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Fake Art Results in $465,000 Jury Award
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Andrew Hall made a series of smart trades in the oil markets and accumulated a sizeable fortune.  With his money he began to develop an art collection.  He took a liking to the works of Leon Golub, an American postwar painter whose art explores “dire political conditions with expressionistic, heroic-scale figures.” [1] Hall believed Golub’s works were underpriced and would soon appreciate in value.

During a three year period ending in 2011, Hall bought 24 paintings by Golub. Some of the purchases were made through famous New York auction houses including Christie’s and Sotheby’s, and 16 were purchased directly from Loretta Gascard, 70, and her son Nikolas.  The latter initiated contact with Hall upon learning that Hall was interested in Golub’s work. 

The provenance of the Golub works came into question when Hall sponsored an exhibition of Golub’s art at a museum.  A foundation established to promote Golub’s work examined the paintings on display and found numerous concerns, including no record of the paintings in the foundation’s database.

When questioned, the Gascards gave the following explanation of how they happened to have so many of Golub’s works.  Ms. Gascard said she was a close friend of the artist resulting from being a student in several of his classes at Fairleigh Dickinson University, and later as a colleague teaching art history and drawing at the university’s art gallery.  She claimed he gave her some of the works, and others she asserted came from family members in Germany who collected Golub’s art.  The Gascards asserted they rescued those pieces following their relatives’ deaths.

Mr. Hall sued the Gascards in a federal court in New Jersey.  A jury trial ensued.  Mr. Hall’s lawyer used an expert witness (a person permitted to testify at a trial because of special knowledge that is relevant to the case), a professor emeritus at the Middlesex University in London, who identified clear distinctions between Golub’s style and that depicted in the paintings purchased from the Gascards.  The jury determined the paintings were fake and awarded Hall  $465,000, presumably the total amount paid to the Gascards for the paintings.

Said Hall, “People defrauding other people, especially in the art market, should not be allowed to get away with it.”  Also, while expressing satisfaction that the money he paid for the forged pictures will be returned, “I am even happier for Leon Golub and his legacy that was being impaired by this whole business.”

The basis for the case was fraud and conspiracy to commit fraud. Fraud is the tort of knowingly making an untruthful statement on which someone reasonably relies and suffers a financial loss as a result. Conspiracy involves two or more people planning and working together to commit illegal activity.

Hall might also have sued under contract law to revoke his acceptance and rescind (cancel) the contract.  UCC 2-721 states that remedies for material misrepresentation or fraud include all remedies available in Article 2 for non-fraudulent breach.  Article 2 – 608 provides that a buyer can revoke acceptance if the buyer initially accepted the goods without discovering the non-conformity, either because of the difficulty of discovery or because of the seller’s assurances, either of which might have applied in this case.   Article 2-714 provides that where the buyer has accepted goods and given notification of their non-conformity, the buyer can recover as damages the loss resulting in the ordinary course of events resulting from the seller’s breach. 

 

DISCUSSION STARTER

Suppose that the discrepancies between Golub’s work and the painting purchased from the Gascards were so obvious that Hall should have identified the works as fake before finalizing the purchase.  In this circumstance should Golub be able to sue for fraud?  Why or why not?

 

 

[1] New York Times, Wall Street Titan to Get a Refund Over Fake Art, by Graham Bowley, November 30, 2018.