EXHIBIT A - Reutersblogs.reuters.com/felix-salmon/files/2012/03/document-4.pdf · EXHIBIT A FILED: NEW YORK ... Gallery as the “most recent casualty” in the contemporary art market,

EXHIBIT A

FILED: NEW YORK COUNTY CLERK 03/26/2012 INDEX NO. 650152/2012

NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 03/26/2012

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK

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JAN COWLES,

Plaintiff,

v.

LARRY GAGOSIAN, GAGOSIAN GALLERY, INC., and THOMPSON DEAN, Defendants.

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Index No. 650152/2012

AMENDED COMPLAINT

(Jury Trial Demanded)

Plaintiff, Jan Cowles (“Mrs. Cowles” or “Plaintiff”), acting through her duly appointed

attorney-in-fact, Lester Marks, for her Complaint against Larry Gagosian, the Gagosian Gallery,

Inc. (collectively, “Gagosian”), and Thompson Dean (“Dean”), alleges as follows, upon

knowledge as to herself and her conduct, and upon information and belief as to all other matters:

NATURE OF ACTION

1. Mrs. Cowles brings this action for conversion and replevin against

Gagosian and Thompson Dean, and for fraud, breach of fiduciary duty and unjust enrichment

against Gagosian in connection with the unlawful taking and sale of an exceptionally valuable

work of art created by the iconic American artist Roy Lichtenstein. The work, entitled Girl in

Mirror, is epoxy enamel on metal, and numbered one from an edition of eight (plus at least two

unnumbered artist’s proofs) created by the artist in 1964 (the “Lichtenstein Work”). In the

current market, the Lichtenstein Work is worth more than $5 million.

PARTIES, JURISDICTION AND VENUE

2. Mrs. Cowles is a resident of Florida and has long been a collector of fine

art works. She is now 93. She has suffered a substantial decrease in hearing and memory since


NYSCEF DOC. NO. 9 RECEIVED NYSCEF: 02/09/2012

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2006, moderate to severe dementia since 2007, and is completely incapacitated. In light of her

severe incapacity, since 2007, Mrs. Cowles has been represented in all financial matters by her

long-time family accountant, Lester Marks, as her duly appointed attorney-in-fact.

3. Defendant Larry Gagosian is an art dealer. He is a resident of New York.

4. Defendant Gagosian Gallery, Inc. is Larry Gagosian’s art gallery.

Gagosian Gallery, Inc. is a corporation organized under the laws of the State of New York, with

its principal place of business at 980 Madison Avenue, New York, New York, 10075. Gagosian

is a long experienced, major international art dealer with galleries in New York and throughout

the world. Among others, he is known for representing prominent living artists such as Mark

Tansey and works from the estates of pre-eminent artists such as Roy Lichtenstein.

5. Defendant Thompson Dean is the Co-Managing Partner and Co-CEO of

Avista Capital Partners, which is a private equity firm. He resides at 550 Park Avenue,

Apartment 10E, New York, New York 10065-7369.

6. This Court has personal jurisdiction over Gagosian and Dean because such

defendants do business in the State of New York and because this action arises out of conduct

that took place in the State of New York.

7. Venue is proper in this Court because a substantial part of the events

giving rise to this claim occurred in the City, County, and State of New York.

FACTS

Mrs. Cowles’s Ownership of the Lichtenstein Work

8. Roy Lichtenstein (1923-1997) was an iconic American artist who created

paintings and other works of art of exceptional value that have been exhibited extensively

throughout the world. In or about 1964, the artist created an edition of eight pieces of artwork,

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in epoxy enamel on metal, entitled Girl in Mirror. The edition depicts a classic Lichtenstein

image of a blonde girl holding a mirror that reflects her smiling face:

9. The Lichtenstein Work, which is owned by Mrs. Cowles, is numbered one

of eight in the Girl in Mirror edition. It was originally acquired by Mrs. Cowles’s late husband,

Gardner Cowles, from the Castelli Gallery in 1983, after which it hung in Mr. and Mrs.

Cowles’s apartment at 810 Fifth Avenue, New York, New York 10021.

10. In 1999, Mrs. Cowles lent the Lichtenstein Work to the Kunstmuseum

Wolfsburg in Germany for a large exhibit of works that focused on Lichtenstein’s use of mirror

imagery. An image of the Lichtenstein Work was featured prominently on the cover of the

exhibition catalogue. At that time, the company responsible for picking up the work, Transart,

Inc., prepared notes concerning the condition of the work. No notable condition issues were

identified. Additionally, the insurance and transport documentation prepared for Mrs. Cowles’s

loan of the work for the exhibit confirm that the work had no significant damage.

