Tovar v. Indiana

JOAO TOVAR, Plaintiff,

v.ROBERT INDIANA, Defendant.

12 Civ. 6104 (KBF)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Dated: January 17, 2013

MEMORANDUM

DECISION & ORDER

KATHERINE B. FORREST, District Judge:

In 2007, a great artist permitted a lesser artist to make art based on the great artist's most well-known work. In 2008, the lesser artist made several pieces of poor art that was not covered by the license granted, and sold it to a dealer, who then resold it for a substantial profit. In 2009, the great artist got wind of the lesser artist's creation of the poor art and made public that he never licensed the poor art's creation and had nothing whatsoever to do with it. Accordingly the poor art, including any pieces still held by the dealer, plummeted in value. Now the dealer has sued the great artist. But the great artist had no connections with the dealer, contractual or otherwise. Nor did the great artist ever lie to the dealer about anything, or indeed make any lie that affected the dealer in any way. For those reasons, more fully explained below, the Court here grants the great artist's motion to dismiss, now before the court, in its entirety.

BACKGROUND

Defendant Robert Indiana created the iconic "LOVE" sculpture, which has the "0" positioned at an angle. (See Compl. ¶ 5.) On August 2, 2007, Indiana and one John Gilbert entered into an agreement (the "License Agreement") pursuant to which Indiana as the "Artist" and "Licensor" would create-and Gilbert as the "Licensee" would produce and sell-objects with Hindi script designs of the Hindi word for "love," spelled phonetically in Latin letters from the English alphabet: "prem" (the "Indian Prem" or "Prem Love"). (See generally Compl. Ex. 1.) The License Agreement stated that its purpose was "to create an arrangement between the Artist and the Licensee for the creation/production of the Artist's work Prem Love depicted in the attached photos and their derivative works." (Id. at 1.) The agreement provided for two $50,000 payments from Gilbert to Indiana, plus a ten percent royalty of all sales by Gilbert. (Id. at 1-2.) It also required Indiana to indemnify Gilbert for "any third party intellectual property claims." (Id. at 2.) It finally contained a merger clause which stated, in pertinent part: "The Agreement contains the entire understanding between the parties." (Id.)

The instant dispute relates, in part, to whether the License Agreement also encompassed another design: a design with block capital letters that used the Latin letters "P," "R," "E," and "M" (the "English Prem"). Importantly however, the photographs attached to the License Agreement showed three different designs of only Indian Prem--none of the attachments used the Latin letters "P," "R," "E," or "M." See Gilbert v. Indiana, 09 Civ. 6352, 2012 WL 688811, at *1 (S.D.N.Y. Mar. 2,2012) (hereinafter "Indiana I"),¹ The only similarity between Indian Prem and English Prem is not in design, but rather solely in the use of the word "Prem" (albeit in different languages and script).

Plaintiff Joao Tovar alleges that he purchased ten English Prem sculptures from Gilbert beginning in May 2008. (Compl. ¶¶ 7-8; see also Indiana I, 2012 WL 688811 at *3.) He alleges that the sculptures purchased had a market value of $1.5 million, that he purchased them for $481,625, and that he resold "[m]any" of them to third parties for around $710,000. (Compl. ¶¶ 7, 46, 47.) He further alleges that "[m]any" of those sculptures were resold by those third parties for around $1.12 million, and that others were "slated for sale in Milan, Italy, and Dubai" by Sotheby's and Christie's auction houses. (Id. ¶¶ 24, 48.)

Tovar does not allege that Indiana created or designed English Prem. Instead, Tovar alleges that "Indiana approved the creation and production of English Prem. (Id. ¶ 11.)

Tovar also alleges that Indiana "executed a certificate of authenticity for the sculptures." (Id. ¶ 12.) This alleged certificate of authenticity (the "COA") is attached to the complaint. It states: "As editor and publisher of the Robert Indiana Perm-Love project . . . I hereby certify the authenticity of this Robert Indiana sculpture . . . [and] have zealously reflected his artistic intention in every work that I published." (Compl. Ex. 2.) The COA ends: "JOHN GILBERT Prem Love Art Publishing Ltd. Mysore India May 2008," and is signed by Gilbert. (Id.) On the side of the COA, in handwriting, are the words "For Tovar," with Indiana's signature. (Id.)

The story does not, however, end with Tovar's resale of "many" of the English Prem sculptures for a profit of approximately $230,000. On June 3, 2009, Indiana wrote a letter to one Simon Salama-Caro stating that English Prem "is . . . not my work." (Compl. ¶ 15 and Ex. 4 at 1.) Tovar alleges that this act rendered the English Prem sculptures he purchased "worth little more than the materials from which they were made." (Compl. ¶ 16.)

