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Earl Davis Wins in Suit Connected to Salander-O'Reilly

David Hewett | May 31st, 2013

Here at M.A.D., we never know where a phone call from a reader might lead us. A call during the early summer of 2007 from a subscriber on the West Coast illustrates that point perfectly. Los Angeles art collector Maurice Katz was having trouble collecting a $32,000 debt owed to him by New York City art dealer Lawrence “Larry” Salander.

Salander was a very hot dealer in 2007. He owned Manhattan’s Salander-O’Reilly Galleries, the only occupant of a lavishly restored town house in the heart of New York City’s art row. His gallery had been described as the best art gallery in the world three years earlier by the posh luxury lifestyle magazine Robb Report. Then Salander-O’Reilly Galleries, after years of dealing in American art, had moved into the fields of old master and Renaissance art.

After Katz’s phone call, it didn’t take long for us to discover that Larry Salander was the subject of three different lawsuits that summer of 2007, all concerning money owed for paintings left with Salander that he appeared to have sold, but for which the owners had never been paid. Were they the result of sloppy business practices or indicative of a more serious money problem? We asked Salander if the latter were true. He answered, “No,” then cautioned us, “You have to be very careful when you say things like that.”

We were cautious but inquisitive. What we discovered, and what the art world now knows, was that Salander’s troubles were far greater than a $32,000 debt to a California collector. One lawsuit had ended with a $497,144 judgment against his Salander-O’Reilly Galleries; he was being sued for over $9 million in another; and there were multiple stories floating around the art world about his bounced checks and unhappy consignors.

We filed six stories about Salander in 2007. In 2008, one year after that initial phone call, Salander declared bankruptcy. In 2009, Salander was indicted on 100 criminal counts. On March 18, 2010, a shaky Salander stood up in a New York City courtroom and admitted what everyone knew by then: the 60-year-old art dealer had committed grand larceny on a grand scale. He pleaded guilty to 29 criminal counts in a plea-bargain that left him facing a six- to 18-year prison sentence. We filed many subsequent reports, and although Salander is in prison and his troubles are no longer front-page stuff for art media buffs, the fallout from his crimes is far from over.

Salander-O’Reilly Galleries handled the art of American Modernist artist Stuart Davis (1892-1964) for his son, Earl Davis, who claimed that over a period of several years he had delivered hundreds of his father’s artworks to Salander-O’Reilly Galleries for sale at specifically chosen prices. All went well until 1994. Then it went bad, very bad indeed, Earl Davis said.

Davis claimed that during a multiyear period, from 1994 through 2005, Salander and his gallery completed deals on nearly 50 Stuart Davis artworks owned by Earl Davis. None of those transactions were reported to Davis; he was never consulted about those transactions; and he was never paid for any of them. Davis sued Salander over those charges.

There were a series of transactions by Salander with another New York City art dealer, Joseph P. Carroll, Davis claimed, “which ultimately resulted in Carroll acquiring 16 Plaintiff’s Works between January 1, 2006 and June 1, 2006.”

Carroll eventually returned eight paintings to Davis, but he resisted Davis’s demands for the remainder, and on February 6, 2009, Davis filed suit against both Carroll and his art firm, Joseph P. Carroll Limited, in U.S. District Court, Southern District of New York.

That suit has just been resolved. On May 21, U.S. District Judge J. Paul Oetken found in favor of Earl Davis and awarded him a “Summary Judgment” verdict of “Conversion,” “Replevin,” and “Unjust Enrichment” against collector and dealer Joseph Carroll.

Judge Oetken declared that Davis was the rightful owner of eight paintings created by his father and sold by Salander to Carroll. Five of those paintings were in a secure art storage warehouse in Manhattan. The judge ordered that they be immediately surrendered to Davis, who could do whatever he wished with them.

In the matter of the three paintings that were missing, Davis “is awarded: 1) damages in the amount of $310,000, representing the fair market value of the following three (3) Stuart Davis artworks at the time of conversion; and 2) pre-judgment interest in the amount of 9% per annum… continuing until entry of this Judgment.”

The interest clock began ticking on February 10, 2006, for Report from Rockport, valued at $200,000; and on April 21, 2006, for both Drawing for Pennsylvania, valued at $60,000, and Study for Rhythm, valued at $50,000. Judge Oetken also awarded Davis post-judgment interests and costs from Carroll.

Carroll filed a notice of appeal on May 31 and posted an appeal bond of $344,100.

Originally published in the July 2013 issue of Maine Antique Digest. © 2013 Maine Antique Digest

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