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11. In or about February 2008, a professional photographer shot a picture of

the Lichtenstein Work in Mrs. Cowles’s apartment in connection with a New York magazine

article featuring Mrs. Cowles’s apartment and art collection. The photograph shows no

significant damage to the work. (Exhibit A hereto)

Gagosian Takes and Sells the Lichtenstein Work

12. Mrs. Cowles’s son, Charles Cowles (“Charles”), has been an art dealer for

some years, with a gallery in New York City. He was known by Gagosian. By 2008, Charles

Cowles had 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.”

13. 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. In

December 2009, that conduct became known to Lester Marks, who immediately retained

counsel and investigated Charles’s activities. 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.

14. Mark Tansey, The Innocent Eye Test. Mrs. Cowles had acquired a 99%

interest in an iconic work by Mark Tansey, The Innocent Eye Test (the “Tansey Work”). She

donated a 30% interest to the Metropolitan Museum of Art (the “Museum”), which became a

co-owner, and the Tansey Work hung at the Museum for many years. Charles borrowed the

Tansey Work from the Museum and then sold it to Gagosian in 2009, without the knowledge or

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consent of Mrs. Cowles or the Museum. Gagosian promptly resold it in 2009 to Robert Wylde

via his holding company, Safflane Holdings Ltd., for $2.5 million. The unlawful sale resulted in

two federal lawsuits (collectively, the “Tansey Litigation”): Safflane Holdings Ltd. and Robert

Wylde sued Gagosian for fraud and other claims, seeking money damages; and, in a separate

action, Mrs. Cowles and the Museum sued Safflane Holdings Ltd. and Robert Wylde, seeking

the return of the painting to them as the rightful owners. Implicitly acknowledging its

wrongdoing, Gagosian settled its lawsuit with Safflane Holdings Ltd. and Robert Wylde,

agreeing to pay a total amount of $4.4 million in a settlement that required the return of the

Tansey Work to Mrs. Cowles and the Museum. After the settlement, Mrs. Cowles donated her

entire interest in the Tansey Work to the Museum.

15. The Lichtenstein Work. In or about August 2008, Gagosian somehow

learned that Mrs. Cowles owned the Lichtenstein Work. 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 and Larry Gagosian visited Mrs.

Cowles’s apartment to view the work at a time when she was not present. 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, as 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 at Sotheby’s for

$4,072,000.

16. Although Gagosian knew the Lichtenstein Work belonged to Mrs. Cowles,

and not Charles, Gagosian made no effort to contact her, or her attorney-in-fact, Lester Marks,

to obtain either any authority to remove the work from the apartment or to offer the work for

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sale to any third party. Nevertheless, on or about October 10, 2008, Charles purported to

consign the Lichtenstein Work to Gagosian. Gagosian took delivery of the work from

Mrs. Cowles’s apartment, and listed it as a consignment with the understanding that it would not

be sold for less than $3 million, with Charles to receive no less than $2.5 million, and Gagosian

to receive a commission of $500,000.

17. At the time of the purported consignment, Gagosian said nothing about

any damage to the Lichtenstein Work, let alone any significant damage that could substantially

reduce its value in the marketplace. In fact, one of Gagosian’s gallery staff made intake notes

on the condition of the Lichtenstein Work – which is common practice in the art industry for

valuable works delivered on consignment – and the notes reflect no significant damage. Had

the Lichtenstein Work been damaged at that time, it would have been customary to document

the damage on the condition report, and immediately bring it to the attention of the consignor,

so that there could be no later misunderstanding as to the condition and value of the work.

18. 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. Although a

shipping report is commonly prepared when a work of high value is shipped internationally, if

only to have a record for insurance purposes in the event of damage in transit, according to

Gagosian, no condition report was prepared prior to the shipment to Frieze. Upon receipt of the

work in London on or about October 16, 2008, however, a condition report was prepared by a

Gagosian employee, who noted that the work was in “[e]xcellent condition overall.”

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19. A few days later, Gagosian shipped the Lichtenstein Work back to its

gallery in New York. The customs invoice and an airway bill prepared by the shipping

company, Martin Speed, valued the Lichtenstein Work at $4.5 million. A shipping company

normally would list the value of a work based on instructions given by Gagosian as the shipper.

