Opinion
No. CV 09-5031240-S
November 23, 2010
MEMORANDUM OF DECISION
Plaintiff Yossi Shelley brings this action against defendants, Gene Shapiro and Stephen Gass in nine counts. However, Judge Robert Hale ruled on defendants' motion for summary judgment, in a memorandum dated July 2, 2010, that the motion should be granted in favor of defendant Gass as to the counts alleged against him and in favor of defendant Shapiro as to the first and third counts, thus leaving for trial before this court claims against defendant Shapiro in the second count (conversion), the fourth count (misrepresentation), the fifth count (CUTPA), and the sixth count (civic theft). The plaintiff however, has abandoned the sixth count. Defendants have alleged six special defenses, as to which defendant Shapiro briefed waiver, estoppel and statute of limitations. The facts are as follows:
His name is reversed in the caption of this case.
Defendant Shapiro in 2006, was a member and employee of Trinity Fine Arts, LLC (TFA) located in Stamford, Connecticut. TFA was in the business of auctioning paintings it obtained by consignment from owners. In April of 2006, TFA was consigned two paintings, one by the Russian artist Yuliy Klever dated 1887 ("Klever painting") and owned by an art dealer in New York City, and the other by Russian artist Nikolai Sverchkov, dated 1889 ("Sverchkov painting") and owned by an art collector in New York City. The consignment agreements contained descriptions of paintings being auctioned and on the reverse side representations and warranties by each of the consignor owners concerning their ownership of the paintings free and clear of liens; their rights to consign and sell the painting; and their assurances to the auctioneer, TFA, that each had been provided "with any information [the owner has] concerning the provenance of the property"; and "that [the owner has] no reason to believe that any lot of property is not authentic or is counterfeit."
These paintings are listed in TFA's catalogue as Lot 22 (Klever painting) and Lot 23 (Sverchkov painting). The catalogue contained the terms and conditions of the offering by auction of TFA. These terms and conditions were also published on the EBAY website. Plaintiff testified he read, understood, and accepted these terms and conditions in writing prior to registering for and participating in the auction. The TFA absentee bid form was signed by plaintiff on April 20, 2006 and submitted to TFA prior to the auction. It stated that plaintiff agreed "to be bound by the auction terms and conditions as stated in the catalogue for this auction." Plaintiff had also registered for the TFA auction on EBAY and had bid on another painting. By registering, plaintiff acknowledged and agreed to be bound by the terms and conditions of the TFA auction listed on the EBAY website.
Paragraph 4 of the terms and conditions for the TFA auction listed on EBAY and paragraph 4 of the terms and conditions contained in the TFA April 22, 2006 auction catalogue are identical. They are as follows:
Bidders are strongly urged to personally examine each lot on which they will be bidding, in order to determine condition, size, and restoration and repair. All items are sold as-is and where-is. Trinity Fine Arts, LLC disclaims any express or implied warranties or guarantees as to the authenticity, condition, merchantability, fitness for a particular purpose, correctness of the catalogue or supplemental material, or other description of the physical condition, size, quality, rarity, importance, medium, provenance, exhibitions, literature or historical relevance of any property. No statements made anywhere, by us, our employees, officers, or agents, whether written or verbal, shall be deemed such a warranty or assumption of liability. Estimates of the selling price should not be relied on as a statement that this is a price at which the item will sell or its value for any other purposes. Photographic images of items being offered, whether provided in print on online, as well as references in the catalogue entry or condition report to damage or restoration are for guidance only. The absence of such a reference does not imply that an item is free from defect or restoration, nor does a reference to particular defects imply the absence of any others. Neither TFA nor its consigners are responsible in any way for errors and omissions in the catalogue, or any supplemental material. All sales are considered final with the following exception: TFA will agree to a refund of the purchase price if within fourteen (14) days of purchase, the purchaser obtains and sends to TFA a written letter from a mutually recognized expert or authority on the artist stating unequivocally that the work is a forgery or not by the represented artist. The purchase date is the date of the auction. The choice of expert or authority must be mutually agreeable to TFA and the purchaser. This exception will only apply to a work signed by the artist and not to an attribution, manner of, school of, circle or, or follower of a particular artist. The letter must be signed, and on letter head of the recognized expert or authority. Any exceptions to this rule must be specifically approved by TFA. (Italics added.)
