Zaret v. Bonsey

Background

Peter H. Zaret, doing business as Peter Zaret & Sons Violins, Inc., brought a product-disparagement action against David Bonsey, D. Bonsey, Inc. also known as New York Violin Consulting Inc., Florian Leonhard, Florian Leonhard Fine Violins, Inc., Peter Horner, Brompton’s Auctioneers Limited, Charles Beare OBE, Beare Violins Limited, and Joe W. Robson. Zaret alleged that defendants wrongfully disputed his claim that a violin in his possession was made by Antonio Stradivari.

Zaret alleged that he purchased the violin for $20,000 at a 1998 auction. In 2015, he and Terrence J. Kavalec began seeking authentication so they could sell it as a genuine Stradivarius. Florian Leonhard examined the violin and concluded that it was not a Stradivarius but a copy of an 1890s German “Ruggieri” violin. Robson later expressed doubts about the violin and wrote on Maestronet that people who had examined it had rejected the claim that it was a Stradivari instrument. Zaret also alleged that Charles Beare concluded from photographs that the violin was probably made by a fine French maker rather than Stradivari.

Zaret alleged that two attempted sales failed. A 2017 proposed sale in the “$9- to $10 million range” depended on certification from Beare. Negotiations from October 2021 through January 2022 involving a potential buyer represented by Professor Odin Rathnam also ended after Beare’s assessment was disclosed. Zaret sought damages based on his estimate of the violin’s fair market value.

Motions to Dismiss

Each defendant moved to dismiss the second amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. Zaret’s sole claim was product disparagement under New York law.

The court stated that a product-disparagement claim requires allegations of falsity, publication to a third person, malice, and special damages. Special damages are specific economic losses, and a plaintiff generally must identify the customers who were lost and itemize the exact damages. The court held that Zaret did not meet this requirement.

The alleged 2017 sale was described only as being in the approximate range of $9 million to $10 million and involved an undisclosed principal. The allegations about the later negotiations did not state a purchase price. The complaint also sought $8.95 million based on Zaret’s estimate of the violin’s market value rather than tying the claimed loss to an actual sale.

The court rejected Zaret’s argument that he could use a more flexible “loss of market” theory. Under that theory, identifying individual customers may be unnecessary when potential customers cannot reasonably be identified. The court found that this exception did not apply because Zaret’s allegations showed that he marketed the violin to known buyers and through familiar marketplaces. The court therefore held that the second amended complaint failed to plead an essential element of product disparagement and granted defendants’ motions to dismiss. The court expressly stated that it would not address the other substantive and procedural issues raised in those motions.

Motion to Amend

Zaret sought permission under Federal Rule of Civil Procedure 15(a) to file a proposed third amended complaint. The proposed pleading added facts supporting the product-disparagement claim and added a tortious-interference claim against Beare concerning the possible consignment of the violin to Brompton’s Auctioneers.

The court denied permission to add more facts supporting product disparagement because the proposed amendment still did not adequately plead special damages.

The court also denied permission to add the tortious-interference claim because the amendment would be futile—that is, the proposed claim still would not state a legally sufficient basis for relief. Under New York law, the claim required, among other things, proof that Beare acted solely out of malice or used dishonest, unfair, or otherwise improper means.

The court found that the proposed complaint did not allege that Beare committed a crime, an independent tort, physical violence, prosecution, or undue economic pressure. It also found no sufficient facts showing that Beare acted solely out of malice or used wrongful means. Allegations that Beare reviewed only two-dimensional images, intended to “kill the deal,” or sought control of the violin were described as conclusory or based on mere suspicion. The court therefore denied Zaret’s motion for leave to amend.

Disposition

The court granted defendants’ motions to dismiss the second amended complaint and denied Zaret’s motion for leave to amend. The court stated that Zaret could file a motion seeking leave to amend by October 31, 2023, if he wished to continue prosecuting the case. The court also stated that defendants’ motion to strike certain allegations was moot because of the grant of the dismissal motions.