Friday, January 29, 2016

De Sole Will Not Be Denied

The gloves were off at the Knoedler trial.  I missed the first part of Domenico De Sole’s testimony where his own lawyer examined him, but this morning (Thursday, January 28), the bulk of the defense's cross examination of him took place, having only just begun the day before.  As a number of journalists noted, Mr. De Sole is angry.  He conveys his anger by tightening his body and by speaking in clipped, curt sentences.  Color rises through his face and his eyes flash.  An extremely elegant man, De Sole, by simply withdrawing his cultivated manner, becomes quite formidable.  He is also not afraid of lawyers or judges and often went way off-piste in his answers, repeatedly posing questions to the attorney questioning him as well as talking over his opponent.

The first defense lawyer to take a whack at him was Charles Schmerler who represents the holding company that owns Knoedler and which probably has enough assets to actually pay damages should they lose.  Burly with dark hair in contrast to De Sole’s lithe silvery appearance, the two of them duked it out.  Like De Sole, Schmerler is intimidating and neither of them backed down.  Schmerler asked De Sole if he had ever asked Ann Freedman straight up about the authenticity, which De Sole hadn’t.  Freedman mentioned numerous experts in connection with the work, did De Sole find it unusual that she was making such a big deal about authenticity when she hadn’t even been asked?  He did not.  Upon making the purchase of the fake Rothko, De Sole had asked Freedman to put all the things she had said in writing, and she indeed sent him a list of the experts. Schmerler asked had De Sole read this?  He hadn’t, only his wife did and told him it arrived in the post.

Throughout all of this, De Sole stuck to his guns.  He said when they first saw the ‘Rothko’, Freedman “did all the talking”.  She went on and on about how beautiful it was and basically talked until they bought it.  Freedman is known for being a gifted saleswoman and here the court saw that hers is definitely the hard sell. De Sole said he trusted Knoedler, that this was a top gallery and it never crossed his mind to check up on any of the various claims.  He often spat out his answers and repeatedly was warned by the judge to not answer questions with questions. 

The document that Freedman sent him was shown up on the screen and it’s pretty clever.  This was the famous list of experts, including Christopher Rothko, et al.  The top of it reads “This Painting Has Been Viewed by the Following Experts with Special Expertise on the Work of Mark Rothko.”  Schmerler implied that anyone who bothered to read this document would immediately see that it wasn’t making a very strong claim.  There were short, glowing biographical notes on each of the experts, but all it said was that they viewed it.  Unbelievably tricky.

Of course, Knoedler’s invoice is much less ambiguous and is obviously a breach of the Uniform Commercial Code.  However, the defense is trying to imply that the De Soles didn’t do anything that well-informed collectors like themselves should have done.  The De Soles don’t want a refund, they want damages, so the bar seems to be getting set much higher…at least, that’s the intent here. 

What Schmerler seemed to be saying was that Freedman’s own documents and behavior should have alerted her clients to the fact that the evidence supporting the painting’s authenticity was flimsy.  Wow.  Again, this case is harming the art dealing profession.  Who wants to walk into a shop where the buyer is supposed to have to constantly monitor the salesperson’s actions for insight into the authenticity of the goods?  Buying art is supposed to be enjoyable.  I suppose a visit to a used-car lot would require one to be alert, but art dealers, especially ones like Freedman are not supposed to be in that category…maybe this sentence should have used the past tense.

Schmerler spent the rest of his time picking at Mr. De Sole’s formal complaint, trying to show parts of it where it could be seen as incorrect.  For example, his complaint stated that Freedman never told him that Knoedler itself owned the work at the time he bought it and that they should have—but Mr. De Sole admitted that it really didn’t matter to him who owned it, that he trusted Knoedler.  These seemed like minor points to me, but I suppose Schmerler didn’t want to leave any money on the table.

One of his attempts to trip up De Sole went horribly awry.  Schmerler asked De Sole about some specific language in the complaint to which De Sole replied to ask his lawyer, that he himself ‘was not a lawyer.’  Wait, said Schmerler, I thought you were a lawyer.  The counter punch was vicious.  Referring to his job at Gucci which made him rich, De Sole said “I am no longer a member of the bar.  I have been selling handbags for the past 25 years.  Very successfully I should add.  And all the handbags I sold were real.”  The courtroom cracked up, the jury was in stitches…all the tension that had built up was relieved and the energy released seemed all to flow in De Sole’s direction.  Schmerler sat down soon after.

