Family Claims Lawyers Spirited Away Caravaggio Painting & Sold It
MIAMI (CN) - A family that says it owns the Caravaggio painting "David Killing Goliath" claims in court that lawyers created a trust "with the sole purpose of obtaining power over the famous masterpiece," then sold it for a fraction of its value, without authorization, and refuse to disclose the buyer's name.
Joao Teixeira Nascimiento, Elena Teixeira and Joao Teixeira Gueits sued Martin C. Boire P.A., Martin Boire and Mark Press in Federal Court. Boire runs his law office in Volusia County, north of Orlando, according to the long, tangled complaint. Press also is an attorney.
Both attorneys formerly represented the Teixeira family in the ill-fated Caravaggio transaction, and Boire is a trustee of the Caravaggio Trust - of which the Teixeiras claim to be beneficiaries.
The Teixeiras seek damages on 10 counts, including conspiracy to defraud, breach of trust, breach of fiduciary duty, and gross negligence.
They claim that the defendants, with others, "created the Caravaggio Trust with the sole purpose of obtaining power over the famous masterpiece and Degas painting in order to deprive the Beneficiaries of their multimillion-dollar assets. The Trustees assigned themselves, without the Beneficiaries' authorization, knowledge or consent, a Security Agreement; Addendum to Security Agreement; an Assumption of Debt and Guarantee of Payment of Debt, in order to file unjustified attorney's fees liens against the multimillion-dollar 'David Killing Goliath' masterpiece, to ultimately file a complaint to foreclose on the corpus of the trust in order to sell the masterpiece and Degas painting to collect the aforementioned attorney fees."
According to the complaint, the drawn-out legal drama began in 1991, when Joao Teixeira Nascimiento contacted Lapsa International Bank president Guillermo Lasally about obtaining a $5 million loan. Teixeira Nascimiento says he offered "David Killing Goliath" as collateral - he says its value was estimated as $40 million.
Teixeira Nascimiento claims that Lasally required that the painting be kept at the bank during the application process. Several months later, however, Lasally informed Teixeira Nascimiento that he did not qualify for the loan, but refused to return the painting, according to the complaint. Lasally threatened to use Boire to seize the masterpiece from the Teixeiras, according to the complaint.
Lasally is not a party to the complaint, which has only three defendants.
The Teixeira family claims that Boire drafted a settlement agreement and created the Caravaggio Trust, agreeing to store the masterpiece for Lapsa Bank in exchange for a $400,000 flat fee. They claim that Lapsa Bank agreed to pay the fee from the 25 percent ownership interest Lasally and Lapsa Bank would receive from the sale of the painting.
The Teixeiras claim that their attorneys - Raul Carreras Jr. and Marco de la Cal - pressured them to sign the agreement giving Lapsa a 25 percent stake in "David Killing Goliath," as well as exclusive rights to sell the work and another painting by 19th century Impressionist Edgar Degas.
"The attorneys threatened Nascimiento and Teixeira with total loss of the 'David Killing Goliath' masterpiece and the Edgar Degas painting if they did not sign the settlement agreement with Lapsa Bank, and the Caravaggio Trust Agreement, naming Boire through Boire, P.A., and Raul Carreras Jr., P.A., Trustees of the Caravaggio Trust multimillion-dollar assets," the complaint states.
Apparently, the Teixeiras signed, because they claim that in 1994, Boire P.A., Carreras and de la Cal pressured them to sign a modification of the Caravaggio Trust. That change added a fourth beneficiary - nonparty Allen Belus - who was given a 3 percent stake, taken from Teixeira Nascimiento's 15 percent.
The Teixeiras claim Boire and their own attorneys failed to inform them of other changes to the Caravaggio Trust. Among them:
"(a) Paragraph 6, gave Lapsa Bank the exclusive right to sell the masterpiece for
25 percent ownership interest was deleted in its entirety;
"(b) Paragraph 13, Trustees made the Caravaggio Trust irrevocable;
"(c) Paragraph 15.2, Trustees gave themselves full authority to control the marketing and sale of the masterpiece and they lowered the minimum sales price from 22 million dollars to 20 million dollars;
"(d) Paragraph 15.11 gave Trustees the right to pledge, mortgage, or otherwise encumber the corpus as security for outstanding and future, beneficiary attorney's fees related to the subject masterpiece and Trustee fees and attorney fees;
"(e) Paragraph 15.6 gave the Trustees the power to sign a bill of sale, and any and all contracts, releases or settlements, relating to the subject masterpiece;
"(f) Paragraph 27 gave Trustees right to 5 percent sales commission of the gross
purchase price, together with 50 percent of any amount paid in excess of the minimum sale price of the corpus ... who are procuring cause of a ready willing and able buyer of the painting," according to the complaint. (Ellipsis in complaint.)
After this, the family claims, their own attorneys signed on to represent the Caravaggio Trust and filed liens against "David Killing Goliath," guaranteeing to pay the "present and future" legal fees of Lasally and Lapsa Bank. The liens guaranteed Boire the gross value of Lapsa's 25 percent interest in the masterpiece, and Carreras and de la Cal a 60 percent cut of the Teixeiras' beneficial interest in the work, according to the complaint.
The Teixeiras claim the attorneys executed these agreements without the family's authorization.
