Judge denies collector's injunction against dealer
In a decision filed 20 May, a federal judge has found that Craig Robins's claims against David Zwirner to prevent the sale of works by Dumas are "unwarranted"
By Helen Stoilas and Marisa Mazria Katz. Web only
Published online: 21 May 2010
A federal judge has denied Miami collector Craig Robins' claims against New York art dealer David Zwirner, alleging a breach of confidentially. In an order filed 20 May, Judge William H. Pauley III said that Robins’ application for a preliminary injunction to prevent the sale of three works by Dumas was unwarranted. In his decision, Judge Pauley also took the opportunity to deliver a harsh verdict on the art world: “This lawsuit offers an unflattering portrait of the art world—a realm of self-proclaimed royalty full of ‘blacklists’, ‘graylists’ and astonishing chicanery.”
Robins was suing Zwirner for $8m, after Zwirner told Dumas, whom he now represents, that he had sold her 1994 painting Reinhardt’s Daughter on Robins’ behalf. Robins filed suit in the United States District Court for the Southern District of New York on 29 March. As well the alleged breach of confidentiality, Robins alleged that the disclosure landed him on a “blacklist” by Dumas, precluding him from buying her works on the primary market. He also says that, to avoid a lawsuit in 2005 when he first found out about the blacklist, Zwirner promised him “first choice, after museums, to purchase one or more [primary market] Marlene Dumas works”.
Last month, fellow dealer Jack Tilton testified in support of Robins’ claims that Zwirner had agreed to keep quiet about the sale, and his claims of the existence of a blacklist of collectors barred from having access to Dumas’ new work. According to court documents, Robins has been a major collector of the South African artist, owning 29 works, and was eager to acquire three paintings from her new exhibition at David Zwirner.
Although the judge found that Robins has shown that he would suffer “irreparable harm” if Zwirner sold the three paintings elsewhere instead of offering them to Robins, he said that without written proof of either of the alleged oral agreements, enforcement is barred by the Statute of Frauds.
According to the decision, “Original works of art are within the small category of intrinsically unique goods for which a specific performance remedy is appropriate… The three Dumas paintings are unique works of art. Thus, if a breach of contract has occurred, a damages remedy would be inadequate to make Robins whole. Dumas rarely makes her work available in the Primary Market. Moreover, the exhibition paintings related to the Israeli-Palestinian conflict. For Dumas, scenes of the Wailing Wall in Jerusalem are thematically exceptional and in a subject area she is unlikely to soon revisit. If one of these paintings is sold, Robins will have no recourse to obtain a substitute.”
But according to the judge, the alleged confidentially agreement is void under the Statute of Frauds because it “was intended to last for ‘an unlimited duration’. Since the agreement was premised on Dumas never learning that Robins had sold Reinhardt’s Daughter, the confidentially agreement could not be fully performed within one year”, the time limit for an oral contract. “Indeed, the only way the [agreement] could terminate…was if Zwirner breached the agreement,” the judge wrote, showing how the oral contract could create a double bind.
The gallery agreement giving Robins right of first refusal is similarly barred under the Statute of Frauds. “The three Dumas paintings are each priced over $1 million, and Plaintiff has not come forward with any writing signed by Zwirner promising to sell the paintings to Robins. Absent a writing signed by Zwirner, enforcement of the oral gallery agreement is barred.”
The judge went on to explain that “as an alternative ground for recovery”, Robins attempted to stop Zwirner from “reneging on his promise to sell the three Dumas paintings” under a legal doctrine known as “promissory estoppel”. In order to succeed, Robins needed to show: “(1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the party to whom the promise was made and (3) an injury to the party whom the promise was made by reason of the reliance. When promissory estoppel is interjected to overcome a valid Statute of Frauds defense, it ‘has been strictly construed to apply only in those rare cases where “the circumstances [are] such as to render it unconscionable to deny the oral promise upon which the promisee has relied”’.”
“Because Robins alleges no injuries sufficiently severe to be ‘unconscionable’, he is unlikely to succeed on estoppel grounds,” wrote the judge. “Here, any injuries Robins suffers are within the realm one would reasonably expect from the non-performance of a sales contract—Robins does not own the artworks promised to him. Moreover, when Robins sold Reinhardt’s Daughter, he was aware Dumas might learn of the transaction and ban him from purchasing in the Primary Market. Indeed, it was for that reason that he sought the confidentiality agreement.”
Judge Pauley went on to say that “the standard of ‘unconscionability’ cannot be judged solely based on Plaintiff’s personal tastes. Because Robins has not shown an unexpected and serious injury flowing from the breach of Zwirner’s promises, has been able to purchase Dumas art, and has been offered another painting form the exhibition by Zwirner, he is unlikely to show an unconscionable injury. Accordingly, a preliminary injunction … is not warranted.”
The judge also addressed Robins fraud claims against Zwirner, which he says “amount to nothing more than a reiteration of his contract claims with words like ‘purposefully’ and ‘induced’ sprinkled in.” According to his decision: “While Robins alleges ‘wanton dishonestly’ on Zwirner’s part…[he] does not allege any special duty owed by Zwirner, and … he suffered no special damages from Zwirner’s misdeed. Further, given that Zwirner did not even represent Dumas in 2005, and was himself on the Dumas blacklist, it is difficult to conceive how Zwirner intended to violate his agreements with Robins.”
In the end, Judge Pauley offered Robins and all collectors the ancient advice of “buyer beware” and “get it in writing”. And he reserved his most severe judgement on the murky dealings of the art world in general. “As the facts of this case make clear, some in the art world desire a market that is neither open nor honest. Thus, collectors in this seemingly refined bazaar should heed the admonition ‘caveat emptor’ and be mindful of the Statute of Frauds.”
UPDATE: Robins and Zwirner have both commented on the decision. See related article.
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