Opinion
Index No. 652208/2022 Motion Seq. Nos. 001 002 003
04-11-2023
THE PACE GALLERY LLC, Plaintiff, v. JEAN-PIERRE SEURAT, CONSTANCE H. SCHWARTZ, FABIAN DOURNAUX, MARK B. GOLDSTEIN, MARK B. GOLDSTEIN, P.A., and JOHN DOES 1-10, Defendants.
Unpublished Opinion
MOTION DATE 09/01/2022, 06/22/2022, 08/29/2022
DECISION + ORDER ON MOTION
HON. LOUIS L. NOCK JUSTICE
The following e-filed documents, listed by NYSCEF document numbers (Motion 001) 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 47, 48, 49, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 117, 119, 122, 127, 130, 131, 133, 134, 135, and 141 were read on this motion to DISMISS -- INCONVENIENT FORUM
The following e-filed documents, listed by NYSCEF document numbers (Motion 002) 36, 37, 38, 39, 40, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 118, 120, 123, 125, and 129 were read on this motion to DISMISS
The following e-filed documents, listed by NYSCEF document numbers (Motion 003) 52, 53, 54, 55, 56, 124, 126, 128, 132, 136, 137, 138, 139, and 140 were read on this motion to DISMISS LOUIS L. NOCK, J.
Plaintiff The Pace Gallery LLC ("Pace") brings this action alleging breach of contract, fraud, and various commercial torts regarding the sale of a drawing allegedly made by Georges Seurat, which Pace asserts was not actually drawn by Seurat. Defendants Jean-Pierre Seurat ("Seurat") (Mot. Seq. No. 001), Fabian Dournaux ("Dournaux") (Mot. Seq. No. 002), and Mark B. Goldstein and Mark B. Goldstein, P.A. (collectively, "Goldstein") (Mot. Seq. No. 003), all move to dismiss the complaint alleged against them; in Seurat and Dournaux's case, for lack of personal jurisdiction pursuant to CPLR 3211(a)(8) and forum non conveniens pursuant to CPLR 327, and in Goldstein's case, based on documentary evidence and failure to state a cause of action. Motion sequence numbers 001 through 003 are consolidated for disposition in accordance with the following memorandum decision.
Background
The following facts are, unless otherwise stated, taken from the complaint, and assumed to be true for purposes of this decision. On August 4, 2021, nonmoving defendant Constance H. Schwartz ("Schwartz") contacted Pace's Vice President, Joseph Baptista ("Baptista"), and informed him that she was in contact with a potential seller of "secondary market works of art" living in France, including a drawing by Georges Seurat (the "drawing"), who wished to remain anonymous (complaint, NYSCEF Doc. No. 54, ¶¶ 10-11). Schwartz provided Pace with certain documents and PDF files purporting to establish the provenance of the drawing (id., ¶¶ 13-15, 18). She also intimated that one of her clients might be interested in purchasing a work from Pace (id., ¶ 17). On August 18, 2021, Pace informed Schwartz that it was interested in purchasing the drawing, subject to a viewing in New York to generate a condition report and Art Loss Register ("ALR") report regarding the drawing (id., ¶ 19). Shortly thereafter, Pace, in discussion with Goldstein, entered into a Letter of Intent with Goldstein that identified Goldstein as the seller and indicated that, subject to the condition and ALR reports, Pace would purchase the painting for $2,000,000 (letter of intent, NYSCEF Doc. No. 74). Goldstein represented that, to the best of his knowledge, the drawing was authentic work by Georges Seurat (id., ¶ 6).