Next up was Luke Nikas, Freedman’s attorney.  He spent a little time going over some of the same ground Schmerler did, making it clear that De Sole had never asked for any specific warranties and so forth.  He also used some questions to reinforce some of his points in his opening, such as the fact that the De Sole’s painting had been loaned to an important exhibition at the Beyeler Foundation in Switzerland (an extremely inconvenient point for the plaintiffs and for the many experts involved in that episode). 

There was some discussion about a phrase in the invoice where Knoedler said that it was verifying “good title” to the work.  Amazingly, De Sole seems to think that means that the seller owned the work.  Later questioning revealed that he actually is not clear on the concept.  “Good title” means that the work has never been stolen or hasn't any liens against it…that the owner is able to convey the property to another person without encumbrance.  It doesn’t matter if the person the buyer pays is the owner or a broker.  For such an educated man who spends vast sums on art to not know this was shocking.  Not sure who won that round, but it was really the only time I was not deeply impressed by De Sole.

At the end, Nikas asked De Sole if he was angry, and indeed, De Sole was and is.  Why?  Because they wouldn’t give it back.”  “Give what back, your money?” said Nikas.  “Yes.”  

At this point, Nikas was midway through a question when the judge interrupted him.  The question began, “Well isn’t it true that…” and, in that context, I was convinced he was about to say that Knoedler had offered to refund his money.  Remember, De Sole wants triple damages here.  Pretty much all of the other parties who made purchases of fakes from Knoedler, that have been made public, have settled.  This is the only one to have come to trial, so I assume that Knoedler offered him his money back.

At any rate, I am guessing that bringing up the possible fact that Knoedler may have offered a refund would have somehow been a legal no-no.  There was a long side-bar and Nikas ended his questions.

Freedman’s problem is that De Sole would rather spend millions of dollars on an extremely costly trial that he may well lose than simply get his money back.  Here is a guy for whom $8.4 Million is not enough to make him go away.  Again, I don’t know any of this for sure, I am just guessing.  But I assume Knoedler made him an offer which he turned down.  My feeling is that De Sole doesn’t care about the money at this point and he probably will get his $8.4 Million back anyway since there is no question that the work was fake.  No matter what happens, I think that all of the details that are coming out will damage Freedman beyond repair.  She pissed off the wrong guy.

Eugene Thaw

The legendary expert Eugene Thaw took the stand after Mr. De Sole stepped down.  As is customary, he was asked to state his profession, which he modestly gave as ‘retired art dealer’.  Calling Eugene Thaw a ‘retired art dealer’ is akin to referring to Deion Sanders as a ‘retired baseball player.’  Sanders was an excellent ball player to be sure; he led the league in triples one year and played on championship teams.  But he played two sports: when the baseball season ended, he was a star in the NFL—Sanders is the only man to have played in both the World Series and the Super Bowl.  Like ‘Neon’ Deion, Thaw is a polymath of the highest order and put up some electrifying stats.  He is a founding member of the Art Dealer’s Association, having opened his gallery in his early 20s and is, I believe, still a board member; moreover he co-authored the Jackson Pollock catalog raisonne (the reason for his visit today).  These achievements alone would comprise a career of which anyone could be proud, but only begin to describe his success.  He and his wife have donated over 400 master drawings to the Morgan Library (where he is a trustee), and there have been five (five) exhibitions of these gifts over the years,  which included artists such as Rembrandt, Piranesi, Cezanne, Picasso and so on.  For good measure, his collection of nomadic art from the Eurasian steppes was shown at the Metropolitan in 2003, and his collection of Native American art toured several museums in the US, including the Cleveland Museum and the Dallas Museum of Art.  The court seemed unaware of his stature and I wonder why the plaintiffs’ attorneys did not do more to show his prodigious connoisseurship.

