Greenway II, LLC v. Wildenstein & Co., Inc.

Background

Greenway II, LLC, as successor to the NWW 1985 Trust, asserted one fraud claim against Wildenstein & Co. Inc. Greenway alleged that Wildenstein sold the Trust an inauthentic Pierre Bonnard painting, Still Life with Basket of Fruit, in June 1985. Greenway sought to recover the $275,000 purchase price, expenses, statutory interest, costs, and fees.

Before the sale, Wildenstein gave Neil Wallace, the Trust’s trustee, a fact sheet stating that another Bonnard work appeared in the Bonnard catalogue raisonné but that Basket of Fruit did not. The catalogue raisonné is a scholarly listing of recognized Bonnard works. The invoice also identified the painting’s provenance but did not refer to the catalogue raisonné. Wallace purchased the painting for $275,000 on June 28, 1985.

Beginning in 2007, Christie’s provided Wallace with at least eight appraisals. Each stated that the painting was not included in the currently accepted catalogue raisonné and that the valuation assumed the recognized authority would confirm the attribution. Wallace testified that he reviewed the appraisals and recalled the notation, but did not ask about its significance. In 2018, Christie’s sent the painting to Guy-Patrice Dauberville for authentication. Dauberville responded that it was not an authentic work by Bonnard. Christie’s then withdrew it from auction. Greenway filed this action in May 2019.

Summary judgment standard

The court applied the summary judgment standard under Rule 56 of the Federal Rules of Civil Procedure. Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The nonmoving party must present concrete evidence showing a genuine factual dispute rather than relying on conclusory or speculative assertions.

Statute of limitations

The court held that Greenway’s fraud claim was barred by New York’s statute of limitations. Under the rule applied by the court, a fraud action must be brought within the longer of six years from accrual or two years after the fraud was discovered, or reasonably should have been discovered.

The court concluded that the information available to Wallace created a duty to investigate. The Christie’s appraisals repeatedly disclosed that the painting was absent from the catalogue raisonné and that its attribution remained subject to confirmation by the recognized authority. The court reasoned that these disclosures should have alerted a reasonable person to investigate the painting’s authenticity. The court also pointed to the pre-sale fact sheet and invoice, which disclosed that Basket of Fruit was not listed in the catalogue raisonné.

The court rejected Greenway’s argument that the painting’s increased appraised value made it reasonable to disregard the disclosures. Because Greenway’s allegations themselves treated absence from the catalogue raisonné as a major warning sign of inauthenticity, the court concluded that the same information in the Christie’s reports should have triggered an inquiry. It held that the 2019 complaint was time-barred and that this independently required dismissal.

Reasonable reliance

The court also granted summary judgment on an alternative ground: Greenway could not establish reasonable reliance as a matter of law. In a fraud claim, reliance is not reasonable when the person receiving a representation has the means to learn the truth through ordinary diligence but does not use them.

The court found that Wallace had those means. He retained Kenworth Moffett, a curator for contemporary art at the Museum of Fine Art in Boston, as a consultant in his acquisitions. Moffett introduced Wallace to Wildenstein, accompanied him to view the painting, discussed its provenance, and commissioned a condition report. The court also found it undisputed that Wildenstein disclosed the painting’s absence from the catalogue raisonné.

The court rejected Greenway’s attempt to characterize Moffett’s role as limited to introductions and ministerial tasks. It relied on Wallace’s deposition testimony that Moffett was an acquisitions consultant and had advised him about the painting’s condition and provenance. The court held that Greenway could not create a genuine factual dispute by contradicting that sworn testimony in its opposition papers.

Disposition

The court granted Wildenstein’s motion for summary judgment. It dismissed the amended complaint with prejudice on both stated grounds—the statute of limitations and the lack of reasonable reliance—and directed the Clerk of Court to terminate the motion and close the case. The opinion identifies the judge as “McMahon, J.” but does not provide the judge’s full first name.