December 23, 2013
Jury finds unanimously that defendants violated confidentiality agreement with respect to sale of major Mark Rothko work.
On December 20, after six days of trial and two days of deliberation, a jury in Dallas federal court returned a $1.7 million unanimous verdict in favor of Willkie client Marguerite Hoffman in a closely watched case concerning the confidentiality of the sale of a major Mark Rothko painting.
The jury found that billionaire financier David Martinez, his company Studio Capital, and New York art dealer L&M Arts all breached a contract for the sale of the 1961 Mark Rothko work, a glowing red painting, which Ms. Hoffman sold in 2007. L&M Arts, run by well-known dealers Robert Mnuchin and Dominique Lévy, acted as the agent for Martinez and Studio Capital. The parties embodied the $19 million transaction in a letter agreement providing that "[a]ll parties agree to make maximum effort to keep all aspects of this transaction confidential indefinitely."
In breach of the confidentiality agreement, the private transaction was publicly revealed three years later when Studio Capital resold the painting in a highly publicized auction at Sotheby's for $31.4 million, revealing Ms. Hoffman’s prior ownership in marketing materials. Ms. Hoffman, one of the world’s top collectors and art philanthropists, initiated the lawsuit to vindicate her right to confidentiality. Ten jurors unanimously agreed that all the defendants had breached their promise to her.
L&M Arts, which had been one of world’s most successful art dealers, has since closed its galleries. The case, Hoffman v. Martinez et al (3:10-cv-00953) was heard before Judge Sidney A. Fitzwater, Chief Judge of the U.S. District Court for the Northern District of Texas.
The trial was handled by partners Roger Netzer and Mary Eaton, and associates Dan Kozusko, Ian Christy, and Hayley Tozeski, and legal assistant Ashley Moore.