Platt v. Michaan

• Court: District Court, S.D. New York
• Decided: March 29, 2021
• Docket: 1:19-cv-04234
• Status: Unknown

Opinion

F O EY yun A jenue of the Americas New York, NY 10019 HOAG LLP 646.927.5500 main 646, 927.5599 fax

Jeffrey LD. Lewis 646-927-5504 direct jidlewis @foleyhoag.com March 26, 2021 □□□ aes MEMO ENDORSEL

By ECF Plaintiffs are directed to respond to Defendant's argument that the Platt Fai Honorable Edgardo Ramos, U.S. District Court Judge Artwork Trust must be represented by U.S. District Court for the Southern District of New York |oounse] by no later than Friday, April 2 Thurgood Marshall United States Courthouse 2021. SO ORDERED. 40 Foley Square New York, NY 10007 Re: Platt Family Artwork Trust v. Michaan, _ (eo Case No. 1:19-cv-04234-ER Edgardo Ramos, U.S.D.J Dated: 3/29/2021 Dear Judge Ramos, New York, New York We represent defendant Allen Michaan in the above-referenced action and write both to advise the Court on the case’s status and to request a continued stay until the Surrogate’s Court appoints an Administrator to represent the interests of the Estate of Henry Platt (the “Estate”). As discussed below, the Estate, on behalf of Harry Platt who sold the paintings at issue, is a necessary party to this action, and it can appear only through an Administrator. Defendant Michaan has filed a Petition in Surrogate’s Court requesting such an appointment (File No. 2021-939). Before addressing the instant request for a stay pending appointment of an Administrator, there is one point we wish to identify for the Court. Original counsel for plaintiff The Platt Family Artwork Trust (the “Trust”) was Charles Platt of Wilmer Cutler Pickering Hale and Dorr. While this case was stayed by Your Honor’s order, Charles Platt and the Wilmer firm withdrew by stipulation of the co-Trustees of the Trust, who then sought to appear on behalf of the Trust pro se. Notably, neither of the co-Trustees is an attorney. We have advised the Trustees that we believe they may not represent the Trust because it, as with a corporation, cannot appear pro se but must be represented by counsel admitted before this Court. See Lutin v. Advanced Mining Sys. (In re Advanced Mining Sys.), 94 Civ. 5744 (CSH), 1995 U.S. Dist. LEXIS 2585, at *1 (S.D.N.Y. Mar. 3, 1995) (‘where an individual’s position as a trustee casts him in a fiduciary role for others, he cannot as a non-attorney represent the trust’); see also Bell v. S$. Bay European Corp., 486 F. Supp. 2d 257, 259 (S.D.N.Y. 2007); Hall vy. Nationstar Mortg. LLC, No. 13-cv-05550 (ENV) (CLP), 2013 U.S. Dist. LEXIS 169101, at *2 (E.D.N.Y. Nov. 22, 2013). We have requested that the Trust designate new counsel of record but have not received a response. We point this out not to seek any specific relief at this juncture, but rather to respectfully suggest that the Trust cannot even

