Grosso v. Cy Twombly Found.

Grosso v Cy Twombly Found.

2024 NY Slip Op 31905(U)

June 2, 2024

Supreme Court, New York County

Docket Number: Index No. 155762/2022

Judge: Andrea Masley

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.

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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48

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PIER FRANCO GROSSO, INDEX NO. 155762/2022

Plaintiff,

MOTION DATE

- V -

MOTION SEQ. NO. 002 003

CY TWOMBLY FOUNDATION, DAVID BAUM, and

NICOLA DEL ROSCIO,

DECISION+ ORDER ON

Defendants. MOTION

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HON. ANDREA MASLEY:

The following e-filed documents, listed by NYSCEF document number (Motion 002) 10, 11, 12, 13, 14,

15, 16, 17,29,40, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 78, 79, 85,92, 93, 94

were read on this motion to/for DISMISSAL

The following e-filed documents, listed by NYSCEF document number (Motion 003) 18, 19, 20, 21, 22,

30,41,51,52,53,54,55,56,57,58,59,60,80,86,90,91, 95

were read on this motion to/for DISMISSAL

In motion sequence number 002, defendants Cy Twombly Foundation and David

R. Baum move pursuant to CPLR 3211 (a) (1 ), (5) and (7) to dismiss the complaint in its

entirety. In motion sequence number 003, defendant Nicola Del Roscio moves

pursuant to CPLR 3211 (a) (8) to dismiss the complaint against him in its entirety, but if

the court finds it has jurisdiction over Del Roscio, he also asks to join motion 002.

Background

The following facts are taken from the complaint and are accepted as true for the

purposes of these motions to dismiss.

Plaintiff Pier Franco Grosso inherited several of the late artist Cy Twombly's

works from his father, Francesco Grosso including the Work which is the subject of this

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action. (NYSCEF 38 1 , Complaint ,m 17-21.) Plaintiff was a friend of Cy Twombly

(Artist) who died in 2011. (Id. ,m 3, 23.) Defendant Cy Twombly Foundation is a private

foundation formed in 2005 with the aim of fostering the study and preservation of Cy

Twombly's works. (Id. ,i 5; NYSCEF 90, Grosso's Memo of Law [mot. seq. no. 003] at

6.)

In 2011, the defendant Foundation confirmed 2 in writing (signed by the

Foundation's President defendant Del Roscio) "that the Work would be included in a

publication intended to be part of a comprehensive catalogue of the Artist's works of art

(the "Catalogue Raisonne")." (NYSCEF 38, Complaint ,i 7.) The Foundation or Del

Roscio did not request an opportunity to view the Work prior to providing the

Authentication. (Id. ,i 28.) They also did not indicate that the Artist had any issues with

the authenticity of the Work. (Id. ,i 30.) Based on the information in its possession,

plaintiff believes that at the time the Authentication was provided in 2011, the

Foundation and Del Roscio did not have any written procedures for communicating

information about the Catalogue Raisonne with owners of artworks attributed to the

Artist and did not require "those seeking information about the inclusion of a work in a

Catalogue Raisonne to sign a written agreement with the Foundation or anyone else."

(Id. ,i,i 31-32.) The Catalogue Raisonne was published in 2013 without including the

Work. (NYSCEF 69, Baum's September 17, 2021 Email at pdf pg. 3.)

1

Since the summons and complaint filed as NYSCEF 1 is redacted, the court refers to

the complaint as NYSCEF 38, which is sealed but unredacted.

2

Plaintiff refers to this writing as an 'authentication' as according to plaintiff in

confirming that the Work would be included in the Catalogue Raisonne, the Foundation

effectively authenticated the Work. (NYSCEF 38, Complaint ,i 7.)

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Plaintiff consigned the Work to Phillips Auctioneers LLC (Phillips) and received a

$ 1.5 million advance against proceeds from Phillips pursuant to written agreements.

(NYSCEF 38, Complaint ,i 62.) In January 2019, Phillips and plaintiff signed an

addendum to the Agreement reaffirming the terms of the sale and recording the accrual

of interest as of January 2019. (Id. ,i 66.) Phillips scheduled the Work for sale at an

auction in 2019 and contacted the Foundation about the Work prior to the sale. (Id. ,i,i

67-68.)

