Judge Rules $6 Million Lawsuit by Buyer of Jeff Koons Sculpture Can Proceed

By Brian Boucher for Artnet News

A judge in New York Supreme Court has ruled that London dealer Fabrizio Moretti’s $6 million lawsuit against David Zwirner can go on.

Justice Barry Ostrager dismissed two charges of fraud and one of “promissory estoppel,” a legal concept in which promises are enforceable by law, against David Zwirner. The ruling was first reported by the Art Newspaper.

Attorney John Cahill, representing Moretti, claimed a significant victory in a statement given to artnet News:

This is a victory for art purchasers and a landmark decision in that it is the first one to rule on an important law that is designed to keep New York’s art market clean and safe for buyers of sculptures and other editioned work. In its decision, the Court specifically noted that the Arts and Cultural Affairs Law was “designed to protect consumers from fraud and deceptive practices in the sale of art.” The Court went on to state that if it followed Zwirner’s interpretation of the law, the result could be the opposite of what New York’s legislature intended when it passed the law decades ago: “a purchaser who spends millions of dollars for a valuable artwork would potentially have to wait until the minute before the artwork is delivered to receive information concerning the artwork. In addition, information pertaining to the artist, the foundry, and so forth is not only necessary to properly value artwork sold in multiples, but could also turn out to be erroneous, or misleading, or both. At that point, an art purchaser is without recourse.”

David Zwirner Gallery did not immediately respond to requests for comment, but a representative told the Art Newspaper:

The gallery is pleased that the court has dismissed Fabrizio Moretti’s frivolous fraud claims and has dismissed the case entirely against David Zwirner. We are confident that the court will reject the remaining claims once the evidence comes out. Moreover, the artwork is completed and the gallery and Jeff Koons remain ready to deliver to Mr. Moretti exactly the work that he purchased.

Fabrizio Moretti. Photo Patrick McMullan.

Fabrizio Moretti. Photo courtesy of Patrick McMullan.

Moretti and his company, Blue Art Limited, sued David Zwirner and his gallery in August over breach of contract for what it called unacceptable delays in delivering a $2 million Jeff Koons “Gazing Ball” sculpture, purchased in 2014 and fully paid for. Moretti claimed that Zwirner was “reckless” in orally promising a delivery date it couldn’t meet. For its part, Zwirner’s gallery points out that no delivery date was agreed on in a written contract.

At the heart of the case are issues of delivery time, the number of works in the limited edition of the $2 million sculpture, Gazing Ball (Centaur and Lapith Maiden), and what information the seller is required to disclose to the buyer and when. Moretti complains that the sculpture was supposed to be an edition of three, and that an additional “prototype,” shown at the gallery in 2013, is in violation of the contract. In a phone conversation with artnet News, Zwirner’s lawyer, Gregory Clarick, maintains that since the prototype was not a cast by the artist, not a part of the edition and not for sale, it is immaterial to the contract.

Moretti further claims that the unsuccessful auction of the third work in the edition at an auction at Sotheby’s New York in May 2015, along with a dip in the art market, adversely affected the work’s value.

Moretti also says the dimensions of the work diverged by a few inches from those promised, thus violating the contract.

The complaint cites the New York Arts and Cultural Affairs Law, which, Justice Ostrager affirms in his October 31 ruling, requires timely disclosure of facts including information about the fabrication of the work and the size of the edition.

The parties are required to attend a preliminary conference on November 29.