Rogath v. Siebenmann

United States District Court for the Southern District of New York · Contracts

ContractsExpress warrantiesBreach of warrantyDamagesSummary judgmentexpress warrantybill of saleauthenticity

Facts

Defendant sold plaintiff a painting represented in a bill of sale as an authentic Francis Bacon, warranted that defendant was the sole and absolute owner, that he had acquired title as described in an attached provenance, and that he had no knowledge of any challenge to the painting's title or authenticity. Before the sale, defendant had been told of repeated concerns from Marlborough representatives, David Sylvester, Sotheby's, and others that cast doubt on the painting's authenticity, and attempted prior sales failed because of those concerns. Defendant had not paid value for the painting, described himself as acting as a nominee on behalf of others for a flat fee, and relied on a letter prepared by non-owners purporting to transfer ownership to him. After plaintiff later resold the painting to Acquavella for $950,000, Acquavella returned it when Marlborough called it an outright fake, and plaintiff refunded the purchase price.

Issue

Did defendant breach the express warranties in the bill of sale by falsely stating that he knew of no challenges to authenticity, that he was the sole and absolute owner, and that he had acquired title as described in the provenance? If so, was plaintiff entitled to summary judgment and damages measured by the lost resale price, and could the court compel a Rule 67 deposit?

Rule

An express warranty is an affirmation of fact, quality, or condition that induces the buyer to purchase and becomes part of the basis of the bargain. Where undisputed evidence shows the seller's warranted statements are false, summary judgment for breach of warranty is proper. Under New York law, breach of warranty damages are usually measured by the benefit-of-the-bargain rule, and consequential damages are recoverable for losses the seller had reason to know of at contracting and that could not reasonably be prevented by cover or otherwise. Rule 67 permits a voluntary deposit with the court and does not authorize the court to compel such a deposit.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Seattle, Lena Ortiz sold a bronze statue to Omar Reed under a signed bill of sale stating, "To induce Buyer to purchase, Seller warrants that the statue is the sole property of Seller, free of any ownership dispute, and cast in 1958 by Arturo Vela." Before signing, Lena told Omar she had not drafted the document and had not read it carefully.

If Omar later sues for breach of express warranty, what is the strongest argument that the statements in the bill of sale are enforceable warranties?

Explanation. An express warranty arises when the seller makes an affirmation of fact, quality, or condition relating to the goods that induces the buyer and becomes part of the basis of the bargain. The majority also rejected the seller's attempt to avoid liability by claiming he had not reviewed the document; a signer is bound by the contents of the signed bill of sale. Thus the factual statements in the instrument are enforceable warranties. (Derived from Rogath v. Siebenmann (n.d.).)