Thaw seemed to have some mobility issues, but he spoke clearly and would suffer no fools.  Whenever any lawyer would show him a letter he had written and ask him to explain what it meant, he would shoot back “I cannot think of any clearer way to put it than I did in the letter you just read out loud.”  It was these letters that were the focus of his testimony.  Being a Pollock expert, two scholars, who were trying to authenticate “Pollock” works that Knoedler had for sale, approached him for his opinion.  Both Stephen Polcari and E.A. Carmean wanted him to weigh in and in two short, concise letters, Thaw demurred.  He didn’t exactly say they were inauthentic and he gave some excuses, saying he was ‘unwilling’, or ‘the committee is dissolved and I’m not really doing this sort of thing anymore’…that kind of thing. 

Freedman’s lawyer, Luke Nikas, pointed to some of these phrases and noted that Thaw never said any of the Pollocks were inauthentic in the letters.  He asked Thaw if he had ever told these two scholars that any of the works were inauthentic to which Thaw replied “No…but the language I was using meant they were wrong.”  

Here, spelled out for all to see, is the problem we all have at the moment in the art world with authentications.  Thaw made it clear to the court that he thought the paintings were fake, but he was not willing to come right out and say it.  He had to resort to nudges and winks in an attempt to convey his doubts, signals that Carmean and Polcari evidently failed to pick up on. 

Should they have known?  That is a question for the jury.  Most people I speak with in the art world think they—and Freedman—should have.  But in a legal sense, I can easily see the jury making the reasonable observation that Thaw’s letters were equivocal; their neutrality may leave enough space for Freedman to succeed in her claims, legally. 

As I understand it, there simply was no upside for Thaw to make a public statement...he would be at risk of a disparagement claim and some hefty legal bills.  He could, of course, have entered into a private agreement with Knoedler to give his opinion without such risk, but what was in it for him?  He had already used his silent dog whistle to Carmean and Polcari and it was up to them to heed it.  Thaw seemed quite disgusted that they didn’t.  It is a shame that experts like Thaw cannot speak freely in the current legal environment, a lot of grief might have been avoided.


After Thaw came the affable dealer Jim Kelly.  Kelly has a well-regarded gallery in Santa Fe, where he opened in the 1990s, but he has been on the scene longer than that.   He explained that in addition to running a gallery, he often worked as an art consultant, and that he did so for the De Soles.  Kelly referred to them as both “friends and clients” and used their first names.  He said his involvement with the current mess had to do with the De Soles asking for his figure out what the proper selling price of the painting should be.  (The painting itself is not on view, but I could see it propped up behind the screen in the courtroom).

Kelly saw the painting and was proffered the list of 10 or so experts who had supposedly praised the work and he explained that he was under the impression that “they had approved it”—meaning they had said it was authentic.  He was asked if he ever did research into provenance when he was involved in a transaction, to which he replied that when he was on the buy side, he did not…only as a seller. Anyway, he was called in to consult on price and that is what concerned him the most.  Using his network, expertise and auction records, Kelly concluded that the ask, $8.5 Million, was fair, but his clients asked him to try and get a discount.  He called Freedman and she offered $200,000, which he could ‘do with as he wished’.

It was at this point that Kelly got a little shaky.  Freedman was giving him $200,000, but he was to decide how much of that was a discount that would flow to the De Soles and how much was his commission. Kelly decided that he would take $100,000 and give the De Soles a $100,000 break.  He interrupted his testimony and went back to this bit of information and it seemed clear to me that at that time, his clients were not aware of how much he was going to make and he seemed slightly embarrassed. At any rate, this line of questioning was shut down.  The art world is full of these transactions, where principles don’t know how much the middle men make, so it’s not really that big a deal, but Kelly did seem a little delicate about all of this.  This trial is laying bare all sides of a number of transactions and nobody seems particularly happy about it.

Another interesting document is the invoice itself.  Knoedler actually invoiced Kelly, who tacked on his commission and then invoiced their daughter.  This is rather inconvenient and probably required all sorts of legal calisthenics to allow the De Soles to sue Freedman.  I don’t pretend to understand how this happened, but the complaint does refer to Kelly as their ‘agent’. 

I had to leave when the lunch recess was called, the defense was asking him about another Rothko that he had advised the De Soles to buy where a good bit more due diligence seemed to take place.

Kelly, a well-liked ADAA member, seems to be yet another person who sustained collateral damage in this case, but the De Soles seem not to blame him and I expect he will take his lumps here and move on.

Unfortunately, I won’t be able to make it in to court tomorrow, but plan on attending some sessions next week.  Stay tuned.

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