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Gallery Faces Amended Fraud Complaints

DETROIT (CN) - A multi-plaintiff complaint accusing Park West Galleries of selling "forged, faked and misrepresented artwork" has been broken down into 15 separate lawsuits in Oakland County Court. One plaintiff claims Park West sold her "100 supposedly hand-signed Salvador Dali prints which were determined by experts to all have forged signatures."

All 15 complaints were filed by attorney Donald Payton, with Kaufman, Payton and Chapa of Farmington Hills.

An attorney for Park West, Jaye Quadrozzi, said the recent set of complaints represent the third attempt at litigation against the gallery, after earlier complaints had been dismissed.

The new claims are "nothing new" and involve transactions that occurred "years ago," said defending lawyer Quadrozzi. She had not yet seen the complaints, but expects to challenge them based on the statute of limitations and contractual terms contained in the underlying sales agreements.

The plaintiffs' lawyer filed the original complaint in June 2010, listing 27 claimants.

Park West responded with a motion to dismiss. The gallery argued that the claims failed because the plaintiffs could not prove Park West owed them separate and distinct duties beyond the terms of the original sales contracts, which the gallery says included an express provision limiting its liability.

The gallery also challenged some of the plaintiffs based on arbitration provisions contained in their contracts to buy artworks.

Judge Wendy Potts in Oakland County found those arbitration provisions valid. She also ruled that the plaintiffs could not proceed all together in a single case, and must file their claims separately.

"The facts of each purchase is going to differ significantly from the facts of all the other purchases," said the judge. "There may be common issues of law, but there are also issues or legal theories that will apply to some of the plaintiffs, but not others ... because these claims are improperly joined, the court orders that the remaining claims be severed and the plaintiffs proceed separately."

As a result, plaintiff lawyer Payton recently filed a series of separate complaints, called amended complaints.

In those amended complaints, the plaintiffs claim the defendants sell phony art, accompanied by forged certificates of authenticity, on cruise ships, land auctions and at Park West's gallery in Michigan.

Plaintiff Mattie King, for example, says the defendants sold her 100 phony Dali prints. "Plaintiff was left with works which are worthless, and certainly fall below the purchase and appraisal prices," according to her complaint.

She accuses the defendants of "misrepresenting the authenticity of the artwork verbally and in writing, falsely claiming that the signatures were from the artist, providing doctored and fraudulent provenance of artwork, and by creating and providing fraudulent appraisals."

Her complaint adds, "Park West is notorious for selling fraudulent, forged, misrepresented, fake, and grossly overprices artwork to unsuspecting customers on cruise ships, at land auctions, and from its gallery located in Southfield, Michigan."

In a footnote, she says a grand jury is investigating the gallery. "Law enforcement agents have confirmed that a federal grand jury has been impaneled, under the direction of Assistant United States Attorney Sheldon Light, to investigate criminal activities by defendant Park West Galleries Inc.," says King's complaint.

In their motion to dismiss the original multi plaintiff complaint, Park West attorneys addressed many of the contentions that are now repeated in the 15 current individual complaints.

Park West lawyers argued in the original motion to dismiss that the plaintiffs' claims of fraud cannot be sustained because the sales contracts contain "non-reliance" merger clauses barring any reference to separate verbal agreements.

In that motion, the lawyers also argued that the complaint has been filed too late.

"Every invoice agreement dated after March 2002 requires Plaintiffs to bring suit on any claim whatsoever within nine months from the invoice date. The vast majority of the plaintiffs ... have, in fact, filed their complaint outside the limitation period," said the motion to dismiss.

The motion also challenged the substance of the buyers' misrepresentation claims. "Other than these blanket allegations that Park West misrepresented ... the artwork, plaintiffs have not identified any specific representation, by whom it was made ... when or where it was made."

Park West lawyers also made the fundamental argument that state consumer protection laws do not apply to the art deals because they were made in international waters.

Michigan consumer protection statutes, said the motion, "do not reach consumer transactions that took place in international waters ... accordingly, admiralty law applies and preempts plaintiffs' consumer protection statutory claims."

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