The Jenack auction house decision made its way into the New York Times this week. The story does a good job giving equal time to the competing interpretations of the decision (which is now on appeal to the Court of Appeals). On the one hand, "many art-law experts say the decision, if upheld, could significantly change the way the auction business is conducted in New York State"; one lawyer involved in the case is quoted as saying the ruling represented "a wholesale invitation to have people renege." On the other hand, Sotheby's Jonathan Olsoff gets a chance to make his case (also made here) that the decision was "narrow and technical" and that its impact was being greatly overstated. He says it "deals only with the evidence that is required if an auction purchaser defaults in paying and is sued by the auction house."
Here's the case for Olsoff's minimalist interpretation. The relevant statute (General Obligations Law § 5-701(a)(6)) says that if "the auctioneer at the time of the sale, enters in a sale book, a memorandum" specifying, among other things, the name of the buyer and the name of the seller, then the statute of frauds is satisfied and a binding contract is thereby created. In Jenack, the "sale book" indicated that the work at issue was "consigned by '#428' and purchased by bidder '#305'" -- in other words, neither party was identified by name. In the case of the buyer, the court looked to another document -- the buyer's "absentee bid form," which "contained both [his] name [and] his bidder number" -- and said that other document could be considered in conjunction with the sale book to satisfy the statute as to the buyer. So, by the same logic, all the auction house had to do to satisfy the statute as to the seller was produce a similar, "other" document identifying him by name. Somehow they failed to do that: "the record establishes that the plaintiff failed to produce any writing identifying [the seller] by name, either in response to the defendant's discovery demands or in opposition to the defendant's motion for summary judgment." They relied instead entirely on the argument that "the requirement of the statute that the memorandum contain 'the name of the person on whose account the sale was made' was satisfied solely by inclusion of the consignor's assigned number [in the sale book]." But again, the implication seems plainly to be that, if they had just produced, in the litigation (perhaps even confidentially), the same kind of external written evidence of the seller's name (and they must have some record of that somewhere) as they did for the buyer, then the case would have come out differently. On this view (which, as I've said before, I find convincing), the decision is, as Olsoff maintains, indeed much ado about nothing.
