Saturday, November 07, 2009

"There is no logical connection between Sotheby's failure to disclose a security interest and any actual or potential injury to … Minor"

Though it comes in the fairly narrow context of a motion for leave to amend his counterclaims, there is some language in a recent decision in the lawsuit that would seem to be pretty devastating to Halsey Minor's overall case against Sotheby's. First, the court rejected the idea that the alleged non-disclosure could have injured Minor in any way:

"Minor does not allege that ... the paintings were auctioned at an inflated price because of the failure to disclose the security interest. To the contrary, because the paintings were sold [to him] at auction, Minor set the price for the paintings. . . . As explained above, the allegations in the proposed counterclaim do not support an inference of any connection between Sotheby's conduct and any actual or potential damage to … Minor… [B]ecause Minor pleads no facts to support an inference that Sotheby's security interest affected the value of the paintings, he fails to identify how Sotheby's failure to disclose this interest was material."

The court also rejected the notion that Sotheby's had fiduciary duties to Minor in connection with the sale:

"In arms length commercial transactions, 'no relation of confidence or trust sufficient to find the existence of a fiduciary relationship will arise absent extraordinary circumstances'" (quoting DeBlasion v. Merrill Lynch & Co., Inc., 2009 WL 2242605).

I believe Sotheby's own motion for summary judgment is still pending.

More Minor legal news here.