A New York Supreme Court judge has shot down a lawsuit filed by prominent collector and philanthropist Michael Steinhardt last fall.
In his claim, Steinhardt accused the veteran Manhattan gallery Hirschl and Adler and its president, Stuart Feld, of fraud, breach of fiduciary duty, and unjust enrichment.
But the judge, Joel M. Cohen, dismissed all those claims in a detailed 13-page decision handed down yesterday, July 26.
The dispute centered on a multimillion-dollar portrait of George Washington painted circa 1800 by celebrated painter Gilbert Charles Stuart. In 2017, Steinhardt enlisted the gallery to sell it, and the two sides agreed that Steinhardt would be guaranteed $10 million.
The $10 million “net to you” price was double what Steinhardt paid for it—$5 million in 2006—when it was deaccessioned by the New York Public Library. An earlier attempt to sell the painting through Sotheby’s in 2004 failed to find a buyer, and the work was “bought in,” or unsold in auction terms.
Steinhardt sued Hirschl and Adler and Feld after learning that the gallery had sold the work for $12 million, pocketing the $2 million difference.
However, Judge Cohen rejected Steinhart’s claims, saying he was a “sophisticated art collector and financier” who never claimed that the consignment agreement had been broken, and did not “do any diligence of his own.”
Steinhardt’s attorney did not immediately respond to Artnet News’s request for comment.
“We feel vindicated by the court’s decision recognizing that—as we always do—we upheld our end of the bargain and achieved a terrific result for the client,” Hirschl and Adler and Feld said by way of their attorneys, Judd Grossman and Lindsay Hogan of Grossman LLP, in an email to Artnet News.
“Notably, Mr. Steinhardt… does not deny that he understood what ‘net to you’ meant—i.e., that the gallery keeps sales proceeds above the specified amount, if any,” according to the decision.
The painting has a long and rich history that is laid out in detail in the decision. It is a nearly nine-foot tall portrait of Washington that was the first of four identical full-length pictures by Stuart.
In a departure from an earlier portrait known as the “Landsdowne” picture, Washington’s body is proportional—taller, thinner, and truer to his actual physique, according to the court papers.
The painting was purchased by Peter Jay Munro, a nephew of John Jay, in England and was later sold to James Lenox, an American bibliophile and philanthropist. Since about 1930, the portrait has been known as the “Munro-Lenox” painting. It became the property of the Lenox Library in 1870.
After Lenox’s death, the Lenox Library merged with the Astor Library and the Tilden Trust to become the New York Public Library, at which point the Munro-Lenox work became the property of the institution.
Amid financial difficulties in the early 2000s, the library enlisted Sotheby’s to deaccession this and other works.