Zucker v. Hirschl & Adler Galleries, Inc.
| Decision Date | 17 September 1996 |
| Citation | 170 Misc.2d 426,648 N.Y.S.2d 521 |
| Court | New York Supreme Court |
| Parties | , 30 UCC Rep.Serv.2d 955 Joseph ZUCKER, Plaintiff, v. HIRSCHL & ADLER GALLERIES, INC., et al., Defendants. |
Richards & O'Neil, New York City (Ted Poretz and Carole Klinger, of counsel), for plaintiff.
Willkie, Farr & Gallagher, New York City (Philippe M. Salomon and Nicole A. Anderson, of counsel), for defendants.
This is an action wherein (a) the defendant-art gallery, Hirschl & Adler Galleries, Inc. and Hirschl & Adler Modern, Inc. (collectively, the "Gallery") seeks recovery of moneys allegedly loaned by it to the plaintiff-artist, Joseph Zucker as well as commissions allegedly due from the plaintiff under a written agreement providing for exclusive worldwide representation of plaintiff's artwork, and (b) the plaintiff seeks recovery of several works of his art which he originally delivered to the Gallery on a consignment basis which the Gallery now refuses to return based upon the claimed existence of a security interest in the Gallery's favor therein.
The primary issue which this court must resolve on this motion is whether Arts & Cultural Affairs Law § 12.01(1)(a)(v) forbids the Gallery's claimed security interest in the plaintiff-artist's works thereby mandating the return of said artwork to plaintiff. The Gallery contends it is entitled to retain plaintiff's unsold artistic works presently in its possession as collateral pursuant to an agreement between the parties wherein plaintiff allegedly pledged the works as security for his promise to repay the sums borrowed. The Gallery contends that neither the creation of its alleged security interest in the artwork, nor its retention of said artwork, violates the Art & Cultural Affairs Law because that law is intended only to prohibit the creation of security interests in favor of an art dealer's creditors, not the creation of a security interest in favor of an art dealer that has loaned money directly to an artist. As discussed more fully herein, despite the Gallery's well-reasoned analysis tending to show a possible legislative printing error resulting in the unintentional deletion of certain crucial language from the statute in question, the court declines the invitation to rewrite the law, leaving that task to the legislative body. Accordingly, a plain reading of Arts & Cultural Affairs Law § 12.01(1)(a)(v), as written, prohibits the security interest asserted by the Gallery herein thereby mandating a return of said property to plaintiff.
Plaintiff moves for partial summary judgment pursuant to CPLR 3212 seeking (a) an order pursuant to CPLR 7101 (Recovery of Chattel) and/or CPLR 3001 (Declaratory Judgment) declaring that he has the right to possession of all of his unsold works of art currently in the Gallery's custody, possession or control, and (b) dismissing the three affirmative defenses interposed in defendants' amended answer (failure to state a cause of action, statute of limitations and laches, and the assertion that the agreement between the parties permits defendants to retain a security interest in plaintiff's consigned artwork.)
The Gallery opposes the motion and cross-moves for partial summary judgment, including a judgment requiring plaintiff to repay the Gallery (a) the outstanding balance of a claimed loan in the sum of $36,321.78 plus interest, and (b) outstanding commissions due to the Gallery in the sum of at least $75,000.
On March 15, 1986, the Gallery and plaintiff entered into a written sales agreement (the "Sales Agreement"), pursuant to which it was agreed that (a) the Gallery would be plaintiff's exclusive representative "for all the [plaintiff's] works offered for sale to the public in all mediums internationally", (b) plaintiff consigned certain of his artistic works to the Gallery for exhibition and sale; and (c) plaintiff agreed to pay the Gallery a 50% commission on the proceeds of any sale of his works during the term of the Sales Agreement. The Sales Agreement provided for an initial term of three years, plus a two year renewal period. The Sales Agreement, in pertinent part, states:
Pursuant to the Sales Agreement, plaintiff delivered various artistic works to the Gallery from time to time for display and sale. The Gallery contends that, notwithstanding the technical expiration of the renewal period of the Sales Agreement in March 1991, the parties continued to do business under its terms until approximately March, 1993.
