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Keywords

statutetrialdivorcegood faith
plaintifftrialtrustgood faith

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Lindholm v. Brant, 283 Conn. 65, 925 A.2d 1048, 63 UCC Rep.Serv.2d 431

Facts

Kerstin Lindholm purchased the painting 'Red Elvis' from art dealer Anders Malmberg in 1987. Over the years, Malmberg acted as an art advisor for both Lindholm and her husband, Magnus Lindholm. In 1999, during divorce proceedings, Lindholm authorized Malmberg to sell certain artworks but did not include 'Red Elvis'. In 2000, Malmberg sold 'Red Elvis' to Peter M. Brant for $2.9 million, despite Lindholm's lack of knowledge about this sale. Lindholm later discovered the sale and sought to recover the painting, leading to this legal dispute.

In 1987, the plaintiff purchased Red Elvis from Malmberg for $300,000. The only written documentation evidencing the plaintiff's purchase of Red Elvis was the invoice that she received from Malmberg, written on Malmberg's stationary. In 1999, the plaintiff and Malmberg entered into an agreement that designated Malmberg as the plaintiff's agent for the purpose of selling 'certain works.' Although the agreement did not specify which artworks Malmberg was authorized to sell, the plaintiff had neither agreed to sell nor discussed with Malmberg or anyone else the possibility of selling Red Elvis.

Issue

Did Peter M. Brant acquire 'Red Elvis' as a buyer in the ordinary course of business, thereby taking the painting free of Kerstin Lindholm's claims?

Did Peter M. Brant acquire 'Red Elvis' as a buyer in the ordinary course of business, thereby taking the painting free of Kerstin Lindholm's claims?

Rule

Under General Statutes § 42a–2–403(2), a buyer in ordinary course of business takes all rights of the seller, provided the buyer acts in good faith and without knowledge that the sale violates the rights of another.

Section 42a–2–403(2) provides that '[a]ny entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.'

Analysis

The court found that Brant acted in accordance with the customary practices of the art industry, which typically do not require extensive verification of title when dealing with reputable dealers. Brant took reasonable steps to investigate the title of 'Red Elvis', including hiring counsel and conducting lien searches, which revealed no competing claims. The court concluded that Brant's reliance on Malmberg's assurances and the customary practices of the art market justified his status as a buyer in ordinary course.

The court found that Brant acted in accordance with the customary practices of the art industry, which typically do not require extensive verification of title when dealing with reputable dealers. Brant took reasonable steps to investigate the title of 'Red Elvis', including hiring counsel and conducting lien searches, which revealed no competing claims. The court concluded that Brant's reliance on Malmberg's assurances and the customary practices of the art market justified his status as a buyer in ordinary course.

Conclusion

The Supreme Court affirmed the trial court's judgment, concluding that Brant was a buyer in ordinary course of business and thus took 'Red Elvis' free of Lindholm's claims.

The Supreme Court affirmed the trial court's judgment, concluding that Brant was a buyer in ordinary course of business and thus took 'Red Elvis' free of Lindholm's claims.

Who won?

Peter M. Brant prevailed in the case because the court determined he was a buyer in ordinary course of business, having acted in good faith and followed reasonable commercial standards.

Peter M. Brant prevailed in the case because the court determined he was a buyer in ordinary course of business, having acted in good faith and followed reasonable commercial standards.

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