Four days before the auction, on April 18, 2006, plaintiff, living in Israel, sent to TFA an email through the EBAY member network asking about the Klever painting. Specifically plaintiff asked TFA whether there was any "expert letter or any other provenan[ce]" on the Klever painting. TFA replied in email the same day as follows: "The Klever does not have any papers of authenticity but we fully believe it to be authentic." That TFA email contained a notice section which in relevant part reads as follows:
The "provenance" of a painting refers to its history of ownership.
When addressed to our clients, any opinions or advice contained in this email are subject to the relevant terms of business of Trinity Fine Arts, LLC. Please note that any condition statement in this email regarding works of art is given as a courtesy to our clients, is only an opinion and should not be treated as a statement of fact. Trinity Fine Arts, LLC, shall have no responsibility for any error or omission.
Before the auction there was a telephone conversation between the plaintiff and Mr. Shapiro. There is a divergence in the testimony of each as to the content of that conversation. Mr. Shapiro testified that he told the plaintiff he had observed restoration on the Klever painting in the sky, clouds and signature areas and that TFA would provide a written condition report if requested and that such a report would provide more detail on the location of restoration on the painting. Shapiro further testified that plaintiff did not ask for a written condition report.
The plaintiff testified that Mr. Shapiro said there was minor restoration of the painting and he did not mention restoration of the signature. As to this conflict in testimony, the court believes Mr. Shapiro's version.
The auction occurred on April 22, 2006. Plaintiff bid over the telephone for the two paintings sight unseen. His successful bid for the Klever painting was $18,000 and his successful bid for the Sverchkov painting was $24,000. On April 26, 2009, TFA emailed an invoice to plaintiff for $50,190 broken down as follows: $18,000 for the successful Klever painting bid; $24,000 for the successful Sverchkov painting bid; and $8,190 for a 19.5% buyer's premium.
Shapiro also had post-auction telephone and email communications with plaintiff and his brother-in-law, Danny Gosis, whom plaintiff had authorized to act for him. These communications involved the mechanics of payment and plaintiff's requests for an extension of time to have the Klever painting examined for authenticity. On May 4, 2006, Gosis sent an email to TFA copied to plaintiff, in which he confirmed that an immediate wire payment was being made to TFA for the Sverchkov painting; that a future payment would be made for the Klever painting; and that the Klever painting payment would be held until May 20, 2006 "so we can make sure that the painting is authentic." TFA replied by email that same day to Gosis, copied to plaintiff. In that email TFA confirmed that payment arrangements had been made and also had:
However, I have agreed with Yossi that the payments for the Klever will not be made to the consigner of the Klever until after the 20th of May. We have absolutely no doubts of the authenticity of the piece and we do not sell `on approval.' However, I have agreed with Mr. Shelley that he has time to check with the Tretyakov or another expert that we mutually recognize as an expert on the artist until the 20th of May. Please note however, that the payment must be received before that time, and that any statement from the Tretyakov or other mutually recognized expert must be provided to us in signed written format.
Tretyakov is a museum in Russia.
Plaintiff, subsequently, paid for both paintings on May 4, 2006 and May 15, 2006. TFA then paid the consignors of the two paintings.
Plaintiff did not have the Klever painting authenticated during the extended authentication period authorized by TFA. Instead, the plaintiff arranged for the Klever and the Sverchkov paintings to be delivered to a UPS store in Farmington, Connecticut for shipment overseas. The plaintiff directed the Klever painting to be sent to the Stolzenberg Gallery in Stuttgart, Germany. That gallery refused to auction the painting unless it was described as "attributed to Klever." The plaintiff then had the painting sent to the Koller auction house in Zurich, Switzerland. He authorized that it to be sold for between 30,000 to 50,000 Euros. which was two to three times what he paid in U.S. dollars for the painting. Koller declined to accept the painting under the terms requested by plaintiff. He then had the Klever sent to Schloss Ahden Gallery in Germany which also required the painting be offered with qualifying language.