Plaintiff alleges that defendants made false statements to Phillips about the Work

and plaintiff. (Id. ,i 71.) Plaintiff eventually discovered 3 that defendants Del Roscio and

the Foundation communicated to Phillips through defendant Baum that "there was "no

doubt" that the Work was a fake and Grosso was aware of this fact when he consigned

the Work to Phillips." (Id. ,i 6.) Defendant Baum also informed Phillips that "the

Foundation had been shown this work before, and that there is a specific reason why

the work is not in the catalogue raisonne." (NYSCEF 16, Dolan's email dated July 8,

2019.) Defendant Baum was deposed during the Phillips Action wherein he asserted

that "Cy Twombly himself declared the work to be fake." (NYSCEF 17, Baum

Deposition Tr 190:8-12.) Plaintiff alleges that the Foundation claimed that the Work is a

fake because a 'Gian Piero Grosso' believed to be plaintiff's father, submitted the Work

for authentication (Submission) through a Vienna gallery and the Artist reviewed the

Work and declared it to be inauthentic. (NYSCEF 38, Complaint ,i 15.) The Foundation

3 Plaintiff only became aware of the nature of Baum's communications with Phillips

during discovery in the action filed by Phillips against plaintiff. (Phillips Auctioneers LLC

v Pier Franco Grosso, Index No. 651782/2020) (Phillips Action) (NYSCEF 38,

Complaint ,i 11.)

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also had in its possession an envelope 4 (in which the Submission was kept) which had

the handwritten inscription "falso dice Cy" which translates in English to "false says Cy".

(Id. ,i 15; NYSCEF 69, Baum's September 17, 2021 Email.) The Foundation believed

this to be proof that Cy Twombly himself reviewed 5 the Submission and declared the

Work to be inauthentic. (NYSCEF 69, Baum's September 17, 2021 Email.)

Plaintiff challenges these claims and alleges that the Foundation's statements to

Phillips were demonstrably false because 'Gian Piero Grosso' was not plaintiff's father,

the handwriting on the envelope is of an unknown person and not the Artist and the

Artist saw the Work in-person at Grosso's residence and never communicated that the

Work is a fake or in any indicated that he was not the creator of the Work. (NYSCEF

38, Complaint ,i,i 22, 25-26, 48.)

Plaintiff alleges that through their actions and false statements, defendants

"intended to convince Phillips that the Work was not authentic, sought to impermissibly

interfere with Mr. Grosso's business relationship and Agreement with Phillips and

induced Phillips into withdrawing the Work from sale." (Id. ,i 72.) Plaintiff further

contends that defendants procured a criminal record evidencing a conviction of a 'Pier

Franco Grosso' in Italy and shared it with Phillips 6 claiming it to be a criminal record for

Grosso. (Id. ,i,i 50-55.)

4

These documents were produced by the Foundation in response to subpoenas issued

by Grosso in the Phillips Action. (NYSCEF 69, Baum's September 17, 2021 Email.)

5

The Foundation also claims that the Artist inscribed a photograph of the Work with the

words "FAKE Cy" and this photograph has since gone missing coincident with a break-

in at the Foundation's offices. (NYSCEF 38, Complaint ,i 15; NYSCEF 69, Baum's

September 17, 2021 Email.)

6

The record was shared with both Phillips and counsel for Grosso in response to

subpoenas issued in the Phillips Action. (NYSCEF 71, Baum's September 21, 2021

Email.)

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Plaintiff claims that due to defendants' false statements and actions, the Work

was not sold and plaintiff in March 2020 was publicly branded as having owned and

fraudulently consigned a fake artwork to Phillips. (Id. ,i 73.) Phillips eventually also filed

a complaint against plaintiff entitled Phillips Auctioneers LLC v Pier Franco Grosso,

Index No. 651782/2020 (Phillips Action) alleging among other things, breach of contract

and fraud arising out of plaintiff's consignment of the Work to Phillips. (Id. ,i 3.)

Plaintiff filed this action against defendants on July 11, 2022, alleging the

following causes of action: (i) Tortious interference with business relationships (Count I);

(ii) defamation (Count 11); (iii) prima facie tort (Count 111); (iv) fraud (Count IV); (v)

Injurious Falsehood (Count V); (vi) Product Disparagement (Count VI); and (vii)

Negligent Misrepresentation (against the Foundation in the alternative) (Count VII). (Id.)

DISCUSSION

Legal Standard

On a motion to dismiss pursuant to CPLR 3211 (a)(7), the court must "accept the

facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible

favorable inference, and determine only whether the facts as alleged fit within any

cognizable legal theory." (Leon v Martinez, 84 NY2d 83, 87-88[1994] [citation omitted].)

