Platt v. Michaan

695 F.Supp.3d 420

Timo PLATT, and Gordon Platt,AS CO-TRUSTEES OF the PLATT FAMILY ARTWORK TRUST, Plaintiffs, v. Allen MICHAAN, Defendant.

19-cv-4234 (ER)

United States District Court, S.D. New York

Signed September 27, 2023

Ethan York Leonard, Neal Brickman, The Law Offices of Neal Brickman, P.C., New York, NY, for Plaintiffs.

Timo Platt, Arroyo Seco, NM, Pro Se.

Gordon Lethbridge Platt, I, Huger, SC, Pro Se.

Matthew Barkan, William Laurence Charron, Pryor Cashman LLP, New York, NY, Peter Grant Ellis, Foley Hoag LLP, Boston, MA, for Defendant Allen Michaan.

OPINION & ORDER

Ramos, District Judge:

This case concerns two paintings by the renowned artist Louis Comfort Tiffany ("Tiffany")¹—"Market Day at Nuremberg,"² and "In the Fields at Irvington"³ (the "Paintings"). Tiffany's great-great grandsons, Timo and Gordon Platt ("Plaintiffs"), as co-trustees for the Platt Family Artwork Trust (the "Trust"), brought this action against Allen Michaan ("Michaan") to recover the Paintings. Plaintiffs allege that the Paintings are subject to an anti-alienation restriction that required that they remain in the Platt family in perpetuity. Michaan alleges that he purchased the Paintings from a member of the Platt family who had title to the Paintings. Plaintiffs and Michaan both move for summary judgment. For the reasons set forth below, Plaintiffs' motion for summary judgment is DENIED and Michaan's motion for summary judgment is GRANTED.

I. BACKGROUND⁴

A. Factual Background

1. The Parties and Possession of the Paintings

The two Paintings had been in the possession of Tiffany's granddaughter, Louise Platt ("Louise"), until her death in February of 1994. At that time, the Paintings were transferred to Louise's three sons—Henry Platt ("Henry"), Thomas Platt ("Thomas"), and Graham Platt ("Graham") via Louise's will. Doc. 1 ¶ 10. The Second Article of Louise's will states, in relevant part:

SECOND: I give and bequeath all my tangible personal property, including animate chattels, wherever situated together with any insurance policies relating thereto, to my husband, COLLIER PLATT, if he survives me, or if he does not survive me, then equally to such of my children as survive me [i.e., Henry, Thomas and Graham], to be divided among them as they shall agree or, should they fail to agree upon such division, then as my Executor [Thomas], in his absolute discretion shall determine.

Doc. 149-8 (Louise's will). Plaintiffs admit that the will does not expressly create an anti-alienation restriction, but assert that the Paintings are not subject to the will. Michaan disputes this. Louise's husband, Collier Platt, did not survive her, and his will also did not have an anti-alienation restriction for the Paintings.

Thomas sent a letter to Henry and Graham on May 20, 1994 (the "1994 Letter") in his capacity as Executor of Louise's will. Plaintiffs allege that the 1994 Letter "demonstrates conclusively" that there was an anti-alienation restriction concerning the Paintings. Doc. 163 at 15. The 1994 Letter provides as follows:

Under . . . Mother's Will, all of her tangible personal property is bequeathed equally to the three of us to be divided among us as we shall agree or, should we fail to agree upon such division, then such division shall be made as her Executor "in his absolute discretion" shall determine . . .

Notwithstanding any tentative allocations which may have been made over twenty years ago or any processes enabling Mother to start making gifts to us and to the children to remove items from her estate, the fact is that no such gifts or allocations were made by her and the discussions with respect to the same are not legally or morally binding on anybody now. The tangible personal property was hers to bequeath then, was hers at the time she made her Will in 1982 and was hers at the time of her death and her Will governs the division.

The term "equally," as I read it, means monetarily equally.

Harry⁵ has expressed to me a preference for at least two, if not more, Tiffany paintings (the Nuremberg and the Algiers). I think if we are going to agree upon preferences of this sort, we are going to have to make the preferences, subject to anti-alienation agreements to any person outside of an immediate family member both during life and at death, i.e. restrict them to life estates with the redivision being made to present members of the class surviving at the termination of the life estate. Absent such agreements . . . . I will in my absolute discretion, determine the division.

I think this is the only fair way for everybody, particularly those who may survive for the next 50 years or so, and I think we have to proceed on this basis.

Hoping you agree.

