ralph e lerner: the auction house and appraisals i & ii.ppt
TRANSCRIPT
The Auction House
And Appraisals
by
Ralph E. LernerRalphELerner.com
590 Madison Ave, New York, NY, 10022
(212) 521-4437
http://www.RalphELerner.com/
Consignor - Auctioneer Relationship
Set Reserves and Estimates
Advise on Art’s Auctionability
Affirm Art’s Authenticity
Vincent Van Gogh - Rats
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* Duty to prepare reasonable
high - low estimates
* Duty to set appropriate reserve
prices
* Duty to obtain the best price
for consignor
Consignor - Auctioneer Relationship
Van Gogh - Houses In Auvers
Cristallina v. Christie’s http://www.RalphELerner.com/
Even assuming that Christie’s, in
advising Cristallina as to the
value of the paintings and
setting reserves, was merely
expressing an opinion, which is
not actionable, rather than a
representation as to an existing
fact, which is, Christie’s had an
obligation to render such
opinion truthfully.Paul Gaugin -
Femmes au Bord de la Riviere - 1892
Cristallina v. Christie’s
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DISCRETIONARY MATTERS:
Christie’s shall have complete
discretion as to seeking the views
of any experts…Christies’ makes
no representations or warranties
to Seller with respect to the
Property, its authenticity,
condition or otherwise.
Consignor - Auctioneer Relationship
Limits On Fiduciary Duty
Georges Braque - Bouteille et clarinetteGREENWOOD v. KOVENhttp://www.RalphELerner.com/
GREENWOOD v. KOVEN
Christie’s was bound by an implied
covenant of good faith.
However, the contract between
Christie’s and Koven contained
a subjective test - Did Christie’s
honestly believe it might be
subject to liability when it
rescinded the sale.
Georges Braque - La Femme au Pinceau
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Foxley v. Sotheby’s
Our appraisal…is not to be
deemed a representation
or warranty with respect
to the authenticity of
authorship…
genuineness [or]
attribution.
Auction House Appraisals
Mary Cassatt - Children Playing With a Cat
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In consideration of our furnishing the
appraisal, you hereby release
Sotheby’s… from any liabilty or
damages whatsoever arising out of or
related to the appraisal, unless due to
Sotheby’s gross negligence or bad
faith.
Summary judgment denied - Having
twice appraised the work as a Cassatt
worth $650,000, there was sufficient
evidence to support a claim of
negligent appraisal.
FOXLEY v. SOTHEBY’S
Mary Cassatt -
Madame De Fleury and Her Childhttp://www.RalphELerner.com/
FOXLEY v. SOTHEBY’SReargument
Appraisals of inauthentic artwork
do not give rise to liability
where they explicitly disclaim
authentication and where a
plaintiff cannot demonstrate
that the appraiser had, or should
have had, knowledge of
inauthenticity.
Mary Cassatt -
Marie-Therese Gaillard
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3. Such appraisal represents Christie’s opinion as to the value of
such property, but Christie’s makes no representation or
warranty with respect to the authenticity, authorship, period,
culture, source, origin, provenance, description or condition
thereof. This appraisal is not furnished, and may not be relied
upon by anyone, in connection with any purchase, sale or
exchange of such property or any other commercial transaction
relating thereto.
4. Christie’s makes no representation or warranty that such
property will realize its appraised value upon subsequent sale at
public auction or otherwise.
Christie’s Appraisal Contract
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Sotheby’s Appraisal Contract
(i) represents our best judgment and opinion as to the current fair
market value [as of the date of death, or ____,] and any other
matters covered therein, and is not a statement or representation
of fact;
(ii) is not to be deemed a representation or warranty with respect to
the authenticity of authorship, period of creation, description,
genuineness, attribution, provenance, title or condition of the
Property;
(iii) is not to be deemed a representation or warranty that the
Property will bring the appraised value if offered for sale at
public auction or otherwise;
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Conflicts of Interest
The value of any art collection is inherently imprecise and capable of
resolution only by a Solomon-like pronouncement. It is difficult, if not
foolhardy, to attempt an answer.
Women of Warhol
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Code of Ethics of the AAA requires
that an appraiser maintain
standards of objectivity and that
the appraiser should not disclose
any desire to act as the exclusive
sales agent until after the
appraisal has been completed.
Court implied a conflict on the part
of Christie’s since it was seeking
future business at the same time it
was retained to render an
impartial opinion.
Estate of Andy Warhol
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6. Christie’s agrees that if the Owner consigns all or part of such property to
Christie’s Inc. or any of its affiliated companies for sale within one year of
the date of the appraisal, all or a pro rated part of the appraisal fee will be
rebated. (For example, if the property is appraised at $50,000 and items of
property appraised at $25,000 are consigned, 50% of the appraisal fee,
excluding expenses, will be rebated.)
Christie’s Appraisal Contract
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If you consign any of the Property to Sotheby’s within one year from the date
of the Appraisal, Sotheby’s will refund at the time of settlement of the sale of
the consigned property, a pro rated portion of the appraisal fee based on the
appraised value of the consigned property. For example, if the Property is
appraised at $100,000, and items appraised at $50,000 are consigned, one-half
of the appraisal fee (excluding out-of-pocket expenses) will be credited to the
selling commission.
Sotheby’s Appraisal Contract
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Ravenna v. Christie’s
Ludovico Carracci - The
P eta
Cir. 1600http://www.RalphELerner.com/
ROTHKO
Avoid Conflicts of Interest
Duty of Loyalty
An executor must care and manage
the assets and affairs of the estate as
would prudent persons of discretion
and intelligence accented by “not
honesty alone” but by the punctilio of
an honor the most sensitive.
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