Rosen v. Spanierman
| Decision Date | 08 January 1990 |
| Docket Number | No. 206,D,206 |
| Citation | 894 F.2d 28 |
| Parties | 10 UCC Rep.Serv.2d 846 Hobart E. ROSEN, Norma Rosen, and Frances Lipman, Plaintiffs-Appellants, v. Ira SPANIERMAN and Ira Spanierman Gallery, Defendants-Appellees. ocket 89-7471. |
| Court | U.S. Court of Appeals — Second Circuit |
Martin E. Karlinsky, New York City (Joshua L. Mallin, Maria Fury, Scheffler Karlinsky & Stein, New York City, of counsel), for plaintiffs-appellants.
Barry J. Boxer, New York City (Rose & Boxer, New York City, of counsel), for defendants-appellees.
Before MESKILL and WINTER, Circuit Judges, and LASKER, * District Judge.
This appeal requires us to examine the New York statute of limitations for breach of warranty concerning a sale twenty years ago of a painting where the purchaser only recently learned that the painting was a fake. We must also address the common law fraud actions arising out of the same sale.
Plaintiffs Hobart and Norma Rosen (the Rosens) and Frances Lipman appeal from a judgment of the United States District Court for the Southern District of New York, Leisure, J., which granted the motion for summary judgment of defendants Ira Spanierman and the Ira Spanierman Gallery (collectively "Spanierman") and dismissed the complaint. In 1968, plaintiffs purchased a painting from Spanierman, which Spanierman represented to be the original work of the well known artist John Singer Sargent. Lipman and the Rosens assert that the painting is a fake, and seek in this action to recover damages.
The district court dismissed plaintiffs' fraud and breach of warranty claims on the basis that plaintiffs had failed to state claims of fraud and that the four year statute of limitations on breach of warranty claims contained in New York's Uniform Commercial Code had run. We agree that plaintiffs' breach of warranty claims are untimely and that Lipman failed to state a claim of fraud. The Rosens, however, have stated a claim of common law fraud. Accordingly, we affirm in part, vacate in part and remand for further proceedings.
In the context of a motion for summary judgment, "factual allegations in the pleadings of the party opposing the motion ..., if supported by affidavits or other evidentiary material, should be regarded as true." Burtnieks v. City of New York, 716 F.2d 982, 983-84 (2d Cir.1983). The facts of this case are thoroughly set forth in the district court's opinion, reported at 711 F.Supp. 749 (S.D.N.Y.1989). We shall briefly discuss only those facts relevant to the present appeal, as they are alleged in the pleadings and other evidentiary materials.
In 1968, as an anniversary gift for her daughter and son-in-law, Norma and Hobart Rosen, Lipman purchased a portrait entitled "The Misses Wertheimer" from Ira Spanierman Gallery. Ira Spanierman is the sole owner of the gallery. Hobart Rosen negotiated with Spanierman for the purchase, and when they had reached an agreement on price the Rosens instructed Lipman to send Spanierman a check for $15,000. Lipman never saw the painting prior to the purchase and had no direct dealings with Spanierman.
Spanierman prepared an invoice that contains the following warranty: "This picture is fully guaranteed by the undersigned to be an original work by John Singer Sargent." The invoice also represented that the painting had been "[a]cquired from a member of the Wertheimer family," a fact that, if true, would enhance the value of the painting. Plaintiffs assert that Spanierman made similar oral representations to Hobart Rosen prior to the purchase. The invoice was addressed to Lipman "c/o" the Rosens, and the painting was shipped directly to the Rosen home.
Spanierman subsequently provided appraisals of the painting for insurance purposes at the Rosens' request. These appraisals were given in 1975, 1979, 1980, 1984 and 1986. Spanierman did not re-examine the painting before rendering any of these appraisals. The 1986 appraisal estimated the value of the painting to be $130,000.
In 1984 the Rosens learned that a "catalogue raisonne" of John Singer Sargent's work was being prepared. Hoping that their painting would be included, the Rosens sent photographs of it and other information to Warren Adelson of the Coe Kerr Gallery in New York, which was involved in the preparation of the catalog. The Rosens did not communicate with Adelson again regarding their painting until after they had attempted to sell it as discussed below.
