing so, the plaintiffs had filed a motion to change venue. Dkt. No. 106. The venue motion makes clear that the plaintiffs seek a change of venue only if the court determines that it does not have personal jurisdiction over the defendants. On November 2, 2020, defendant Peter Colasante filed a motion to dismiss the second amended complaint, dkt. no. 117, and defendants Donald R. Tharpe and the Donald R. Tharpe Trust filed their motion to dismiss on November 13, 2020, dkt. no. 118.
Plaintiffs Robert and Susanne Lang (the Langs) are residents of Wisconsin. Dkt. No. 112 at ¶1.
Defendant Ronald R. Tharpe lives somewhere in Virginia, although exactly where has not been established. See id. at ¶2. The plaintiffs allege that Tharpe is the sole trustee of the Donald R. Tharpe Trust, which also is located somewhere in Virginia. Id. at ¶3. Defendant Colasante is the owner and operator of an art gallery in Washington, D.C. called “L'Enfant Art Gallery.” Id. at ¶4. The plaintiffs allege that the Tharpe Trust is an alter ego of Tharpe and Colasante. Id. at ¶43.
Ronald J. Aiani is a former defendant. The court previously dismissed him, dkt. no. 44, but the plaintiffs still make several allegations against him in the second amended complaint, dkt. no. 112 at ¶5. He is a resident of Virginia. Id.
The plaintiffs allege that Robert Lang met Colasante at Colasante's gallery around August 2010. Id. at ¶7. Colasante allegedly solicited business from Lang starting in 2011, including sales by consignment, restoration and framing of art owned by Lang and requests to ship Lang's paintings from Wisconsin to Colasante's D.C. gallery. Id. at ¶8.
The plaintiffs say that sometime between August 2010 and August 2011, Lang commented on the “Dorchester Painting” Colasante was exhibiting and told Colasante that he had a collection of Lincoln art and artifacts (“the Collection”). Id. at ¶13. Around August 2011, Colasante allegedly called Lang at Lang's home in Wisconsin to express interest in the Collection. Id. at ¶14.
In September or October 2011, Lang's Collection was being exhibited at various locations in Wabash, Indiana. Id. at ¶15. Colasante drove to Wabash; while there, he gave Lang an estimate of between $2 and $3 million for the Collection. Id. at ¶¶15, 16. The plaintiffs allege that “Colasante convinced Lang of his many connections in the art world, his ability to quickly restore and sell paintings and art, his experience in the civil war and the names of many wealthy clients he had.” Id. at ¶16.
One of the paintings Lang owned was “an extremely valuable painting of Abraham Lincoln, ” known as the “Lincoln Matthews painting.” Id. at ¶17. The amended complaint alleges that, except for a brief period while it was being restored in Washington, D.C., the Lincoln Matthews painting always has been located in Wisconsin. Id. The plaintiffs assert that while he was in Indiana in 2011, Colasante convinced Lang that Colasante could restore the Lincoln Matthews Painting and other pieces of art in Lang's Collection, and that the restoration (given Colasante's alleged expertise) would increase the value of the collection. Id. at ¶18. The plaintiffs say that Colasante convinced Lang that “it was appropriate in the art industry for him to do restorations without documentation;” the plaintiffs maintain that Lang wasn't an expert in the art world and that he orally agreed to have Colasante restore the Lincoln Matthews painting. Id. at ¶19. The plaintiffs allege that based on Colasante's representations, in November 2011, Lang had the Collection sent to the L'Enfant Gallery and Colasante worked on the restoration through the spring of 2012. Id. at ¶20. The plaintiffs allege that it was Lang's belief, based on Colasante's representations, that in February 2012 Colasante was restoring the Lincoln Matthews painting and documenting its value. Id. at ¶23.
The plaintiffs allege that in December 2011, Colasante “proposed a scheme to Lang” where Colasante would join Lang's Collection with contributions from both Tharpe and Colasante. Id. at ¶21. This collection would then be called the “Combined Collections.” Id. The plaintiffs claim that the “scheme was conceived of and communicated by Colasante, ” who said he'd worked with Tharpe for over twenty years, buying and selling art and artifacts. Id. The plaintiffs allege that based on these representations, Lang committed $300, 000 to the Combined Collections based only on “oral representations and promises of future millions of profits [from] the Combined Collections.” Id. at ¶22.
