Shanks v. Hall

Decision Date21 June 2019
Docket NumberCIVIL ACTION No. 18-4042
PartiesLEONA SHANKS, administratrix of the Estate of Nelson Shanks Plaintiff, v. LARRY HALL, et al. Defendants.
CourtU.S. District Court — Eastern District of Pennsylvania
MEMORANDUM
I. BACKGROUND

The Complaint alleges that Decedent Nelson Shanks ("Shanks") was granted permission by the Vatican in 2002 to paint a portrait of Pope John Paul II (the "Portrait"), which he completed in September 2002. ECF No. 1, Exhibit D at ¶ 9. That same year, Shanks met Anne Hall1 at an art workshop in Miami, Florida. Id. at ¶ 14. When Anne Hall met Shanks, she told him that she wanted to attend the art school that he founded, Studio Incamminati, but that she had nowhere to live in Pennsylvania where the school was located. Id. at ¶ 15. Shanks offered to have Anne Hall and her husband, Larry Hall, stay at his home so that she could attend the art school. Id. at ¶ 16. Anne Hall stayed at Shanks's home for over a year, andher husband often traveled to Pennsylvania and stayed there as well. Id. at ¶ 17. Anne and Larry Hall became close with Shanks and "bec[a]m[e] a close part of his inner circle." Id. at ¶ 18.

The Complaint alleges that Anne and Larry Hall "spent many days and nights with Nelson Shanks, praising him and his work and seemingly assisting at" his art school. Id. at ¶ 19. The Complaint alleges that Anne and Larry Hall often spoke to Shanks about the Portrait and the difficulty he had coming to an agreement with the Vatican to display the Portrait at the Vatican Museum, during which they shared wine, "which they knew he enjoyed." Id. at ¶¶ 20-21. During that time, Anne and Larry Hall suggested that they could "become caretakers of the" Portrait, and act "as a public face for the [Portrait], appearing as art investors who could arrange for a permanent home for the Portrait at the Vatican or some other highly reputable museum where the Portrait could be appreciated by the world." Id. at ¶ 22. The Complaint alleges that Anne and Larry Hall attempted to convince Shanks that the best way to have the Portrait displayed in a highly-reputable museum was to "have a third party (them) appear to own the Portrait and as the 'owner' could then arrange for the sale of the painting, with the proceeds of any such sale being given to Mr. Shanks." Id. at ¶ 23. At this time, "Shanks was in need of money," which Anne and Larry Hall knew. Id. at ¶ 24.

In September 2003, Anne and Larry Hall formed Art Heritage Holdings,LLC ("AHH") "for the purpose of becoming the caretaker and public face of the Portrait." Id. at ¶ 25. "The sole purpose of the creation of AHH was to maintain custody of the Portrait and to attempt to arrange for a permanent home for the Portrait in a museum of the highest order." Id. at ¶ 26. Anne and Larry Hall "repeatedly represented that AHH taking custody of the Portrait and appearing to be the owner was a favor that the Halls were willing to do for Mr. Shanks because of their love and appreciation for his friendship and talents." Id. at ¶ 27. Therefore, the Complaint alleges, the price that Anne and Larry Hall agreed to pay for the Portrait, $170,000, was "significantly less than the appraised value." Id. at ¶ 28. Anne and Larry Hall then consulted an attorney to create AHH and had their attorney draft a contract "for custody of the Portrait." Id. at ¶ 29.

The Complaint alleges that Anne and Larry Hall "urgently faxed [the contract] to Mr. Shanks on the evening of September 22, 2003, pressuring him to sign it immediately," as Larry Hall had to leave for the airport. Id. at ¶ 30. Later that night, at 10:56 p.m., Larry Hall sent another fax "imploring Mr. Shanks to sign the agreement." Id. at ¶ 31.

The Complaint alleges that although Shanks "did not often deal in legal documents and was not normally one to place agreements into formal contracts," Shanks, "[w]ithout seeking advice of counsel or any other party . . . signed the contract [the '2003 Agreement'] with AHH on or about September 24, 2003." Id.at ¶¶ 32-33. The Complaint alleges, "[u]nder the terms of the written [2003 Agreement] and contrary to the specific discussions and intent of the parties, AHH became owner of the painting and purchased the painting, which had been valued at $500,000.00 for $170,000.00." Id. at ¶ 34. The Complaint alleges, however, that "it was the intent of the parties that the Halls have AHH only appear to be the owner of the Portrait for the purposes of arranging for the Portrait to be displayed in a museum of the highest order, which was why the price of the portrait was so much lower than its actual appraised price at the time." Id. at ¶ 35. The Complaint alleges that Shanks "[a]lmost immediately" realized that the 2003 Agreement "did not contain the full and complete terms of the agreement between the parties," and he therefore contacted Anne and Larry Hall via letter on December 15, 2003, about three months after Shanks signed the Contract, "seeking to clarify the terms of the agreement regarding the custody of the Portrait." Id. at ¶ 36. The Complaint alleges Larry Hall responded via letter on January 15, 2004, where he "agreed with Mr. Shanks about the terms of the [2003 Agreement], and repeatedly affirmed in writing that the purpose of creating AHH was to . . . 'take care of the [Portrait] . . . until it reached a final resting place . . . .'" Id. at ¶ 37.

