Wei Su v. Sotheby's Inc.
| Decision Date | 24 October 2022 |
| Docket Number | 17-CV-4577 (VEC) |
| Parties | WEI SU and HAI JUAN WANG, Plaintiffs, v. SOTHEBY'S, INC., Defendant. SOTHEBY'S, INC., Counter-Claimant, v. WEI SU, HAI JUAN WANG, and YEH YAO HWANG Counterclaim-Defendants. YEH YAO HWANG, Cross-Claimant, v. WEI SU and HAI JUAN WANG, Cross-Defendants. WEI SU and HAI JUAN WANG, Cross-Claimants, v. YEH YAO HWANG, Cross-Defendant. |
| Court | U.S. District Court — Southern District of New York |
Wei Su (“Su”), Su's agent Hai Juan Wang (“Wang”), and Yeh Yao Hwang (“Yeh”) dispute the ownership of the Zhou Zha Hu, an ancient Chinese ritual wine vessel (the “Vessel”), which was consigned by Wang to Sotheby's for auction. After five years of protracted litigation, Yeh's cross-claim against Su and Wang for conversion is the only live claim remaining. To resolve this dispute, the Court held a seven-day bench trial from June 6, 2022, to June 16, 2022. For the reasons discussed below, the Court finds that Yeh has proved that Su and Wang converted his fifty percent ownership interest in the Vessel and that Su and Wang are equitably estopped from asserting a statute of limitations defense to his conversion claim. Therefore, the Court finds in favor of Yeh on his conversion cross-claim.
Based on its observations of the witnesses, examination of the evidence, and the parties' briefing, the Court makes the following findings of fact and conclusions of law. See Fed.R.Civ.P. 52(a).
The Vessel at issue is from the Middle Western Zhou Dynasty around the tenth to ninth Century B.C., see Stip Fact 1, Dkt. 226 at 4, and is of considerable historical and financial value. Yeh credibly testified that he purchased the Vessel in 2002 from Lin, the son of a well-known art collector, for $600,000 dollars. Trial Tr (“Tr.”)[1] at 83a:9-10, 84a:20-21, 407:15-409:4 414:68.[2] In 2005, Yeh needed $1 million in seed money to build a music center in Guangzhou, China. Id. at 490:8-491:6. To that end, on May 31, 2005, Yeh met with Zhang Shenbao (“Zhang”) and Szutu Chin Chiang (“Szutu”) to arrange a $1 million loan from Zhang.[3] Id. at 514:8-10. At the meeting, Zhang agreed to lend Yeh $1 million at an eighty percent interest rate, and Yeh agreed he would pay Zhang $1.8 million following a successful auction of the Vessel by the Chongyuan Art Auction Company (“Chongyuan”). Id. at 91a:24-92a:9, 99a:24-100a:9, 297:24-298:5, 497:23-498:5, 514:8-12. In the end, Zhang lent Yeh only $200,000, at the same eighty percent interest rate. Id. at 107a:11-23. Yeh agreed to repay Zhang the $200,000 loan plus $160,000 in interest, either following a successful auction of the Vessel, or if the auction failed, then thirty-five days after the new year. Id. at 107a:11-23, 522:5-11, 541:5-9, 553:5-9. Yeh was involved in extensive negotiations with Chongyuan about the consignment of the Vessel for auction, including meeting and corresponding with Ji Chong Jian, a bronzeware expert who held a senior position at Chongyuan,[4] and with Wu Ji, Chongyuan's lawyer at the time.[5] Id. at 91a:24-92a:9, 101a:22-24, 104a:23-105a:2, 106a:1-11, 108a:3-12, 111a:8-21, 117a:13-18, 247:1-10, 248:1719, 259:25-260:15, 261:7-8, 262:18-20, 427:8-18.
The Chongyuan auction, which was held in January 2006 in Shanghai, failed to result in a sale. Id. at 114a:19-20. In February 2006, Yeh wrote to Ji Chong Jian to ask Chongyuan to return the Vessel to him. Id. at 117a:2-6, 118a:9-12, 264:7-12. Instead of returning the Vessel, Chongyuan presented Yeh with an agreement dated June 2, 2005, which stated that the Vessel must be returned to Zhang if the auction fails. Id. at 117a:2-6, 118a:9-12, 264:7-12, 265:1-17, 269:4-11; see also Agreement, Pl. Ex. 3. The agreement was purportedly signed by Yeh and Zhang and was stamped with the Chongyuan seal. Agreement, Pl. Ex. 3. Yeh claimed that the agreement was invalid because his signature was forged. Tr. at 266:20.
Given the dispute, Chongyuan refused to return the Vessel to either Yeh or Zhang, and litigation ensued.[6] After losing twice below, Yeh appealed to the Shanghai Higher People's Court. Id. at 269:23-270:9; see also Yeh Decl., Pl. Ex. 80 ¶¶ 37-39. On May 22, 2007, that court held that Yeh and Zhang were co-owners of the Vessel and that Zhang had the right to possess the Vessel (the “Shanghai Judgment”). See Shanghai Judgment, Pl. Ex. 4 at 12-13, 1516. Yeh testified that, although he disagreed with the result of the litigation, he ultimately accepted it. Tr. at 542:20-24; see also Yeh Decl., Pl. Ex. 80 ¶ 40.