To prevail on a CPLR 3211 (a)(1) motion to dismiss, the movant has the "burden

of showing that the relied-upon documentary evidence resolves all factual issues as a

matter of law, and conclusively disposes of the plaintiff's claim." (Fortis Fin. Servs. v

Fimat Futures USA, 290 AD2d 383, 383 [1st Dept 2002] [internal quotation marks and

citation omitted].) "A cause of action may be dismissed under CPLR 3211 (a)(1) only

where the documentary evidence utterly refutes [the] plaintiff's factual allegations,

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conclusively establishing a defense as a matter of law." (Art and Fashion Group Corp. v

Cyclops Prod., Inc., 120 AD3d 436, 438 [1st Dept 2014] [internal quotation marks and

citation omitted].) For evidence to be considered documentary, it "must be

unambiguous and of undisputed authenticity." (Fontanetta v John Doe 1, 73 AD3d 78,

86 [2nd Dept 201 O].) Affidavits and deposition testimony do not constitute "the type of

documentary evidence that may be considered on a motion pursuant to CPLR 3211 (a)

(1 )." (Correa v Orient-Express Hotels, Inc., 84 AD3d 651, 651 [1st Dept 2011] [citations

omitted].)

"On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) as

barred by the applicable statute of limitations, a defendant must establish, prima facie,

that the time within which to sue has expired. Once that showing has been made,

the burden shifts to the plaintiff to raise a question of fact as to whether the statute of

limitations has been tolled, an exception to the limitations period is applicable, or the

plaintiff actually commenced the action within the applicable limitations period."

(Flintlock Constr. Servs., LLC v Rubin, Fiorella & Friedman, LLP, 188 AD3d 530, 531

[1st Dept 2020] [citations omitted].)

CPLR 3211 (a) (8) authorizes dismissal of "one or more causes of action

asserted ... on the ground that ... the court has not jurisdiction of the person of the

defendant." "On a motion pursuant to CPLR 3211 (a) (8) to dismiss for lack of personal

jurisdiction, the party asserting jurisdiction has the burden of demonstrating 'satisfaction

of statutory and due process prerequisites."' (Matter of James v iFinex Inc., 185 AD3d

22, 28-29 [1st Dept 2020] [citation omitted].) A plaintiff meets this burden by presenting

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affidavits and relevant documents. (See Coast to Coast Energy, Inc. v Gasarch, 149

AD3d 485,486 [1st Dept 2017].)

Mot. Seq. No. 003

Personal Jurisdiction

New York courts may exercise general jurisdiction over a defendant under the

United States Constitution or under CPLR 301 if the defendant is domiciled in the state

or has "continuous and systematic" contacts with New York which are substantial

enough to render the defendant at home in New York. (Daimler AG v Bauman, 571

U.S. 117, 126, 134, 139; IMAX Corp. v Essel Group, 154 AD3d 464, 465-466 [1st Dept

2017].) Activities undertaken by an individual defendant in the state on behalf of a

corporate entity do not confer personal jurisdiction over the individual defendant. (IMAX

Corp., 154 AD3d at 466 [internal citation omitted].)

Courts may also exercise jurisdiction over a non-domiciliary if it has long-arm

jurisdiction over the defendant under CPLR 302 and the exercise of such jurisdiction

comports with due process. (0 & R Glob. Selections, S.L. v Bodega Olegario Falcon

Pineiro, 29 NY3d 292 [2017].)

In mot. seq. no. 003, defendant Del Roscio moves pursuant to CPLR 3211 (a) (8)

to dismiss the compliant against him for lack of personal jurisdiction. Del Roscio, an

Italian citizen and resident, contends that the court does not have general jurisdiction

over him because he is not domiciled in New York and does not have "continuous and

systematic contacts with New York sufficient to render him essentially at home in New

York." (NYSCEF 19, Del Roscio's Memo of Law at 6.) Del Roscio further contends that

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the court also does not have specific jurisdiction over him under CPLR 302 as the only

interaction alleged between him and plaintiff occurred in Italy over a decade ago. (Id.)

General Jurisdiction

Roscio disputes the assertion in the complaint 7 that "on information and belief,

Defendant Nicola Del Roscio is an individual who has a residence and a workplace in

the State and County of New York." (Id. at 7.) He claims that he resides and works in

Italy and does not regularly conduct business on behalf of the Foundation in New York.

(NYSCEF 22, Del Roscio aff ,i,i 2-6.) He claims that he has not conducted any personal

or non-Foundation business in New York. (Id. ,i 6.)

Plaintiff contends that the Foundation's general presence in the forum is

sufficient to confer general jurisdiction over Del Roscio. (NYSCEF 90, Grosso's Memo

of Law [mot. seq. 003] at 11.) Plaintiff relies on the alter-ego theory to contend that

"where a court has personal jurisdiction over a defendant, the court also has jurisdiction

over the defendant's alter ego, and such jurisdiction over the alter ego does not offend

due process." (Id.) Plaintiff also contends that Del Roscio is estopped from claiming

that he is not domiciled in Italy because he "holds himself as residing in New York for

tax purposes." (Id. at 13.) 8

Del Roscio is not domiciled in New York and does not have continuous or

systematic contacts with New York which would render him at home in New York. He

7 Plaintiff further contends in the complaint that Roscio's address is listed as "19 East

82nd Street, New York, NY 10028 on the Foundation's most recent tax filing."

