California entrepreneur and art collector Halsey Minor has filed a lawsuit against Sotheby’s, alleging that it failed to disclose a loan it made to the consignor of a painting by Edward Hicks (1780–1849), The Peaceable Kingdom with the Leopard of Serenity, which Minor won for $9.67 million at the auction house’s sale of American art
NEW YORK—California entrepreneur and art collector Halsey Minor has filed a lawsuit against Sotheby’s, alleging that it failed to disclose a loan it made to the consignor of a painting by Edward Hicks (1780–1849), The Peaceable Kingdom with the Leopard of Serenity, which Minor won for $9.67 million at the auction house’s sale of American art last May.
The lawsuit, filed in U.S. District Court in Northern California on Oct. 1, accuses Sotheby’s of “concealing information concerning its economic interests” in the work. Minor brought the suit, for which he is seeking class-action status, a month after Sotheby’s filed a $16.8 million lawsuit against him (ANL, 9/16/08) for failure to pay for three paintings he bought at Sotheby’s: Hicks’s Peaceable Kingdom (which had been estimated at $6 million/8 million); Andy Warhol’s Diamond Dust Shoes, 1980, which sold for $301,000 (estimate: $100,000/150,000); and Childe Hassam’s Paris, Winter Day, 1887, which Minor bought for $3.96 million, above its $2.5 million/3.5 million estimate.
Minor is the only named party to the lawsuit, but his attorney Eric George, of Dreier Stein Kahan Browne Woods George in Los Angeles, stated that Sotheby’s “has caused an injury to an entire class,” adding that “we’ll find out in the course of discovery the identity of others.” George said that the lawsuit seeks no specific dollar amount; instead, if Minor prevails, he will ask that a fund be set up to compensate others who he alleges were misled into overpaying at Sotheby’s.
According to Minor’s complaint, “Sotheby’s intentionally deceives its own clients into bidding more for auctioned property than they otherwise would have, and more than Sotheby’s believes the property to be worth.”
Minor told ARTnewsletter last month that he was unaware at the time of the sale that Sotheby’s had made a loan to Ralph Esmerian, the jewelry dealer and collector of American folk art who owned the Hicks and consigned it for sale as part of the agreement to repay that debt. Minor said that he only discovered that a loan had been made last August.
Sotheby’s spokesperson Diana Phillips said in an e-mail to ARTnewsletter, “When Mr. Minor failed to pay for his purchases, he told us the sole reason he was not paying was because he was owed money by others. This lawsuit is nothing other than a smokescreen to hide Mr. Minor’s default in paying for his purchases. Sotheby’s has fulfilled every obligation, both regulatory and professional, in these transactions, which will be validated when litigated in an appropriate court.”
New York City Department of Consumer Affairs regulations require that when auctioneers make loans or advances to consignors, “this fact must be conspicuously disclosed in the auctioneer’s catalogue or printed material.” The disclosure need not be made on a lot-by-lot basis and can be satisfied by a general statement in the auction catalogue.