20. In or about December, 2008, Gagosian engaged the art conservator,

Amann+Estabrook Conservation Associates (“Estabrook”) to examine a work in the Girl in

Mirror edition. On December 5, 2008, Estabrook issued a condition report, together with an

accompanying invoice. Neither the Eastabrook condition report nor the invoice identifies the

specific work in the Girl in Mirror edition that was examined. In the Tansey Litigation,

Estabrook produced an invoice that stated: “The work was examined in the owner’s home:

Agnes Gund, 765 Park Avenue,” thereby explicitly stating that the Girl in Mirror work it had

examined did not belong to Mrs. Cowles. After the filing of the original complaint in this

action, Estabrook executed an affidavit stating that its invoice was inaccurate, that it did not

examine any work in the Girl in Mirror edition at the home of Ms. Gund as stated in its invoice,

and that it had “mistakenly produced” its document from a “back up file” in error. Discovery

will be required to ascertain the true facts about this extraordinary revelation.

21. Approximately five days after the Estabrook condition report, Gagosian

offered the Lichtenstein Work for sale to one of the gallery’s important clients, Robert Wylde.

In an email dated December 10, 2008, Gagosian’s employee, John Good, emailed the image to

Wylde: “Here it is, Forgot to show you this yesterday; it is here at 980 Madison, a classic Pop

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image.” (Exhibit B hereto). On or about February 13, 2009, Good sent another email to Wylde

(Exhibit C hereto) that set forth, and justified Gagosian’s asking price of $3.5 million:

In May 2007 a work from this edition sold for $4,072,000. We are offering this for 3.5m. Given that the correction for living artists of solid reputation is as much as 50% off the peak and up to 25% for important dead artists, 3m is a reasonable value for this classic image by Lichtenstein.

(Emphasis added). Good never mentioned any damage to the Lichtenstein Work.

22. In June 2009, Gagosian again shipped the Lichtenstein Work overseas,

this time to Basel, Switzerland for viewing at the Basel Art Fair, which is the most prestigious

international art fair for contemporary artwork. Once again, it would be highly unusual – indeed

unthinkable – that Gagosian would send a materially damaged work to its gallery stand at the

prominent Basel Art Fair for exhibition.

23. After the close of the Basel Art Fair, Gagosian shipped the Lichtenstein

Work to its gallery in London, England. Again, contrary to common practice in the art industry,

Gagosian failed to prepare a condition report for the work both (a) prior to its shipment from

Switzerland to London, and (b) upon its receipt in London.

24. On or about August 3, 2009, Gagosian purported to sell the Lichtenstein

Work for $2 million to Dean in New York. Gagosian invoiced the sale from its gallery in

London. On or about December 12, 2009, Gagosian shipped the Lichtenstein Work to Dean

from London. Prior to the transport, the shipper, Martin Speed, prepared a condition report,

noting that the Lichtenstein Work was in “[o]verall good condition.”

Mrs. Cowles’s Investigation

25. After learning, in December 2009, of Charles’s sales of the Tansey Work

and the Lichtenstein Work, Mrs. Cowles, through her representatives, launched an investigation.

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Upon learning that Gagosian had not yet remitted all of the promised funds to Charles, they

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.

26. On or about January 14, 2010, Gagosian forwarded to Mr. Marks

$500,000. Apparently, by then, $2,000,000 out of the $2,500,000 sales proceeds received by

Gagosian for the Tansey Work, and $500,000 of the alleged $2,000,000 in total sale proceeds

for the Lichtenstein Work had already been paid by Gagosian to Charles. Gagosian retained

$500,000 as a commission on the sale of the Tansey Work, and an astounding $1,000,000

commission based on an alleged sale price of $2,000,000 for the Lichtenstein Work.

27. Starting in December, 2009, and continuing into 2010, Mrs. Cowles

demanded detailed accounts of the Lichtenstein transaction from both Charles and Gagosian.

Charles represented: (a) that in October 2008 Gagosian agreed that the Lichtenstein Work

would be offered on consignment at $3 million, with Gagosian to receive a commission of

$500,000; (b) that in 2009 Gagosian represented that the Lichtenstein Work had been shipped to

potential purchasers on multiple occasions, and that multiple buyers had declined to purchase

the work because it was badly damaged; and (c) that Gagosian ultimately convinced Charles

(based upon the representations of substantial damage) to accept $1,000,000 in payment for the

Lichtenstein Work, although Gagosian did not disclose the actual sales price to the purported

third-party purchaser or the identity of the purchaser. Charles explained that he accepted

Gagosian’s representations at the time because he was deeply in debt and desperate for cash.