Subsequent to entering into the letter of intent identifying him as the seller, Goldstein then somewhat confusingly asserted to Pace that the seller was "an elderly man and extremely difficult," who required that the painting be viewed in Switzerland rather than New York, and who would be procuring the condition and ALR reports (complaint, NYSCEF Doc. No. 54, ¶¶ 22-24). Pace asserts that the reports provided authenticated the provenance of the drawing such that Pace reasonably relied on them to its detriment (id.; Condition Report, NYSCEF Doc. No. 5 at 4-5). On November 5, 2021, Pace's agent viewed the drawing in Switzerland, after which Goldstein sent Pace an invoice for the drawing that incorporated the condition and ALR reports by reference (id., ¶¶ 26-27). The invoice provided that the drawing would be conveyed "in its 'AS IS, WHERE IS, HOW IS CONDITION' with all faults and defects except for a warranty of good and marketable title and freedom from liens, encumbrances and rights of third parties with a disclaimer of any and all express or implied warranties of merchantability or fitness for a particular purpose" (Pace invoice, NYSCEF Doc. No. 7). The invoice also indicated that Goldstein "shall act as agent to convey title to the Buyer following Seller's receipt of the Purchase Price" (id.). Baptista signed the invoice on behalf of Pace as Buyer (id.). Goldstein also prepared a similar invoice, with identical terms, for Seurat as Seller, making Goldstein the agent to transfer title, which bears Seurat's signature (Seurat invoice, NYSCEF Doc. No. 29). Seurat argues that he had no idea that the drawing would be sold to Pace, and instead offers a contract of sale on Goldstein's letterhead indicating that Goldstein would purchase the drawing from Seurat for himself, with no mention of Pace or any other potential future buyer (Seurat-Goldstein contract, NYSCEF Doc. No. 20).
Following the sale, the drawing was delivered to Pace on December 3, 2021 (complaint, NYSCEF Doc. No. 54, ¶ 29). Thereafter, Pace attempted to conduct further due diligence as to the provenance of the drawing, but its inquiries met with no response from Goldstein, Schwartz, or Dournaux (id., ¶ 30). The court notes that this is the first instance of Dournaux's name appearing in the complaint other than as a copied recipient of certain email communications between Pace and Schwartz. On March 24, 2022, Pace asserts, without detail, that it "was informed that the alleged Seurat work of art purchased from Defendants is fake" (id., ¶ 31).
Standards of Review
"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction" (Leon v Martinez, 84 N.Y.2d 83, 87 [1994]). "[The court] accept[s] the facts as alleged in the complaint as true, accord[ing] plaintiffs the benefit of every possible favorable inference, and determin[ing] only whether the facts as alleged fit within any cognizable legal theory" (Id. at 87-88). Ambiguous allegations must be resolved in plaintiff's favor (JF Capital Advisors, LLC v Lightstone Group, LLC, 25 N.Y.3d 759, 764 [2015]). "The motion must be denied if from the pleadings' four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" (511 West 232nd Owners Corp. v Jennifer Realty Co., 98 N.Y.2d 144, 152 [2002] [internal citations omitted]). "[W]here ... the allegations consist of bare legal conclusions, as well as factual claims either inherently incredible or flatly contradicted by documentary evidence, they are not entitled to such consideration" (Ullmann v Norma Kamali, Inc., 207 A.D.2d 691, 692 [1st Dept 1994]).
On a motion to dismiss for lack of personal jurisdiction pursuant to CPLR 3211(a)(8), the plaintiff bears the burden of showing jurisdiction (Wang v LSUC, 137 A.D.3d 520, 521 [1st Dept 2016]). The court may assert personal jurisdiction over a non-domiciliary where the action is permissible under the long-arm statute (CPLR 302), and the exercise of jurisdiction comports with due process (Williams v Beemiller, Inc., 33 N.Y.3d 523, 528 [2019]). Due process requires that a nondomiciliary have "certain minimum contacts" with the forum state and "that the maintenance of the suit does not offend traditional notions of fair play and substantial justice" (id., quoting International Shoe Co. v Washington, 326 U.S. 310, 316 [1945]). To defeat a motion to dismiss on this ground, a plaintiff need only "make a prima facie showing that the defendant is subject to the jurisdiction of the court" (Bloomgarden v Lanza, 143 A.D.3d 850, 851 [2d Dept 2016]). "The facts alleged in the complaint and affidavits in opposition to such a motion to dismiss are deemed true and construed in the light most favorable to the plaintiff, and all doubts are to be resolved in favor of the plaintiff" (Nick v Schneider, 150 A.D.3d 1250, 1251 [2d Dept 2017]).