On September 4, 2006, plaintiff emailed TFA complaining that the Klever painting was not by Klever and that he had not been told about the restoration of it. He demanded a refund of the money paid for the painting. TFA responded by declining plaintiff's request for a refund, referring to the terms and conditions of the auction and noting the absence of any writing from a recognized authority stating that the Klever painting was not authentic. In February 2007, plaintiff tried to sell the Klever painting to the Bukowski auction house in Finland for an estimated price of 15,000 to 25,000 Euros, stating that the painting had "minor restoration in the clouds." Bukowski refused to accept the painting for sale.
As to the Sverchkov painting, plaintiff consigned it to Christie's in London on November 26, 2006 claiming an estimated sale price of 150,000 to 200,000 British Pounds. That was more than ten times what he paid for the painting at the TFA auction. The Sverchkov painting did not sell at the Christie's auction. Plaintiff at trial conceded that prior to and after the TFA auction he had no communication whatsoever with Shapiro or TFA concerning that painting.
At the trial plaintiff called Michele Bechtell as an art expert and the court accepted her credentials. However, she testified that she had not previously appraised Russian artists and was not a leading expert on Klever or Sverchkov. She examined each of the paintings under black light and noted that the Klever painting was substantially restored over sixty percent of its canvas and that the signature was restored. She went to art data base on the web to locate paintings of Klever and compare them with the subject painting. She concluded that the "original work on the canvas may have been painted by Klever, with over sixty percent of the canvas surface painted by another later hand, the work is no longer that of the artist who originally painted the canvas. And, given the additional adulteration of the date and the signature, the work has little value to a serious collector or an institution."
As to the Sverchkov painting, Bechtell's report says, "The painting does not appear to be a work by Sverchkov. The signature does not resemble that which is typical of either original work by Sverchkov. There is no evidence of age on the canvas which is purported to be over 100 years old."
The defendant introduced evidence of signatures of Sverchkov on other paintings and some of them appear to this court to be similar to the signature of Sverchkov's on the subject painting.
THE COUNT OF MISREPRESENTATION
Plaintiff sues Shapiro individually. Shapiro however, during this entire transaction was working as an officer and an employee of TFA. TFA was a limited liability company. Connecticut General Statutes § 33-134(a) provides that a member of such a company is not liable for the debts and obligations of the company. There is however an exception to this statutory immunity where the agent, employee, manager or member of the limited liability company commits or participates in the commission of a tort. In that instance he may be liable to a third person injured thereby. Sturm v. Harb Development, LLC, 298 Conn. 124, 131-38 (2010). The tort the court will now address is intentional misrepresentation.
The terms and conditions of the auction, which were accepted by the plaintiff provided that items were being sold "as is and where is"; that TFA was disclaiming any "express warranties or guarantees as to the authenticity, condition . . . correction of the catalogue or supplemental material . . ." And that no statement made by TFA, its "employees, officers, or agents, whether written or verbal, shall be deemed such a warranty or assumption of liability." Terms and conditions further warn purchasers that all sales were considered final unless within fourteen days after purchase a buyer presented a written report from a mutual recognized expert stating unequivocally that the item was "a forgery or not by the represented artist."
Those terms and conditions are binding on the plaintiff. "Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms." Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 498 (2000). Plaintiff recognized the validity of this principle when he says in his brief, "Accordingly, a contract proviso which relieves a seller from the consequences of reliance by buyer on representation made by said seller is a valid contract term." Martinez v. Zovich, 87 Conn.App. 766, 772-73, cert. denied, 274, 908 (2005). However, Martinez also recognized the existence of an exception to this rule in that a contract may be voided if there exists fraud, mistake or unconscionability. The existence of fraud vitiates all contracts. Thus, again this court must deal with the count of intentional misrepresentation.
