The Basquiat Estate: Trumping The Dead Man’s Statute with The Federal Rules of Evidence?

Jean-Michel Basquiat was one of the most gifted artists of the late 20th century, raising graffiti art from its street roots to the pinnacle of fine art and in the process redefining Neo-Expressionism.  His untimely death from a drug overdose in 1988 stunned the art world.  He was 27 years old.  According to Phoebe Hoban in her book Basquiat:  A Quick Killing in Art, the auction house Christie’s determined that the artist had left behind a prodigious collection of  917 drawings, 25 sketchbooks, 85 prints, and 171 paintings.

Basquiat died without a Will (intestate).  At the time of his death, his parents Gerard and Matilde were estranged, but not divorced.  New York’s EPTL § 4-1.1 (a) (4) states that, where a person dies without a Will and is survived by one or both parents, the whole of the estate goes to the surviving parent or parents.  Gerard Basquiat began the long process of probating the estate, a process slowed by a number of lawsuits against the estate.  Matilde Basquiat died in November of 2008, leaving Gerard as the sole administrator of their son’s valuable collection.

In 1993, an art dealer named Michelle Rosenfeld sued the Basquiat Estate for allegedly failing to deliver three paintings that had been purchased from Jean-Michel pursuant to a partly written and partly oral purchase agreement.   At trial, defense counsel for the Basquiat Estate affirmatively waived his objection based on New York’s Dead Man’s Statute (CPLR  § 4519) to Michelle Rosenfeld’s testimony concerning her conversations with the deceased Basquiat.  This affirmative waiver came after the judge in the case said that he would instruct the jury about the Dead Man’s Statute if Basquiat chose to invoke it.    Rosenfeld proceeded to testify about her conversations with Basquiat. 

Rosenfeld testified that she had met Jean-Michel Basquiat at his apartment on 25 October 1982.  She said that during their meeting, Jean-Michel had agreed to sell her three paintings, identified in her complaint, for $4,000 each.  Jean-Michel then asked her for a 10% deposit.  Rosenfeld returned ten days later with $1,000 in cash whereupon she asked for a receipt.  According to Rosenfeld, Jean-Michel then set upon writing a “contract” in crayon that identified the three paintings and recited the agreed-upon price and the deposit.  The dated document was signed by both Basquiat and Rosenfeld (Rosenfeld v. Basquiat, 78 F.3d 84).

That trial ended in a hung jury. Rosenfeld filed for a new trial in the United States District Court for the Southern District of New York.  In a pretrial conference, the parties were asked to brief the court regarding the threshold question as to the applicability of the Dead Man’s Statute (Rosenfeld v. Basquiat, 866 F. Supp. 790; 1994 U.S. Dist. LEXIS 15662).  The court had to decide three preliminary questions:

“1. Does Basquiat’s waiver of his objection based on CPLR 4519 at the first trial, allow Rosenfeld to testify about her transactions with the decedent at the retrial?

2. Is Rosenfeld entitled to a jury instruction concerning the effect of CPLR 4519, if I exclude her live testimony?

3. Is Rosenfeld’s prior trial testimony admissible in evidence at the retrial?” Id. at 792.

The district court judge reasoned that the Federal Rules of Evidence (FRE) and specifically FRE 804(b)(1) governed hearsay, and not the Dead Man’s Statute. FRE 804(b)(1) “provides that a declarant is ‘unavailable’ if ‘exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant’s statement.'”  Id. at 793.  As a result, the judge ruled that if Basquiat asserted the Dead Man’s Statute, which the judge termed a “privilege” (FRE 804(a)(1)),  then Rosenfeld would become “unavailable” within the meaning of FRE 804(b)(1).  The judge would then admit Rosenfeld’s prior testimony, and so instruct the jury.

At the second trial, the trial court allowed the reading of Rosenfeld’s prior testimony from the first trial to the jury.  The jury found in Rosenfeld’s favor:  “The jury in the second trial reached a verdict in favor of Rosenfeld, returning answers to special interrogatories as follows: Basquiat entered into a written agreement in October 1982 to sell the three paintings to Rosenfeld for $12,000; although there was no initial agreement establishing a delivery date, they made a separate oral agreement approximately ten days later setting the delivery date; a reasonable delivery date was October 1987; Rosenfeld first learned of the breach in August 1988, when Jean-Michel Basquiat died; and the market price of the three works at that time was $395,000.” (Rosenfeld v. Basquiat, 78 F.3d 84).  The jury awarded Rosenfeld $384,000, the market value of the paintings minus the remainder of the purchase price, plus $217,301.92 in interest.  The Basquiat Estate appealed to the Second Circuit Court of Appeals.

The Second Circuit Court of Appeals distinguished the hearsay exceptions under the Federal Rules of Evidence from the Dead Man’s Statute.  The court said that the hearsay rule (Rule 802) is a rule of exclusion that makes certain out-of-court statements inadmissible as evidence.  FRE 804 lists several exceptions to the exclusionary rule for when a witness is “unavailable” to testify.  FRE 804 (a) defines “unavailability,” one instance of which is that the declarant “is exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant’s statement.” The District Court had ruled that New York’s Dead Man’s Statute was such a privilege, thus making Rosenfeld “unavailable” and her prior testimony admissible if the Basquiat Estate asserted the Dead Man’s Statute.

But the Second Circuit declined to follow the District Court in its definition of the Dead Man’s Statute as a “privilege” under the FRE.  Instead the Second Circuit defined the Dead Man’s Statute as a statute regarding witness competency.  But the court went on the say that even if Rosenfeld’s prior testimony could have been brought in under an exception to the hearsay rule of the FRE, that testimony would still have been barred by the Dead Man’s Statute.  The Federal Rules of Evidence are not independent of state statutes  While FRE 804(b)(1) does not bar the admission of prior testimony of a witness who is now “unavailable,” it does not resolve the threshold issue of whether that testimony is admissible in the first place.  New York’s Dead Man’s Statute made Rosenfeld legally incompetent as a witness.  Therefore, the FRE was irrelevant in this case.  Absent a compelling federal interest, federal courts may not ignore state statutes in their rulings unless the statute is unconstitutional.  The judgment of the district court was reversed a new trial was ordered.

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