A Michigan jury rules in favor of Fine Art Registry who claims cruise ship art auctioneers have been selling fraudulent works.
Last night a Michigan jury ruled unanimously in favor of Phoenix, AZ-based Fine Art Gallery in a lawsuit brought against them by Park West Galleries, the purveyors of art auctions onboard several cruise ships. Fine Art Gallery (FAR) had accused Park West of supplying the onboard art auctions with fake Salvador Dali prints that were essentially worthless, and said the Michigan art seller had bilked hundreds of cruisers out of millions of dollars in total by selling the fraudulent art pieces.
In the counterclaim brought by Fine Art Registry against Park West the judge did not award any damages, but he did order Park West to pay Fine Art Gallery $500,000 for trademark infringement saying Park West had illegally used FAR's trademark in sponsored links in search engines. Park West was apparently trying to steer searchers away from the negative reports about the Gallery on the FAR web sites, including a special site devoted solely to Park West called SalvadorDaliFakes.com.
That site showed the entire history of a huge collection of supposed Dali Prints that Park West says it acquired and authenticated as true Salvador Dali artwork. Fine Art Registry's web site not only showed how the pieces in question were denounced as forgeries many times over, but it also showed the many ways in which the Park West had endeavored to circumvent the legal process by hiring their own experts and writing their own appraisals. The conclusion drawn on the web site was that Park West cruise ship art auctions were fraudulent and sales were not handled according guidelines normally affiliated with legal due process as defined by U.S. Statutes for art auctioneers such as Sotheby's or Christie's.
Fine Art Gallery even alleged that by all appearances Park West has been making and selling prints that it was forging with the Salvador Dali signature while telling cruisers the prints were hand-signed by Dali, the artist. Many people spent as much as $20,000 on just one print, and one witness in the trial purchased an entire set of the Dali prints from a Park West auction aboard a Royal Caribbean ship for over $500,000 and is still hoping to get a refund.
The jury did not specifically say that the Dali prints are fake, but by denying Park West's defamation claim against Fine Art Registry it is safe to assume that the jury found the prints to have little to no value monetary value, despite the claims by Park West.
It will be very interesting to see where the cruise lines and Park West go from here, whether they takes the Dali prints off the market and start offering refunds, or if they stay the course. It will also be very interesting to see what the cruise lines decide to do now that it is evident a jury is not likely to rule in favor of Park West in several forthcoming class action lawsuits regarding the sales of misrepresented artwork.
Teri Franks, the CEO of FAR said to Crain's Detroit Business "I'm overwhelmed. We went through three years of hell with this company (Park West), and I was honored by the witnesses and experts who came and helped us from around the country and all over the world. This was a company with three law firms and we were in a classic David and Goliath case, and I feel like we kicked rear-end today."
Frank's lawyer, Jonathan Schwartz, hailed the jury's findings as a win and a possible indicator of the strength of the several class action lawsuits to follow. His firm is representing 10 art buyers in a civil lawsuit at Oakland County Circuit Court.
"We mounted a defense of truth in the defamation case, and were able to bring witnesses and experts to support the claims that were made (online)," he said. "The (parties) are going to take a look at the buyer claims on a case by case basis, but if Park West wants to present this same case as a defense to those allegations, the outcome today might say something about the strength of presenting that defense," Schwartz told Crain's Business.
Park West had decided to try the Fine Art Registry defamation case first in hopes that a win would make those other cases much less likely to succeed. Now it appears that strategy was probably not well conceived. One of the class action lawsuits also names Royal Caribbean as a co-defendant, while another one is scheduled to take place in Seattle, the location of the headquarters of Holland America Lines.
Apparently, the art auction business started small but grew to a peak in the early 2000s when sales reached as high as $300 million per year or more for cruise ship art auctions alone. The profits started diminishing when questions of authenticity concerning the Park West product arose in the news along with the economic meltdown. In the last few years Park West's profits have dropped significantly. Last month (March 2010) Disney Cruise Lines officially ended their affiliation with Park west without comment. But most other major cruise lines still use them including Carnival, Royal Caribbean, NCL, Celebrity, Oceania and more. The only line we know of at CruiseMates that holds art auctions but does not use Park West is Princess Cruises.
On a personal note, we started warning our readers about these art auctions back in early 2007 when the Fine Art Registry controversy was just getting started. Like so many others, we attended an art auction and were shocked by the prices we saw Park West asking for the art they were selling. I was on Carnival Cruise Lines and they were trying to sell a Picasso for $30,000 (as I recall). I asked the auctioneer's assistant this question, "There cannot be that many of these in the world, why would you have this one valuable piece on this Carnival cruise ship?" Carnival is a very mainstream cruise line, frankly. She replied, "Because our studies have shown that this is the exact ship with the most sophisticated art buyers." Right, and I'm Queen Elizabeth - and it was an inaugural cruise.
So, that day I personally took video of an auctioneer offering a Dali print, whichI would only later find out was one of the Dali prints in question. With the bids starting at $18,000, the auctioneer referred to the small drawing as "very, very, very, very collectable." I don't believe the piece sold that day, but the auction was authentic. My picture taking was shut down within minutes.
During the trial several witnesses told the jury about a number of practices conducted by Park West before, during and after the auctions that would never be allowed in a legitimate art auction in the United States. For example, the "appraisal" of the pieces sold were signed by the owner of Park West Galleries, Albert Scaglione, himself. By law, an appraisal must be made by an independent third party with expertise in the field of art and the specific artist.
Albert Scaglione is said to have regularly "appraised" his own gallery's art work at about 90% over the price one of his pieces normally sells for in the open market, regardless of the artist. The Dali pieces in question, even if their authenticity could have been more convincing, would have been worth closer to $1000 apiece.
