Art Market Monitor

Here’s a story that makes no one look good. Najung Seung just lost a case in New York’s Supreme Court over a Julian Schnabel painting that was sold to her for $290,000 with assurances that it was worth–and would be resold–for $500,000. Except that the painting was sold at auction for $110,000.

If that saga didn’t add enough insult to injury, the dealer’s defense is pretty brazen. Though the buyer was foolish to take the dealer’s valuations as definitive–or even a guide to making the purchase–the dealer, Mary Dinaburg, fairly discredits herself by arguing that her judgment cannot be relied upon. It’s a fool or a knave choice that leaves everyone looking embarrassed. Here’s Law.com on the whole story:

In May 2006, Seung, a resident of North Korea, paid Dinaburg $118,000 toward the purchase of a painting by John Wesley entitled “Bulls and Bed.”

But the following March, Seung learned that Dinaburg had sold the Wesley painting to another buyer. Instead of returning Seung’s money, Dinaburg offered her a $200,000 credit toward the purchase of “Chinkzee.”

According to the complaint, Dinaburg, a graduate of Pratt Institute with an M.F.A. in painting who had taught at the University of the Arts in Philadelphia and Pratt, told Seung she would sell her the Schnabel painting for $380,000, the “same cost the gallery pays for the work.”

“I believe we have a good opportunity to place your work within the year and resell it a profit,” Dinaburg wrote in a May 2008 e-mail.

On July 1, 2008, allegedly relying on Dinaburg’s representations that the painting was worth at least $500,000, Seung advanced $90,000 to buy “Chinkzee.”

Seung later learned that in May 2007 the painting had been sold at auction for $156,000 and that it had a current market value of no more than $110,000.

At that point, Seung decided she no longer wanted the painting and sued Dinaburg and her partnership, Fortune Cookie Projects, for $290,000, plus punitive damages.

On a motion to dismiss, Dinaburg argued that Seung failed to allege the defendant “possessed any unique or specialized expertise in the valuation of contemporary art beyond that common to any art dealer.”

The complaint also did not “assert how Dinaburg might have assumed any position of trust and confidence such that Seung could have reasonably relied on her opinion as to the painting’s ‘value,’” the defendant maintained.

No Money Back for Gallery Worker Who Relied on Estimate of Schnabel Painting’s Value (Law.com)

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• Caveat Venditor
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• Caveats for the Emptors
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• John Wesley Won’t Say
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