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engage before Your Honor on the issue of a stay pending appointment of an Administrator until counsel of record appears. Nonetheless, since the Court’s May 8, 2020 decision on Mr. Michaan’s motion to dismiss, the parties have engaged in good faith settlement negotiations (prior to which the case was stayed by Court Order) and Charles Platt remained involved. As noted below, however, those negotiations have not yet produced a resolution and the passage of time now requires that defendant take further action. Accordingly, Mr. Michaan has filed an Answer, Counterclaims and Third-Party Complaint (ECF 41). The Trustees, as outlined below, have not consented to this request for a stay. BACKGROUND By way of background, the Trustees filed this case seeking recovery of two paintings created by Louis Comfort Tiffany that Defendant Michaan bought in 2011 from Henry Platt. The Complaint alleges that Henry Platt (a direct descendant of the artist) could not sell the paintings because he held them subject to an agreement with his two brothers that imposed a life estate and/or an anti-alienation restriction. The effect of such an agreement, the Complaint argues, requires that when Henry Platt died in 2015 the paintings reverted to the Platt family such that the sale to Mr. Michaan should be unwound. When he sold the paintings to Mr. Michaan, Henry Platt represented, including in writing, that he had good title to the paintings he was selling. The Trustees do not dispute that Henry Platt made those representations, but instead primarily argue that those representations were false – in other words, the Trustees assert that Henry Platt defrauded Mr. Michaan because of the purported agreement with his brothers. Significantly, the Trustees admit that there was no signed writing setting forth the purported life estate or anti-alienation agreement, as required by the New York statute of frauds, and Mr. Michaan filed a motion to dismiss on that basis. In denying that motion, the Court recognized, in relevant part, that a life estate or an anti-alienation restriction is subject to the statute of frauds but ruled that Mr. Michaan lacked standing to raise the defense because he was “a stranger to any agreement among the Platt brothers.” Opinion and Order at pp. 9-10. After the issuance of the Opinion and Order, the parties agreed to enter into settlement discussions and to take no further action during the course of those discussions. THE SURROGATE’S COURT PETITION On March 11, 2021, Mr. Michaan filed a Petition in New York County Surrogate’s Court seeking his appointment as Administrator of the Estate of Henry Platt. The Surrogate’s Court has exclusive jurisdiction over certain key issues, which we respectfully submit must be decided before the case at bar can proceed, and accordingly we seek a stay until the Administrator is appointed. The involvement of the Surrogate’s Court and appearance of the Administrator before this Court may clarify certain jurisdictional issues, avoid duplication of effort and, perhaps most important, permit the interposition of certain claims and defenses as to which the Estate must be present. More specifically, Mr. Michaan’s Petition requests his appointment as Limited Administrator of the Estate. The Surrogate’s Court has exclusive jurisdiction to appoint an Administrator, and so it will be up to the Surrogate to decide whether Mr. Michaan may properly represent the Estate’s interests before Your Honor or to select another Administrator. (Upon reasonable inquiry, we have been unable to determine that a will of Henry Platt was probated in any jurisdiction where he resided or that anyone – including any of his relatives – requested to administer his Estate.) Exhibit A to this letter is a copy of that Petition for the Court’s convenience. Having the Estate as a party to the instant case is essential to protect the parties’ rights and may prove dispositive for several reasons. First, the Administrator has standing to assert the statute of frauds defense against the alleged agreement among the Platt brothers in defense of the Estate’s liability to Mr. Michaan for fraud as to Henry Platt’s representation of clear, marketable title; this is the case dispositive standing issue highlighted in Your Honor’s decision on the motion to dismiss. Second, if the Trust is correct that an enforceable agreement existed among the Platt brothers, then the estate must have an opportunity to defend claims against Harry Platt as a seller of the paintings at issue, including Mr. Michaan’s claims that the Estate defrauded plaintiff by misrepresenting title and concealing the agreement. Third, if Henry Platt could not transfer the paintings to Mr. Michaan, then they potentially were part of his Estate at the time of death (for example, if the Trust proves an anti-alienation agreement) and it will be up to the Surrogate’s Court to determine whether the paintings are assets of the Estate or part of the Trust’s corpus. And, Fourth, the Surrogate’s Court has jurisdiction to determine who are the heirs and distributees of the Estate, as well as transferees of the Estate’s assets (including paintings at issue here), which is material since under New York law (e.g., NY EPTL 12-1.1) transferees can be liable for claims against the Estate. All of these issues become relevant based upon Mr. Michaan’s Third Party Complaint against the Estate and Henry Platt’s direct and indirect disributees. THE THIRD PARTY COMPLAINT Earlier today, Mr. Michaan filed a Third Party Complaint in the action before Your Honor naming certain individuals as third party defendants. Those defendants include the as yet unnamed Estate Administrator (John Doe 1), participants in the sale including John Does 2- 5, and other unnamed heirs and distributees (John Does 6-25) as well as the Trust; their liability is largely contingent on whether the Trust succeeds in proving an agreement between the brothers. The Third Party Complaint seeks to compensate Mr. Michaan if, as the Trustees allege, Henry Platt could not deliver good title to the paintings he sold. We also believe that the Trust and its settlors, as transferees of the paintings and other assets of Henry Platt, may be liable to Mr. Michaan if Henry Platt defrauded him. Although the Administrator may have to marshal the assets, we believe that the Estate includes valuable assets that may be sufficient to satisfy a judgment on the third-party claims. Underlying these actions is fairness to Mr. Michaan, because if the Trustees succeed in proving there was an agreement hidden from Mr. Michaan then Mr. Michaan most certainly was defrauded by Henry Platt and those who worked with him in any fraud. Absent relief available against the Estate, he would be without both the paintings and the purchase money, making him the undeserving victim for buying paintings in good faith. The ultimate source of Mr. Michaan’s recompense if he has to surrender the paintings would depend on the assets of the Estate identified by an Administrator currently in the hands of third parties, including heirs, distributees and transferees that will be identified by the Surrogate’s Court. THE REQUESTED STAY We respectfully submit that the Surrogate’s Court will resolve many key issues, such that the matter will either be resolved or positioned to go forward with the properly identified parties before this Court. The first step in that process is the appointment of an Administrator to represent the Estate. Accordingly, we submit that a stay is appropriate pending that appointment – and perhaps longer depending upon the proceedings in Surrogate’s Court – to allow the Surrogate’s Court to resolve fundamental issues that must be decided before the case before Your Honor can proceed. Before filing this letter request, we advised the Trustees that Mr. Michaan had filed a petition in Surrogate’s Court and asked for the Trust’s position on this request for a stay (at our request, Mr. Charles Platt, the Trust’s former counsel of record – himself a nephew of Henry Platt and beneficiary of the Trust – participated in that call). The Trustees have advised us that they oppose this request for a stay. As noted above, we also have advised the Trust that it cannot continue to appear until it designates proper counsel of record. For that reason, we request that this action, including consideration of the issues raised herein, be stayed in its entirety until such time as counsel appears on behalf of the trust and the Surrogate’s Court appoints an Administrator. Respectfully submitted,