(NYSCEF 38, Complaint ,i 59.)

8

The Foundation's most recent tax filing (Form 990) lists the defendant Del Roscio's

address as "19 East 82nd Street, New York, NY 10028 which is the Foundation's New

York address. (NYSCEF 38, Complaint ,i,i 57, 59.)

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does not regularly conduct business on behalf of the Foundation from New York and in

any event, activities undertaken on behalf of the Foundation would not confer personal

jurisdiction over Del Roscio. Plaintiff's contention that this court acquires general

jurisdiction over Del Roscio by virtue of the Foundation's general presence in New York

is contrary to prevailing law. (See IMAX Corp., 154 AD3d at 466 [internal citation

omitted].

The court also rejects plaintiff's reliance on an alter-ego theory. A corporate veil

will be pierced to exercise jurisdiction over an alter-ego if there is complete domination

to commit fraud or a wrong against plaintiff. (Matter of Morris v New York State Dept. of

Taxation and Fin., 82 NY2d 135 [1993]

"Factors to be considered include the disregard of corporate formalities;

inadequate capitalization; intermingling of funds; overlap in ownership, officers,

directors and personnel; common office space or telephone numbers; the degree

of discretion demonstrated by the allegedly dominated corporation; whether

dealings between the entities are at arm's length; whether the corporations are

treated as independent profit centers; and the payment or guaranty of the

corporation's debts by the dominating entity. No one factor is dispositive."

(Fantazia Intern. Corp. v CPL Furs New York, Inc., 67 AD3d 511, 512 [1st Dept 2009].)

None of these factors exist here. Plaintiff's conclusory assertions that Del Roscio is the

"key decision maker", "an integral part of the day-to-day activities of the Foundation",

"the primary individual associated with the Foundation or Artist who provides information

about whether an artwork attributed to the Artist will be included in any of the Artist's

catalogues raisonne" (NYSCEF 90, Grosso's Memo of Law [mot. seq. 003] at 12) do not

provide a sufficient basis for this court to find that Del Roscio is the Foundation's alter-

ego. Further, plaintiff has failed to allege much less demonstrate that Del Roscio used

the Foundation's corporate form to perpetuate fraud on plaintiff. Plaintiff's reliance on

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the Foundation's Form 990 tax filing to allege "judicial estoppel" is misconceived. Del

Roscio putting down a New York address at which he can be contacted 9 is not

tantamount to him claiming a New York residence. Del Roscio is correct in contending

that "the form lists the same address for all of the Foundation's officers, so it clearly is

not Del Roscio's residence" (NYSCEF 19, Del Roscio's Memo of Law [September 16,

2022] at 10, fn 3) and was likely the only New York address he could provide, being an

Italian resident.

The court finds that it does not have general jurisdiction over Del Roscio.

Specific Jurisdiction

The defendant Del Roscio contends that the court does not have specific

jurisdiction over him under CPLR 302 (a) as the acts in the complaint attributed to Del

Roscio all occurred outside of New York. In the complaint, plaintiff alleges that Del

Roscio on behalf of the Foundation agreed in writing to include the Work in the

Catalogue Raisonne (NYSCEF 38, Complaint ,i 7) and at some point "Roscio grew

hostile to Mr. Grosso and eventually stopped communicating with Mr. Grosso

altogether." (Id. ,i 42.) Del Roscio explains in his affidavit that he had signed the back

of a photograph of the Work (which plaintiff refers to as the signed writing in ,i 7 of the

complaint) during a meeting with plaintiff which took place in Rome, Italy (NYSCEF 22,

9

According to Del Roscio, "The IRS website makes clear that corporate officers do not

have to put their home address on Form 990". See Exempt Organizations Annual

Reporting Requirements - Form 990, Parts 1-V: Home Addresses Need Not Be

Reported. The IRS website states that an organization may list business addresses at

which these persons can be contacted, rather than their home address." (NYSCEF 95,

Del Roscio's Memo of Law [November 21, 2022] at 12; NYSCEF 19, Del Roscio's

Memo of Law [September 16, 2022] at 10, fn 3.)

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Roscio aff ,i 7) and he last visited New York in 2020 for purposes wholly unrelated to

plaintiff, the Work, or the issues in dispute in this litigation. (Id. ,i 8.)

Plaintiff contends that "CPLR 302 (a) (1) does not require that every element of

the cause of action pleaded must be related to the New York contacts; rather, where at

least one element arises from the New York contacts, the relationship between the

business transaction and the claim asserted supports specific jurisdiction under the

statute." (NYSCEF 90, Grosso's Memo of Law [mot. seq. 003] at 14.) Plaintiff also

contends that the court can find specific jurisdiction over Del Roscio because he

repeatedly projected himself into the jurisdiction (via telephone or email) through Baum.

