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Rojas-Buscaglia v. Taburno-Vasarhelyi

United States Court of Appeals, First Circuit

July 24, 2018

LUIS ROJAS-BUSCAGLIA; INART CORP.; INART SERVICES, INC., Plaintiffs, Appellees,
v.
MICHELE TABURNO-VASARHELYI, a/k/a Michele Taburno-Vasarely, Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Francisco A. Besosa, U.S. District Judge]

          Lydia M. Ramos Cruz for appellant.

          David A. Carrión Baralt for appellees.

          Before Torruella, Selya, and Kayatta, Circuit Judges.

          TORRUELLA, Circuit Judge.

         Following a lengthy bench trial, the district court entered judgment for Michele Taburno-Vasarhelyi ("Vasarely")[1] on several of her counterclaims against her business partner, Luis Rojas-Buscaglia ("Rojas"), [2] awarded her over $400, 000 in damages, ordered her to provide Rojas certificates of authenticity for two disputed pieces of artwork, and dismissed several of her remaining counterclaims. Unsatisfied with this result, Vasarely sought our assistance. Finding no error in the district court's rationale, we affirm the district court's judgment.

         I. BACKGROUND

         A. Factual Background

         We begin with the relevant facts, reciting them as they relate to the issues presented on appeal. Vasarely, daughter-in-law of deceased "Op Art" artist Victor Vasarely, and widow of Victor's son, Jean Pierre Vasarely (better known as "Yvaral"), accumulated a large and valuable artwork collection as a result of her relationship with both artists. Rojas, a Puerto Rican entrepreneur and art dealer, and widower of Vasarely's best friend, moved to France in December 2000 to work as Yvaral and Vasarely's assistant. Yvaral died in August 2002.

         From 1981 to 1985, Rojas's father, Dr. Luis Rojas ("Dr. Rojas"), purchased eleven Victor Vasarely paintings from a gallery in Venezuela. Among the works he bought were: Grilles-II, Helios-Neg, Tridim-S, and Tsoda. Dr. Rojas gave Rojas custody of the works of art along with the right to sell or exchange them in his father's name. In September 2002, Rojas consigned the works of art to Vasarely for exhibit or possible sale.

         1. The 2009 Settlement Agreement

         In 2004, Vasarely and Rojas moved to Chicago and acquired what, according to Rojas's allegations, was community property shared between the two of them. After their relationship took a negative turn, Rojas moved back to Puerto Rico in 2005. At some point between 2005 and 2009, Vasarely alleged that Rojas and his father had sold some of her artwork to a private party, Dr. Fernando Zalduondo, but never paid Vasarely for the sale. On February 5, 2009, Vasarely and Rojas signed a settlement agreement (the "2009 Settlement Agreement") stating that Rojas would give nine of Dr. Rojas's paintings, including Grilles II, [3] Helios-Neg, Tridim-S and Tsoda, to Vasarely as payment for the sale to Dr. Zalduondo.

         2.The Chicago Agreement

         From 2008 to 2012, Vasarely was involved in a civil lawsuit in the Circuit Court of Cook County, Illinois, against an art gallerist, Thomas Monahan, during which the Cook County court attached hundreds of works of art that Vasarely had in storage in Chicago. This included three pieces of artwork listed in the 2009 Settlement Agreement: Grilles II, Tridim-S, and Tsoda. On January 20, 2009, Vasarely wrote to Dr. Rojas that she regretted the situation and that she hoped his seized works would be returned to him in March or April. On September 22, 2010, Dr. Rojas and Vasarely signed an agreement (the "Chicago Agreement"), in which Vasarely recognized that Dr. Rojas was the owner of these paintings, as well as Helios-Neg.

