August Uribe Fine Art, LLC v. Dartmilano SRL, Pier Giulio Lanza, Riccardo Manfrin, Maria Stellina Marescalchi, Fracassi Worldwide Shipping SRL, Oblyon Group, LLC, and Art Lending, Inc.; Sotheby’s, Inc. v. Dartmilano SRL, Pier Giulio Lanza, Riccardo Manfrin, and Art Lending, Inc.

Summary

This opinion addresses competing claims to ownership and security interests in Pablo Picasso’s painting Le Peintre (1967). The court considers summary-judgment motions under UCC §§ 2-401 and 2-403, including the effect of title-retention clauses, delivery, and a lender’s claimed security interest. The court grants Maria Crippa’s motion, grants Sotheby’s motion in part and denies it in part, grants Art Lending’s motion in part and denies it in part, and denies Art Lending’s motion in limine.

Holdings

1. Delivery under UCC § 2-401 requires a voluntary transfer of possession with intent to relinquish control; because Sotheby’s only loaned the Artwork to UFA and never intended to relinquish control, delivery did not occur and title never passed to UFA or DART.
2. DART was not a buyer in the ordinary course of business because it acted in bad faith by deceiving UFA about the purpose of transferring the Artwork and because it knew or should have known of red flags regarding UFA’s ownership.
3. Art Lending did not obtain a security interest because DART had no rights in the collateral; a security interest attaches only when the debtor has rights in the collateral.
4. Crippa established absolute ownership and exclusive right to possession, entitling her to replevin.

Questions Presented

1. Whether title to the Artwork passed from Crippa to UFA or DART under UCC § 2-401
2. Whether DART qualified as a buyer in the ordinary course of business under the merchant entrustment rule of UCC § 2-403(2)
3. Whether Art Lending obtained a valid security interest in the Artwork
4. Whether Crippa was entitled to replevin of the Artwork
5. Whether Sotheby’s had an independent lien or security interest in the Artwork

Disposition

affirmed