Grossman LLP | <strong >New Lawsuit Highlights Importance of Clear Documentation When Loaning Artworks – Even To Family</strong >
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  • New Lawsuit Highlights Importance of Clear Documentation When Loaning Artworks – Even To Family
    10/26/2018
    This week, a family dispute over a Max Ferguson painting ripened into litigation, providing a cautionary tale for art collectors who loan their works to institutions and family members.

    The plaintiff in the lawsuit, filed Monday in New York state court, is the Estate of Michael Dinkes (the “Estate”), an art collector who died in 2016.  The Estate is represented by its administrator: Mary Geary, Michael Dinkes’s widow.  The defendant is Michael Dinkes’s own son (and Geary’s stepson), Adam Dinkes, who is currently CEO of undergarment retailer Tani USA.  (See Docket No. 521182/2018, Kings Co.) 

    The Estate’s Complaint alleges that, during his life, Michael Dinkes frequently loaned pieces from his art collection to his children and to museums.  In 2012, he loaned a Max Ferguson painting, titled My Father in the Subway, I (“the Painting”) to the Hebrew Union College Museum for an exhibition.  The Estate further claims that Michael Dinkes opted to loan the Painting “through his son” Adam, “so as to enable Adam Dinkes to receive co-credit” for the loan.  When Michael Dinkes died in 2016, his will left the Painting to Geary, who contacted the Museum to find out where the Painting was; the Museum told her that, at the close of the exhibition in 2012, the Painting had been returned to Adam, who has apparently had it ever since.  Adam has allegedly refused to return the Painting, prompting the Estate to sue.  The Complaint puts forth claims for replevin and conversion, and seeks return of the Painting itself as well as damages, including punitive damages, plus attorneys’ fees. 

    The Defendant has not yet responded to the Complaint, so we don’t know what potential defenses may be at issue.  But the parties may dispute what Michael Dinkes intended when he loaned the Painting to his museum in a manner that enabled Adam “to receive co-credit” for the loan; did that simply mean that he wished for Adam to receive public credit, or did it indicate some intent to give or bequeath the Painting to Adam?  What did the loan paperwork for the Museum say about Adam’s interest in the painting and his right to take delivery of it after the exhibition ended?  The litigation may also raise questions about what Michael Dinkes’s usual practices were regarding loans (or any gifts) of artworks to family members.  The case will also likely explore New York case law regarding “bailment,” which is the formal legal term for an arrangement whereby someone holds another person’s personal property for some particular purpose, after which it is expected to be returned to the bailor.  It’s also worth noting that, although Adam Dinkes has apparently had the Painting since 2012, and New York’s statute of limitations for conversion and replevin claims is only three years, he might face an uphill battle in trying to advance a defense on the basis of the statute of limitations or laches (a related doctrine involving delay by a plaintiff in making a claim).  That’s because under New York law, when it comes to a conversion or replevin claim against someone who is rightfully in possession of the property (for example, a bailee), the statute-of-limitations clock generally doesn’t start ticking until the owner has demanded the property be returned, and the possessor has refused.  (Adam Dinkes probably had a right to be in possession of the Painting until the Estate demanded it back in 2018.)  Finally, it’s possible that the case might ultimately implicate New York’s so-called “Dead Man’s Statute” (CPLR § 4519), which bars the testimony of an interested witness concerning a personal transaction between the witness and someone who is deceased.   

    We’ll continue to monitor the case, but we close with our oft-repeated observation that disputes like this can sometimes be avoided by clear documentation.  For example, regardless of how an artwork is to be exhibited or presented publicly—as here, where the Museum exhibition apparently gave both Michael and Adam credit as the lenders of the Work, which might suggest to a casual observer that they both had some sort of interest in it—documentation should be clear among the interested parties as to who is truly the owner, and the exhibiting institution needs clear instructions regarding where the work should be returned after the exhibition is over.  Likewise, if a valuable artwork is to physically move between family members—for example, if property is to be “borrowed,” stored, or displayed in the home of someone other than the owner—it’s worth memorializing that arrangement in writing.  (Such documentation can address not only basic questions like title and how long the loan is to last, but also pragmatic considerations such as who will be responsible for insuring the property.)  While it might seem unnecessary to “paper” such seemingly-informal arrangements, especially among family, even basic efforts can go a long way toward preventing misunderstandings or even disputes down the road.