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Prominent Art Gallery Alleges It Was Sued for “Buyer’s Remorse” (NY)

August 23, 2016

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<a href="">A recently filed suit</a> by art dealer Fabrizio Moretti claims art dealer David Zwirner engaged in “chicanery” and played a game of “three-card monte,” regarding the sale of a sculpture titled <em>Gazing Ball (Centaur and Lapith Maiden)</em> by artist Jeff Koons, pictured below.
<a href=""><img class="alignnone size-medium wp-image-9692" src="" alt="Gazing Ball (Centaur and Lapith Maiden)" width="300" height="225" /></a>
The work of art was initially marketed by Zwirner in 2013 as Edition 1 of 3 (plus an artists’ proof). In June 2014, Moretti contracted with Zwirner’s gallery to purchase #2 of 3 in the sculpture set for $2,000,000. According to the complaint, Zwirner promised Moretti the sculpture would be delivered within a year after signing the purchase agreement.
Moretti alleges his sculpture was completed in April 2015, but was misidentified as “3/3.” Moretti claims Zwirner knew the work was mislabeled, but did not attempt to correct the mistake because Zwirner wanted to sell the work as the third and final part of the set at public auction. In May 2015, #3 of 3 was listed at Sotheby’s in New York, but failed to fetch the estimated $1.8–$2.5 million listing price. According to Moretti, this failed auction heavily damaged the overall value of Koons’ work. After waiting over two years for #2 of 3, Moretti advised Zwirner it was cancelling the contract and he requested his money for the sculpture be returned. When that didn’t happen, Moretti filed suit seeking $6 million in damages, and alleging violations of New York Arts and Cultural Affairs Law, breach of contract, breach of warranties, and fraud.
Zwirner swiftly moved to dismiss the complaint in lieu of answering based on CPLR 3211(a)(1) and (7) for failure to state a claim and documentary evidence. According to Zwirner, there was no breach of contract because the purchase agreement did not contain any deadline for completion, and Moretti was required to provide notice before claiming a breach.  According to Zwirner, Moretti continued to make payments on the sculpture, showed interest in having it delivered, and only now seeks to cancel the contract because he “lost interest” in the work.
It will be interesting to see whether the court grants Zwirner’s motion to dismiss. Here, it does seem there was some “chicanery” on both sides. Moretti likely was sold on the exclusivity of Koons’ work based on the artist’s relationship with the Zwirner Gallery and the exhibition materials provided to Moretti by Zwirner. The catalogue clearly states that <em>Gazing Ball </em>is Edition 1 of 3 (plus artist’s proof). Yet, Moretti claims there are at least five casts of the sculpture (with more on the way), and Moretti would not have made his original purchase if all of this information was disclosed. In the world of fine art, owning a specific piece of art from a set can drastically increase the work’s overall worth because of its exclusivity. Yet, according to Moretti, Zwirner ignored this exclusivity premium by attempting to sell additional sculptures as “prototypes.”
On the other hand, there is substance to Zwirner’s claims that Moretti is simply having “buyer’s remorse.” Why would Moretti continue to make payments on the purchase agreement without requesting a deadline for the completed work? Why would Moretti inquire with Zwirner about potential resale values for Koons’ work a couple months before attempting to rescind the contract? Moretti may have determined the subjective interests that drive the art world no longer favored Koons’ work (e.g., the failed Sotheby’s auction). Upon seeing the decline in interest for similar sculptures, Moretti may be trying to hedge his bets since the sculpture was never delivered. Either way, it’s a case that we will keep an eye on because it can have profound effects on how art galleries transact business with each other.
Thanks to Dan Beatty for his contribution to this post. If you have any questions about this post, please call or email Brian Gibbons at <a href="">Brian Gibbons</a> for additional information.


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