Specifically, plaintiff alleges that the defendant falsely represented that the works of Klever and Sverchkov were actually done by these artists and that plaintiff was not notified about the restoration of the Klever painting in the signature and the sky and sun and that he relied on those representations to his detriment. At the outset the court concludes that the evidence did not reveal that the defendant made any representations whatsoever as to the Sverchkov painting. We are therefore dealing only with the Klever painting in this count.
It is well settled that a claim for intentional misrepresentation requires a plaintiff to establish that "(1) a false representation was made [by the defendant] as a statement of fact; (2) the statement was untrue and known to be so [by the defendant]; (3) the statement was made with the intent of inducing reliance thereon; (4) the other party relied on the statement to his detriment." Nazami v. Patrons Mut. Ins. Co., 280 Conn. 619, 628 (2006).
As to the first element of the cause of action, plaintiff points to defendant's representation, in his April 18, 2006 email to the plaintiff as follows: "the Klever does not have any papers of authenticity but we fully believe it to be authentic." Also, in an email on May 4, 2006, defendant said, "we have absolutely no doubts of the authenticity of the [Klever] piece." Those are not statements of fact but clearly of opinion. Moreover, the email contained a caveat to the effect that "any opinion or advice contained in an email is given as a courtesy to our client and is only an opinion and should not be treated as a statement of fact."
Apart from the disclaimer, the Restatement 2d (torts) § 538A (1977) states: "A representation is one of opinion if it expresses only . . . the [maker's] . . . judgment as to quality, value, authenticity, or other matters of judgment."
The plaintiff has failed to prove that the defendant made a false representation as a statement of fact.
The second element of the cause of action is that the statement was untrue and known by the defendant to be so. The defendant said in his email and testified at trial that he did believe that the Klever painting was authentic.
Plaintiff argues that the defendant could not have had that belief because the defendant had black lighted the Klever painting and saw the restoration in the clouds and sky and saw that approximately 60% of the canvas had been restored. However, plaintiff inaccurately conflates restoration of the painting with authenticity. The evidence was that many paintings are restored without necessarily affecting their authenticity.
The court believes the defendant when he stated that he believed the Klever painting to be an original.
Consequently, plaintiff has failed to prove that defendant made an untrue statement that he knew to be so.
Thus the court concludes that the plaintiff has failed to prove the first two essential elements of his claim of intentional misrepresentation and, therefore, has failed to prove that count.
THE COUNT OF CONVERSION
The tort of "conversion occurs when one without authorization assumes and exercises ownership over property belonging to another to the exclusion of the owner's rights." Hi-Ho Tower, Inc. v. Com-Tronics, 255 Conn. 20, 44 (2000). Defendant bases his claim of "unauthorized conduct" on this court finding that "Shapiro's remarks concerning the authenticity of the Klever painting were appropriate and could be considered as good faith opinion rather than a deliberate misstatement whose purpose was to induce reliance by plaintiff" on purchasing the painting. This court has indicated above that Shapiro's opinion as to the authenticity of the plaintiff was made in good faith and was not a deliberate misstatement. As a consequence, the court here finds that plaintiff has failed to prove his count of conversion.
THE COUNT OF VIOLATION OF CUTPA
Conn. Gen. Stat. § 42-110b(a) provides that no person "shall engage in unfair or deceptive acts or practice in the conduct of any trade or commerce." In determining whether a practice violates CUTPA the court has adopted three criteria: (1) whether the practice necessarily had been previously considered unlawful, offends public policy as it has been established by statutes, the common law or otherwise; (2) whether it is immoral, unethical, oppressive or unscrupulous; (3) whether it causes substantial injury to consumers, competitors or other business persons. Ramirez v. Healthnet of the Northeast, Inc., 285 Conn. 1, 19 (2008).
This court having found that the defendant did not commit the torts of intentional misrepresentation or conversion must necessarily also conclude that the defendant did not violate any common-law principle and that his acts were not immoral, unethical, oppressive or unscrupulous.
