Athena Art Finance Corp. v. that Certain Artwork By Jean-Michel Basquiat…

Background

Athena brought this action to foreclose a lien and obtain permission to sell a 1982 Jean-Michel Basquiat painting titled “Humidity.” Satfinance Investment Limited intervened and asserted its own interest in the painting. Delahunty Limited also asserted claimed interests. The opinion addressed only Athena’s motion to strike the expert report of Michael Plummer, which Satfinance submitted in opposition to summary-judgment motions.

Satfinance retained Plummer to discuss art-market and art-finance conditions, reasonable business practices and due diligence in that market, and Athena’s diligence concerning loans secured by artwork. Athena argued that Plummer was unqualified to testify about secured financing and asset-backed lending. It also argued that he violated Federal Rule of Civil Procedure 26 by failing to disclose a prior expert report and prior business relationship with Athena, and that the relationship made him biased.

Qualification under Evidence Rule 702

The court denied Athena’s argument that Plummer was unqualified. It explained that a witness may qualify as an expert through knowledge, skill, experience, training, or education, and that a lack of formal training or professional licensing in a particular field does not necessarily bar testimony when the witness has relevant practical experience.

The court relied on Plummer’s extensive experience in art-market economics, valuations, art purchases and sales, and art lending. His background included work in art-market advising, leadership of an art fair, positions at Sotheby’s involving dealer credit facilities and art loans, work at Christie’s Financial Services, published market-analysis reports, teaching, and formal economics training.

The court concluded that Plummer was qualified to testify about art-industry standards for underwriting loans secured by artwork. His opinions were limited to the art market, art finance, and related business practices, rather than general asset-backed lending. The court also stated that objections concerning the strength of his credentials or his failure to consider particular documents went to the weight of his opinions, not whether the opinions could be admitted.

Disclosure of the prior report

The court found that Plummer should have disclosed a prior expert report from an earlier case because he testified that the report was the “starting point” for his report here and relied on facts and descriptions from it. Rule 26 requires disclosure of facts or data considered by a testifying expert, and the court interpreted that requirement broadly.

The court nevertheless declined to exclude Plummer’s report. Athena knew about the prior report before Plummer’s deposition, questioned him about it, and had its own expert discuss it. Because Athena had an opportunity to examine the report and challenge Plummer’s opinions, the nondisclosure was harmless and did not justify preclusion under Rule 37.

Disclosure of prior interactions with Athena

The court also found that Plummer should have disclosed personal interactions and conversations with Athena personnel because he testified that he relied on them for at least some opinions. The court again declined to exclude the report because Athena knew about those interactions before the deposition and questioned Plummer about them.

Alleged bias

Athena argued that Plummer was biased because of a prior business relationship involving his former art-advisory firm and a proposed sponsorship arrangement with Athena. Athena described disputes and a heated meeting after which Plummer was asked to leave Athena’s office, followed by litigation concerning the failed business relationship.

The court held that the evidence did not establish bias serious enough to disqualify Plummer. It noted that some possible bias does not automatically make expert testimony inadmissible and that Athena could question Plummer about the prior relationship at trial. In the court’s view, the deposition testimony cited by Athena was too limited to show that Plummer’s relationship with Athena had ended so acrimoniously that it made him biased.

Disposition

The court denied Athena’s motion to strike under Federal Rule of Civil Procedure 26 and Federal Rule of Evidence 702. The Clerk was directed to terminate the motion at ECF No. 221.