         3.The 2010 Artwork Agreement

         In June 2009, Rojas sued Vasarely for the division of their community property. On September 22, 2010, Rojas and Vasarely settled their community property dispute by entering into an agreement (the "2010 Artwork Agreement") pursuant to which Rojas, as the sole owner, director, and officer of Inart Corporation and Inart Services, would earn commissions by selling Vasarely's artwork to Inart's clients. According to the agreement, Vasarely would receive eighty percent of the sale price and Inart would receive the other twenty percent. Appendix A of the 2010 Artwork Agreement listed eleven paintings and three sculptures, which Vasarely gave to Inart on consignment. Pursuant to Clause 8 of the 2010 Artwork Agreement, after the consigned artwork was sold and Vasarely received her share of the payment, she was to deliver the sold artwork's certificate of authenticity to the purchaser. Clause 11 provided that either Rojas or Vasarely was entitled to terminate the agreement with eight days' notice for reasonable cause or for a breach of the contract by the other party. Upon termination, Clause 12 established that Inart had to return all artworks to Vasarely within forty-eight hours by depositing them in a storage facility of Vasarely's choice. If the forty-eight hours passed without Inart returning the artwork, Inart would be fined $1, 000 per day payable to Vasarely.

         4. Verbal Agreement: Pompari and Quasar-Zett

         The parties restored their working relationship and, in December 2011, Vasarely and Rojas verbally agreed that Rojas would travel to Paris for five days to complete some tasks for her. Pursuant to her instructions, Rojas found several pieces of artwork in storage facilities that Vasarely maintained in France, prepared the artwork to be shipped to Puerto Rico -- where Vasarely was contemplating moving -- contacted a shipping company to relay Vasarely's specific moving instructions, and supervised the move. As compensation for his work, Vasarely agreed to give Rojas two pieces of artwork, Pompari and Quasar-Zett, together valued between $240, 000 and $300, 000, as well as their certificates of authenticity. Rojas received the artwork after the items arrived in Puerto Rico, but Vasarely did not provide him the certificates of authenticity.

         5. Shipment of Vasarely's belongings from Chicago

         In late October 2012, Vasarely moved from Chicago to Puerto Rico. At Vasarely's request, Rojas agreed to take care of the shipment of Vasarely's belongings and hired a company to pack and ship the items located in her condo and four storage warehouses in Chicago. Vasarely oversaw a representative from the shipping company, Bill Mamer, as he packed her things in the condo, and she put Rojas in charge of overseeing the packing of her items in the warehouses. Vasarely did not create an inventory of the items from the warehouses that were placed into each of the six shipping containers and did not ask Rojas to do so either. The shipping company prepared lists with very general descriptions of the contents packed in each of the containers, which held hundreds of boxes in total. Contrary to her instructions to ship the containers and lease storage units in Puerto Rico under her name, Rojas used either his name (or various misspellings of his name) or his companies' names for the shipping and leasing agreements. Five of the containers arrived in Puerto Rico on different dates between September 19 and December 20, 2012, where Rojas received them and, with the help of two hired assistants, unloaded them at either the storage facility or at the building where he and Vasarely both lived. The sixth container was sent to a storage facility in New Jersey, purportedly with Vasarely's knowledge, because Rojas believed not all of the boxes would fit into Vasarely's Puerto Rico apartment. This New Jersey storage is also where Vasarely stored items that she purchased at auction, and the plan was to keep the shipped items there until she had room in Puerto Rico for the container and auctioned items. Vasarely received the container in Puerto Rico in June 2013. Vasarely now contends that many of her possessions, including a number of valuable works of art, are missing and were lost or stolen either in transit or upon arrival in Puerto Rico.

         6. Sale of the Chicago condominium

         In 2003-04, when Vasarely moved from France to the United States, Vasarely and Rojas purchased a condominium in Chicago under Rojas's name for $1, 160, 000. Subsequent renovations to the condominium cost approximately $250, 000. On September 3, 2010, Rojas and Vasarely signed a "Memorandum of Note" stating that Vasarely would receive the proceeds of the sale of that condominium when it was sold. In November 2010, Vasarely put the condominium up for sale and, because she felt that the $1, 100, 000 offer she received was too low, [4] she took the property off the market. After Vasarely moved to Puerto Rico in October 2012, Rojas hired a realtor and recommended that Vasarely sell the condominium for $1, 100, 000. Vasarely still felt that this amount was too low and said that an appraisal needed to be done to know the true market value of the property. On April 15, 2013, Rojas sold the condominium without an appraisal for $1, 075, 000.