"When the court finds that in the interest of substantial justice the action should be heard in another forum, the court, on the motion of any party, may stay or dismiss the action in whole or in part on any conditions that may be just" (CPLR 327[a]). Courts consider:
the burden on the New York courts, the potential hardship to the defendant, and the unavailability of an alternative forum in which plaintiff may bring suit.... The court may also consider that both parties to the action are nonresidents ... and that the transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction.... No one factor is controlling.(Shin-Etsu Chem. Co., Ltd. v 3033 ICICI Bank Ltd., 9 A.D.3d 171, 176 [1st Dept 2004], quoting Islamic Republic of Iran v Pahlavi, 62 N.Y.2d 474, 479 [1984].)
"In general, a decision to grant or deny a motion to dismiss on forum non conveniens grounds is addressed to a court's discretion" (Al Rushaid v Pictet &Cie, 28 N.Y.3d 316, 332 [2016]). Defendant's burden to demonstrate that New York is an inconvenient forum is a heavy one (Creditanstalt Inv. Bank AG v Chadbourne &Parke LLP, 14 A.D.3d 414, 415 [1st Dept 2005]).
Seurat's Motion pursuant to CPLR 3211(a)(1), (a)(8) and 327 (Mot. Seq. No. 001)
Seurat argues that the complaint against him should be dismissed either for lack of personal jurisdiction or for forum non conveniens; in the latter case, arguing that the action should be dismissed in favor of a proceeding before a French court. Relevant to this argument, New York's long-arm statute provides that that "a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . transacts any business within the state or contracts anywhere to supply goods or services in the state" (CPLR 302[a][1]). "Even one instance of purposeful activity directed at New York is sufficient to create jurisdiction, whether or not defendant was physically present in the State, as long as that activity bears a substantial relationship to the cause of action" (Corporate Campaign v Local 7837, United Paperworkers Intl. Union, 265 A.D.2d 274, 274-75 [1st Dept 1999]).
Here, the documentary evidence indicates that Seurat, acting through Goldstein, contracted with Pace to sell the drawing to Pace for delivery in New York (Pace Invoice, NYSCEF Doc. No. 7; Seurat invoice, NYSCEF Doc. No. 29; Broner email to Goldstein dated August 20, 2021, NYSCEF Doc. No. 74). This one transaction is sufficient to invoke the court's jurisdiction under the long-arm statute (Corporate Campaign, 265 A.D.2d at 274-75). While the documentary evidence also suggests an alternative sequence of events in which Seurat sold the drawing to Goldstein with no knowledge that Goldstein would sell it again to Pace thereafter, at the pleading stage all doubts must be resolved in favor of finding jurisdiction (Nick, 150 A.D.3d at 1251). Moreover, exercising jurisdiction over defendant herein comports with due process. Generally, where jurisdiction under the long-arm statute is proper, due process is satisfied (Al Rushaid, 28 N.Y.3d at 331 ["[While] personal jurisdiction permitted under the long-arm statute may theoretically be prohibited under due process analysis, we would expect such cases to be rare"]). With regard to "fair play and substantial justice," courts consider "the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies" (id., citing Burger King Corp. v Rudzewicz, 471 U.S. 462, 477 [1985]). Any burden on Seurat litigating this action in New York is obviated by "modern communication and transportation," and New York will provide plaintiff with convenient and effective relief (id.). Seurat's sale of a work of art to be delivered in New York is, therefore, sufficient to satisfy the minimum contacts inquiry.
