De Sole v. Knoedler Gallery, LLC
Decision Date | 30 September 2015 |
Docket Number | Nos. 12 Civ. 2313(PGG),12 Civ. 5263(PGG).,s. 12 Civ. 2313(PGG) |
Citation | 137 F.Supp.3d 387 |
Parties | Domenico DE SOLE, and Eleanore De Sole, individually and as assignee of Laura De Sole, Plaintiffs, v. KNOEDLER GALLERY, LLCd/b/a Knoedler & Company, Ann Freedman, Glafira Rosales, Jose Carlos Bergantinos Diaz, Michael Hammer, 8–31 Holdings, Inc., and Jaime Andrade, Defendants. John D. Howard, individually and as assignee of Jaime Frankfurt, LLC, Plaintiff, v. Ann Freedman, Glafira Rosales, Knoedler Gallery, LLC, d/b/a Knoedler & Company, Michael Hammer, 8–31 Holdings, Inc., José Carlos Bergantinos Diaz, and Jaime R. Andrade, Defendants. |
Court | U.S. District Court — Southern District of New York |
Gregory A. Clarick, Aaron Hayes Crowell, Emily Reisbaum, Isaac Berkman Zaur, Clarick Gueron Reisbaum LLP, New York, NY, for Plaintiffs.
Andrius R. Kontrimas, Houston, TX, Charles David Schmerler, India Decarmine, Fulbright & Jaworski L.L.P., Mark Allen Robertson, Sarah E. O'Connell, Norton Rose Fulbright U.S. LLP, Nicholas A. Gravante, Jr., Luke William Nikas, Boies, Schiller & Flexner LLP, Silvia L. Serpe, Eric B. Einisman, Paul W. Ryan, Serpe Ryan LLC, New York, NY, Philip J. Iovieno, Boies, Schiller & Flexner LLP, Albany, NY, Anastasios Sarikas, Office of Anastasios Sarikas, Astoria, NY, for Defendants.
Plaintiffs Domenico De Sole, Eleanore De Sole, and John Howard bring these actions against Defendant Knoedler Gallery, LLC ("Knoedler"); 8–31 Holdings Inc. ("8–31"), Knoedler's sole member; Michael Hammer, Knoedler's managing member and the owner of 831 Holdings, Inc.; Ann Freedman, Knoedler's former president; Glafira Rosales, an art dealer who brought certain paintings to Knoedler; Jose Carlos Bergantinos Diaz, Rosales's "longtime companion"; and Jaime Andrade, a former Knoedler employee who introduced Rosales to Knoedler and Freedman.1
On September 30, 2013, this Court issued a memorandum opinion and order granting in part, and denying in part, Defendants' motions to dismiss the complaints in both actions. De Sole v. Knoedler Gallery, LLC, 974 F.Supp.2d 274, 285 (S.D.N.Y.2013). Plaintiffs in both actions then filed amended complaints. . The amended complaints allege that paintings that Plaintiffs purchased from Knoedler—on the representation that they had been created by Mark Rothko and Willem de Kooning—were forgeries.2 Plaintiffs assert causes of action arising under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962 et seq., and state law causes of action for fraud, fraudulent concealment, aiding and abetting fraud, conspiracy to commit fraud, breach of warranty, and unilateral and mutual mistake.
On October 1, 2014, Defendants 8–31, Hammer, and Knoedler moved to dismiss certain claims in the De Sole Second Amended Complaint and the Howard Amended Complaint. (De Sole Dkt. Nos. 210, 211, 213, 215; Howard Dkt. Nos. 264, 266, 268) For the reasons stated below, Defendants' motions to dismiss will be granted in part and denied in part.
The De Sole action was filed on March 28, 2012, and the Howard action was filed on July 6, 2012. On September 13, 2012, the De Sole Plaintiffs filed an amended complaint against Defendants Knoedler Gallery, LLC d/b/a Knoedler & Company, Ann Freedman, Glafira Rosales, Jose Carlos Bergantinos Diaz, Michael Hammer, and Jaime Andrade. The De Sole Amended Complaint pleads the following causes of action:
(Id. ¶¶ 136–208) This complaint does not assert any claims against 8–31 Holdings, Inc. See id.
Plaintiff Howard's original complaint asserted claims against Ann Freedman, Glafira Rosales, Knoedler Gallery, LLC, d/b/a Knoedler & Company, Michael Hammer, 8–31 Holdings, Inc., Jose Carlos Bergantinos Diaz, and Jaime R. Andrade. (Howard Dkt. No. 1 (Cmplt.)) Howard's Complaint pleads the following causes of action:
The De Sole Amended Complaint and the Howard Complaint contain the following factual allegations concerning Hammer:
(Cmplt. (Howard Dkt. No. 1) ¶ 18)
With respect to Howard's breach of warranty claim against Knoedler and Freedman, Howard asserted that Freedman and Knoedler made the following representations to him and his advisor and agent—Jaime Frankfurt:
(Cmplt. (Howard Dkt. No. 1) ¶ 377) Howard further alleged that Knoedler and Freedman's representations to Howard and Frankfurt constitute express warranties under N.Y.U.C.C. § 2–313(1). (Id. ¶ 380) Howard also alleged that "the representations concerning authenticity and provenance in the invoice by defendants (who are art merchants) to Howard (who is not) constitute express warranties under § 13.01 of the New York Arts and Cultural Affairs Law." (Id. ¶ 381) Finally, Howard claimed that "Freedman and Knoedler concealed ... information [about authenticity and provenance] from Howard such that Howard was unable, despite due diligence, to bring his claims in a timely manner." (Id. ¶ 383)
With respect to Howard's unilateral mistake and mutual mistake claims against Knoedler, the Howard Complaint alleges that "Howard [had a] mistaken belief that: (1) the [w]ork was owned by a Swiss private collector who obtained the [w]ork through David Herbert and passed title "by descent" to his son; (2) there were no questions about the [w]ork's authenticity; and (3) the [w]ork was fully marketable." (Id. ¶ 391) Howard purchased the painting "without any knowledge of these mistakes," "exercised reasonable diligence in investigating the [w]ork prior to its purchase," and "would not have been able to ascertain the truth concerning his mistaken belief at the time of the sale of the [w]ork because such information was exclusively in the defendants' possession." (Id. ¶¶ 392–94) Howard further alleged that a mutual mistake "existed by virtue of both Howard's and Knoedler's mutual mistake that the [w]ork was an authentic de Kooning." (Id. ¶ 406) The Howard Complaint pleads the same two mistake claims against Knoedler with respect to Frankfurt's mistaken belief.4 (Id. ¶¶ 247, 397–404, 410–15)
All Defendants moved to dismiss. (De Sole Dkt. Nos. 24, 27, 63, 71, 75; Howard Dkt. Nos. 35, 39, 45, 48, 74, 76) On September 30, 2013, this Court granted in part and denied in part Defendants' motions. De Sole, 974 F.Supp.2d 274.
This Court dismissed all claims against Hammer in both cases, De Sole, 974 F.Supp.2d at 302–04, reasoning...
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