Doc. 162-3 ("1994 Letter"). The letter is not signed by Thomas. Plaintiffs do not know anyone who ever observed Thomas create, sign, or send the 1994 Letter. Timo Tr. at 176:18-178:6; Gordon Tr. at 40:16-41:21. However, in his February 1, 2023 sworn declaration, Timo stated that he has "personal knowledge" of the copy of the 1994 Letter and that he "read this letter back in 1994." Timo Decl. ¶¶ 13, 15. He stated that the letter was prepared by his father Thomas in May 1994 following the death of Thomas' mother Louise, and in connection with the division of custody of the Tiffany paintings, including the Paintings. Id. ¶ 13. He also stated that the 1994 Letter was sent to and received by Henry and Graham; that it was created using carbon paper in a manual typewriter; and that it is a duplicate of the original sent by Thomas. Id. ¶ 14. According to Timo, the carbon copy was not signed because that was "the ordinary practice at the time." Id.

There is no evidence that there was a written response to the 1994 Letter. Timo Tr. at 29:24-30:7 (Q. Did you ask your father whether there was anything in writing that confirmed the anti-alienation restrictions? A. I knew about the 1994 [L]etter. I did not ask him about further written documentation . . . it was not necessary." Gordon testified during his deposition that the 1994 Letter reflects that, "if [Henry, Graham and Thomas] did not agree to the anti-alienation restriction, that my uncle [Thomas] would exclusively decide what was to be done with the artwork." Gordon Tr. at 46:17-25.

Thomas and Graham engaged Alastair Duncan ("Duncan") in 1994 to appraise all of the Tiffany art owned by Louise, including the Paintings. Duncan Tr. at 9:22-24:14, 26:11-27:19, 29:25-32:18 (Doc. 149-12); Doc. 149-25 at 6 (listing the fair market value of "Marketplace at Nurenberg" [sic] and "In the Fields at Irvington" as $45,000 each); Doc. 149-24 (December 4, 1995 Letter to Duncan from Thomas discussing negatives for a photograph, on United States District Court letterhead)⁶; Doc. 149-26 (April 15, 1997 Payment of invoice to Duncan from Thomas, on United States District Court letterhead); Doc. 149-35 (April 22, 1999 Payment of invoice to Duncan from Thomas, on United States District Court letterhead).

In his role as Executor, Thomas oversaw a federal estate tax filing for Louise's estate, in which he attested under penalty of perjury that Louise, at the time of her death, "own[ed] . . . articles of artistic or collectible value in excess of $3,000," specifically identifying "Tiffany . . . works of art, as appraised by J. Alastair Duncan, Ltd." Doc. 149-11 at 15 ("Louise Estate Tax Return").

When the IRS contested Duncan's Tiffany art valuations of the Paintings as too low, Thomas retained legal counsel to challenge the IRS's finding. Doc. 149-25 at 2, 5-6 (IRS Fair Market Value Conclusion Letter and Letter from LeBeouf, Lamb, Greene & MacRae law firm to the IRS). During this three-year dispute, Thomas never claimed that there was an anti-alienation restriction governing the two Paintings. Timo conceded at his deposition that an "anti-alienation restriction, if taken into account, would have an impact upon the taxable value of the assets in question" and would mean "[t]here was no market for the paintings because the paintings were not capable of being sold," thereby resulting in "a deduction from the taxable value" according to "the taxpayer's position." Timo Tr. at 98:2-15, 106:14-107:5, 206:16-208:8, 215:16-216:3, 217:23-218:16; see also Docs. 149-36 (correspondence between Timo and an appraiser discussing impact of an anti-alienation restriction on market value).

a. Henry's Possession

The Paintings were then in Henry's possession from 1994 until they were sold to Michaan in April 2011 for the aggregate sum of one million dollars. Michaan is an auction house owner and a collector of art created by Tiffany. The Plaintiffs are Henry's nephews—Timo is Thomas' son and Gordon is Graham's son.

Henry received care from a nurse seven days a week for 12 hours a day starting in approximately 2008 until his death on July 22, 2015, at the age of 91. Wathne Tr. at 179:6-8, 190:24-25, 261:2-12 (Doc. 162-16). Henry's longtime companion, Thorunn Wathne ("Wathne"), testified in her deposition taken on September 14, 2022, that Henry's health began to decline in 2014. Id. at 185:4-20. Plaintiffs allege that Henry was incompetent at an earlier point in time—by 2007 or 2008—and that if Henry "knowingly and voluntarily [ ] transferred the two Paintings . . . he did so when he was not competent." Timo Tr. at 166:11-167:10; see also Doc. 156 ¶ 77 (Pls' Opposition to Def's Rule 56.1 Statement)

Plaintiffs offer no documentary evidence regarding Henry's competency.⁷

Timo and his father Thomas expressed concerns about Wathne and the Paintings as early as 2008. For example, in his deposition taken September 12, 2022, Timo testified that by 2008 Thomas began to be concerned that Wathne "would object to being told . . . that the [anti-alienation] restrictions existed" with respect to the two Paintings, and that she might "force a confrontation over" the issue. Timo Tr. at 80:11-19.

In a letter dated February 19, 2008 and addressed to Thomas, Henry referenced a conversation that Timo had with Henry's lawyer,...