Beginning on January 20, 1987, and from time to time thereafter, the Gallery agreed to advance money to plaintiff, allegedly in the form of loans. According to the Gallery, the oral agreement between the parties provided that: (a) the Gallery would retain all of plaintiff's unsold works, no matter when delivered to the Gallery, until the sums loaned were repaid in full, and (b) the Gallery would apply plaintiff's share of the sales proceeds to reduce the balance of any unpaid loans from plaintiff to the Gallery. As shown by the documents annexed to the Gallery's papers, upon the sale of an item of plaintiff's work the Gallery regularly prepared and delivered to him a statement of account which indicated that the Gallery deducted from the sales proceeds its 50% commission and any sums previously advanced to him and paid the remaining sums to plaintiff.
Plaintiff admits that he received monetary advances from the Gallery, and does not seem to dispute that he borrowed a total of approximately $129,000 from the Gallery. Of this sum $36,321.78 currently remains outstanding. However, plaintiff claims that the advances did not constitute a "loan," but rather an advance against commissions, in that he never agreed to repay these sums other than through the Gallery's deduction from the proceeds of sales of his artwork. In this regard, in paragraphs 12 and 13 of his affidavit dated April 1, 1996, plaintiff states:
Some of the documents submitted by the defendant appear to lend credence to this claim, notwithstanding the affidavits submitted by defendant (see, Exhibit "O" annexed to the Notice of Cross-Motion).
In approximately March 1993, plaintiff and the Gallery terminated their relationship. On June 15, 1993, the Gallery demanded repayment of the outstanding loan balance ($36,321.78). The Gallery claims it also made other demands for repayment. Plaintiff failed to repay said amounts or any part thereof. Therefore, the Gallery contends it may continue to retain the works as security for plaintiff's repayment of said loan amounts.
With respect to the Gallery's claim for commissions, it is undisputed that on July 21, 1992, plaintiff sold 31 pieces of his artwork to Robert Feldman of Parasol Press, Ltd. for $150,000. The Gallery contends that it is owed a 50% commission (i.e., $75,000) by plaintiff for this sale as well as commissions for any other such sales which may have occurred during the term of the Sales Agreement. Plaintiff claims that the Sales Agreement only required payment of commissions to the Gallery for sales of works of art offered for sale "to the public". The above-mentioned transaction, according to plaintiff, was a "private" sale for which he owes no commissions. In his reply affidavit, plaintiff stated:
"It was always clear to me that the agreement only covered works which I had consigned to [the Gallery] to be exhibited for sale to the public ... It was and remains clear to me that this agreement did not preclude me from privately selling works that had not been offered to the public, and specifically, did not ban me from selling works to friends of mine who solicited me for them...."
THE PLEADINGS
The Complaint, purports to set forth two causes of action, the first for recovery of chattel under CPLR Article 71, and the second for a declaratory judgment declaring that the Gallery has no right to hold any of plaintiff's unsold works and directing the Gallery to return all such works to plaintiff.
The Amended Answer, denies the material allegations of the Complaint and
(1) failure to state a cause of action,
(2) statute of limitations and laches, and
(3) that, pursuant to the agreement between the parties, the Gallery holds a valid security interest in the plaintiff's unsold works as security for plaintiff's promise to repay the money lent to him by the Gallery which works the Gallery has a right to retain all of which is not in violation of Arts & Cultural Affairs Law § 12.01(1)(a), and
(1) that plaintiff owes the Gallery at least $36,321.78 plus interest representing moneys loaned plaintiff (2) that plaintiff owes the Gallery at least $75,000 representing commissions due to the Gallery under the terms of the Sales Agreement for sales of certain of plaintiff's artwork made by plaintiff for which plaintiff failed to remit to the Gallery its commission due under the terms of the Sales Agreement, and
(3) that the Gallery expended in excess of $10,000 in its continued performance under the Sales Agreement in reliance upon plaintiff's acceptance...
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