Commercial Division Blog

Posted: May 23, 2022 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Categories Unjust Enrichment, Breach of Contract

Auctioning of Artwork Did Not Place Plaintiff Under Duress

On March 3, 2022, in Zhang Chang v. Phillips Auctioneers LLC, 2022 NY Slip. Op. 01383, the First Department affirmed an Order of Justice Jennifer G. Schecter, which granted defendant’s motion to dismiss causes of action for breach of contract and unjust enrichment.  In affirming, the First Department rejected the plaintiff’s argument that an acknowledgement of the debt was voidable because it had been signed under duress.  The Court explained:

Because defendant was doing no more than exercising its right under previous agreements, it did not place plaintiff under duress by re-auctioning the artwork (Stewart M Muller Constr. Co. v New York Tel. Co., 40 NY2d 955, 956 [1976]; 767 Third Ave. LLC v ORIX Cap.ital Mkts., LLC, 26 AD3d 216,218 [1st Dept 2006], lv denied 8 NY3d 803 [2007]). The duress claim is barred on the additional ground that plaintiff ratified the agreement by paying off the entire debt and receiving the artwork (Allen v Riese Org., Inc., 106 AD3d 514, 517 [1st Dept2013]; Fruchthandler v Green, 233 AD2d 214,215 [1st Dept 1996]). Because the acknowledgement plaintiff countersigned merely restated his obligations under the settlement agreement and auction, the acknowledgement was not invalid (see General Obligations Law§ 5-1103; GG Mgrs. v Fidata Trust Co. NY., 215 AD2d 241,242 [1st Dept 1995], Iv dismissed 87 NY2d 896 [1995]).

The attorneys at Schlam Stone & Dolan frequently litigate breach of contract and unjust enrichment claims.  Please contact the Commercial Division Blog editors at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such claims.