Safflane Holdings Ltd. et al v. Gagosian Gallery, Inc.

Filing 34

THIRD PARTY COMPLAINT against Charles Cowles.Document filed by Gagosian Gallery, Inc. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit)(mro)

\VITHERS BERGMAN LLP
Hollis Gonerka Bart (HB-8955)
Brian Dunefsky (BD-3554)
Dara G. Hammerman (DH-1591)
Azmina J asani (AJ -4161 )
430 Park Avenue, 10th Floor

New York, New York 10022
212.848.9800 (p)
212.848.9888 (f)

Attorneysfor delendant Gagosian Gallery, Inc.
UNITED SI'ATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

Case No.: 11 CIV 1679 (DLC)

- --- - ---- -- - ---- ---- - -- - ------ -- -- ---- - - -- -- -- -- - - - --- - )(

SAFFLANE HOLDINGS LTD., and
ROBERT WYLDE,
Plaintiffs,

THIRD-PARTY COMPLAINT

-against-

GAGOSIAN GALLERY, INC.,
Defendant.
---- - --- -- - - -- ------- --- --- - - - ---- --- - --- ---- -- -- -- --- -- )(

GAGOSIAN GALLERY, lNC.,
Third- Party Plaintiffs,

-against-

CHARLES COWLES,
Third-Party Defendant.
- --- ---- --- --- ---- --- ------- -- ------- - ----- - ---- --- ----- )(

Defendant/Third-Party Plaintiff Gagosian Gallery, Inc. ("Gagosian Gallery"), by its
attorneys, Withers Bergman, LLP, as and for their third-party complaint, alleges as follows:

THE PARTIES
1. Defendant/Third-Party Plaintiff Gagosian Gallery is a corporation organized

under the laws of

the State of

New York, and maintains its principal office and place of

at 980 Madison Avenue, New York, New York 10075.

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business

2. Third-Party Defendant Charles Cowles ("Cowles") is an individual residing at 84

Mercer Street, New York, NY 10012.

NATURE OF TllIS ACTION
3. This is a third-party action by Gagosian Gallery against Co\v!es for

indemnification and contribution arising out of claims Plaintiffs Saffane Holdings, Ltd. and
Robert Wylde have asserted in the underlying action against Gagosian Gallery for allegedly
fraudulent and negligent misrepresentations as to the title and ownership of a painting by ¡'v1ark

Tansey entitled, "The Innocent Eye Test" (the "Tansey Painting") that Cowles sold to plaintitls
through Gagosian Gallery.

JURISDICTION AND VENUE
4. This Court has supplemental over the subject matter of this Third-Party

Complaint pursuant to 28 U.S.c. § 1367(a). The claims in this Third-Party Complaint are so

related and intertwined with the claims at issue in the lawsuit commenced by Saffane Holdings,
Ltd. and Robert Wylde against Gagosian Gallery in the United States Court, Southern District of

New York, bearing Civil Action number 11 Civ 1679 (the "Saffane Action") and the lawsuit
commenced by The Metropolitan Museum of Art and .Ian Cowles against Saffane Holdings,
New York, bearing Civil

Ltd. and Robert Wylde, in the United States Court, Southern District of

the same case or controversy

Action number lI-cv-3I43 (the "Met Action"), they form part of

under Article II of

the United States Constitution.

5. Venue is proper in this District pursuant to U.S.c. § 1392 (a)(I) and (2) because
the Third-Party Defendant resides in this District and a substantial portion of

the events and

omissions giving rise to Defendant/Third- Paiiy Plaintiff's claims occurred in this District.

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PROCEDURAL HISTORY

6. On March 10, 2011, Gagosian Gallery was named as a Defendant in the Saffane
Action, which seeks to recover $6 million from Gagosian Gallery on claims relating to the

Tansey Painting. A copy of the Saff1ane Action is annexed hereto as Exhibit A.
7. On May 10,2011, the

Metropolitan Museum of Art (the "Met") and .Ian Cowles

filed a lawsuit against Plaintiffs in the Saffane Action for a declaratory judgment that the Met is
the sole and exclusive owner of the Tansey Painting and for its immediate return. A copy of the
Met Action is annexed hereto as Exhibit B.
8. On June 6, 2011, the parties in the Saffane Action and the Met Action entered

into a Coordination Stipulation consolidating discovery for the Saffane Action and Met Action

(the "Coordinated Actions.").