Turning to the question of whether New York is a convenient forum for this dispute pursuant to CPLR 327, Seurat fails to satisfy his burden to demonstrate that New York is inconvenient. Both Pace and Schwartz are New York residents, and given that Goldstein is a Florida resident, Dournaux a Tennessee resident, and Seurat a French national, there is no one convenient forum for all the parties (Coelho v Grafe Auction Co., 128 A.D.3d 615, 616 [1st Dept 2015]). Moreover, where the sale of the drawing has sufficient ties to New York, dismissing only the case against Seurat based on New York being inconvenient only for him would unduly fragment the case (Van Deventer v CS SCF Mgt. Ltd., 37 A.D.3d 280, 281 [1st Dept 2007]). Finally, the Letter of Intent specifies that New York law shall govern the transaction (letter of intent, NYSCEF Doc. No. 74, ¶ 9), and such a choice of law provision must be enforced where, as here, the transaction is for at least $2,000,000 (General Obligations Law § 5-1402; CPLR 327[b] ["the court shall not stay or dismiss any action on the ground of inconvenient forum, where the action arises out of or relates to a contract, agreement or undertaking to which section 5-1402 of the general obligations law applies, and the parties to the contract have agreed that the law of this state shall govern their rights or duties in whole or in part"]). Goldstein signed the letter of intent, and as set forth above, at this stage the court must operate as though Goldstein was acting as Seurat's agent.
Finally, Seurat makes various arguments for dismissal based on documentary evidence; but the court need not address the specific arguments made. Dismissal based on documentary evidence is only appropriate where the evidence "proffered in support of the motion utterly refutes the plaintiffs' factual allegations, thus conclusively establishing a defense as a matter of law" (Goodale v Cent. Suffolk Hosp., 126 A.D.3d 671, 672 [2d Dept 2015]). Here, the factual disputes regarding the sale and the relationships among the parties are not resolved by the documentary evidence provided by Seurat.
Dournaux's Motion pursuant to CPLR 3211(a)(8) (Mot. Seq. No. 002)
Dournaux, a Tennessee resident, argues that the court has no personal jurisdiction over him because he had no part in the transaction other than connecting Seurat with Goldstein (Dournaux aff., NYSCEF Doc. No. 38, ¶¶ 9-11). The complaint offers very little regarding Dournaux, alleging that he is Schwartz's business partner, and that he was copied on certain emails between Pace and some of the other defendants. Even taking the allegations of the complaint as true, Dournaux is not alleged to have directly communicated with Pace, authenticated the painting, or directed any business activities of any kind towards New York related to the transaction. While plaintiff attempts to link Dournaux to New York via Goldstein's signature on the Letter of Intent, for purposes of deciding the motion the court can only find that Goldstein was acting as Seurat's agent, not on behalf of Dournaux as well. Nor is Dournaux's affidavit susceptible of the construction that plaintiff places on it, namely, that Dournaux claimed he was acting, at separate times, as both Seurat's and Goldstein's agents. While Dournaux does state in his affidavit that he expected Goldstein would find a subsequent purchaser for the drawing and pay him a finder's fee (id., ¶ 10), that expectation does not indicate that Dournaux did anything to transact business with Pace such that jurisdiction under the long-arm statute would be appropriate. Personal jurisdiction requires purposeful activities by a defendant, which "are those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws" (Fischbarg v Doucet, 9 N.Y.3d 375, 380 [2007] [internal quotation marks and citations omitted]). The complaint simply does not allege any volitional acts by Dournaux such that exercising jurisdiction over him would be proper, and Pace cites no authority for the argument that Dournaux's mere awareness of a subsequent transaction involving the drawing is sufficient to hale him into court when his only activity with regard to the drawing as alleged in the complaint had no connection to New York (Liberatore v Calvino, 293 A.D.2d 217, 220 [1st Dept 2002] ["Telephone calls and written communications ... must be shown to have been used by the defendant to actively participate in business transactions in New York"]).
Pace's cross-motion for jurisdictional discovery pursuant to CPLR 3211(d) must be denied. In the complete absence of any volitional acts by Dournaux directed towards New York, Pace has failed to meet its burden of making "a sufficient start" towards establishing jurisdiction over Dournaux (Peterson v Spartan Indus., Inc., 33 N.Y.2d 463, 467 [1974]).