28. Although Gagosian has refused to provide any detailed account of the

transaction, his counsel represented to Mrs. Cowles’s counsel that: (a) the Lichtenstein Work

had been consigned by Charles in October 2008; (b) the Lichtenstein Work hung at its gallery,

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except for one shipment to the Art Basel Fair in June 2009 (Gagosian made no mention of the

shipment to the Frieze Art Fair in October 2008); and (c) the Lichtenstein Work had been sold

for only $2 million due to its badly damaged condition. As to Gagosian’s enormous

commission – which doubled from $500,000 to $1,000,000 despite the sale price dropping from

$3 million to $2 million – Gagosian claimed that it was negotiated as part of a “package deal”

with Charles involving the sales of both the Lichtenstein and Tansey Works. As noted above,

Gagosian charged a $500,000 commission for the Tansey Work and $1,000,000 for the

Lichtenstein Work, for a total of $1.5 million in commissions.

29. In response to the information given by Gagosian, Mrs. Cowles’s counsel

repeatedly told Gagosian’s counsel that: (a) Gagosian lacked any authority to sell Mrs.

Cowles’s property; and (b) in any event, their investigation confirmed that, contrary to

Gagosian’s representations, there was no damage to the Lichtenstein Work before Gagosian

took possession of it, and that the work was worth at least $4,500,000, not $2,000,000.

Gagosian Keeps Documents and Information Hidden

30. As noted above, Gagosian represented to both Charles and Mrs. Cowles

that it was Mrs. Cowles’s Lichtenstein Work that was badly damaged. Due to Gagosian’s

refusal to identity the purported purchaser, 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. Based on the

foregoing, however, it is clear that Gagosian had fraudulently represented to Charles in 2009,

and to Mrs. Cowles in 2010, that Mrs. Cowles’s Lichtenstein Work had been badly damaged

and that the damage accounted for the below-market sale price of $2,000,000.

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31. In the Tansey Litigation, the Safflane Parties also sought documents and

testimony directly from Gagosian regarding the Lichtenstein Work, but Gagosian refused the

requests. For example, Gagosian refused to provide an un-redacted invoice for the purported

sale of the Lichtenstein Work, which would have disclosed the identity and location of the

purported purchaser of the work. Gagosian’s witness, John Good, also refused to answer

questions at his deposition regarding the condition of the work. As a result of Gagosian’s

refusals, the Safflane Parties filed – and the court granted – a motion to compel the production

of the Lichtenstein documents. Gagosian did not comply with the federal court order to produce

the documents. Instead, Gagosian filed a motion for reconsideration of the federal court’s order,

and within days of the court denying that motion for reconsideration, Gagosian settled the

lawsuit and kept the documents hidden. In fact, Gagosian kept the identity of the purported

purchaser hidden until was required by a second court order – from this Court, after this separate

state court action was commenced – to produce documents containing that information.

32. Gagosian continues to withhold various documents concerning the

Lichtenstein Work. To support its representation that the Lichtenstein Work was damaged,

however, Gagosian has repeatedly purported to rely upon the December 5, 2008 Estabrook

condition report. Assuming that the report applies to Mrs. Cowles’s work, Gagosian has not and

cannot explain: (a) Larry Gagosian’s representation to Charles that the work was worth at least

$3 million at the time that he closely inspected the work at Mrs. Cowles’s apartment in August

2008, when any significant damage should have been readily apparent, and failed to identify any

alleged “damage” that would diminish its sale potential; (b) why Gagosian failed to obtain a

condition report, from Estabrook or any other art conservator, for two months after the work

was taken on consignment, hung in the Gagosian Gallery, and sent overseas to a major art fair;

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(c) why the alleged “damage” that Gagosian claims to extrapolate from Estabrook’s notes of the

work’s condition accounts for the greatly reduced sale price when Gagosian’s own records state

that the work was received in “excellent condition overall,” and Gagosian placed an insurance

value on the work as high as $4.5 million; (d) why Gagosian shipped the work to major art fairs

such as Frieze or Basel while it allegedly was in a badly damaged condition; (e) why, even after

receiving the Estabrook condition report, Gagosian still offered the work to at least one

important client for as much as $3.5 million, stating that a “reasonable value” was no less than

$3 million; (f) why Gagosian has failed to identify the potential buyers, or produce documents

supporting his representation to Charles that multiple potential buyers rejected a purchase of the

work because of its badly damaged condition, and (g) why Gagosian never explored any

potential restoration work to maximize the sale value of the work.

