Al Hirschfeld Foundation v. Margo Feiden Galleries Ltd.

Facts

P was a renowned cartoonist, famous for his depictions of Broadway stars and other celebrities and for his weekly cartoon in the New York Times. D began selling his works on consignment in 1969. Their relationship was formalized with a 1974 agreement. In 2000, P and D agreed to settle a dispute and to continue doing business together. In 2003, P died. The Al Hirschfeld Foundation succeeded to his rights and obligations under the Agreement. P created line drawings and color illustrations that were later printed as limited-edition lithographs. Originals and limited editions of these are still sold today. The Agreement contains provisions governing such works. Some of P's drawings were commissioned by third parties, including the New York Times. The Agreement also covers such works. The Agreement also addresses photostatic copies of the Works. The Agreement contains provisions authorizing the parties to license third parties to use the works for limited purposes, either for a fee or for free. A giclee is a 'high quality photo-static reproduction of a work of art;' that is, a high-quality reproduction made via an inkjet printer. The Agreement does not contain any provisions addressing giclees as such. P authorized D to serve as D's 'exclusive representative,' of up to 250 original works on a consignment basis. The Agreement covered the consignment of certain 'Media Commissioned Works'-that is, works that were previously commissioned by third parties, and for the sale of photostatic reproductions of P's work. The Agreement also authorizes D to produce new, limited-edition prints of the work, subject to several limitations. D is authorized to produce up to 18 series of limited-edition prints per year of 100 to 550 prints per edition. The following fee schedule was in effect: for the sale of Consigned Works, 50% of the sale price; for the licensing of a reproduction, 20% of the licensing fee; for arranging the creation of new Media Commissioned Works, 15% of the sales price of such works; for the sale of photostatic reproductions, 36.5% of the sale price; and for the sale of limited-edition prints as authorized 100%, minus certain fees for P. P 'retained all rights in the Works not expressly granted to D in the Settlement Agreement.' The retained rights included, but were not limited to, 'sole proprietorship of copyright, trademark, privacy, publicity and related rights in the Works and in P's name, likeness and signature, subject to D's right ... to use P's name, likeness (including self-portraits), biographical material and to reproduce Works in connection with D's' promotion, advertising and marketing. The Agreement could be terminated for cause 90 days after written notice. 'Cause,' was defined to include a 'material breach' of several of the paragraphs of the Agreement. P initiated this action alleging a series of escalating breaches by D over the preceding months. P claimed that the works were being mishandled; that the Gallery space itself was poorly maintained and disorganized so as not to comply with the requirements of the Agreement; and that the Gallery staff also did not meet the qualifications required by the Agreement. P alleged that D had refused to return certain works consigned to D.P alleged that D had infringed copyright rights by making various unauthorized reproductions, including two works, 'Carol Burnett' and 'Bob Hope,' for use by Time-Life without P's permission. of the Settlement Agreement. Specifically, the Foundation asserted that:

 • D failed to maintain gallery space similar in quality to the space the Galleries had previously maintained at 699 Madison Avenue, in violation of paragraph 5(b) of the Agreement;

 • D failed to maintain adequate fire and theft insurance for P works in their possession, in violation of paragraph 5(f) of the Agreement;

 • D failed to employ a person knowledgeable in the arts at the gallery, in violation of paragraph 5(g) of the Agreement;

 • D failed to comply with the Foundation's reasonable requests in furtherance of its rights under the Agreement, in violation of paragraph 5(i) of the Agreement;

 • d failed to return works consigned to them by the Foundation, in violation of paragraphs 6(a) and 6(e) of the Agreement; and

 • D violated P's copyright rights by making reproductions of P's works, in violation of paragraph 6(h)(i).

If the asserted breaches were not cured within 30 days of the notice, the Agreement would be terminated on September 6, 2016. 

D asserted that P's claims were barred by its own breaches and by the doctrines of laches and ratification. D alleged that P had breached the Agreement by reducing the number of P works consigned to D below the number the Agreement required, by consigning works to other galleries in violation of the Agreement's exclusivity provision, and by making disparaging remarks about D. D brought claims of trade libel, defamation per se, and breach of the covenant of good faith and fair dealing. Both parties moved for summary judgment

Issues

Rule of Law

Holding and Decision

Legal Analysis

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