Scher v. Stendhal Gallery, Inc.

117 A.D.3d 146, 983 N.Y.S.2d 219
Appellate Division of the Supreme Court of the State of New York·Decided March 27, 2014·Published·Cited by 3 cases

Opinion

OPINION OF THE COURT

Friedman, J.

The primary issue on this appeal is whether plaintiff Paula Scher, an artist, or defendant Stendhal Gallery, Inc. (the Gallery), Scher’s former exclusive agent, owns 320 fine-art silkscreen prints made from Scher’s paintings that remained unsold upon the termination of the parties’ relationship.1 Pursuant to an oral agreement between the parties, the prints had been fabricated, with Scher’s close collaboration, by a printer hired and paid by the Gallery. Although the motion court adopted Scher’s contention that the question of the ownership of the prints is resolved in her favor by Arts and Cultural Affairs Law § 12.01, as construed in Wesselmann v International Images (172 Misc 2d 247 [1996], affd 259 AD2d 448 [1st Dept 1999], lv dismissed 94 NY2d 796 [1999]), we affirm the declaration that Scher owns the prints on a different ground. Specifically, the parties’ initial written agreement provided that the Gallery would act as Scher’s “exclusive agent” in matters relating to, inter alia, any future deal “for the exhibition and sales of. . . limited edition prints published exclusively by [the] [G]allery” during the term of the agreement. Thus, when the Gallery purchased the finished prints from the printer, it did so as Scher’s agent. Accordingly, the parties’ written agreement establishes as a matter of law that the prints are to be treated as Scher’s property.

[149] In the 1990s, Scher, a nationally known graphic designer, began to create fine-art paintings. Between 1998 and 2005, she produced a series of 12 map-based acrylic-on-canvas paintings known as the Map I paintings. Scher and the Gallery entered into a written agreement, dated October 18, 2005 (the 2005 agreement), that provided for the consignment and sale of the Map I paintings and any future works Scher might create during its term, as well as a broader “exclusive agen[cy]” relationship between the parties encompassing, inter alia, any publication of limited-edition prints of Scher’s paintings during the agreement’s term. In 2006 and 2007, while the 2005 agreement was in effect, Scher produced seven additional map-based paintings (the Map II paintings), which were consigned to the Gallery pursuant to the 2005 agreement.

Section 1 of the 2005 agreement provides in pertinent part:

“1. Scope of Agency. The Artist [Scher] appoints the Gallery to act as Artist’s [X] exclusive agent in the following geographic area: Exclusive worldwide for the exhibition and sales of artworks in the following media: original paintings/ Works on Paper /limited edition prints published exclusively by [GJallery and Digital / electronic art for computers.
“Publishing. The [G]allery will publish a full color catalogue to accompany the exhibit and will act as the artist’s agent to put forth a book deal based on ‘The Maps.’ In the event of a publishing deal, a separate agreement will be furnished to the artist.” (Emphases added.)

Pursuant to section 2 of the 2005 agreement, the agreement was to have a term of three years from its date, although it is undisputed that the parties continued to operate under it for about 4V2 years, until May 11, 2010, when Scher’s counsel sent the Gallery a letter terminating the relationship. Section 2 of the 2005 agreement also provides that, upon termination or expiration of the agreement, “all works consigned hereunder” are to be returned to Scher. Section 4 provides that the Gallery “shall receive a commission of 50% percent [sic] of the retail price of each work sold,” a rate that, it is undisputed, applied to paintings but not to prints. Finally, section 11 provides: “All modifications of this Agreement must be in writing and signed by both parties. This Agreement constitutes the entire understanding between the parties hereto.”

As noted, the 2005 agreement contemplated that, during its term, the scope of the Gallery’s agency for Scher would extend [150] to the production and sale of any “limited edition prints” based on Scher’s works. It is undisputed that, while the 2005 agreement was in effect, Scher reached an oral agreement with nonparty Maya Stendhal, then one of the Gallery’s principals, concerning prints of Scher’s paintings. Scher granted the Gallery an oral license to produce ink-on-paper silk-screen prints based on the Map I and Map II paintings, at the Gallery’s expense, and to sell the prints, with the proceeds to be split 90% to the Gallery, 10% to Scher.2

The Gallery engaged a printing company headed by Alexander Heinrici, a prominent fine-art printer, to make the prints. Scher worked closely with the printer in the production of the prints, a process that the parties agree was not one of simple reproduction. The prints, which were much smaller in size than the original paintings, were the result of what Scher described at her deposition as “a back and forth collaborative process” between herself and the printer, involving the fabrication of printing plates based on the original paintings and the choice of ink colors to approximate the paint colors of the original works. Ultimately, Scher approved and signed each numbered individual print to be sold.3 Scher, however, admittedly had no contractual relationship with the printer; the Gallery hired and paid the printer and took delivery of the finished prints from the printer. In January 2012, the Gallery claimed that it had incurred costs of $299,163 in producing and selling the prints, which by that time had generated sales of $1,388,680.4 Nonetheless, as of the time this action was commenced, the Gallery had paid Scher only $15,000 on account of print sales.5

[151] By letter dated May 11, 2010, Scher’s counsel notified the Gallery that both the 2005 agreement and the oral license to create and sell prints of the Map I and Map II paintings were terminated, and demanded, among other things, that the Gallery return to Scher all of her unsold paintings and prints. The following month, Scher commenced this action against the Gallery and its principal, Harry Stendhal, in Supreme Court, New York County. Scher’s complaint asserts numerous causes of action, seeking, among other relief, recovery of Scher’s unpaid share of the sales of her paintings and prints, replevin of the unsold prints, and an accounting. In January 2011, Supreme Court ordered that the unsold prints be placed in the possession of an independent escrow agent pending determination of which party owns them.

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Scher v. Stendhal Gallery, Inc., 117 A.D.3d 146, 983 N.Y.S.2d 219 (N.Y. Ct. App. 2014).

117 A.D.3d 146 (Scher v. Stendhal Gallery, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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