Goldstein's Motion pursuant to CPLR 3211(a)(1) and (a)(7) (Mot. Seq. No. 003)
Pace asserts eight causes of action against Goldstein: breach of the Pace invoice (first cause of action); breach of the letter of intent (second cause of action); breach of express/implied warranties (third cause of action); fraud (fourth cause of action); aiding and abetting fraud (fifth cause of action); unjust enrichment (sixth cause of action); conversion (seventh cause of action); and unilateral mistake (eighth cause of action). Goldstein moves to dismiss the complaint in its entirety.
Contract Claims
The first three causes of action revolve around Pace's assertion that the drawing is not a genuine work by Georges Seurat, and, therefore, is not as described in the Pace invoice, the Letter of Intent, and in the various statements made regarding the drawing's authenticity and provenance. Pace takes the position that the description of the drawing, which is included in both the Letter of Intent and the Pace invoice and includes the name of the work, the artist, when it was created and a brief description, operates as a warranty that the drawing is authentically as described.
A breach of contract requires allegations of "the existence of a contract, the plaintiff's performance thereunder, the defendant's breach thereof, and resulting damages" (Harris v Seward Park Housing Corp., 79 A.D.3d 425 [1st Dept 2010]). The complaint adequately alleges the existence of both the Letter of Intent and the Pace invoice, the tender of the purchase price, defendants' failure to deliver an authentic Georges Seurat, and resulting damages. While Goldstein claims that the invoice does not promise to deliver an authentic Georges Seurat, the included description of the work and the provenance statements contained within the condition report incorporated by reference in the invoice (Pace invoice, NYSCEF Doc. No. 7), plainly indicate that the authenticity of the work was a part of the bargain. Goldstein's argument to the contrary is entirely unpersuasive. Moreover, in the absence of a merger clause within the invoice, the factual issues raised by the complaint are not resolvable solely by the terms of the invoice and thus cannot be resolved on a motion to dismiss (Williams v Citigroup, Inc.. 104 A.D.3d 521, 522 [1st Dept 2013]).
The description of the drawing states: "including all reports, materials and documentation that accompany the Work."
Turning to the Letter of Intent, Goldstein argues that it is an unenforceable agreement to agree, and even if it is enforceable, was superseded by the later Pace invoice. As to the first point, a Letter of Intent may be binding upon the signatories thereto where, as here, it contains the essential terms of the parties' agreement, does not contain an express reservation of the right not to be bound absent a further writing, and manifests an intent to be bound by its terms (Bed Bath &Beyond Inc. v IBEX Const., LLC, 52 A.D.3d 413, 414 [1st Dept 2008]). Nor was the Letter of Intent superseded by the later Pace invoice, as the Pace invoice does not contain a written merger clause indicating that the invoice supersedes the terms of the Letter of Intent (Pate v BNY Mellon-Alcentra Mezzanine III, LP, 163 A.D.3d 429, 429-30 [1st Dept 2018] ["Because the parties' release agreement contains a merger clause, the release agreement supersedes the preceding term sheet, and the breach of contract claim was correctly dismissed"]).
Finally, as to the claim for breach of express or implied warranties, UCC 2-313(1)(b) provides that "[a]ny description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description." A claim for breach of an express warranty requires an affirmation of fact or promise made by Goldstein to Pace, upon which Pace relied in purchasing the drawing (Fiuzzi v Paragon Sporting Goods Co. LLC, 212 A.D.3d 431, 433 [1st Dept 2023]). As discussed above, both the Letter of Intent and the Pace invoice warrant that the drawing being sold is an authentic Georges Seurat work. Goldstein argues that the Pace invoice expressly disclaims any express warranty as to the provenance of the drawing, however the general disclaimer contained in the Pace invoice cannot overcome the specific representation as to the authorship and provenance of the work (Jesmer v Retail Magic, Inc., 55 A.D.3d 171, 185 [2d Dept 2008] ["In addition, the general disclaimers in the DLA do not, in any event, apply to defeat the specific promises of 'Support' and 'Extended Installation' services which Auto-Star agreed to provide to First Americans"]).
