Christie's to Gallery to Collector - Law Suit

Noleen Walder of the New York Law Journal is reporting on a case where a collector purchased a painting by Jean-Michel Basquiat from a gallery which purchased the painting from Christie's. The authenticity of the painting is in question and the collector who purchased the Basquiat from the Tony Shafrazi Gallery according to a recent court ruling may sue not the gallery, but Christie's. It appears that both the gallery and the collector relied upon the auction catalog statement of authenticity. The court ruled since the gallery was able to sell the painting, it did not suffer damages, but the purchaser (in this case a third party) who relied on the gallery and the original auction gallery may have a claim against the auction house.

Walder states Guido Orsi, who paid the Tony Shafrazi Gallery Inc. $185,000 for the untitled work 17 years ago, alleges that Christie's passed off the painting as genuine at a 1990 auction, even though Basquiat's estate had expressed doubts to the auction house about its authenticity.

According to the complaint, the Christie's catalogue attributed a painting identified as "Lot 176" to Basquiat, saying it had been "acquired directly from the artist." It described the painting as "signed and dated 1982 on the reverse -- acrylic and color oilsticks on canvas."

The catalogue provided a limited warranty for "any article described in headings printed in UPPER CASE TYPE in this catalogue ... which is unqualifiedly stated to be the work of a named author or authorship is authentic and not counterfeit."

What I find very interesting and according to attorneys quoted in the article the ruling could open a tremendous amount of liability and litigation issues against auction houses and their specialists. This ruling may allow third parties who relied upon the published auction catalog content and the expertise and reputation of the auction house to now hold the auction house liable for damages if the catalog listing is found incorrect or negligent. It is important to keep in mind that the specific claim and court case claims Christie's knew there was a question of authenticity and even with that knowledge authenticated the painting and published it in the sales catalog.

I would recommend that every appraiser and auctioneer on read the NY Law Journal article. Click HERE to read.