(Id. at 15-16.) Plaintiff also claims that personal jurisdiction can be exercised over Del

Roscio under CPL 302 (a) (3) because he spread falsehoods (through Baum) to Phillips

about plaintiff and the Work and facilitated the procurement and distribution of the False

Criminal Record to further defame plaintiff. (Id. at 16-18.) In the alternative, Grosso

requests leave to replead his allegations and conduct jurisdictional discovery. (Id. at 19.)

For a court to exercise jurisdiction under CPLR 302 (a) (1 ), the "attachment to

New York must be (1) purposeful; and (2) there must be a substantial relationship

between the New York transaction of business and the claim asserted." (Silverman v

Minify, LLC, 2016 NY Slip Op 30046 [U] *5 [Sup Ct, NY Cty 2016].) "Purposeful

activities are defined as those with which a defendant, through volitional acts, avails

itself of the privilege of conducting activities within the forum State, thus invoking the

benefits and protections of its laws." ( C. Mahendra (N. Y), LLC v Nat'/ Gold & Diamond

Ctr., Inc., 125 AD3d 454,457 [1st Dept 2015] [internal quotations and citations

omitted]). A court can exercise jurisdiction even in the absence of physical presence if

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the "the defendant on his [or her] own initiative ... project[s] himself [or herselfj into this

state to engage in a sustained and substantial transaction of business." (Silverman,

2016 NY Slip Op 30046 [U] *, 8 [internal quotations and citations omitted]).

The court does not have jurisdiction over Del Roscio under CPLR 302 (a) (1)

because the Authentication which is the only act by Del Roscio which has a substantial

relationship with the claims in this action was performed in Italy. Grosso's argument

that Del Roscio projected himself into the State through telephone calls and emails with

Baum and other employees of the Foundation is similarly unavailing. "To establish that

a defendant acted through an agent, a plaintiff must convince the court that [the New

York actors] engaged in purposeful activities in this State in relation to [the] transaction

for the benefit of and with the knowledge and consent of [the defendant] and that [the

defendant] exercised some control over [the New York actors]." (Coast to Coast

Energy, Inc. v Gasarch, 149 AD3d 485, 486-487 [1st Dept 2017] [internal quotation

marks and citation omitted].) Grosso has failed to proffer specific facts to show that Del

Roscio exercised control over Baum in relation to the specific matter in question.

Conclusory assertions about telephone calls and emails between Del Roscio and Baum

are insufficient to make such a showing.

A court may exercise personal jurisdiction under CPLR 302 (a) (3) if a defendant

commits a tortious act outside the state which causes injury to person or property in the

state, other than a cause of action for defamation of character arising from the act, if he

"(i) regularly does or solicits business, or engages in any other persistent course of

conduct, or derives substantial revenue from goods used or consumed or services

rendered, in the state, or (ii) expects or should reasonably expect the act to have

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consequences in the state and derives substantial revenue from interstate or

international commerce."

The acts attributed to Del Roscio by Grosso are expressly excluded as a basis of

jurisdiction under CPLR 302 (a) (3). In any event, Grosso also fails to satisfy the other

requirements for the application of CPLR 302 (a) (3). Del Roscio does not regularly

conduct business or solicit business (on his own account) or derive substantial revenue

from good used or consumed or services rendered in New York. Del Roscio's business

contacts with New York are limited to his role as the President of the Foundation.

The court holds that it does not have personal specific jurisdiction over Del

Roscio under CPLR 302 (a).

The court rejects Grosso's request to replead his allegations for the reasons

stated above. The court also rejects Grosso's request to conduct jurisdictional

discovery as Grosso has failed to make a sufficient start to establish that Del Roscio

was engaged in purposeful activity in New York State such that jurisdictional discovery

should be ordered. (See Mannooch v Avon Prods., Inc., 2023 NY Slip Op 33355[U] *

(Sup Ct, NY Cty] [the court declined to order jurisdictional discovery as plaintiff "failed to

make a sufficient start to establish that defendant was engaged in purposeful activity in

New York State such that jurisdictional discovery should be ordered"].)

Mot. Seq. No. 002

In mot. seq. no. 002, defendants Cy Twombly Foundation and Baum (Movants)

seek a dismissal of the complaint pursuant to CPLR 3211 (a) (1), (5) and (7).

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Grosso's Fraud (Count IV) and Negligent Misrepresentation (Count VII) Claims

The Movants assert that Grosso's fraud and negligent misrepresentation claims,

premised on Del Roscio's alleged 2011 promise that the Work would appear in the

Catalogue Raisonne, are time-barred. (NYSCEF 12, Movants' Memo of Law

[September 16, 2022] at 14.) According to the Movants, Grosso's fraud and negligent

misrepresentation claims accrued in 2013 when the Catalogue Raisonne was published

without the inclusion of the Work, nine years before Grosso initiated this action and are

now beyond the period of limitations. (Id. at 15.)