Plaintiff argues that defendant's actions were deceptive in that he made a representation which was likely to lead the plaintiff to purchase the paintings. He claims that the defendant's assertion that "in his opinion the paintings are authentic" constitutes this misrepresentation. But the court has held above that this statement by Shapiro was honestly believed by him and did not constitute a misrepresentation. As a result, the plaintiff has failed to prove his claim of a violation of CUTPA.
THE DEFENDANT'S DEFENSE OF STATUTE OF LIMITATIONS
The plaintiff initiated his first action in this case in December 2007, well within the statute of limitations. That case was dismissed by the court on November 19, 2008 because the plaintiff's attorney failed to appear at a pretrial. The plaintiff then initiated the instant action by a complaint dated June 5, and served on the Defendants on June 9, 2009.
The statute of limitations for the torts of intentional misrepresentation and conversion is three years. Section 52-571. Plaintiff's claim for violation of CUTPA is governed by similar three-year limitations period, as set forth in Section 42-110g(f). Under each of these statutes, the limitations period begins upon the last act of defendant, not when plaintiff first discovers an injury. Certain Underwriters at Lloyd's London v. Cooperman, 289 Conn. 383, 408 (2008). As indicated above, the complaint was served upon the defendants on June 9, 2009 and that is deemed to be the date of initiation of the action.
Defendant made his statement about his belief as to the authenticity of the Klever painting on April 18, 2006. The auction occurred on April 22, 2006. On May 4, 2006, defendant also reiterated in an email "We have absolutely no doubts of the authenticity of the [Klever] piece . . ." Plaintiff paid TFA for the Sverchkov painting on May 4, 2006 and for the Klever painting on May 15, 2006. TFA delivered both paintings to UPS by May 20, 2006. All of those dates are more than three years before the date of service of this complaint on June 9, 2009.
Plaintiff seeks to avail himself of Section 52-592, which provides that when an action has not been tried on its merits and been dismissed for certain reasons, a new action may be brought within one year of the dismissal of the original action. In his reply to defendant's special defense of statute of limitations, the plaintiff does not plead Section 52-592. Our courts require that that section must be pleaded in avoidance to a statute of limitations special defense. Beckenstein Enterprise Prestige Park, LLC v. Keller, 115 Conn.App. 680, 690-91, appeal denied, 293, 916 (2009). The Appellate Court said in that case: ". . . we conclude that the [trial] court properly denied the plaintiff's offer to prove the applicability of § 52-592 after the close of evidence when it had not been pleaded in the complaint or as a matter in avoidance of the statute of limitations defense." Thus, plaintiff's failure to plead Section 52-592 bars his reliance upon that saving statute.
Moreover, in order to fall within the purview of Section 52-592, the original lawsuit must have failed for one of the reasons enumerated in the statute. Skinner v. Doelger, 99 Conn.App. 540, 553 cert. denied, 282, 902 (2007). Section 52-592 provides relief if the action was dismissed "for any matter of form." Whether a disciplinary dismissal, such as here, in which the case was dismissed for plaintiff's counsel failing to appear at a pretrial may be characterized as a "matter of form," "depends upon the nature and extent of the conduct that lead to the disciplinary dismissal." Ruddock v. Burrowes, 243 Conn. 569, 570 (1998).
In Ruddock the Supreme Court held that disciplinary dismissals do not in all cases demonstrate the occurrence of conduct so egregious as to bar recourse to § 52-592. The court said: "To enable a plaintiff to meet the burden of establishing the right to avail himself or herself of the statute, a plaintiff must be afforded an opportunity to make a factual showing that the prior dismissal was a `matter of form' in the sense that the plaintiff's noncompliance with the court order occurred in circumstances such as mistake, inadvertence or excusable neglect," supra at 576-77.
In the instant case, the plaintiff offered no evidence to satisfy the factual showing required to meet his burden of establishing the right to avail himself of § 52-592.
As a consequence, the statute of limitations is a bar to the plaintiff's action.
For all of the foregoing reasons, judgment may enter in favor of the defendant Gene Shapiro.