FRIEDMAN, J.
The primary issue on this appeal is whether plaintiff Paula Scher, an artist, or defendant Stendhal Gallery, Inc. (the Gallery), Scher's former exclusive agent, owns 320 fine-art silk-screen prints made from Scher's paintings that remained unsold upon the termination of the parties' relationship.
Section 1 of the 2005 agreement provides in pertinent part:
Pursuant to section 2 of the 2005 agreement, the agreement was to have a term of three years from its date, although it is undisputed that the parties continued to operate under it for about 4½ years, until May 11, 2010, when Scher's counsel sent the Gallery a letter terminating the relationship. Section 2 of the 2005 agreement also provides that, upon termination or expiration of the agreement, "all works consigned hereunder" are to be returned to Scher. Section 4 provides that the Gallery "shall receive a commission of 50% percent [sic] of the retail price of each work sold," a rate that, it is undisputed, applied to paintings but not to prints. Finally, section 11 provides: "All modifications of this Agreement must be in writing and signed by both parties. This Agreement constitutes the entire understanding between the parties hereto."
As noted, the 2005 agreement contemplated that, during its term, the scope of the Gallery's agency for Scher would extend
The Gallery engaged a printing company headed by Alexander Heinrici, a prominent fine-art printer, to make the prints. Scher worked closely with the printer in the production of the prints, a process that the parties agree was not one of simple reproduction. The prints, which were much smaller in size than the original paintings, were the result of what Scher described at her deposition as "a back and forth collaborative process" between herself and the printer, involving the fabrication of printing plates based on the original paintings and the choice of ink colors to approximate the paint colors of the original works. Ultimately, Scher approved and signed each numbered individual print to be sold.
In April 2011, after the parties had conducted discovery, Scher moved for partial summary judgment declaring, inter alia, that she is the owner of the unsold prints and that she is entitled to recover "the full list price for all Scher Prints sold by the Gallery after May 11, 2010 [the date Scher terminated her agreements with the Gallery] and for all undocumented transfers and missing prints." Scher's motion also sought a ruling on a claim (not pleaded in the complaint) concerning one of the Map I paintings (Long Island), and a declaration that she was entitled to an accounting.
By order and interlocutory judgment entered October 19, 2011 (the initial judgment), the motion court granted in part and denied in part both Scher's motion and the Gallery's cross motion (see 2011 NY Slip Op 34078[U] [2011]). Regarding the ownership of the unsold prints, the court granted Scher's motion
In determining that Scher owns the prints, the motion court adopted Scher's argument that this result is compelled by Arts and Cultural Affairs Law § 12.01 ("Artist-art merchant relationships") as construed by this Court and Supreme Court in Wesselmann v International Images (172 Misc.2d 247 [1996], affd 259 A.D.2d 448 [1st Dept 1999]), an earlier case concerning ownership of unsold prints from an artist's paintings that were commissioned and paid for by an art dealer. As in effect at all relevant times (which were before the effective date of a 2012 amendment),
The motion court read Wesselmann and a number of nisi prius decisions construing section 12.01 to establish that Scher was the owner of the prints because they were works "of h[er] own creation" (§ 12.01 [1] [a]) that, by signing them as the Wesselmann artist had signed the prints in that case (see 172 Misc 2d at 251), she "deliver[ed] or cause[d] to be delivered" (§ 12.01 [1] [a]) to the Gallery (an art merchant within the meaning of the statute [see Arts and Cultural Affairs Law § 11.01 (2)]) "for the purpose of exhibition and/or sale" (§ 12.01 [1] [a]). The Gallery contended that the statute applies only when the artist owns the work as a physical object in the first place and, therefore, did not apply to prints that were physically produced and delivered to the dealer by a third-party contractor that the dealer had commissioned and paid to produce them.
The Gallery sought to distinguish Wesselmann on the ground that the relationship between the artist and the dealer in that case was described by this Court, in the decision affirming Supreme Court's determination that the artist owned the prints, as "most closely approximat[ing] a joint venture" (259 AD2d at 449-450). The Gallery contended that the finding in Wesselmann that the parties' relationship resembled a joint venture was the basis for the determination that the artist owned the prints (see Matter of Steinbeck v Gerosa, 4 N.Y.2d 302, 318 [1958], appeal dismissed 358 U.S. 39 [1958] [property contributed to a joint venture is deemed to be held "jointly" by the venturers]), thereby rendering the case distinguishable from this one, in which both Scher and the Gallery strongly deny that their relationship could be characterized as a joint venture. The motion court rejected this argument, pointing out that neither the Appellate Division nor the Supreme Court in Wesselmann expressly connected the finding that the artist owned the prints to the finding that the parties' relationship was akin to a joint venture. The motion court further opined that "the particular terms of the parties' agreement is irrelevant" to its determination of the ownership issue because section 12.01 (1) provides that it applies in pertinent part "[n]otwithstanding ... any agreement, note, memorandum or writing to the contrary." (2011 NY Slip Op 34078[U], *10.)
