Al Hirschfeld Foundation v. Margo Feiden Galleries

Background

The Al Hirschfeld Foundation (AHF) moved to hold Margo Feiden Galleries Ltd. (MFG) and Margo Feiden in civil contempt and to award monetary sanctions for violating several court orders. The dispute involved Hirschfeld drawings that AHF had consigned to MFG under a settlement agreement, as well as discovery about the sale of consigned works.

Earlier in the case, the court had ordered the defendants to return all consigned artwork after the settlement agreement ended. The court had also required MFG to respond to discovery requests seeking records about income and sales of consigned works. In addition, a preliminary injunction prohibited the defendants from selling consigned works except as permitted by the settlement agreement.

Civil Contempt Standard

The court explained that civil contempt requires proof that the violated order was clear and unambiguous, that noncompliance was shown by clear and convincing evidence, and that the party did not diligently try to comply reasonably. The court stated that a violation need not be willful and that inadvertent or good-faith conduct does not necessarily prevent a civil-contempt finding. Civil contempt sanctions may be coercive or compensatory; here, AHF sought compensation for fees and costs caused by the violations.

Violations Found

The court found three categories of violations. First, MFG kept three missing consigned drawings—“Of Mice and Men,” “Joseph Wiseman,” and “Winterset”—on its premises without disclosing that it possessed them or returning them to AHF. The court found that MFG did not return or disclose the drawings until about 22 months after the first return order and only after the court had found that the defendants converted the drawings and the parties were preparing for a damages hearing.

Second, MFG failed to produce records in its possession concerning its November 2016 sale of the drawing “Pauline Kael,” despite discovery orders requiring records relating to the sale of consigned works. The records included emails between Feiden and the buyer.

Third, the court found that MFG’s November 2016 sale of “Pauline Kael” violated the preliminary injunction. The injunction barred unilateral sales of consigned works, while the settlement agreement gave AHF an opportunity to approve sale prices for Hirschfeld works covered by the agreement.

The court rejected the defendants’ arguments that the orders allowed the sale, nondisclosure of the sale records, or continued possession of the three drawings. It also found no inability to comply. The court stated that the works and sale records were readily accessible and that Feiden had personal knowledge of the consigned works and personally negotiated and arranged the “Pauline Kael” sale. The court held both MFG and Feiden responsible for the violations.

Sanctions

AHF requested $34,800.91 in legal fees, along with other expenses. The court reduced the requested legal-fee amount to $20,000 because the billing records did not always identify which missing works were involved and because some work would have been necessary even without the violations.

The court declined to award $1,595.30 in fees and $392.93 in travel and hotel expenses for AHF’s expert because that testimony and travel would have been necessary regardless of the number of missing works. The court awarded $3,000 for work by AHF employees David Leopold and Katherine Eastman, reducing the amount because their time estimates were not supported by detailed narrative time records.

Disposition

Judge Engelmayer held MFG and Margo Feiden in civil contempt for violating multiple clear and unambiguous court orders. He ordered them—not MFG’s counsel—to pay AHF $23,000 in monetary sanctions by Friday, February 21, 2020, and directed MFG’s counsel to file a sworn declaration confirming payment. The court terminated the pending contempt motion.