The Value of the Lichtenstein Work

33. The value of the Lichtenstein Work, in the condition that it existed at the

time that it was taken by Gagosian in October, 2008, far exceeded $2 million. Its current value

is no less than $5 million. As noted above, in 2007, one work in the edition of eight of Girl in

Mirror sold at a Sotheby’s auction for $4,072,000. In November 2010, Christie’s sold another

work from the Girl in Mirror edition at auction for approximately $4.9 million. The market for

Lichtenstein artworks has grown more valuable since that time. For example, in November

2011, Christie’s sold a painting (of a different image) from the artist’s highly-prized 1960’s

period for $43.2 million, which is the highest price ever achieved for a work by Lichtenstein at

auction, the second highest price achieved in 2011 for a contemporary painting, and the fourth

highest price achieved overall in 2011 for a painting of any genre.

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COUNT ONE CONVERSION

(Against Larry Gagosian, Gagosian Gallery, Inc. and Thompson Dean)

34. Mrs. Cowles repeats and realleges each and every one of the foregoing

allegations as if set forth fully herein.

35. Neither Mrs. Cowles nor her attorney-in-fact, Lester Marks, gave

Gagosian permission to sell the Lichtenstein Work. As a result, Gagosian’s actions amount to

an unlawful conversion of Mrs. Cowles’s property. Similarly, Dean could not obtain good title

to a work of art that was converted by Gagosian.

36. Gagosian’s and Dean’s unlawful conversion of Mrs. Cowles’s property

has caused damage in a sum reflecting the proper value of the Lichtenstein Work at the time of

trial, which is no less than $5 million, less the $500,000 that Gagosian delivered to

Mrs. Cowles’s representative in January, 2010.

37. Gagosian’s conversion of Mrs. Cowles’s property evinced a high degree

of moral turpitude, demonstrating such wanton dishonesty as to imply criminal indifference to

civil obligations, with reckless disregard of Mrs. Cowles’s rights. As a result, Mrs. Cowles is

entitled to punitive damages from Gagosian in an amount no less than $10 million.

COUNT TWO REPLEVIN

(Against Larry Gagosian, Gagosian Gallery, Inc. and Dean)



39. At all relevant times herein, Mrs. Cowles was the sole owner of the

Lichtenstein Work. Mrs. Cowles has repeatedly demanded that Gagosian identify the purported

purchaser of the Lichtenstein Work, in order to communicate a demand to that party for the

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return of that property to its rightful owner. Gagosian has refused to provide that information.

The continued possession of the Lichtenstein Work constitutes a wrongful detention of property.

As a result, Mrs. Cowles is entitled to the immediate return of the property, plus damages

suffered by the current denial of use and possession of that property.

COUNT THREE FRAUD

(Against Larry Gagosian and Gagosian Gallery, Inc.)



41. In discussions and correspondence between counsel for Mrs. Cowles and

Gagosian, and in papers submitted to the court in the Tansey Litigation, Gagosian repeatedly

contended that Charles was an authorized agent of Mrs. Cowles with full authority to consign

Mrs. Cowles’s artwork to Gagosian, for sale to third parties.

42. Assuming that Charles is deemed to be an agent of Mrs. Cowles in

connection with the consignment of the Lichtenstein Work to Gagosian and the payment

arrangements agreed to between Gagosian and Charles, a fraud was practiced on Mrs. Cowles

through fraudulent representations to Charles. Gagosian omitted disclosures of material facts to

Charles concerning Gagosian’s sale efforts of the Lichtenstein Work, and falsely represented to

Charles Cowles that the Lichtenstein Work was substantially damaged to fraudulently induce

him into agreeing to accept $1,000,000 in full payment for the Lichtenstein Work. At that time

Gagosian had full knowledge that Mrs. Cowles’s Lichtenstein Work was not damaged to such

an extent as to warrant such a drastic reduction in value. Gagosian falsely represented the

condition of the Lichtenstein Work to Charles, and never disclosed its own condition report

noting that the work was received in “excellent condition overall,” or the $4,500,000 valuation

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that Gagosian had put on the work when it shipped the work in October, 2008, with the purpose

of deceiving Charles as to the true condition and value of the work. Charles relied on the

fraudulent representation and material omission when he agreed to accept $1,000,000 for the

Lichtenstein Work.

