328 F. Supp. 3d 232
S.D. Ill.2018Background
- Plaintiff Al Hirschfeld Foundation (AHF) sued Margo Feiden and Margo Feiden Galleries for breaches of a settlement agreement involving consigned original drawings and licensed reproductions; the Court previously found defendants liable on two theories: failure to account for/maintain custody of certain original works and unauthorized sales of giclée reproductions.
- Parties waived a jury on damages; the Court held a three-day evidentiary hearing with expert and fact witness testimony and post-hearing briefing focused on damages for (1) 19 "Missing Works" and (2) various categories of unauthorized giclée sales.
- The Court treated defendants’ custody failures as conversion under New York law and analyzed the appropriate measure of damages (market value at time/place of conversion on Dec. 14, 2017, plus interest) versus defendants’ argument for lost-profits limitation tied to a 50% commission under the Agreement.
- The Court evaluated expert appraisals (Harry Katz) and defendants’ critiques, accepted many of Katz’s comparables but discounted certain valuations where comparables or images were lacking, and made work-by-work adjustments.
- The Court quantified unlawful giclée profits by category (Time-Life, Henri Bendel posters/installation, PBS premiums, "ordinary" giclées, and posthumous editions), resolving disputes over number sold, revenue, Duggal (printer) costs, employee time, and remittances to AHF.
- Final damages awarded to AHF for the issues resolved: Missing Works $288,600; Time-Life giclées $4,715.87; Hirschfeld Spectacular posters $6,120; PBS premiums $751.50; ordinary giclées $29,594.30; posthumous editions $1,200; total $330,981.67.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of damages for conversion of missing original drawings | Market value of each work at time/place of conversion (100% value) | Limit damages to Foundation's lost profits (50% share under Agreement) | Market value at time/place of conversion (NYC, Dec 14, 2017); Agreement terminated so full value reverted to Foundation |
| Valuation methodology for 19 Missing Works (expert comparables vs critiques) | Katz's comparable-sales-based valuations appropriate starting point | Katz ignored condition uncertainty, limited sales fora, unverified Foundation sales data; valuations overstated | Court largely adopts Katz where solid comparables exist; discounts applied where no comparable, no image, or weaker support; total $288,600 awarded |
| Measure and calculation of damages for unauthorized giclée sales | Damages = Galleries' unlawful profits (revenue less attributable costs and remittances); AHF provided sales list and revenue figures | Galleries contested some sales counts, cost allocations, and argued some remittances/offsets | Court quantified profits by category, credited many of AHF's figures, resolved disputed counts in favor of plaintiff where supported, and calculated profits totaling awards for each category (see damages totals) |
| Liability/amount for posthumous editions and offset for payment for printing rights | AHF asserted large-scale sales (1,122) and seeks substantial damages; no offset for purchase of rights | Galleries conceded one sale, denied large-scale sales, and sought to offset by $33,000 paid to AHF for edition rights | Court found record supports only one posthumous sale (Washington Square) for $1,200; galleries not entitled to refund of paid rights; large-sale theory rejected as speculative |
Key Cases Cited
- Fantis Foods, Inc. v. Standard Importing Co., 49 N.Y.2d 317 (establishes market-value rule as usual measure for conversion damages)
- Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400 (2d Cir.) (definition and elements of conversion under New York law)
- Rajeev Sindhwani, M.D., PLLC v. Coe Bus. Serv., Inc., 52 A.D.3d 674 (2d Dep't) (lost profits may be awarded in conversion where they reasonably follow from conversion)