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Art collector brings breach of contract claim against gallery

When a contract disagreement cannot be resolved out of court, the complaining party will usually file a complaint in a state or federal court to start a lawsuit. In California procedure, the plaintiff lists in the complaint all reasonably possible legal theories of recovery, such as breach of contract, fraud and perhaps unjust enrichment. Legal procedure in all jurisdictions generally allows the listing of alternative claims in the complaint. It is left to the proof of the case to determine which of those theories, if any, will be applicable to provide relief.

There is a wide and unending subject matter of business disputes and types of businesses vying for finality in the civil court systems. The range goes from international business giants fighting over billion dollar disputes down to two small sole proprietorships pitted against one another. Of course, it often takes a relatively long time for a problem to become so intransigent as to require resort to the courts.

In most cases, business litigation attorneys will pursue settlement prospects assiduously before recommending litigation. In other situations, the disputed contract will provide for mandatory arbitration. The case is heard by a neutral arbitrator who hears the evidence and arguments of the respective parties. However, businesses should not try to attend an arbitration without representation by counsel.

In a recent breach of contract dispute on the smaller end of the scale, a lawsuit was filed in a California state court by a former Disney executive who now is primarily a private investor. He filed against a small art gallery to which he had turned over for sale two paintings done by a current living painter of some international renown. The lawsuit in general alleges that the gallery took unauthorized action on both art works that ended up damaging their value in the marketplace.

In this breach of contract case, the investor is suing to get the paintings back and to be compensated for about $1 million in losses. He also claims punitive damages under California law, which is rarely granted in contracts case but can if the party acted callously and in a grossly reckless manner. One of the paintings may have been sold already, which will relegate the plaintiff to monetary damages without recovery of the item.

Source: Los Angeles Times, Michael Ovitz sues gallery, alleging fraud over artwork sales, Daniel Miller, Nov. 27, 2013

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