Help! My work’s been sold and I’m not being paid! What do I do? - a lawyer's answer
June 17, 2010
This post on ASK Harriete is by Chris Balch, a lawyer and arts advocate in Georgia. Familiar with the non-payment issues mentioned in the previous five posts on ASK Harriete. Mr. Balch offers his lawyer's perspective on what to do if a gallery is not paying you for your work.
Note: The opinions expressed by the author, Chris Balch in this post are his and his alone, and do not necessarily reflect the opinions of ASK Harriete or Harriete Estel Berman. No endorsement or refutation is intended or implied.
FROM THE LEGAL PEN OF Chris Balch: The short answer--sue them. Your consignment contract provides a remedy for when it is breached or broken. In general, most states allow the wronged party (that’s you) to recover damages associated with what the contract allows. Things such as your wholesale price for the work, your lost profits (which may be the same thing), or other provable losses may be recoverable. In addition, if the contract provides (or in some cases, the law of the state may allow) you may be able to recover any attorney’s fees associated with the breach of your agreement.
Usually, you will not be able to recover damages for any mental pain and suffering associated with the loss of the work, the dispute with the gallery, or worry about how you will be able to pay your mortgage this month. Those types of damages are generally recoverable only in non-contract actions.
But where (not as in what court but where geographically) do you sue the gallery and perhaps the gallery owner? That’s the hard part. Usually, there are at least two choices, i.e., the state and county where you (the artist) live or the state and county where the gallery is located. However, other factors may limit that choice to only one--where the gallery owner is located.
The due process clause of the Fifth Amendment to the United States Constitution (which applies to the states) requires a defendant in a lawsuit to have at least minimal contact with the state where they are being sued. That is easy to satisfy when you sue someone where they live and do business. They have voluntarily elected to take advantage of the benefits of living and working in the state and thus it is no burden at all that the courts of that state may call them into court.
It gets a bit trickier when you try to sue someone in another state. This is best explained by way of example. Suppose for a moment you are an artist in South Carolina and a gallery in Tennessee contacts you to represent your work. After getting a contract and sending them work you discover they have sold your work but not paid you. Can you sue them in South Carolina where you live and where it is more convenient and easier on you? You can but it may not mean much in the long run. After you get your judgment you have to collect the money. This can be a very challenging step. If your judgment is in the same state where the gallery and the owner(s) lives and works, then what is required is getting the right documents from the Court. The Sheriff of the county will go out and seize property owned by the defendants equal to the amount owed to you in the judgment of the Court. You may also be able to garnish bank accounts to collect your judgment.
When your judgment is from another state than the one where the gallery is located you have an additional step. You have to get a court in the state where the gallery is located to recognize your judgment from another state as a judgment of the state where you are trying to collect your money. It sounds more confusing than it is but there is a hitch: the gallery and its owner now get to contest the judgment you obtained in your state (even if they did not bother to defend the case when filed) and argue that the state’s assertion of authority over them violated the due process clause of the Constitution.
It is your burden to prove that the people who owe you money had sufficient purposeful contacts with your home state that there is no Constitutional violation in collecting the judgment you obtained against them where you live. The question is answered by looking at the law of the state where you obtained your judgment. Thus, the Tennessee Court would have to look to and interpret South Carolina law to establish whether the judgment was valid or not. If you have a lot of emails, telephone calls, and other electronic communications with the gallery or its employees, (don't forget to keep accurate and detailed records of your communication) there are some states which will conclude those are sufficient minimum contacts to satisfy the traditional notions of fair play and substantial justice required by the Due Process Clause.
This is not an easy area of the law to navigate. Even seasoned and experienced trial attorneys will likely need to revisit the rules to provide accurate advice about where the best place to sue may be.
Disclaimer: The content of this post is not intended as legal advice and does not create an attorney-client relationship between the reader and Mr. Balch. It may be considered lawyer advertising in some jurisdictions. Hiring a lawyer is an important decision that should not be made solely based on advertising. Mr. Balch is not certified in any specialty by any state.
FROM THE PEN OF ASK Harriete: Please keep in mind that suing is your last resort AFTER you have tried to contact the gallery, picked up all your work at the gallery, and tried to arrange payment without legal action. There are several "lawyers for the arts" organizations in the United States that may offer you help or guidance at no cost or a reduced fee.
Stay tuned for Victoria's update on her lawsuit next week.
P.S. Did you miss the previous five posts?
Previous posts in this series include:
Good Galleries Gone Bad - Don't Let This Happen to You by Victoria Lansford,
Good Galleries Gone Bad - Don't Let This Happen to You by Jen Townsend
Good Galleries Gone Bad - The Saga Continues...Time to Sue - from Victoria Lansford
Good Galleries Gone Bad - Don't Let This Happen to You! Prevent Delinquent Payments
This post was updated on January, 18, 2022.