In February 2012, Lang met Tharpe at the L'Enfant Gallery; Colasante introduced the two and was present at the meeting. Id. at ¶24. The plaintiffs believed that Tharpe was one of Colasante's clients and that Tharp and Colasante owned art and artifacts together. Id. at ¶25. During the meeting, Colasante “represented to Lang” that Tharpe was “a wealthy real estate developer from Warrenton, Virginia who was a collector or purchaser of Revolutionary and Civil War artifacts and artwork.” Id. at ¶26.
The plaintiffs say that during this meeting, Tharpe “took Lang aside and told him about a real estate development in Warrenton, Virginia, ” identified as the White Marsh Project. Id. at ¶27. The White Marsh property was composed of two parcels-ninety-four acres owned by Tharpe and three acres, called the “Shaw Property, ” that provided ingress and egress to the project. Id. at ¶28. The plaintiffs believe that Tharpe lived in a home that adjoined the property, and they say that Tharpe told Lang that the land was available for development and that Tharpe had been working for a few years to obtain zoning. Id. at ¶27. Tharpe also told Lang that Tharpe was in debt to “Gibralter, LLC, ” and that the debt was secured by “the 94 acres supposedly owned by Tharpe.” Id. The plaintiffs say that Tharpe had “deals” with a national real estate investment firm called the Toll Brothers to develop the White Marsh project. Id. According to the Langs, during this February 2012 meeting at the L'Enfant Gallery, Tharpe invited Lang to join the White Marsh development venture. Id.
The plaintiffs say that around April 12, 2012, Tharpe solicited Lang to pay $3, 300, 000 to Gibralter, LLC and the Toll brothers on behalf of Tharpe for both parcels of land comprising the White Marsh project. Id. at ¶29. The money was supposed to be Lang's capital contribution to “Lang and Tharpe LLC;”[1]Tharpe's contribution was to be the land. Id. The plaintiffs allege that Tharpe agreed, on behalf of Lang and Tharpe, LLC, to “assume 50% of any outstanding liabilities of the Toll Brothers on White Marsh.” Id. The plaintiffs assert that “after more than a year of negotiation with Gibralter and the Toll Brothers, ” Lang secured a commitment from Alliance Capital Corporation to procure $3, 000, 000, and that Lang paid Alliance a fee for that commitment. Id. at ¶30. The plaintiffs contend that at that time, Tharpe had not disclosed to Lang his other business dealings with Gibralter or the Toll Brothers, or his debt obligations to Sona Bank “in which many of the artwork and artifacts supposedly being sold to Lang were pledged as collateral for the Sona Bank loan(s).” Id. at ¶¶31, 35. The plaintiffs allege that Colasante was an obligor or guarantor on Tharpe's loans to Sona Bank. Id. at ¶31.
Around March or April of 2012, “Tharpe convinced” the Langs to purchase, at “full retail, ” the “War & Peace” painting and the “Healy” painting. Id. at ¶¶42, 47. The plaintiffs allege that Tharpe and Colasante represented to them in writing that the “War & Peace” painting was being transferred “free and clear of all liens and encumbrances.” Id. at ¶44. Around the same time, the Langs purchased “from Tharpe and Colasante the General Grant Epaulettes and the McClellan Sword, which Tharpe and Colasante also represented was being transferred to the Langs free and clear of all liens and encumbrances.” Id. at ¶48. The plaintiffs say they paid Tharpe and Colasante $800, 000-a $200, 000 transfer on March 15, 2012 and a $600, 000 check on April 13, 2012.[2] Id. at ¶43. The plaintiffs assert that a portion of this $800, 000 was for the “War & Peace” painting, id. at ¶44, and a portion was for the General Grant Epaulettes and the McClellan Sword, id. at ¶48. They allege that Tharpe represented that he was going to use yet another part of the $800, 000 to purchase the “Shaw Property.” Id. at ¶45.
The plaintiffs assert, however, that Lang never purchased the Shaw Property. Id. at ¶46. They allege that contrary to assurances that the War & Peace painting, the General Grant Epaulettes and the McClellan Sword were being sold to them free and clear, Tharp and Colasante previously had pledged all three items as collateral for Tharpe and Colasante's $750, 000 debt to Sona Bank. Id. at ¶49. The plaintiffs assert that they were not aware of Sona Bank's security interest until June...
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