/s/ Jeffrey I D. Lewis . Jeffrey I. D. Lewis cc: Timo Platt (by email) Gordon Platt (by email) Charles Schmerler (by email) Attachment Exhibit A Surrogates Court Petition i: New York State Surrogate’s Court Form A-1 New York State Bar Association Official OCA Forms Petition for Letters of Administration Filing Fee Paid $ 1,250.00 SURROGATE’S COURT OF THE STATE OF NEW YORK 5 Certificates Paid $ 30.00 COUNTY OF NEW YORK Trustee Certs. Paid $ Prelim. Certs. Paid$ $ Bond, Fee: $ ADMINISTRATION PROCEEDING, ESTATE OF Receipt No... Nw HENRY B. PLATT PETITION FOR LETTERS OF: a/k/a L_] Administration Limited Administration HENRY PLATT A/K/A HARRY PLATT [-] Administration with Limitations L_] Temporary Administration Deceased. File No. TO THE SURROGATE’S COURT, COUNTY OF NEW YORK It is respectfully alleged: 1. The name, domicile and interest in this proceeding of the petitioner, who is of full age, is as follows: Petitioner Information: Name itizenship Allen Michaan United States Domicile Address: Street and Number 1691 Central Avenue Alameda California 94501 United States County Telephone Alameda (510) 227-2503 Mailing Address: Street and Number (if different from domicile) 2751 Todd Street Alameda California 94501 United States Interest: (Check O nteres ( eC. ne) [| Distributee Other real bes proper party" brought in which the decedent Is proposed Administrator an attorney? LJ] Yes No [If yes, submit statement pursuant to 22 NYCRR 207.16(e); see also 207.52 (Accounting of attorney-fiduciary).] The proposed Administrator [] is is not aconvicted felon nor is he/she otherwise ineligible, pursuant to SCPA 707 to receive letters. If the proposed Administrator is a convicted felon, submit a copy of the Certificate of Relief from Civil Disabilities.

NYSBA's Surrogate's Court Forms A-1 (3/2018) -1- © 2021 Matthew Bender & GCompanv. Inc.. a member of LexisNexis.

NDaemceedentInformation: Citizenship Henry B. Platt, a/k/a Henry Platt a/k/a Harry Platt United States DomicileAddress:StreetandNumber 825 Fifth Avenue, Apt. 10E City,VillageorTown State/Province ZIPCode Country New York New York 10065 United States County DateofDeath PlaceofDeath New York July 22, 2015 Palm Beach County, FL The Death Certificate must be filed with this proceeding. If the decedent’s domicile is different from thatshownonthedeathcertificate,checkbox X andattachanaffidavitexplainingthereasonforthis inconsistency. 3.Theestimatedgrossvalueof: [Donotincludeanyassetsthatarejointlyheldintrustforanother,or haveanamedbeneficiary.] (a)Thedecedent’spersonalpropertypassing byintestacyislessthan $ 5,000,000.00 (b)Thedecedent’srealproperty,inthisstate,whichis Improved,passing byintestacy, islessthan $ 0.00 Descriptionof eachparcel: Unimproved, passing byintestacy, islessthan $ 0.00 Descriptionof eachparcel:

$ 0.00 Total $ 5,000,000.00 (c)Theestimatedgrossrentforaperiodof eighteen(18)monthsisthesumof $ 0.00 breycsopveecreiadlpthreorveisinio:n[Borfielaflwy,satantdeitthiseicmapursaectoicfaalcttoiognivaendatbhoenpdesrusfofinciaegnatitnosctowvheormtheitepxroisbtas,bilnecalumdoinugntntaombeesand carrier.] None See attachment.

(e)Ifdecedentissurvivedbyaspouseandaparent,orparentsbutnoissue,andthereisaclaimfor wrongfuldeath,check here andfurnishname(s) andaddress(es)of parent(s)inParagraph7. [SeeEPTL 5-4.4.] 4.Adiligentsearchandinquiry,includingasearchofanysafedepositbox,hasbeenmadeforawillof thedecedentandnonehasbeenfound.Petitioner(s)has/havebeenunabletoobtainanyinformation concerninganywillofthedecedentandthereforeallege(s),uponinformationandbelief,thatthedecedentdied withoutleavinganylastwill. 5.Asearchof therecordsof thisCourtshowsthatnoapplicationhaseverbeenmadeforlettersof administrationupontheestateofthedecedentorfortheprobateofawillofthedecedent,andyourpetitioneris informedandverilybelievesthatnosuchapplicationeverhasbeenmadetotheSurrogate’s Courtofanyother countyofthisstate. 6.Thedecedentleftsurvivingthefollowingwhowouldinherithis/herestatepursuanttoEPTL4-1.1and 4-1.2:[Informationisrequiredonlyastothoseclassesofsurvivingrelativeswhowouldtakethepropertyof decedent pursuant toEPTL 4-1.1. State“number”of survivors ineach class. Insert “No”inall prior classes. Insert “X”inall subsequent classes.] a. NO Spouse(husband/wife). b. NO Childor childrenor descendantsof predeceasedchildorchildren. [Mustincludemarital, nonmarital,andadopted.] c. NO Anyissueof thedecedentadoptedbypersonsrelatedtothedecedent(DRLSection117). d. NO Mother/Father. e. 2 Sistersor brothers,eitherof wholeorhalf blood,andissueof predeceasedsistersor brothers. f. X Grandmother/Grandfather. g. X Auntsor uncles, andchildrenof predeceasedauntsor uncles(first cousins). h. X First cousins once removed (children of first cousins). panedrsroenlaistiorenlsahteipdotfothdeecaendceenstt.oIrftroeltahteiondsehceipdiesntth.rSoeueghUannifoarnmceRsutolersw2h0o7i.s16d(ebc)e.aIfspeedr,sgoivneisnaamnoen,mdaatreitaolfdeath person,ordescendedfromanonmaritalperson,attachacopyoftheorderoffiliationorScheduleA.Ifperson wasadoptedbyanypersonsrelatedbybloodormarriagetodecedent ordescendedfromsuchpersons,attach ScheduleB.] 7.(a)Thefollowingareoffullageandundernodisability: ScheduleA—NonmaritalPersons(PersonsBornOut of Wedlock)isAttached ScheduleB—IssueoftheDecedentWhoWeretheSubjectofanAdoptionisAttached Name Citizenship Thomas Collier Platt, Jr. United States DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country United States MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Surviving brother of the decedent who subsequently died on 03/04/2017 Name Citizenship Thomas C. Platt III United States DomicileAddress:StreetandNumber 520 State Highway 150 City,VillageorTown State ZIPCode Country Arroyo Seco New Mexico 87514 United States MailingAddress:StreetandNumber PO Box 196 City,VillageorTown State ZIPCode Country Arroyo Seco New Mexico 87514 United States Relationship Executor of the Estate of Thomas Collier Platt, Jr. Name Citizenship Graham Lusk Platt United States DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country United States MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Surviving brother of the decedent who subsequently died on 01/25/2016 Name Citizenship Christina May Nelson United States DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country United States MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Executor of the estate of Graham Lusk Platt ScheduleA—NonmaritalPersons(PersonsBornOut of Wedlock)isAttached ScheduleB—IssueoftheDecedentWhoWeretheSubjectofanAdoptionisAttached ScheduleC—InfantsisAttached ScheduleD—PersonsUnderDisabilityOtherthanInfantsisAttached Name Citizenship DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Name Citizenship DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Name Citizenship DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship Name Citizenship DomicileAddress:StreetandNumber City,VillageorTown State ZIPCode Country MailingAddress:StreetandNumber City,VillageorTown State ZIPCode Country Relationship 8. There are no outstanding debts or funeral expenses, except: |_| None The Peittioner is unable to confirm whether there are any outstanding debts of the decedent. 9. There are no other persons interested in this proceeding other than those hereinbefore mentioned. WHEREFORE, your petitioner respectfully prays that: X]a. Process issue to all necessary parties to show cause why letters should not be issued as requested; [_]b. An order be granted dispensing with service of process upon those persons named in Paragraph (7) who have a right to letters prior or equal to that of the person nominated, and who are nondomiciliaries or whose names or whereabouts are unknown and cannot be ascertained; A decree award Letters of: L_] Administration to Limited Administration to Allen Michaan [-] Administration with Limitation to |_] Temporary Administration to or other such person or persons having prior right as may be entitled thereto, and; [_]d. That the authority of the representative under the foregoing Letters be limited with respect to the prosecution or enforcement of a cause of action on behalf of the estate, as follows: the administrator(s) may not enforce a judgment or receive any funds without further order of the Surrogate. e. That the authority of the representative under the foregoing Letters be limited as follows: The representative shall be authorized to join the Decedent’s estate in the action captioned Timo Platt and Gordon Platt, co-trustees of the Platt Family Artwork Trust v. Allen Michaan, No. 19- CV-4234 (S.D.N.Y.) and to raise all necessary and proper defenses and counterclaims in that action that are reserved to the Decedent’s estate. L]f. Further relief sought (if any):