Although it found that Scher owned the prints, the motion court further held in the initial judgment that Scher's ownership "does not defeat the Gallery's contract right to 90% of their re-sale value." (Id. at *14.) In support, the motion court relied on Wesselmann, which held that, notwithstanding the determination that the artist owned the prints, the dealer's "claim for its share of the profits upon the sale of the prints still remains to be determined" (172 Misc 2d at 252). In so holding, the motion court rejected Scher's argument that Arts and Cultural Affairs Law § 12.01 barred enforcement of any contractual right that the Gallery might otherwise have to recover any portion of the value of the prints that remained unsold when the parties' relationship terminated.
Scher moved for reargument and renewal of the initial judgment, seeking to have the judgment amended
The latter relief, for which renewal was sought, was rendered moot when the Gallery voluntarily paid its share of the escrow costs while the motion was pending.
The motion court granted Scher's motion for reargument and, upon reargument, directed that the initial judgment be amended to deny the Gallery's cross motion and to declare that the Gallery "is not entitled by contract or otherwise, to any portion of the value of the 320 unsold prints except for the Gallery's printing costs." The initial judgment was amended accordingly on or about May 9, 2012 (the amended judgment). In its decision granting reargument, the motion court, while it continued to reject Scher's argument that Arts and Cultural Affairs Law § 12.01 bars recognizing any right of the Gallery to a portion of the value of unsold prints, found that the parties' oral agreement concerning the prints "established nothing more than a split of sales proceeds at such time as prints were sold pursuant to the [2005 agreement]." Because it was undisputed that both the 2005 agreement and the oral agreement concerning the prints were terminated on May 11, 2010, the court found that Scher was "entitled to the full list price for all prints sold after May 11, 2010," and that the Gallery was not entitled to any share of the value of the prints that remained unsold at the termination of the relationship. Without explanation, however, the court directed that the amended judgment permit the Gallery
The Gallery appeals from the amended judgment, arguing, with respect to the unsold prints, that: (1) the Gallery owns the unsold prints by normal operation of commercial law, and nothing in Arts and Cultural Affairs Law § 12.01 is to the contrary; and (2) in the alternative, the Gallery is entitled, by virtue of the oral agreement concerning the prints, to recover from Scher 90% of the resale value of the unsold prints. Scher has also appealed from the amended judgment to the extent (as stated in her notice of appeal) that it "den[ies] Plaintiff's Motion for Partial Summary Judgment, misconstrue[s] New York Arts and Cultural Affairs Law § 12.01 and binding precedent of the Appellate Division, First Department, and fail[s] to grant Plaintiff's Motion to Renew." Upon review of Scher's appellate briefs, it appears that her chief complaint is not about the particular results the motion court reached but about some of the reasoning it employed, which is not a proper basis for an appeal. However, Scher identifies one aspect of the amended judgment by which she arguably is aggrieved, namely, the failure of the amended judgment, apparently inadvertent on the part of the motion court, to specify that Scher is entitled to recover the full list price of prints that the Gallery sold after May 11, 2010, and of prints that are missing or were disposed of by undocumented sales.
We turn first to the Gallery's argument that it owns the 320 unsold prints. The Gallery, relying on Uniform Commercial Code § 2-401 (2), contends that it owns the prints by normal operation of law. The Gallery points out that it engaged the printer, paid the printer, and took delivery of the prints from the printer, while Scher had no contractual relationship with the printer, never made any payment to the printer, and never had possession or control of the prints as physical objects. The Gallery further argues that nothing in Arts and Cultural Affairs Law § 12.01 compels a different result, since that statute says nothing about when an artist owns an artwork, as a physical
The foregoing argument seemingly has some cogency, as it would appear anomalous for the law to designate property that did not belong to the artist in the first place as "trust property" for the artist's benefit. The Gallery offers hypothetical examples in which an artist delivers artwork that she created, but clearly did not own, to an art merchant, arguing that to construe the mere act of delivery to trigger section 12.01's application in these situations would lead to absurd results.
We need not determine whether the Gallery's interpretation of the statute is correct because we find that the written 2005 agreement between Scher and the Gallery specifies that the Gallery was acting with regard to the prints as Scher's "exclusive agent." While the parties agree that the 2005 agreement does not set forth all of the terms of the print deal (in particular, the 90/10 split of the print sales was orally agreed upon at a later time), section 1 of the 2005 agreement ("Scope of Agency") expressly provides that Scher was appointing the Gallery "to act as [her] exclusive agent ... for the exhibition and sales of ... limited edition prints published exclusively by [the] [G]allery," among other kinds of artwork, for the duration of the agreement. Thus, when the Gallery commissioned the printer to produce the prints, paid the printer for the prints, and took delivery of the prints, it did so as Scher's agent and, hence, fiduciary (see Sokoloff v Harriman Estates Dev. Corp., 96 N.Y.2d 409, 416 [2001]).
