A San Francisco jury found that Christie’s owes Minor close to $8.5m for wrongly delaying the return of contemporary art consigned for sale at the height of the art boom.
Minor’s dispute with Christie’s arose when the auction house, concerned at the collector’s failure to pay his bill for other works purchased at auction, held on to seven works by Richard Prince consigned for sale at Christie’s-owned Haunch of Venison gallery in May 2008. They included a pulp-fiction Nurse series painting and perhaps Prince’s best-known work, the 1989 Untitled photograph of the Marlboro cowboy valued at the time at around $4m.
The seven works failed to sell but, despite Minor’s repeated requests for their return, Christie’s held on to the pictures, hoping to use them as leverage against the $12m that the collector owed for auction purchases.
The court found that the auction house had no right to do this, regardless of what they were owed for an unconnected transaction.
By mid-August, Minor had paid $5m toward his purchases but – while the auction house sent emails promising the Princes would be returned to him shortly – they had decided not to ship an estimated $25m cache of pictures until Minor paid his debts in full.
However, in the highly volatile contemporary art market, Christie’s retention of the Princes was to have significant financial implications: prices collapsed at the end of 2008 and when the works were sold in January 2009 the market was at a nadir. Christie’s had finally returned the works in November.
While the auction house would later launch legal action against Minor for breach of contract after he failed to pay for works, including A Rearing Horse by Van Dyck ‘sold’ for £2.7m at Christie’s in London in 2008, Minor sued, alleging Christie’s had prevented him from cashing in while he could.
In their lawsuit against the auction house for wrongfully retaining the works, Minor’s lawyers offered expert analysis to determine the drop in value experienced by the Prince artworks during their seven-month sojourn at Haunch of Venison. Untitled (Cowboy), for example, was thought to have been worth $4m at its peak (August 2008), but was sold five months later for just $1.5m.
In total, minus the notional transaction fees paid as a vendor, lawyers calculated that Minor’s total ‘hit’ across the four pictures was $8.6m. The jury in the two-week trial agreed with the arithmetic and have ordered Christie’s to pay damages.
It is understood that Christie’s, who claimed in court that Minor didn’t hold clear title to the artworks because they were pledged to secure a loan, may appeal the verdict.
In the counterclaim brought by Christie’s against Minor for non-payment of auction bills, the former co-founder of Cnet was ordered by the judge to pay Christie’s $1.4m. Having reneged on paying for the remaining $7m of his winning bids, this was the difference in the price he had bid at auction and the sum subsequently realised when the works were reoffered.
As previously reported, a Manhattan federal judge ruled on March 30 that the dotcom entrepreneur owed Sotheby’s $6.6m to pay for paintings that he won at auction and never paid for.
Across all three cases (works by Edward Hicks, Andy Warhol and Childe Hassam) this totalled $4.4m, with a further $2.25m added in “pre-judgment interest and late charges”. Mr Minor has declared his intentions to pay but remains on both houses’ “no-bid” list.