On the contrary, Grosso contends that his fraud and negligent misrepresentation

claims are timely because the 2013 publication of the Catalogue Raisonne did not put

him on inquiry notice because he believed that the Catalogue Raisonne could be

supplemented in the future. (NYSCEF 93, Grosso's Memo of Law [mot. seq. no. 002] at

12-13.) Grosso claims that the catalogue raisonnes for Twombly have been

supplemented in the past and it was his understanding that the 2013 Catalogue

Raisonne would be supplemented in the future to include the Work. (Id. at 15.) In the

alternative, Grosso claims that he only discovered during the discovery in the Phillips

Action that defendants had informed Phillips that they "believed in 2011 that the Artwork

was inauthentic." (Id. at 23.) Therefore, Grosso claims that his fraud claim is timely

because he only discovered the fraud regarding the certification of the Work during the

Philips Action. (Id.)

An action based upon fraud [or negligent misrepresentation] must be

commenced within the greater of six years from the date of the fraud [or

misrepresentation] or within two years from the time plaintiffs discovered, or with

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reasonable diligence, could have discovered the fraud [or misrepresentation]. (MB/

Intern. Holdings Inc. v Barclays Bank PLC, 151 AD3d 108, 114 [1st Dept 2017], Iv

denied, 31 NY3d 902 [2018]; Demian v Calmenson, 156 AD3d 422,423 [1st Dept 2017]

[fraud and negligent misrepresentation].) Grosso does not and cannot contest the

Movants' assertion that its fraud and negligent misrepresentation claims are subject to

the greater of the six-year limitation or the two-year discovery rule. (NYSCEF 93,

Grosso's Memo of Law [mot. seq. no. 002] at 23.) Grosso also does not contest the fact

that it knew that the Catalogue Raisonne was published in 2013 without including the

Work.

Even if Grosso believed that the Catalogue Raisonne could be supplemented in

due course, it was incumbent upon him to exercise reasonable diligence and inquire of

the Foundation when the Catalogue Raisonne would be supplemented to include the

Work. (See MB/ Intern. Holdings Inc., 151 AD3d T 117 [internal citation and quotation

omitted] ["[W]here the circumstances are such as to suggest to a person of ordinary

intelligence the probability that he [or she] has been defrauded, a duty of inquiry arises,

and if he [or she] ... shuts his [or her] eyes to the facts which call for investigation,

knowledge of the fraud will be imputed to him [or her]"].) Despite his knowledge of the

significance of being included in a Catalogue Raisonne for an artwork's authenticity and

consequently marketability, Grosso made no effort to contact the Foundation and

inquire about the inclusion of the Work in any forthcoming of Twombly's forthcoming

catalogue raisonnes. Grosso'S alternate argument that he only discovered the fraud

regarding the Authentication during the discovery in the Phillips Action is also without

merit as actual knowledge of fraud is not required to trigger the limitation period and

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such period began to run from the time Grosso could have with reasonable diligence

discovered the fraud or misrepresentation.

The court finds that Grosso was on inquiry notice in 2013 when the Catalogue

Raisonne was published without inclusion of the Work and his fraud and negligent

misrepresentation claims are time-barred. The court does not address the Movants

arguments on dismissal of the fraud and negligent misrepresentation claims pursuant to

3211 (a) (1) and (7) since the court has already determined that these claims are

untimely.

Tortious Interference with Business Relationships (Count I)

Grosso contends that its tortious interference claim arose in 2019 when the

"defendants first communicated to Phillips that there was no doubt that the Artwork was

fake, and that Grosso knew it." (NYSCEF 93, Grosso's Memo of Law [mot. seq. no.

002] at 14-15.)

The Movants contend that Grosso's tortious interference claim is subject to a

three-year statue of limitations and is time-barred as it accrued in 2013 when the

Catalogue Raisonne was published without including the Work. (NYSCEF 12, Movants'

Memo of Law [September 16, 2022] at 18.) Relying on Thome v Alexander & Louisa

Calder Foundation, 70 AD3d 88, 108 [1st Dept] [2009]), Movants contend that a tortious

interference claim arising out of a foundation's refusal to include a work in a catalogue

raisonne accuses when the catalogue raisonne is published even if the claim is based

entirely on the assertion that defendants' action (or inaction) has a negative effect on

subsequent contractual relationships. (NYSCEF 12, Movants' Memo of Law

[September 16, 2022] at 19; NYSCEF 94, Movants' Memo of Law [November 21, 2022]

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at 13-14.) The Movants further contend that Grosso's tortious interference claim is

time-barred even if it accrued in 2019 when defendants made the alleged statements to

Phillips as a tortious interference claims based on alleged defamation is subject to a

one-year statute of limitations. (NYSCEF 94, Movants' Memo of Law [November 21,

2022] at 14.)