43. Gagosian further perpetuated its fraudulent scheme in 2010, by falsely

representing to Mrs. Cowles that (a) her Lichtenstein Work was never worth more than

$2,000,000 because it had been substantially damaged, and (b) that Gagosian had paid full value

to Charles for the work when he agreed to accept $1,000,000 in full payment for the work. At

the times of said representations, Gagosian knew the representations were false.

44. As a result of the foregoing, Mrs. Cowles has been damaged in a sum

reflecting the proper value of the Lichtenstein Work at the time of trial, which is no less than $5

million, less the $500,000 that Gagosian delivered in January 2010.

45. Gagosian’s fraud evinced a high degree of moral turpitude, demonstrating

such wanton dishonesty as to imply criminal indifference to civil obligations, with reckless

disregard of Mrs. Cowles’s rights. As a result, Mrs. Cowles is entitled to punitive damages

from Gagosian in an amount no less than $10 million.

COUNT FOUR BREACH OF FIDUCIARY DUTY




47. Any consignment of the Lichtenstein Work that placed it in the care of

Gagosian created an agency relationship between Gagosian, on the one hand, and Mrs. Cowles

and/or Charles Cowles, on the other hand. As an agent, Gagosian owed a fiduciary duty to

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Mrs. Cowles and/or Charles Cowles, and was required to be loyal, and at all times exercise the

utmost good faith and loyalty, with the highest and truest principles of morality.

48. Gagosian’s conduct described above was disloyal, and below the standards

of good faith, loyalty and principles of morality required of a fiduciary. In fact, Gagosian acted

directly against the interests of Mrs. Cowles and/or Charles Cowles by either (a) selling the

Lichtenstein Work below-market based upon false representations of damage to the work, or

(b) masking a different transaction wherein Gagosian made a very large profit by realizing the

true value of the Lichtenstein Work without disclosing the actual transaction. Gagosian’s

actions benefited Gagosian at the expense of Mrs. Cowles and/or Charles Cowles. Further,

Gagosian breached its fiduciary duty by increasing its own commission on the purported sale,

despite manipulating a lower, purported sale price.

49. By reason of the foregoing, Mrs. Cowles is entitled to recover all sums or

other compensation that Gagosian received in connection with the purported sale of her artwork,

and Gagosian is not entitled to any commission.

50. The purported consignment agreement also created a bailment. At the

time that Gagosian took possession, the Lichtenstein Work was in undamaged condition, and

would have achieved a maximum market sales price. To the extent that the Lichtenstein Work

was in any damaged condition at the time of the purported sale, Gagosian is responsible as the

bailee. As a result, Mrs. Cowles would be damaged in a sum reflecting the proper value of the

Lichtenstein Work at the time of trial, which is no less than $5 million, less the $500,000 that

Gagosian delivered in January 2010.

51. Gagosian’s breach of fiduciary duty evinced a high degree of moral

turpitude, demonstrating such wanton dishonesty as to imply criminal indifference to civil

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obligations, with reckless disregard of Mrs. Cowles’s rights. As a result, Mrs. Cowles is entitled

to punitive damages from Gagosian in an amount no less than $10 million.

COUNT FIVE UNJUST ENRICHMENT




53. As set forth above, Gagosian made a very large profit by misrepresenting

the true value of the Lichtenstein Work and causing Charles to agree to a purported sale. Due to

Gagosian’s refusal to disclose the full nature of the transaction, Mrs. Cowles is unable to

determine the exact amount of Gagosian’s profit. At the very least, however, Gagosian has

wrongfully realized $1.5 million in commissions on the sale of Mrs. Cowles’s artwork. This

amount represents an unjust enrichment at Mrs. Cowles’s expense.

54. By reason of the foregoing, Mrs. Cowles is entitled to recover all sums or

other compensation that Gagosian received in connection with the purported sale of her artwork,

which is no less than the $1.5 million commission, plus interest.

WHEREFORE, Plaintiff prays for judgment against Defendant as follows:

(1) Upon Count One: a judgment in the amount no less than $4.5 million in

compensatory damages, and $10 million in punitive damages.

(2) Upon Count Two: an order directing Defendants to deliver possession of the

Lichtenstein Work to Mrs. Cowles, the rightful owner of it;

(2) Upon Count Three: a judgment in the amount no less than $4.5 million in

compensatory damages, and $10 million in punitive damages.

Exhibit A


NYSCEF DOC. NO. 9-1 RECEIVED NYSCEF: 02/09/2012

Exhibit B



Exhibit C