Dated:

Signature of Petitioner Signature of Petitioner Allen Michaan Print Name Print Name

Name of Corporate Petitioner Signature of Petitioner By Signature Print Name Print Name Signature of Petitioner Title Print Name NYSBA's Surrogate's Court Forms A-1 (3/2018) -6- © 2021 Matthew Bender & GCompanv. Inc.. a member of LexisNexis.

COMBINED VERIFICATION, OATH AND DESIGNATION For use when petitioner is to be appointed administrator STATE OF ______ CALIFORNIA COUNTY OF SS.:

|, the undersigned, the petitioner named in the foregoing petition, being duly sworn, say: 1. VERIFICATION: | have read the foregoing petition subscribed by me and know the contents thereof, and the same is true of my own knowledge, except as to the matters therein stated to be alleged upon information and belief, and as to those matters | believe it to be true. 2. OATH OF ADMINISTRATOR as indicated above: | am over eighteen (18) years of age and a citizen of the United States ; and | will well, faithfully and honestly discharge the duties of Administrator of the goods, chattels and credits of said decedent according to law. | am not ineligible, pursuant to SCPA 707, to receive letters and will duly account for all moneys and other property that will come into my hands. 3. DESIGNATION OF CLERK FOR SERVICE OF PROCESS: | do hereby designate the Clerk of the Surrogate’s Court of New York County, and his/her successor in office, as a person on whom service of any process, issuing from such Surrogate’s Court may be made in like manner and with like effect as if it were served personally upon me, whenever | cannot be found and served within the State of New York after due diligence used. My domicile is: 1691 Central Avenue, Alameda, California94501

Signature of Petitioner Allen Michaan Print Name Onthe___ dayof__————CSCS the yearr______— before me, the undersigned, personally appeared, Allen Michaan personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument. Sworn to before me this day of

Notary Public Commission Expires: (Affix Notary Stamp or Seal) Stephanie E. Heilborn Signature of Attorney Print Name of Attorney Proskauer Rose LLP (212) 969-3679 Firm Name Telephone 11 Times Square, New York, New York 10036-8299 sheilborn @proskauer.com Address Email (optional) NYSBA's Surrogate's Court Forms A-1 (3/2018) © 2021 Matthew Bender & GCompanv. Inc.. a member of LexisNexis.