         7. Vasarely's demands for return of her artwork

         Because she suspected that Rojas was taking artwork from her storage unit without her permission, on March 14, 2013, Vasarely emailed Rojas requesting that he give her the keys to the Puerto Rico storage units and a list of artwork that he had taken. Rojas did not answer. On April 7, 2013, Vasarely sent Rojas an email that, after addressing personal matters, stated, "I no longer want to work with you, you don't do anything, other than abuse me and take away my fortune by [f]orce." On May 16, 2013, Vasarely wrote to Rojas: "If tomorrow prior to my leaving at one, all of my works of art have not arrived, I forewarn you that we are going to file a complaint in court and of course I am going to cancel all pending projects." The next day, she wrote in another email, "[w]e are not going to have any business until everything is clarified with attorneys and all my works of art are in my possession." Between May and October 2013, she wrote Rojas several emails requesting that he return all of the artwork that he took from her storage units, as well as the keys to those storage units, but Rojas nevertheless continued to ignore her repeated requests. Rojas did not return the artwork or keys to Vasarely until February 2014 after the district court ordered him to do so on January 30, 2014. The set of artwork, consisting of at least thirty-one works, was worth between $3, 000, 000 and $10, 000, 000.

         B. Procedural Posture

         1. Complaint and Counterclaims

         On October 9, 2013, Rojas filed suit in the United States District Court for the District of Puerto Rico, claiming inter alia that Vasarely breached the 2010 Artwork Agreement by reducing Rojas's commissions, interfering with artwork sales, and delaying providing the purchasers certificates of authenticity for the artwork. Rojas further sought injunctive relief and urged the district court to order Vasarely to produce the certificates of authenticity for the paintings already sold, as well as for Pompari and Quasar-Zett. Finally, Rojas alleged that Vasarely defamed him and his companies, causing damage to their commercial reputation.

         On November 14, 2013, Vasarely asserted numerous counterclaims; those relevant to this proceeding we discuss below. Vasarely counterclaimed that Rojas breached the 2010 Artwork Agreement by refusing to give her proceeds from certain artwork sales, entering into her property and removing artwork and her personal belongings, and refusing to return artwork after she terminated the 2010 Artwork Agreement. She next counterclaimed that Rojas breached a "mandate contract" when he failed to follow her instructions regarding the shipment of her belongings from Chicago to Puerto Rico, and breached a consignment contract when he leased the storage units in Puerto Rico under his name and failed to return to her the items that she deposited. Vasarely also claimed Rojas was liable for the unauthorized sale of her condo in Chicago, and for the proceeds of the sale for not proving that he had paid her in full. She further requested damages for mental and moral anguish suffered due to Rojas's "purposeful, illegal, mean and disloyal acts" towards her.

         On November 22, 2013, and again on July 2, 2014, Vasarely moved to replevy several works of art, including the Pompari, Quasar-Zett, Grilles-II, Helios-Neg, Tridim-S, and Tsoda paintings, and other belongings that she alleged that Rojas illegally possessed. The district court denied both motions.

         2. Motions for Partial Summary Judgment

         On January 30, 2015, Vasarely filed a motion for partial summary judgment, requesting that the court grant judgment in her favor on her counterclaims related to the breach of the 2010 Artwork Agreement and the sale of the Chicago condo, and that it dismiss all of Rojas's claims. She again urged the district court to order Rojas to return the artwork in their possession. On the same day, Rojas filed a motion for partial summary judgment, requesting that the court dismiss Vasarely's breach of the consignment contract claim and her request for replevin of the artworks, with the exception of La Bergere, Quasar-Zett and Pompari.

         The district court denied Rojas's motion for partial summary judgment in its entirety and granted in part and denied in part Vasarely's motion for partial summary judgment. Specifically, as is relevant to this appeal, the district court: 1)granted judgment in Vasarely's favor as to her counterclaims that Rojas breached the 2010 Artwork Agreement by failing to provide her proceeds from the sale of several pieces of artwork; 2)denied her request for judgment as to her counterclaim that Rojas breached the 2010 Artwork Agreement by not returning her artwork; 3) denied her motion for summary judgment on Rojas's claim that Vasarely breached the 2010 Artwork Agreement; and 4) granted in part and denied in part her motion for summary judgment as to her counterclaim regarding the sale of the Chicago condominium. As to the condominium counterclaim, the district court found that Rojas ...


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