In June 2007, the month after the Shanghai Judgment was entered, Zhang, Szutu, and Su met to discuss Su's purchase of the Vessel from Zhang. Tr. at 598:3-7. Su and Szutu have a longstanding relationship: Su testified that he has known Szutu for almost thirty years and that Szutu is like his father. Id. at 593:9, 603:13-16. In July 2007, Su, Szutu, and Zhang met again to discuss the purchase of the Vessel. Id. at 600:20-23. Su testified that at the July meeting he signed without reading what he thought was a letter of intention, but what was actually a sales contract.[7] Id. at 600:14-19, 601:15-19, 602:9-12, 603:8-16, 605:8-606:5; see also Sales Contract, Pl. Ex. 86. In August 2007, Su traveled to Hong Kong to see the Vessel in person.[8]Tr. at 620:21-22. Su testified that it was only at this visit that he agreed to purchase the Vessel for 5 million RMB.[9] Id. at 622:10-17.
On September 14, 2007, Su arranged for the transfer of 1 million RMB to Zhang from someone who owed him money.[10] Id. at 635:11-13, 635:22-637:7. Su also gave Zhang four checks, each for 1 million RMB, from the account of a friend. Id. at 634:10-23. On the same date, in Szutu's presence at a restaurant in Hong Kong, Zhang gave Su physical possession of the Vessel.[11] Id. at 637:10-22, 638:19-20. According to Su, each of the four checks Su gave to Zhang bounced. Id. at 639:16-18. Su testified, however, that he ultimately paid Zhang in full: he testified that between 2007 and 2010, he brought Zhang cash each month until the amount owed was fully paid. Id. at 619:18-620:8, 641:21-642:12. Su testified that he believed the transaction was complete under Chinese law in 2007, even though he did not pay the full purchase price until 2010. Id. at 640:4-641:15. Yeh credibly testified that he did not give Zhang permission to sell his fifty percent ownership interest in the Vessel to Su or to anyone else. Id. at 273:21274:1, 275:21-23.
In 2011, Su gave Szutu power of attorney to sell the Vessel. Id. at 654:21-24. Szutu, in turn, consigned the Vessel to Chongyuan for auction. See id. at 596:13-17; 2011 Chongyuan Consignment Agreement, Pl. Ex. 6. The auction was held, but, as with the auction in 2006, it failed to produce a sale. Tr. at 663:11-665:5, 681:11-24.[12] Yeh credibly testified that he was unaware that the auction had taken place. Id. at 341:19-23.[13]
In 2014, Su again tried to sell the Vessel at auction, this time through Sotheby's in New York. Su again gave power of attorney to Szutu to auction the Vessel. See Power of Attorney, Pl. Ex. 22. Szutu, in turn, authorized Wang to handle the consignment to Sotheby's. See Power of Attorney, Pl. Ex. 21. In August 2014, Wang, as Su's agent, entered into a Consignment Agreement with Sotheby's to sell the Vessel at auction. Stip. Fact 4, Dkt. 226 at 5. In September 2014, having seen in a Chinese art magazine that the Vessel was to be auctioned at Sotheby's, Yeh contacted Sotheby's, claimed he was a co-owner of the Vessel, and demanded that Sotheby's remove the Vessel from auction. Tr. at 299:21-300:9; Stip. Facts 5, 6, Dkt. 226 at 5. Sotheby's informed Wang about Yeh's ownership claim, see Stip. Fact 7, Dkt 226 at 5, and withdrew the Vessel from auction pending determination of the Vessel's true owner, see Stip. Fact 9, Dkt 226 at 5.[14] Throughout 2014 and 2015, Sotheby's repeatedly urged Su and Wang to communicate directly with Yeh to resolve the ownership dispute. See Oct. 28, 2014 E-Mail, Pl. Ex. 61; Dec. 24, 2014 Letter, Pl. Ex. 35; Jan. 2, 2015 Letter, Pl. Ex. 37; Jan. 23, 2015 Letter, Pl. Ex. 38. Sotheby's also repeatedly requested authorization to share Wang's contact information, or that of Wu Ji, Wang's attorney in China, with Yeh. See Feb. 25, 2015 Letter, Pl. Ex. 39; July 22, 2015 Letter, Pl. Ex. 40; Aug. 14, 2015 Letter, Pl. Ex. 42; see also Tr. at 68b:11-15; 89b:6-12, 110b:3-10; 111b:18-114b:7, 222:18-24 (Wang's testimony acknowledging that Sotheby's wanted to share her contact information with Yeh).
Despite Sotheby's repeated requests, Su and Wang refused to permit Sotheby's to share their names and contact information with Yeh. Wang admitted that she refused to disclose that information or to allow Sotheby's to do so. See Tr. at 41b:12-15, 69b:1-15, 93b:20-24 114b:14-19, 228:16-18, 234:17-235:5, 240:10-14 (); see also Aug. 11, 2014 Consignment Agreement, Pl. Ex. 51 at 8 (); Tr. at 189:1-7 (); Sept. 11, 2014 Wang Email to Sotheby's, Pl. Ex. 57 ().[15] Additional evidence presented at trial confirmed that Wang and Su refused to allow their identities and contact information to be disclosed to Yeh. Sotheby's repeatedly requested Wang and Su to permit it to share their contact information with Yeh; Sotheby's also expressed its frustration to both Yeh's counsel and Su and Wang's counsel about the lack of...
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