For a tortious interference claim, the time to file begins to run when the

"defendant performs the action (or inaction) that constitutes the alleged interference. It

does not commence anew each time plaintiff is unable to enter into a contract, unless

the defendant takes some further step." (Thome, 70 AD3d 88, 108.) The First

Department in Thome dismissed plaintiff's tortious inference claim for being time-barred

as the claim accrued when the "Foundation failed to issue the numbers for the

catalogue raisonne, thus purportedly injuring plaintiff in his ability to sell the Work." (Id.)

Grosso's claim for tortious interference arises out of the Foundation's failure to include

the Work in the Catalogue Raisonne which impaired Grosso's ability to sell the Work to

Phillips. The claim first accrued in 2013 when the Catalogue Raisonne was published

without including the Work. The claim did not commence anew when Grosso was

unable to sell the Work to Phillips; however, the claim did commence anew in 2019

when defendants [Foundation and Baum] allegedly communicated to Phillips that they

believed that Work was fake. Movants' reliance on Thome to contend that the cause of

action for tortious inference accrues when the catalogue raisonne is published is

unavailing as unlike defendants in Thome, defendants here did take "some further step."

The tortious interference claim accruing in 2019 is premised on defendants' [Foundation

and Baum] alleged defamatory statements to Phillips and is subject to a one-year

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statute of limitations. (CPLR 215 (3).) As Grosso has asserted this claim in 2022, well

beyond the one-year period prescribed by the statute of limitations, it too is barred.

Accordingly, the court does not address Movants' arguments seeking its dismissal

pursuant to 3211 (a) (1) and (7).

Prima Facie Tort (Count Ill)

Grosso alleges a prima facie tort claim based on the Foundation acting with

"disinterested malevolence and with the sole intent to inflict harm on Mr. Grosso" in "(a)

not including the Work in the Catalogue Raisonne, and (b) obtaining and distributing the

False Criminal Record." (NYSCEF 38, Complaint ,i 99.) The Movants contend that

prima facie tort claim accrued in 2013 when the Catalogue Raisonne was published and

expired in 2016 as prima facie tort claims are subject to a three-year statute of

limitations that runs from the date of the alleged tort and are not subject to the discovery

rule. (NYSCEF 12, Movants' Memo of Law [September 16, 2022] at 18.) The claim is

dismissed in the absence of opposition to defendants' statute of limitations argument.

Injurious Falsehood (Count V)

The Movants contend that Grosso has not adequately pied his injurious

falsehood claim against the Foundation and Baum. (NYSCEF 12, Movants' Memo of

Law [September 16, 2022] at 21.) The Movants contend that Grosso has failed to

allege the particular falsehoods uttered by defendants and has only proffered vague

allegations that the "Defendants made statements to Phillips that led Phillips to wrongly

conclude that the Work is a fake, and which undermined Mr. Grosso's probity, without

specifying what was said, when, by and to whom." (Id.) To the extent that Grosso's

claim for injurious falsehood is based on Baum's July 2019 conversation with Phillips,

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the Movants contend that this statement is not actionable as Baum had good reason to

believe the truth. (Id.) Further, Movants contend these communications do not give rise

to individual liability against Baum as he was acting solely within the scope of his role as

a lawyer for the Foundation when making these statements. (Id. at 22.)

"The elements of a cause of action for injurious falsehood are (1) a false and

misleading statement harmful to the interests of another, (2) uttered or published

maliciously and with intent to harm another, or done recklessly and without regard to its

consequences, and (3) a reasonably prudent person would or should anticipate that

damage to another would naturally flow therefrom. In addition, the injured party must

plead with specificity that it suffered special damages as a result of the false and

disparaging statement." (Fulton Quality Foods LLC v Arcon Constr. Group Inc., 2014

NY Slip Op 31618[U] * [Sup Ct, NY Cty].) [internal citation and quotation marks

omitted].) An injurious falsehood claim must "specify with particularity the alleged

falsehood uttered." (See BCRE 230 Riverside LLC v Fuchs, 59 AD3d 282, 283 [1st

Dept 2009] [internal citation and quotation marks omitted].)