FACTUAL BACKGROUND
9. Cowles, a graduate of Stanford University, is a well-known New York City art

dealer and collector of contemporary art. In 1979, after four years as the curator of Fine Art at
the Seattle Art Museum, Cowles opened his own contemporary art gallery, The Charles Cowles

Gallery, in lower Manhattan at 420 West Broadway. The Charles Cowles Gallery was later re-

located to 537 West 24th Street, where it remained until its closing in June 2009. In addition,
from 1965 until the mid-I980s, Cowles published Ariforum magazine, one of the leading
contemporary art magazines in America,
10. During the years, Gagosian Gallery engaged in art transactions with Cowles

and/or the Charles Cowles Gallery without incident.
11. In or about late July 2009, Cowles contacted John Good ("Good"), a Gagosian

Gallery employee, and asked Good if Gagosian Gallery could help him find a buyer for the

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Tansey Painting. Attached hereto as Exhibit C are the relevant excerpts from the deposition of

Charles Cowles on July 13,2010 ("Cowles Tr.") at 189-190.
12. Because the Tansey Painting has attained an "iconic status" in the art world, and

had been on display at the Met, Good asked Cowles whether the Met had an interest in it.
was

Cowles replied that due to a "spat" Cowles had with the Met's director, the Tansey Painting

no longer being exhibited at the Met and, as such, the Tansey Painting had been properly
returned to Cowles by the Met, that Cowles was rightfully in possession of the Tansey Painting,
and it was now his to selL.

13. Cowles intended for Gagosian Gallery and Good to rely on these representations

in helping Cowles find a buyer for the Tansey Painting.

14. On the basis of the representations made by Cowles, Good agreed to assist
Cowles in finding a buyer for the Tansey Painting and Cowles consigned the Tansey Painting to
Gagosian Gallery for sale.
15. Knowing of

Robert Wylde's interest in, and knowledge ot: Tansey and his works,

Good thereafter contacted him to determine whether he might be interested in purchasing the
Tansey Painting from Cowles.
16. During their discussion of the Tansey Painting, Good conveyed to Wylde exactly

the

what Cowles, the seller, had told him - namely, that Cowles owned and was in possession of

the Tansey Painting, it had

Tansey Painting, that prior to Cowles having taken possession of

been located and exhibited at the Met, that due to a "spat" that Cowles had with the Met's
director, the Tansey Painting was no longer being exhibited at the Met, and that the Tansey
Painting was now owned by Cowles and could be sold to Saffane.

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l7. Before deciding to purchase the Tansey Painting from Cowles, Wylde told Good

he wanted to view it at Cowles' gallery. Thereafter, Good arranged for Wylde to view the
Tansey Painting at Cowles' gallery, which was located at the same premises as Cowles'
residence.
18. On or about July 27, 2009, Wylde, accompanied by Good, viewed the Tansey

Painting in the gallery space of

Cowles' residence, and confirmed that the Tansey Painting was

in Cowles' possession.
19. During the viewing at Cowles' gallery, Wylde directly questioned Cowles about

the Tansey Painting previously being in the possession of and on display at the Met. In response,
Cowles reassured and represented that the Tansey Painting was his (Cowles) to selL.

20. Wylde never asked Good if he had contacted the Met to determine whether it had
any ownership interest in the Tansey Painting, nor did Wylde request that Good do so. Instead,
Wylde appears to have conducted his own due diligence, which confirms that he was on inquiry
notice of

the Met's interest in the Tansey Painting before he decided to purchase it ÍÌom Cowles.
21. Specifically, the next day on July 28,2009, Wylde sent an email to Good with the

following subject line: "promised gift of charles cowles in honour of william s. lieberman."¡
Id.; see also Cpl. ~ 18. As the email contained a link to an apartment, but nothing that would

explain the subject line, Good responded: "Saw the listing for the loft but was there something

Willam S.

else about the promised gift?" Good Aft' Ex. A. Wylde replied: "in honour of

i As a quick Google search confirms, Wylde appears to have lifted the text from "Visions and

Revisions," the definitive art book on the works of Tansey. The text also appears in the subject
line from the webpage on the Met's website regarding the Cowles' promised gift of The Innocent
Eye Test. See The Met Works of Art, Modern Collection Database, Mark Tansey, Innocent Eye
Test, available at http://www.metmuseum.org/works_ oCart/collection_ßatabase/modern _art/
the_innocent_ eye_test_mark _tansey/objectview.aspx?collD=2I&OID=21 0005185; see also
Bart Aff. at Ex 13; Muller-Paisner v. TlAA, 289 Fed. Appx. 461, 466, 466 n.5 (2d Cir. 2008)
(taking judicial notice of "defendants' website for the facts of its publications.").
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Lieberman.... who was he?" Good answered, explaining, "Curator of 20th century art; now

retired and replaced by Gary Tinterow." lei
22. Nonetheless, satisfÌed by the representations made by Cowles during the viewing,

Wylde, shortly after the viewing, told Good to let Cowles know that he would purchase the

Tansey Painting for $2.5 million.
23. On or about August 5, 2009, Saf1ane paid the $2,500,000.00 in full for the

Tansey Painting, and Gagosian Gallery thereafter, paid Cowles $2,000,000 for the Tansey
Painting and arranged for its delivery from Cowles' home gallery to plaintiffs.