In 1997, family says, the attorneys pressured them to amend the Caravaggio Trust again:
"(a) Trustees gave themselves the exclusive right to control, to offer and market the masterpiece for sale, and the exclusive right to hire third parties to market and offer the masterpiece for sale;
"(b) The beneficiaries were prohibited from engaging in the marketing and offering of the masterpiece for sale;
"(c) Trustees reduced the minimum sales price of the masterpiece from $20 million to $15 million;
"(d) Trustees gave themselves the right to pledge or otherwise encumber the subject masterpiece or a portion thereof for the purposes of marketing, authenticating and selling the subject masterpiece; and
"(e) Trustees gave themselves the right to store the masterpiece, to transport it, to leave it at testing labs, to display it in museums, universities, and to allow potential buyers to inspect it, without insurance. The Trustees attempted to shield themselves from liability for damages to beneficiaries for the loss of the masterpiece due to any of the activities mentioned above," the family states in the complaint.
Sixty-nine months after the creation of the Caravaggio Trust, Boire sent his first bills: $24,500 for his work for the trust, $78,088 for his work on behalf of the Teixeiras and a $421,041 lien against "David Killing Goliath" for his work on behalf of Lasally and Lapsa Bank, according to the complaint.
In 2001, Boire and Boire P.A. sued the Caravaggio Trust trustees and beneficiaries - himself, Carreras, de la Cal and the Teixeiras - in Volusia County Court, alleging breach of contract and seeking to foreclose on the masterpiece, according to the complaint.
In the years that followed, with defendant Press representing the Teixeiras, Boire filed a flurry of motions, moves on a legal chessboard. He seized whatever control remained with Lapsa Bank and - when they resigned as trustees of the Caravaggio Trust - dismissed his claims against Carreras and de la Cal, according to the complaint.
Press tried to remove Boire P.A. as trustee, since the firm had named itself as a defendant, had failed to answer the complaint on behalf of Caravaggio Trust or to secure independent counsel for the trust, the complaint states. The family claims Press also filed a counterclaim against Boire and Boire P.A. which included counts of breach of trust, accounting and disparagement of property.
The court ordered the parties to propose a new trustee in 2002, but denied the Teixerias' attempt to remove Boire after they failed to come up with anyone within the 14 days mandated by the court, according to the complaint.
By 2007, the court noted that since the Teixeiras - through Press - consented to most of Boire P.A.'s claims, it should discard the family's affirmative defenses, counterclaims and other motions. According to the complaint, Press didn't show up at the hearing.
He did, however, file a lien against the Caravaggio Trust for his services. So did Boire.
The family claims that Press in 2012 filed on their behalf a "no objection" agreement, which included a contract for the sale and purchase of "David Killing Goliath." The Teixeiras claim they knew nothing about the sale.
"The contract for sale and purchase between Boire, P.A. Trustee and the unknown buyer was detrimental to the beneficiaries in the following ways:
"(i) Paragraph Five - Purchase price of $15,080,000.00 was significantly below actual market value;
"(ii) Paragraph Five - Boire, P.A. Trustee received purchase deposit in the total amount of $710,000.00;
"(iii) Paragraph Five - There is a purchase money note and mortgage in the amount of $15,080,000.00 with unknown terms of disbursements;
"(iv) Paragraph Five - Contract contains buyback option not disclosed to beneficiaries;
"(v) Paragraph Thirteen - No third party beneficiaries. Purchase and Sale contract was created for the sole benefit of parties who signed purchase agreement; and
"(vi) Paragraph Sixteen - Trustee warranted that Caravaggio Trust was the lawful owner of the 'David Killing Goliath' masterpiece," the complaint states.
Teixeira Nascimiento says he tried to block the sale of the masterpiece through a court filing by the family's new attorney. Boire filed a letter with the court stating "he would not agree to the removal of Press as defense attorney in the matter, due to the great work Press had done on behalf of the beneficiaries," according to the family, who add that a bigger shock came a day later.
"On Dec. 4, 2012, Boire, P.A. Trustee sent the Beneficiaries a post-closing
situation letter in which the Boire, P.A. Trustee advised he had $450,000.00 from the sale of the 'David Killing Goliath' masterpiece, to divide among the beneficiaries, and that they should thank God for such generous offer by the Boire, P.A. Trustee," the complaint states.
While the Teixeiras' new attorneys filed disclosure requests to try to figure out who had bought the painting and how to block the sale, Press sent a letter to Boire P.A. on Jan. 2, advising the firm that he continued to represent the family. And according to the complaint, he sent the family a slightly different letter on the same day.
"On Jan. 2, 2013, Press sent Teixeira, Nascimiento, and Gueits a letter advising them that a distribution in the total amount of $500,000.00 from the Trustee would be available to them in the percentages stated therein, with 10 percent going to Press," the Teixeiras state in their complaint.
The family seeks an injunction ordering the return of the Caravaggio and the Degas, damages, an accounting, and removal of trustee (Boire and Boire, P.A.)
They are represented by Cesar Dominguez of Coral Gables.
Caravaggio, 1571-1610, in addition to being a master artist, lived a swashbuckling life. A tavern brawler, he killed at least one man, possibly by accident, and had a death warrant issued against him by the pope. He died in mysterious circumstances at 38, while traveling to Rome to seek a pardon.