Tort Claims
Pace claims it was fraudulently induced to purchase the drawing by Goldstein, or alternatively that Goldstein aided and abetted Seurat's fraud in inducing it to make the purchase. "Generally, in a claim for fraudulent misrepresentation, a plaintiff must allege a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Mandarin Trading Ltd. v Wildenstein, 16 N.Y.3d 173, 178 [2011]). Here, Pace fails to allege that it justifiably relied on Goldstein's alleged misrepresentation as to the drawing's provenance. By Pace's own admission, it relied solely on reports procured by Seurat and Goldstein to establish the provenance of the work; but only after the sale attempted to conduct further due diligence into the provenance of the work and concluding that it was not an authentic Georges Seurat. Where the subject of a misrepresentation is not peculiarly within the knowledge of the party making it,
and the other party has the means available to him of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation, he must make use of those means, or he will not be heard to complain that he was induced to enter into the transaction by misrepresentations.(DDJ Mgt., LLC v Rhone Group L.L.C., 15 N.Y.3d 147, 154 [2010].)
Moreover, no party disputes that the drawing is not a part of Georges Seurat's catalogue raisonne, "an annotated, illustrated comprehensive listing of the artist's work" (Thome v Alexander &Louisa Calder Found., 70 A.D.3d 88, 94 [1st Dept 2009]). As the Appellate Division, First Department, has previously observed, a work that is not included in an artist's catalogue raisonne will often be viewed by the art world as inauthentic and of negligible value (id. at 102-03, 106-107). Thus, where Pace was presented with a work that was not part of the catalogue raisonne, as well as information on the provenance of the work that it was apparently able to follow up on but did not do so until after the sale was consummated, it cannot now be heard to complain of fraudulent inducement. In the absence of a viable claim for fraud, there can be no claim for aiding and abetting fraud (El Toro Group, LLC v Bareburger Group, LLC, 190 A.D.3d 536, 542 [1st Dept 2021] ["Absent an underlying fraud, there is no aiding and abetting fraud claim"]).
Finally, the remaining three causes of action are all defective in one way or another. The causes of action for unjust enrichment and conversion are duplicative of the causes of action for breach of contract and must be dismissed (Clark-Fitzpatrick, Inc. v Long Island R.R. Co., 70 N.Y.2d 382, 388 [1987] [unjust enrichment]; Richbell Information Services, Inc. v Jupiter Partners, LP, 309 A.D.2d 288, 306 [1st Dept 2003] [conversion]). The claim for rescission based on a unilateral mistake fails as well, as Pace has an adequate damages remedy in its claims for breach of contract and breach of warranties (e.g. Nelson v Rosenkranz, 166 A.D.3d 558, 558 [1st Dept 2018]).
Accordingly, it is hereby
ORDERED that the motion of defendant Jean-Pierre Seurat (Mot. Seq. No. 001) to dismiss the complaint as against him is denied; and it is further
ORDERED that the motion of defendant Fabian Dournaux (Mot. Seq. No. 002) to dismiss the complaint as against him is granted, and the Clerk of the Court is directed to enter judgment in favor of said defendant dismissing the complaint as against him; and it is further
ORDERED that the motion of defendants Mark B. Goldstein and Mark B. Goldstein, P.A. (Mot. Seq. No. 003) is granted to the extent of dismissing the fourth through eighth causes of action alleged against said defendants, and otherwise denied; and it is further
ORDERED that defendants Jean-Pierre Seurat, Mark B. Goldstein and Mark B. Goldstein, P.A. are directed to serve answers to the complaint within 20 days after the date of filing hereof; and it is further
ORDERED that counsel are directed to appear for a preliminary conference in Room 1166, 111 Centre Street, New York, New York, on May 17, 2023, at 10:00 AM.
This constitutes the decision and order of the court.