In this suit against Indiana, Tovar asserts six causes of action: (1) breach of the License Agreement; (2) product disparagement; (3) violation of New York Art and Cultural Affairs Law ("NYACAL") section 13.01.3(a); (4) breach of the COA; (5) unjust enrichment; and (6) misrepresentation. (Id. ¶¶ 27-78.)

Tovar, moreover, is not the only person to have sued Indiana in this story. In 2009, Gilbert sued Indiana alleging similar facts and asserting various claims, each one of which was premised on Indiana, as the creator of English Prem, being contractually bound to Gilbert. See Indiana I, 2012 WL 688811, at *l-3. This Court granted Indiana's motion for summary judgment on March 2, 2012, ruling, in sum, that English Prem was not covered by the License Agreement, that English Prem was not a "derivative work" of Indian Prem (which was covered by that agreement), and that Indiana and Gilbert did not modify or amend the License Agreement to cover English Prem either (a) by Indiana's statement "this is an Indiana" upon seeing two designs of English Prem in 2008, or (b) by Indiana placing his signature on the COA. See id. at *4-6.

DISCUSSION

Choice of Law

This action, originally brought in Maine State Superior Court (Knox County) was removed by Indiana to the District of Maine, and then transferred to this Court pursuant to 28 U.S.C. § 1404(a).² (See docket no. 20 at 2-4.) "[W]hen a case is transferred for convenience under 28 U.S.C. § 1404(a), the law of the transferor state is to be applied so long as the transferor state could properly have exercisedjurisdiction." Gerena v. Korb, 617 F.3d 197, 205 (2d Cir. 2010). Accordingly, this Court will apply Maine law to the issues on this motion,³

Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain enough factual material 'to raise a right to relief above the speculative level."' Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2012) (quoting Bell Alt. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, the complaint must allege "enough facts to state a claim to relief that is plausible on its face." Román-Oliveras v. P.R. Elec. Power Auth., 655 F.3d 43, 49 (1st Cir. 2011) (quoting Twombly, 550 U.S. at 570); see also Ashcroft v. Iabal, 556 U.S. 662, 678 (2009) (same). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. In applying that standard, the court accepts as true all well-plead factual allegations, but does not credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Id. If the court can infer no more than "the mere possibility of misconduct" from the factual averments, dismissal is appropriate. Maldonado v. Fontanes, 568 F.3d 263, 268 (1st Cir. 2009) (quoting Iqbal, 556 U.S. at 679).

Damages

As a threshold matter, Tovar has not adequately pleaded damages. This alone disposes of his claims. Damages are an essential element of breach of contract, product disparagement, and misrepresentation. See Wetmore v. MacDonald, Page. Schatz. Fletcher & Co., LLC, 476 F.3 1, 3 (1st Cir. 2007) (breach of contract elements include damages) (quoting Me. Energy Recovery Co. v. United Steel Structures. Inc., 724 A.2d 1248, 1250 (Me. 1999))⁴ ; Found, for Blood Research v. St. Paul Marine & Fire Ins. Co., 730 A.2d 175, 179 (Me. 1999) (disparagement); Allolding v. Portland Housing Auth., CV-02-675, 2003 WL 23109962, at *3 (Me. Super. Ct. Nov. 18, 2003) (misrepresentation).

Tovar alleges that he purchased ten English Prem sculptures from Gilbert for $481,625, and resold "many" of them for $710,000. (Compl. ¶¶ 7-8, 46-47.) He therefore ended up up $228,375 combined as a middleman in transactions in English Prem, and his tort claims for disparagement and misrepresentation fail immediately.⁵ Moreover, any contract expectation damages Tovar might havebased on his resale of any unsold English Prems-damages he does not claim in the complaint-would require Tovar's perpetration of the very fraud he complains of. It rings of hypocrisy to claim victimhood due to both a fraud being perpetrated upon you and your inability to perpetrate that fraud yourself.

Each of Tovar's claims fails, however, for additional reasons as well.

Third Party Beneficiary of the License Agreement

Tovar's first count is for breach of the License Agreement. Tovar of course did not sign and was not party to the License Agreement. He argues, however, that he was an intended third party beneficiary of that contract, and therefore entitled to sue under it. (Pl.'s Supp. Opp'n at 6-9.)

In Maine, a party is an intended third party beneficiary of a contract between other parties-and can therefore sue to enforce performance of that contract-if "recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties [to the contract] and either (a) the performance of the promise will...