As Scher's fiduciary, the Gallery was obligated to disclose to her in plain terms all material facts within the scope of the agency, obviously including any understanding the Gallery had, upon entering with Scher into the oral print deal, that it would own the prints and any intention it entertained to treat the prints as its own property (see Greenberg, Trager & Herbst, LLP v HSBC Bank USA, 17 N.Y.3d 565, 579 [2011]; Rivkin v Century 21 Teran Realty LLC, 10 N.Y.3d 344, 355 [2008]; Dubbs v Stribling & Assoc., 96 N.Y.2d 337, 340 [2001]). If the Gallery did not wish to finance the production of prints that it would not own, it could have sought to reach an agreement with Scher specifying that prints made at the Gallery's expense would be the Gallery's property. Alternatively, if the Gallery merely wished to protect itself from being abruptly terminated as Scher's agent before it had a fair chance to sell the prints, it could have sought to reach an agreement with her on a minimum time period it would have to sell each batch of prints during which the agency could not be terminated without cause. Instead, the Gallery left itself exposed by going forward with the print deal based on only a vague, unwritten agreement that left nearly all of the terms up in the air except for the basic 90/10 split of sales revenue (and even as to that, there is a dispute as to whether Scher's cut is calculated based on gross or net sales). We see no reason to relieve a fiduciary, such as this professional art merchant, of the consequences of its own carelessness in dealing with its principal.
Although we find that the 2005 agreement's designation of the Gallery as Scher's "exclusive agent" as to the prints suffices to resolve the dispute over the ownership of the unsold prints, we observe that there is little in the record to cast additional light on the parties' specific intentions concerning ownership of the prints at the time of contracting. Scher testified at her deposition that she always believed that she owned the prints but
Given that the prints are Scher's property, we find no merit in the Gallery's argument that it is entitled to receive 90% of their resale value, however that value might be determined.
We have considered the Gallery's remaining arguments concerning ownership of the unsold prints and its alleged right to compensation for those prints and find them unavailing.
Given the determination that Scher owns the unsold prints and has no obligation to reimburse the Gallery for their value, it follows that she is entitled to recover from the Gallery the full list price of any prints that the Gallery sold without authorization after May 11, 2010, as well as the full list price of any prints that are missing or are believed to have been disposed of through undocumented transactions. On Scher's appeal, we modify the amended judgment to provide accordingly. The remaining issues Scher raises on her appeal are matters as to which she is not aggrieved, and therefore lacks standing to appeal, because they involve either (1) disagreements with the motion court's reasoning rather than its result or (2) the motion court's failure to make findings that Scher did not request in her notices of motion.
Finally, we turn to the dispute over the painting Long Island, which the 2005 agreement provides was to have been sold for $90,000. As previously noted, section 11 of the 2005 agreement requires all modifications of the agreement to be "in writing and signed by both parties." The complaint, while it asserts a general claim for breach of contract (the fifth cause of action), does not allege that the Gallery sold Long Island in breach of the 2005 agreement. When Scher moved for partial summary judgment, however, she represented that she had learned from the Gallery's document production that the Gallery had sold Long Island in October 2007 for $50,000, not the contractually specified $90,000.
The Gallery argues that Scher is not entitled to summary judgment on the Long Island issue because an issue of fact exists as to whether she orally "waived" her right to have the painting sold at the $90,000 price specified by the 2005 agreement. This argument is based entirely on the following three sentences in Harry Stendhal's affidavit opposing Scher's summary judgment motion:
As a matter of law, these allegations that Scher orally consented, after the fact, to the Gallery's sale of Long Island for $50,000, rather than for the contractually specified price of $90,000, cannot overcome the requirement of the parties' written agreement that "[a]ll modifications of this Agreement ... be in writing and signed by both parties."
General Obligations Law § 15-301 (1) provides that "[a] written agreement ... which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought ...." The Court of Appeals has explained that, under this statute, "if the only proof of an alleged agreement to deviate from a written contract is the oral exchanges between the parties, the writing controls" (Rose v Spa Realty Assoc., 42 N.Y.2d 338, 343 [1977]). While the Court of Appeals also noted in Rose that, because section 15-301 (1) "nullifies only `executory'
Accordingly, the amended interlocutory judgment of Supreme Court, New York County (Melvin L. Schweitzer, J.), entered May 9, 2012, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for partial summary judgment declaring her the owner of and entitled to immediate possession of approximately 320 unsold prints of her artwork being held in escrow and ruling that defendant gallery owes her a $45,000 commission on the sale of her painting Long Island, and denied defendants' cross motion for partial summary judgment on their claim to be the owners of the unsold prints or, in the alternative, entitled to 90% of the resale value of the prints, should be modified, on the law, to adjudge and declare that plaintiff is entitled to the full list price for all prints that the Gallery sold after May 11, 2010 and all prints that are missing or believed to have been disposed of through undocumented sales, and otherwise affirmed, with costs to plaintiff. To the extent an appeal is taken from so much of an order and interlocutory judgment, same court and Justice, entered October 19,
Amended interlocutory judgment, Supreme Court, New York County, entered May 9, 2012, modified, on the law, to adjudge and declare that plaintiff is entitled to full list price for all prints that the Gallery sold after May 11, 2010, and all prints that are missing or believed to have been disposed of through undocumented sales, and otherwise affirmed, with costs to plaintiff. Appeal from order and interlocutory judgment, same court, entered October 19, 2011, as amended by an order, same court, entered May 7, 2012, dismissed, without costs, as subsumed in the appeal from the amended judgment.