From 2004 to 2015, Anne and Larry Hall "maintained possession of the Portrait and acted as the ostensible owners" and regularly stayed in contact with Shanks regarding the Portrait and its potential final resting place. Id. at ¶¶ 39-40.During that time, "the Portrait was exhibited approximately 11 times in museums of the highest order or with exhibitions of Mr. Shanks' work all over the world, with the full cooperation of the Halls." Id. at ¶ 41. The Portrait was valued for insurance purposes at each of these exhibitions at $500,000 in 2003 and at $2.5 million in 2015. Id. at ¶ 42. When certain opportunities to sell the Portrait came to Shanks's attention, Anne and Larry Hall notified Shanks that it was not the right time to sell or the buyer was not the proper person to accomplish the goal of ensuring that the Portrait ended up in a reputable museum. Id. at ¶ 43.

In July 2015, Shanks's representative contacted Anne and Larry Hall to inform them that the Vatican and local Catholic Church offered to display the Portrait at the Cathedral Basilica of Saints Peter and Paul during the World Meeting of Families ("WMOF"), at which Pope Francis would be present. Id. at ¶¶ 45-47. Anne and Larry Hall were "overjoyed," stated "they would cooperate and do everything in their power" to help, and began working with the Archdiocese of Philadelphia to have the Portrait displayed. Id. at ¶¶ 48-49.

In mid-August 2015, however, the Archdiocese refused to display the Portrait at the WMOF because Defendants did not have the Portrait insured for display at the WMOF and the Archdiocese could not afford the cost of insurance and transport of the Portrait (approximately $4,875). Id. at ¶ 52. Shanks was upset that the Portrait was uninsured and that it was not displayed at the WMOF. Id. at ¶53. Shanks expressed his "outrage" in an email on August 19, 2015 to Larry Hall, stating that Larry Hall "was to act as an 'agent' to secure the [Portrait] to its proper home," and that Larry Hall was not putting the best interests of the Portrait first, but focusing instead on the valuation of the painting. Id. at ¶ 53. Neither Anne nor Larry Hall responded to the email, and nine days later Shanks passed away. Id. at ¶¶ 54-55.

The Complaint alleges that since August 2015, Anne and Larry Hall have not arranged for the Portrait's exhibition or attempted to find a permanent home for the Portrait and instead have kept the Portrait crated and warehoused for years, "in violation of the contractual terms and duties owed by the Halls and AHH to the Estate of Nelson Shanks." Id. at ¶ 57.

Plaintiff alleges that the Defendants and Shanks entered into a legally binding agreement for Defendants to become caretakers of the Portrait and ensure that the Portrait was "sold to someone who could guarantee that the Portrait would be displayed in the Vatican Museum or another museum of the highest order." Id. at ¶ 57. Only "[s]ome of the terms of [this] agreement were reduced to writing" in the 2003 Agreement, "which was lawfully modified and clarified by written communications by and between the parties that occurred in December 2003 and January 2004." Id. at ¶ 60. The terms of this agreement were "certain, distinct, free from ambiguity, and clearly understood by all the parties." Id. at 61. Plaintiffalleges that it was "[e]xplicit and implicit in th[e] agreement [that] the Halls would abide by the covenant of good faith and fair dealing and would cooperate with exhibiting the Portrait in appropriate settings to maximize the attention to and value of the Portrait, to further the ultimate goal of ensuring the painting a final resting place in a museum of the highest order" though there was "no set specific timetable . . . for the Portrait to end up in its final resting place." Id. at ¶¶ 63, 64.

Anne and Larry Hall maintained contact with Shanks regarding the Portrait for 10 years, and during this time "the Portrait was displayed at exhibitions and museums of the highest order." Id. at ¶¶ 65, 66. However, the Complaint alleges that Defendants' failure to have the Portrait exhibited at the WMOF, which it describes as "scuttl[ing] the once in a lifetime opportunity," was a failure to "act[] in good faith to further the interests agreed by the parties." Id. at ¶ 67.2 The Complaint alleges that since Shanks's death in August 2015, Plaintiff has made several attempts to contact the Defendants regarding "their attempts to satisfy the terms of their agreement and find a final resting place for the Portrait," but Defendants have been "non responsive to all attempts to determine the location of the...

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