ASK THE ART LAWYER. I Got Such a Deal …
Buying stolen or fake art. It can happen to anyone. How to navigate the minefield.
By Octavio Robles, AIA, Esq.
This is a two-part article that discusses the issue of the sale and purchase of stolen or fake art. Part one will deal with stolen art. In part two in the next issue, the topic of the sale and purchase of fakes will be discussed.
FINDING A TREASURE IN A TRASH PILE
Yes, you can find a great deal on a legitimate work of art out there in the world. There have been cases of people buying a very valuable painting or object at a yard or garage sale. A woman bought a Picasso in a Shreveport, Louisiana trailer park yard sale for $2 that turned out to be worth hundreds of thousands. A New York family purchased a bowl at a garage sale in 2007 and placed it on their mantle to collect dust for several years. It turned out to be a piece from China’s Northern Song Dynasty and was resold some years later at a Sotheby’s auction for $2.2 million. Some art experts claim that this sort of thing happens more often than anyone would expect. The likelihood however is that if a buy, anywhere, at any level, seems too good to be true, it probably is.
Buying art is not an easy task. There’s always the typical question of whether one is paying a reasonable price for a known legitimate piece from a living artist. The concept gets seriously complicated when one is dealing with art from artists that are no longer alive. Not only do you have to know about its value but you must know it under the assumption that it is not a fake or stolen.
AVOIDING THE PURCHASE OF STOLEN ART
You do not want to purchase stolen art in Florida. The work will be confiscated regardless of the price paid and the apparent legitimacy of the purchase. A rightful owner will prevail in retrieving his or her art once they prove ownership. No one except the person who holds good title can pass good title. There are several steps that one can take to improve the likelihood of not purchasing stolen art. The first thing to do is to become educated. Get acquainted with the artist and his or her work, particularly if the artist is deceased. Study the artist’s catalogue raisonné which means the history of the artist’s work. Investigate the provenance of the piece; who has owned the piece. A good place to look is in The International Foundation for Art Research. This organization maintains a reliable database for catalogues raisonnés. Check online databases that keep updated information on lost and stolen art. Start with The Art Loss Register. Other sources are The International Foundation for Art Research (IFAR), the Art Recovery Group, the Holocaust Claims Conference and the Commission for Looted Art in Europe. Some of these organizations not only maintain records on lost and stolen art but also assist in their recovery. Unlike other high ticket items like real estate and vehicles, art does not have a reliable chain of title system. Regardless and depending on the nature of the piece, a title search conducted by an investigation service and overseen by legal counsel is advisable. Insuring your purchase may help to mitigate possible losses, however, coverage for faulty title is sometimes excluded in basic insurance coverage. There are insurance companies that will cover clear legal title for the value insured. They will also likely provide defense protection in the event of a claim on the piece’s title and will even protect against claims brought after the piece is sold.
KNOW WHO YOU ARE BUYING FROM
By far, the most important factor in avoiding the purchase of a stolen work is to know who you are buying from. Only buy from reliable and established dealers. Major auction houses like Sotheby’s and Christie’s and dealers that have been in business for years are a very reliable source for art with clear title. These types of dealers go the extra mile to avoid issues with stolen art. Many will be willing to take the piece back and refund the amount paid in order to protect their reputation. Avoid so called Traveling Auction Dealers and other sellers that have no solid assets to go after if a piece you buy turns out to be stolen.
IT CAN HAPPEN TO THE BEST
A good example that it can happen to the best in the business is what seemed like a good legitimate purchase of a Picasso by South Florida art dealer Ken Hendel of Gallery Art in Aventura. Hendel has been in the art business in Aventura for thirty years, yet, he was the victim of inadvertently purchasing a stolen Picasso. In Ken Hendel’s own words: “I did not smell this as a stolen piece”.
Ken followed every protocol in the purchase of his Picasso. A 1928 piece entitled Portrait de Marie-Therese. He was approached by a New York dealer with what seemed like a good investment of $350,000 for the Picasso. During due diligence investigations, he found out that the piece had been purchased by wealthy New York businessman Lawrence Tisch in the 1960s. The sellers had previously taken the piece to Sotheby’s where it was advertised and offered for auction at an estimated value of between $700,000 and $900,000. Before offering it and placing it in their catalog, Sotheby’s had the piece authenticated by Claude Picasso, who had no idea that the piece was stolen. However, Sotheby’s was unable to sell the piece. Further inquiry did not find the piece listed in any lost or stolen art registry. The real key for Ken to go ahead with the purchase was the authentication by Claude Picasso.
After purchasing the Picasso, Ken held the piece at home for three years and was not planning on selling it. He had it shown during Art Basel at the Red Dot exhibit one year and eventually sent it to New York to a bonded warehouse for storage, to show and possibly to sell it. Ken was offered $1.1 million at one point for the piece. It was during the time that the piece was in the New York facility, that notice was received that the piece may be stolen. Luckily, the piece was returned to Ken in Miami before a court order was served on the storage facility commanding it to hold the piece until its ownership could be established and demonstration made that the piece was stolen from the Tisch home. Lawrence Tisch’s widow claimed that the piece had been hanging in her home as late as 2008 but that she did not notice it missing until recently. Insurance records were offered to prove ownership.
A MEDIATED SETTLEMENT
Rather than go through a protracted and expensive legal battle, a mediated settlement was reached between Ken and the Tisch widow whereby the piece was returned to her for an undisclosed amount. Ken was forced to kiss his Picasso good by and learn from his experience. Ken does have a couple of remedies for his losses. He may have insurance available to mitigate his financial loss and he definitely has a cause of action against the person who sold him the art. That would likely be based on the difference between what he got from the Tisch family and the value of the piece at the time he returned it plus his legal expenses. Whether he has the willingness to go after the seller for a judgment is a different issue. It would likely depend on the seller’s assets and their availability for attachment under a judgment.
THERE’S NO STATUTE OF LIMITATION FOR STOLEN ART IN FLORIDA
Even if Ken had just hung the Picasso in his home and never taken it out, the title to that painting would have never vested in him. No matter how long a piece of stolen art is kept from its rightful owner, title would never transfer. Eventually, Ken would have had to kiss the Picasso good by.
Octavio Robles, AIA, Esq. is a legal contributor to ARTDISTRICTS and a member of the Florida and Federal Bars (Southern District of Florida). He is a Florida Supreme Court Certified Mediator and Approved Arbitrator; a member of the Construction Committee of the Real Property, Probate and Trust Law Section, the Art and Entertainment, and the Alternative Dispute Resolution Law sections of the Florida Bar; and a member of the American Institute of Architects, Art Deco Society of Miami and Copyright Society of the USA. He holds licenses as a registered architect, state-certified general contractor and real-estate broker in Florida and is a LEED-accredited professional. He received his Juris Doctor degree from the University of Miami School of Law in 1990. He holds master’s degrees in architecture and construction management and a bachelor’s degree in design, all from the University of Florida. His practice is limited to art, design, architecture, construction and real-estate law.