The court finds that Grosso has failed to plead with particularity the alleged

falsehood uttered by defendants. To the extent that the claim for injurious falsehood is

based on Baum's 2019 conversation with Phillips, the defendant and Baum had good

reason to believe that the statements were true and such communication would

therefore not be actionable. ( See Id. [the court found a failure to plead injurious

falsehood as the "plaintiff's representatives had good reason to believe" in the truth of

the statement in issue].) Further, Grosso has also failed to plead with particularity the

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special damages incurred as a result of the alleged falsehood. Grosso's injurious

falsehood claim is dismissed.

Product Disparagement (Count VI)

The Movants contend that Grosso's product disparagement claim is subject to a

one-year period of limitations and is time barred. (NYSCEF 12, Movants' Memo of Law

[September 16, 2022] at 18.) Grosso does not dispute the Movants' argument that the

claim for product disparagement is time-barred.

Claims for product disparagement are subject to a one-year statute of limitations.

(CPLR 215 [3].) Grosso's claim for product disparagement is based on Baum's 2019

communication to Phillips. (NYSCEF 38, Complaint ,m 127-132.) This claim is time-

barred and is dismissed pursuant to CPLR 3211 (a) (5).

Defamation (Count 11)

Grosso's claim for defamation is based on the (i) Foundation's communication

(through defendant Baum) to Phillips on September 21, 2021 sharing a criminal record

which the Foundation believed to be relating to Grosso; and (ii) Baum's deposition

testimony in the Phillips Action where he described Grosso as "someone who is

fraudulently peddling works," "a dishonest person", "a fraud", and "a criminal".

(NYSCEF 38, Complaint ,-I,J 77-86.)

The Movants move to dismiss Grosso's defamation claim because the claim is

barred by absolute litigation privilege as it is based on allegedly defamatory statements

made or produced during non-party discovery in the Phillips Action. (NYSCEF 12,

Movants' Memo of Law [September 16, 2022] at 23.) The Movants also claim that

Grosso has failed to plead a cause of action for its defamation claim as the allegedly

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defamatory statements in question were not statements of fact. (NYSCEF 94, Movants'

Memo of Law [November 21, 2022] at 19.)

Grosso contends that defendants cannot claim immunity from liability for

defamation because the defamatory statements in question were not 'material and

pertinent to the questions involved' and would not be subject to the absolute litigation

privilege. (NYSCEF 93, Grosso's Memo of Law [mot. seq. no. 002] at 21.)

"Absolute immunity from liability for defamation exists for oral and written

statements made .... in connection with a proceeding before a court when such words

are material and pertinent to the questions involved. The litigation privilege, being

absolute, confers immunity from liability regardless of motive." (Gottwald v Sebert, 40

NY3d 240, 253.) [internal quotation marks and citation omitted].)

The defamatory statements in question were made in a deposition and in

response to a subpoena request and are evidently statements made in connection with

a legal proceeding (the Philips Action). Grosso alleges that the statements concerning

him were "out of context" and not material and pertinent to the questions involved. The

Phillips action involves claims of breach of contract and fraud arising out of Grosso's

consignment of the Work. According to plaintiff, Phillips publicly branded him as having

owned and fraudulently consigned a fake artwork." (NYSCEF 38, Complaint ,i 73.)

Therefore, ( 1) the authenticity of the Work, (2) whether Grosso was aware that it was a

fake, (3) defendants' reasons for believing that the Work was fake, and (4) Grosso

knowingly assigned the purportedly fake Work to Phillips were all issues material and

pertinent to the Phillips Action. Defendants' statements about Grosso were therefore

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pertinent and material to the Phillips Action and protected by the absolute litigation

privilege.

In any event, the defamatory statements identified by Grosso convey an opinion

and are not statements of fact. A statement of "pure opinion" cannot form the basis for

a defamation claim. (See Davis v Boeheim, 24 NY3d 262, 269 ["A defamatory

statement of fact is in contrast to "pure opinion" which under our laws is not actionable

because [e]xpressions of opinion, as opposed to assertions of fact, are deemed

privileged and, no matter how offensive, cannot be the subject of an action for

defamation"] [internal citation and quotation marks omitted].)

Grosso's claim for defamation is dismissed pursuant to CPLR 3211 (a) (1) and

(7).

Accordingly, it is

ORDERED that defendants Foundation and Baum's motion to dismiss the

complaint is granted; and it is further

ORDER □ that defendant Del Roscio's motion to dismiss the complaint is

granted; and it is further

ORDERED that the complaint is dismissed with costs and disbursements to

defendants as taxed by the Clerk and the clerk is directed to enter judgment

accordingly; and it is further

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ORDERED that such service upon the Clerk of the Court shall be made in

accordance with the procedures set forth in the Protocol on Courthouse and County Clerk

Procedures for Electronically Filed Cases (accessible at the "E-Filing" page on the court's

website)].

6/2/2024

DATE ANDREA MASLEY, J.S.C.

~

CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED □ DENIED GRANTED IN PART □ OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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