Plaintiffs demand refunds for “fake” works as gallery dismisses “smear campaign”

Plaintiffs demand refunds for “fake” works as gallery dismisses “smear campaign”

By Martha Lufkin

MICHIGAN. Park West Gallery, which says it sells 300,000 works annually and earns more than $300m in annual art sales revenue, including through auctions on 85 cruise ships, has been sued by ten customers seeking refunds.

According to the complaint, filed in state court in Oakland County, Michigan, on 23 December, the gallery has refused to refund hundreds of thousands of dollars in purchase prices allegedly collectively paid by the plaintiffs for works by Dalí, Rembrandt and others. The art “was later found by experts to either be fake or have forged signatures, or to be heavily overpriced and misrepresented as bargains and investments”, the plaintiffs’ lawyers, Kaufman Payton & Chapa of Farmington Hills, Michigan, said in a statement on 8 January.

Park West, which is based in Southfield, Michigan, and is headed by Albert Scaglione, dismisses the allegations as false and malicious, and says that the suit is meritless.

“Over the past 40 years, Park West Gallery has served more than 1.2 million satisfied customers,” the gallery said in a statement on 9 January. “We stand behind the authenticity of everything we sell.” The gallery said the lawsuit was “organised to advance the business interests” of an organisation, Fine Art Registry, which Park West sued for defamation in Florida and Michigan in April 2008, citing material on the FAR website that is critical of the gallery. FAR’s assertions are “baseless,” says Rodger Young, the gallery’s lawyer in Southfield, Michigan.

In the defamation complaint, Park West says that FAR and its founder, Theresa Franks, have engaged in a “smear campaign” seeking to harm its business relationships with customers and its reputation. The gallery is seeking damages and an injunction against further defamatory statements.

FAR describes itself as offering “advocacy to victims of art fraud and abuse”, and offers members a system of tagging and registering art. Eight of the plaintiffs in the Michigan lawsuit are FAR members. Jonathan Schwartz, who represents the ten plaintiffs, and is also a lawyer for FAR and two individuals named in the defamation cases, told The Art Newspaper that the defamation suits were attempts by Park West to “prevent our clients from voicing legitimate criticism of Park West’s allegedly questionable business practices, and actions”. He said his clients “refuse to be bullied into submission by Park West”, and would show that “everything they may have written, or uttered has been the whole truth, and nothing but the truth”.

In June 2008, Park West was sued in a consumer class action suit in federal court in Florida by David Bouverat, who says he bought art from Park West on a cruise. Mr Bouverat, who alleges violation of Florida’s Deceptive and Unfair Trade Practices Act and other claims, says that appraisals that the gallery provided were based on Park West Gallery’s price for the art, not a replacement price “from some unknown reputable retail art gallery”. The case is continuing, according to Mr Bouverat’s lawyer, Shawn Khorrami of Los Angeles.

In the Michigan case, the ten plaintiffs allege that they paid amounts ranging from $7,000 to over $400,000 to Park West to buy one or more works represented to be by Goya, Marc Chagall, Dürer, Tomasz Rut and other artists, purportedly including etchings by Rembrandt and lithographs by Salvador Dalí. The transactions included purchases at cruise ship auctions and at Park West’s Michigan gallery, the allegations say. The plaintiffs say that they received certificates of authenticity and in a number of cases appraisals, and were also told in a number of cases that the art would go up in value over time. Instead, the complaint alleges, much of it is “worthless”, purportedly including in one case “images removed from an art magazine” and in other cases “digital prints which were nothing more than glorified posters”. The complaint alleges that the plaintiffs are not sophisticated art buyers, and relied on the representations the gallery made to them.

Among the plaintiffs, lawyers Sharon Day and Julian Howard of London say that they bought a set of Dalí’s “Divine Comedy” prints from Park West and paid $422,601.50 in March 2008 for the art, with Royal Caribbean Cruise line receiving a share of the money. They have also sued the cruise line. The plaintiffs allege that while Park West provided an appraisal of $510,000 for the art, experts allegedly determined in December that the series was worthless and that the signatures were faked.

The plaintiffs are also seeking an injunction preventing the gallery’s sale of “allegedly signed Salvador Dalí lithographs” and resales of the art, which they dispute. The complaint alleges violations of the Michigan Warranty in Fine Arts Statute and Consumer Protection Act, fraud and breach of contract.

Park West’s response in the case was to be filed by the end of January as we went to press.

In September 2008, the gallery announced an “enhanced” returns policy, offering price refunds within 40 days or merchandise exchanges within 40 months.

The Art Newspaper