The Rosens subsequently decided to sell the painting and asked for appraisals from Sotheby's Parke Bernet and Christie's Appraisals (Christie's) in New York. The appraisals ranged from $175,000 to $250,000. Upon placing the painting with Christie's for auction in 1987, however, the Rosens were informed that it was a fake. They then met with Warren Adelson of the Coe Kerr Gallery, who agreed that the painting was not an authentic work of Sargent and stated that he had immediately suspected the painting was not genuine when the Rosens first contacted him in 1984.
The Rosens commenced this action against Spanierman in 1987 for common law fraud, negligent misrepresentation, breach of warranty and professional negligence. The original complaint named only Hobart and Norma Rosen as plaintiffs. In his answer, Spanierman raised as an affirmative defense the Rosens' lack of standing to bring the suit. The Rosens amended the complaint to add Frances Lipman as plaintiff.
Spanierman denied that the painting was a fake and moved for summary judgment, asserting, inter alia, the bar of the statute of limitations and plaintiffs' failure to state a claim of fraud. The district court granted Spanierman's summary judgment motion and dismissed the complaint in its entirety. Lipman and the Rosens appeal only the dismissal of the fraud and breach of warranty claims.
Under section 2-725 of New York's Uniform Commercial Code the statute of limitations on an action for breach of contract is four years from the time the cause of action accrues. N.Y. U.C.C. Sec. 2-725(1) (McKinney 1964). The plaintiffs purchased the painting from Spanierman in 1968, and therefore their action clearly was untimely unless the statute was extended for some reason. Lipman and the Rosens assert that their action falls within the exception to the four year limitations period contained in subdivision two of section 2-725, which states:
A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
Id. Sec. 2-725(2) (emphasis added).
The district court assumed, and the parties agree, that a painting "performs" for purposes of the statute by being what it is purported to be, i.e., an authentic work of the artist. See 711 F.Supp. at 753 (citing Lawson v. London Arts Group, 708 F.2d 226, 228 (6th Cir.1983)). The district court then concluded that the statute of limitations on plaintiffs' breach of warranty claims had run because Spanierman's warranty did not explicitly extend to future performance and because discovery of the alleged defect in the painting did not necessarily await future performance. Id. at 754-55.
We note that the Court of Appeals for the First Circuit reached these same conclusions on nearly identical facts. See Wilson v. Hammer Holdings, Inc., 850 F.2d 3, 4-7 (1st Cir.1988) ( Mass.Gen.L. ch. 106, Sec. 2-725(2)); see also Lawson, 708 F.2d at 228 (). We agree with the First Circuit in its interpretation of section 2-725 as it applies to the authenticity of works of art.
Lipman and the Rosens contend that Spanierman's warranty explicitly extended to future performance for three reasons: (1) authenticity is a permanent quality, and any warranty of authenticity therefore necessarily extends to the future; (2) under New York law, a warranty explicitly extends to future performance when the nature of the product implies performance over an extended period; and (3) Spanierman's subsequent appraisals indicate his intent to extend the warranty to the future and acted to revive the warranty.
The argument that a warranty of authenticity necessarily extends to future performance is unconvincing. Lipman and the Rosens are, in essence, asking us to create an exception to section 2-725's explicitness requirement when the warranty concerns an immutable quality. We decline this invitation to invade what is properly the domain of the state legislature. See Wilson, 850 F.2d at 6. As the district court recognized, subdivision 2 of section 2-725 is itself an exception to the general statute of limitations on breach of warranty claims. It would be inappropriate to expand this exception beyond its plain terms by dispensing with the condition that, to take advantage of the exception, the warranty explicitly extend to future performance. See Stumler v. Ferry-Morse Seed Co., 644 F.2d 667, 671 (7th Cir.1981) () (per curiam opinion adopting and quoting in full the opinion of the district court); accord Frey Dairy v. A.O. Smith Harvestore Prods., Inc., 680 F.Supp. 253, 255 (E.D.Mich.1988), aff'd, 886 F.2d 128 (6th Cir.1989); Sellon v. General Motors Corp., 571 F.Supp. 1094, 1099 (D.Del.1983).
Plaintiffs maintain that a warranty of authenticity explicitly extending to future...
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