24. In or about December 2009, Gagosian Gallery learned for the fÌrst time that
Cowles did not have the authority to sell the Tansey Painting, as he had represented he did, and
that the Met, through gifts made by Cowles and his mother, held a 31 % undivided interest in it.

25. Cowles readily admitted in his deposition taken on July 13,2011 that the

following statements attributed to him in an article that was recently published in the Nelv York

Times discussing this lawsuit, are true and were made by him:

Mr. Cowles. . . said that he considered the whole dispute his mistake. He said
that after the museum returned the painting to him "I didn't even think about
whether the Met owned part of it or not." "And one day I saw it on the wall and
thought, 'Hey, I could use money' and so I decided to sell it," he added. "And
now it's a big mess."
Annexed hereto as Exhibit D is a copy of The New York Times article entitled, Collector Sues
Gagosian Galleryfòr Sellng Him a Painting Partially Owned By Met, dated March 11,2011.

See Cowles Tr. 191-193.

AS AND FOR A FIRST CAUSE OF ACTION
(Indemnifcation)
26. DefendantiThird-Paiiy Plaintiff Gagosian Gallery repeats and re-alleges each and

every of the foregoing allegations as if more fully set forth herein.

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27. If the Safflane Plaintifls sustained damages in the matters they alleged in the

t
l

underlying action, then Cowles' negligent misrepresentations or omissions were the sole
proximate cause of the damages thereof, and not any acts or omissions of Gagosian Gallery.
28. If the Saf1ane Plaintiffs should obtain a recovery against Gagosian Gallery in the

Saffane Action in the underlying action, then the facts and conditions resulting in such recovery
were brought about by the negligence, wrongful, or culpable conduct of Cowles.

29. By approaching and asking Gagosian Gallery to assist him in finding a buyer for
the Tansey Painting on his behalf, Cowles created an agency-principal relationship with
Gagosian Gallery that gives rise to an implied duty to indemnify Gagosian Gallery.
30. By reason of

the foregoing, in the event of any recovery, judgment or verdict

against Gagosian Gallery, then Gagosian Gallery is entitled to common law indemnifìcation

from Cowles, for the full amount of any such recovery, judgment, or verdict including costs and
disbursements, together with attorneys' fees and the expenses incuHed therein.

AS AND FOR A SECOND CAUSE OF ACTION
(Contribution)
31. Defendant/Third-Party Plaintiff Gagosian Gallery rcpeats and re-alleges each and

every ofthe foregoing allegations as if more fully set forth herein.
32. If the Saffane Plaintiffs sustained damages in the underlying action, then Cowles'

negligent misrepresentations or omissions were the sole proximate cause of the damages thereof,

and not any acts or omissions of Gagosian Gallery.
33. If the Saffane Plaintiffs should obtain a recovery against Gagosian Gallery in the

Saffane Action in the underlying action, then the facts and conditions resulting in such recovery
were brought about by the negligent, wrongful, or culpable conduct of Cowles.

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34. By reason of the foregoing, in the event of any rccovery, judgment or verdict

against Gagosian Gallery, Gagosian Gallery would be entitled to full contribution from Cowles,
based on his culpability, including costs, disbursements, and expenses as well as attorneys' fees.

WHEREFORE, Defendants/Third-Party Plaintiffs Gagosian Gallery demands judgment

against Third-Party Defendant Cowles for the amount of any recovery, judgment or verdict

which shall or may be recovered against Gagosian Gallery, and/or apportionment ofliability and
contribution for any rccovery Plaintiffs obtain against Gagosian Gallery, together with costs and

disbursements of this action including attorney's fees, and for other, further, and diffcrent relief
that this Court may deem just and proper.

Dated: New York, New York
July 15,2011

WITHERS BERGMAN LLP

it. ( ~

By: ~l Jj~L ( r
Hollis Gonerka Bart (HB-8955)
Brian Dunefsky (BD-3554)

Dara G. Hammerman (DH-I59I)
Azmina Jasani (AJ-4I61)
430 Park Avenue

New York, NY 10022
[phone]
Attorneysfor Defendant Gagosian Gallery, lnc.

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