First Department reiterates factors to be considered in determining art ownership in divorce proceedings.

The First Department recently held in Anonymous v. Anonymous, 2017 NY Slip Op 02613, (April 4th, 2017) that invoices paid by one party does not in itself constitute as  ownership for the purposes of single ownership with respect to marital property.  The Court reiterated the the factors stated in  Susan W. v Martin W. (89 Misc 2d 681 [Sup Ct, Kings County 1977]) are to be considered in determining art ownership: (1) parties’ interest in art; (2) joint involvement in the purchase of art and (3) source of payment e.g joint or single accounts.

The parties were married on May 5th, 1992 and under the prenuptial agreement signed on April 21st, 1992,  specific disposition of any art collection acquired was not explicitly addressed.  However, a key provision of the prenuptial agreement stated that with respect to property in general: “hereafter . . . acquired” by one party remains that party’s separate property.  It provides that “[n]o contribution of either party to the care, maintenance, improvement, custody or repair of . . . [the other’s party] . . . shall in any way alter or convert any of such property . . . to marital property.” (internal citations omitted).  Furthermore, in another key provision: “No property hereafter acquired by the parties or by either of them . . . shall constitute marital property . . . unless (a) pursuant to a subscribed and acknowledged written agreement, the parties expressly designate said property as marital property . . . or (b) title to said property is jointly held in the names of both parties.”  (Internal citations omitted).

Throughout the course of their marriage, the parties obtained art through various channels, and the wife’s contention was the such pieces obtained were jointly held whereas the husband argued that the such pieces where part of his personal collection and thus, outside of marital property.

The husband substantiated his position that he has sole title to the works because the invoices attached to the sale were solely on his name.  The Court disagreed with this argument and held that “that invoices, standing alone, may not be regarded as evidence of title or ownership of the art.”

Court’s reasoning was based on two premises: (1) the plain meaning definition of an invoice and (2) also its reliance in the Supreme Court case, Sturm v Boker, 150 US 312 (1893) which held that “”An invoice . . . is not a bill of sale, nor is it evidence of a sale. It is a mere detailed statement of the nature, quantity, or cost of the goods, or price of the things invoiced, and it is as appropriate to a bailment as a sale. Hence, standing alone, it is never regarded as evidence of title.”  (Internal citations omitted).

In its reasoning, the Court expressed its concerns over potential unreliability of invoices since prices may be distorted and the possibility of inaccurate description of the goods purchased.  As applicable to the parties here, the Court noted that the invoices presented already contained multiple discrepancies including issues with names presented to the auction house and where applicable, actual purchases in private sales, as well as painting explicitly purchased jointly, but the invoice indicating only the husband’s name.

The Court had disregarded the husband’s reliance on Tajan v Pavia & Harcourt (257 AD2d 299 [1st Dept 1999], lv dismissed in part, denied in part 94 NY2d 837 [1999]).  In Tajan, the Court noted that despite reference to a bill of sale produced during an auction “warranted the painting’s good title”, nevertheless, the Tajan Court considered the admissions and other releases of claims by the parties in determining the ownership of the art work.

In considering the wife’s arguments, the Court appeared to rely more on the cases cited, in particular Lindt v Henshel (25 NY2d 357 [1969]) and Susan W. v Martin W. (89 Misc 2d 681 [Sup Ct, Kings County 1977]).  The Lindt, the Court of Appeals held that a wife was entitled to a sculpture since she purchased it without the involvement of her husband and further, attended the auction by herself.  The Court noted that the bid card was signed by her and furthermore, the price of the painting was charged to her account along with the invoice being in her name.  In Susan W., the Court considered factors such as (1) parties’ interest in art; (2) joint involvement in the purchase of art and (3) source of payment e.g joint or single accounts.

Overall, the Court appears to be dismiss invoices as the sole determination of ownership of art between the parties.  The totality of the circumstances of the purchases needs to be considered as stated in the suggested factors in Susan W. and Lindt decisions.

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