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Woman Sues Gagosian Over a Lichtenstein

MANHATTAN (CN) - An elderly woman sued the Gagosian Gallery, claiming it allowed her son to sell a major work by pop artist Roy Lichtenstein, without her permission, for far less than its true value.

Ninety-three-year-old Jan Cowles sued Larry Gagosian and the Gagosian Gallery, in New York County Court.

She claims that her son Charles Cowles, an art dealer in New York City, sold her Lichtenstein enamel, "Girl in Mirror," out of financial desperation, while his mother suffered "moderate to severe dementia."

Charles Cowles is not a party to the case.

The complaint states: "By 2008, Charles Cowles suffered large financial losses and was in desperate financial condition. Charles's financial distress was known to Gagosian; and, in fact, the closing of Charles's gallery was reported in a large article in the 'New York Times' in June 2009, which refers to Charles Cowles Gallery as the 'most recent casualty' in the contemporary art market, and quotes Charles as commenting that '[i]t's shocking how bad business has been.'

"Unknown to Mrs. Cowles, by 2008 Charles had sold some of her art collection without her knowledge or consent and failed to remit the sale proceeds to her."

Jan Cowles says that her attorney-in-fact Lester Marks discovered what her son was doing in December 2009, and immediately hired counsel to investigate it.

"The investigation revealed two transactions between Charles and Gagosian regarding two major works of art: one involving a painting by Mark Tansey, and the other concerning the Lichtenstein work."

The Tansey work, "The Innocent Eye Test," was the subject of a similar lawsuit that Jan Cowles filed in May 2011.

Her new lawsuit, filed Wednesday, details the alleged fraud involving the $5 million Lichtenstein work at greater length.

"In or about October 2008, Gagosian somehow learned that Mrs. Cowles owned the Lichtenstein work," the complaint states. "Rather than contacting Mrs. Cowles directly, however, Gagosian chose to contact Charles Cowles to inquire as to whether Mrs. Cowles would consider selling it. Thereafter, Charles took Larry Gagosian to Mrs. Cowles's apartment at a time when she was not present to view the work. Upon closely inspecting the work (which hung prominently in the apartment) and without expressing any undue concern about its condition, Larry Gagosian represented that he could achieve a sale price of $3 million or more. In fact, Gagosian was aware, another 'Girl in Mirror' in the edition of eight had been sold almost a year and a half earlier, in May 2007, at an auction in Sotheby's for $4,072,000."

Cowles claims Gagosian bought the artwork without trying to contact her, removed it from her apartment, and listed it as a consignment. Gagosian promised not to sell it for less than $3 million, and said that he would collect a $500,000 commission, according to the complaint.

"Three days after receipt, on or about October 13, 2008, Gagosian shipped the Lichtenstein work to London, England to make it available for exhibition at Frieze, a prominent international art fair in London. It would be highly unusual for any major art dealer to send a materially damaged work to its gallery stand at Frieze for exhibition. According to Gagosian, no condition report was prepared prior to shipment (a shipping report is commonly done when a work of art is shipped internationally, if only to have a record for insurance purposes in the event of damage in transit), and no condition report was prepared upon receipt of the work in London (this, again, is commonly done in the art industry)," the complaint states. (Parentheses in complaint.)

Cowles says that Customs invoice for shipping the work back to New York valued the enamel at $4.5 million.

In June 2009, Gagosian shipped it again, to the Basel Art Fair in Switzerland, without preparing a condition report, then sold the artwork months later to an unknown third party in the United States, according to the complaint.

"Upon learning that Gagosian had not yet remitted all of the promised funds to Charles, they [Jan Cowles' investigators] immediately called and wrote to Gagosian on December 17, 2009, instructing that all proceeds from any past artwork sales should be remitted to Mrs. Cowles, in care of Mr. Marks," the complaint states.

Gagosian sent $500,000 to Marks, refused to provide any detailed account of the sale and blamed the low sale price on damage to the enamel, according to the complaint.

"To support its representation that the Lichtenstein work was damaged, Gagosian's counsel sent a purported one-page condition report prepared in December 2008 by the art conservator, Amann+Estabrook Conservation Associates (the 'False Condition Report'). Gagosian's forwarding email of July 23, 2010 to Mrs. Cowles's counsel stated: 'Attached is the condition report we discussed,'" the complaint states.

The report stated that the artwork had "'numerous dark inclusions and small pits in the yellow field,' 'three areas of discoloration and altered textures,' and 'noticeable prior restoration,'" the complaint states.

Cowles suspected that the report was not credible because any such damage would have been apparent to Gagosian when he first saw it, and would have been disqualified the artwork from major art fairs like the Frieze or Basel. She said she found the smoking gun to prove her suspicions during discovery of the Tansey litigation.

"John Good, Gagosian's employee, testified [during the Tansey case] that the Gagosian gallery had two different works from the 'Girl in Mirror' edition at the same time. Mr. Good further testified that only one of those two works at the gallery was damaged.

"As noted above, Gagosian represented to both Charles and Mrs. Cowles that it was Mrs. Cowle's Lichtenstein work that was badly damaged. Due to Gagosian's (a) refusal to disclose its possession of a second 'Girl in Mirror' during the time that Mrs. Cowles was inquiring about the sale of her work, and (b) refusal to disclose whether the 'Girl in Mirror' belonging to Ms. Gund was ever sold, and if so, to whom and for what price, and (c) refusal to indentify the purported purchaser of Mrs. Cowle's 'Girl in Mirror,' Mrs. Cowles has been unable to ascertain the true facts concerning the transactions, including whether her work actually was sold as a damaged work or whether it was retained or sold by Gagosian in a dishonest fashion," the complaint states.

Cowles wants her artwork back and $10 million in punitive damages for fraud, conversion, breach of fiduciary duty and unjust enrichment.

She is represented by David Baum with SNR Denton.

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