Bloomberg News

Artist Calder’s Heirs Lose Fraud Lawsuit Against Art Dealer (2)

December 26, 2013

Heirs of Alexander Calder, the American modernist who invented the moving sculpture known as the mobile, lost a $20 million fraud lawsuit against the estate of his longtime dealer, Klaus Perls.

Many claims in the case amounted to “an incoherent stew of irrelevance and innuendo,” and the evidence failed to show Perls wrongfully sold Calder works without the heirs’ knowledge, Justice Shirley Werner Kornreich said in a decision made public Dec. 24 in New York Supreme Court in Manhattan.

“All these allegations are so patently inadequate that the court can only conclude that they were brought solely for the purpose of harassment or embarrassment,” Kornreich said in the ruling, dismissing the case.

In the suit, filed in 2010, Perls and his estate were accused of creating a web of deceit dating back more than three decades, going so far as using a Swiss bank account held under the pseudonym Madam Andre, to stash the proceeds of unauthorized art sales. Calder, whose works are in public and private collections around the world, died in 1976. Perls died in 2008.

“We are definitely appealing -- the defendants should not go to bed easily at night,” Aaron Richard Golub, the lawyer for Calder’s heirs, said today in a phone interview. “The behavior of the Perlses was so contorted that it’s very hard to describe it in straightforward terms.”

The appeal will be filed within 30 days, he said.

‘Undue Pain’

“We are gratified by the court’s ruling, which upholds the integrity of Klaus Perls and his family,” the estate’s lawyer, Steven Wolfe of Eaton & Van Winkle LLP, said today in a phone interview. The case “caused undue pain and distress,” he said.

The lawsuit was filed after Perls, his wife, Dolly, and employees of his gallery died, as well as the original executors of the artist’s estate, according to the ruling. The complaint also blamed the estate’s executor, Perls’s daughter Katherine.

“Plaintiffs are attempting to litigate issues that necessarily stretch back decades without any personal knowledge or contemporaneous records, where nearly all of the people who had personal knowledge of the facts of the case are dead,” Kornreich said in her ruling.

The art dealer’s estate provided evidence showing it sold 14 out of 15 disputed works from 1976 to 1988, meaning the statute of limitations to sue over the transactions would have expired, according to the ruling.

Works Dispersed

While Calder’s heirs claimed they didn’t know about the sales, the evidence showed that in 1989, the Calder Foundation -- set up by his family to promote his legacy -- was “explicitly informed” that seven of the works had gone to other galleries, according to the ruling.

“It raises the serious question of why” the Calder estate “decided to wait 21 years before making a demand for the works’ return, under the false pretense that they still believed all of the works to be in the defendants’ possession,” Kornreich said. In documents filed in the case, the heirs never explained the discrepancy, she said.

The judge also rejected claims that the art dealer’s use of a Swiss bank account was evidence of fraud.

“That Klaus Perls may have deposited some of his proceeds from the sale of Calder works into a Swiss bank account does not amount to fraud,” Kornreich said. “That Klaus never disclosed to the estate that Calder also maintained a Swiss bank account is immaterial, as it was not his obligation to do so.”

The Calder Foundation, which wasn’t a party in the suit, was founded in 1987 by his heirs and is dedicated to “collecting, exhibiting, preserving, and interpreting the art and archives” of Calder, according to its website.

A message left at the Calder Foundation brought no reply.

The case is Davidson v. Perls, 651760/2010, New York State Supreme Court, New York County (Manhattan).

To contact the reporters on this story: Erik Larson in New York at elarson4@bloomberg.net; Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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