(*You know how that joke goes, right?)
Some of you might remember that last September I was putting some of my Jim Marshall photograph collection in an auction of American memorabilia taking place in New York City. It turned out to be quite an adventure; things did not go exactly as I had planned. So sit right back and you'll hear a tale—
Let me start off by clearly and honestly stating that everyone advised me against participating in this. By everyone, I mean Paula, my housemate; Laurie, my best friend and sometimes photography partner; my agent; and the executor for Jim's estate. I do listen—I just do not always take the advice of others. I decided that gambling a modest portion of my holdings (only a little more than a third) was a worthwhile gamble. I might lose or I might win. While my advisors thought it was the wrong choice, they did agree that I understood what I was getting into, and I wasn't risking the whole pot. We all knew it might not turn out well.
None of us imagined how badly it would turn out.
The auction house, Guernseys, picked 15 photographs, six dye transfer and nine Ultrachrome prints, which went to auction on September 24th. It was not a rousing success.
That was understatement. The auction bombed.
People simply weren't in a buying mood. Three of the Ultrachromes sold early, and at such appallingly low prices that I decided I was very happy that more hadn't sold. (Those didn't have reserves on them; most of the pieces I put up for auction didn't have reserves, because there are downsides and expenses associated with reserves.) Nothing sold well in that auction; a good 80% of the items put up either got no bids at all or didn't hit their very modest reserves. Maybe one piece got anything close to the estimated street value (the Black Bird—sorry, Mike!), and I was familiar enough with enough items in the auction to know that the estimated street values that were posted by Guernseys were normally realistic ones. I am absolutely, positively sure it wasn't usual performance for a Guernseys auction; they could not survive in the business making a profit and handling the kind of properties they do from auctions like this. It was just bad luck for all involved.
Well, that was the gamble I had taken.
Then things went really, really bad...
Aretha and Ray—12" x 18"
Brian Wilson—15" x 22"
Lenny Bruce—11" x 17"
Grateful Dead—12" x 17"
Mick Jagger Palace Laundry—12" x 18" (this is the one that was pictured with Mike's article, linked above)
Santana—12" x 18"
Jimi Hendrix Burning Guitar—15"x 19"
The Who—9" x 14"
There is a monetary loss of about $35,000. The real loss is that only a few prints ever existed of most of these. Rare work destroyed in an instant.
The nature of the creases and cracks and the randomly varying locations from print to print made it clear that the damage had occurred due to mishandling while they were in the possession of Guernseys.
Full photograph and closeup of a section of "Grateful Dead"
It was not a shipping accident nor a single event, like dropping a box. I don't know exactly how the damage occurred, but Guernseys chose to mat the prints for display for the auction, and the damage would be consistent with someone who was matting or unmatting the prints handling them carelessly. It's the kind of damage you'd get if you picked up a large flimsy photographic print by one hand or let it flex and bow to the point where the paper creases when you moved it around. Whatever; the particulars don't matter.
What does matter is how Guernseys behaved when I informed them of the damage.
They refused to talk about the matter with me, ever. Understand that prior to this incident, I could always get the owner, Arlan Ettinger, to return my calls within a day or so, even when he was traveling. Everyone else in the office was extremely helpful and they educated me immensely on the ins and outs of participating in a full-blown, professional auction. They did great handholding.
Up until something went wrong. Then I became persona non grata.
It's easy to be nice to a client when everything is champagne and roses. What speaks to your character is how you behave when something goes wrong. At the very least, there is a certain amount of make-nice, sympathetic handholding you're supposed to do, that doesn't commit nor obligate you to anything. It's good manners. It's good morals. It's even good business.
They did not treat me as a client who'd suffered an unfortunate accident, but as an adversary. I did consider this merely an unfortunate accident; I was unhappy but I certainly wasn't angry. People are human. I live in mortal fear of the day that I damage a client's irreplaceable photograph. It could happen. Accidents do. It doesn't make you bad. It's how you step up after the accident that defines your character.
Guernseys did not step up. I never got one call back from Guernseys. Numerous phone calls to the director of the auction house were unproductive, a persistent refrain that boiled down to, we have nothing to say to you. Deal with our insurance agent.
There was insurance involved, thank God. Guernseys (at my expense) had taken out an insurance policy on the artwork with AXA Art Insurance Corporation. They dealt with the matter fairly directly. It took about six weeks to work through the process. I needed to provide them with photographs of the damage to each piece. Those were convincing enough that they did not require me to show the originals to an inspector or ship them to them until after the settlement.
Then we had to confirm the valuation I'd put on the pieces. That was harder. What we fell back on was a fortunate single sale I had made of seven dye transfer prints shortly after Jim died, which established that the prices for comparable work that I had sent to Guernseys were realistic. I had e-mail exchanges and the stub from the check I received in payment that matched up. The insurance company accepted that as a reasonable valuation.
I was relieved; I was truly fearful that they were going to offer me mere pennies on the dollar. Instead they offered me a settlement of 80% of my claimed value. It would have been essentially 100%, except that one of the damaged photos, the Jimi Hendrix, was one I had put a low reserve on for the auction as a hedge. Well, guess what? When you put a reserve like that on a piece, the insurance company's policy says that that's the amount you're willing to accept in payment for the piece. That's reasonable and hard to argue with, but it meant I did screw myself out of the remaining 20%.
Of course, if I hadn't put the reserve on, that photograph might've gone for even less in the auction. As I said, it's a gamble. Still, it's a downside to reserves I bet that most of you don't know about. I didn't.
There was one oddness. AXA wouldn't pay me the $5,000 deductible on the policy. They told me I could go after Guernsey's for that. That may be entirely normal practice; I don't know anything about art insurance nor insurance law and regulations in New York State. It seems peculiar to me; here in California, if another driver totaled my automobile, their insurance company would pay for replacing my car. They wouldn't expect me as the injured third party to go after the policyholder for the deductible; that would be their job. I asked the claims director via e-mail if this left me free to pursue Guernseys the $5,000 and he wrote back very clearly that it did.
The "Full And Final Release Of All Claims" that AXA sent me read, in part:
...hereby releases and forever discharges AXA Art Insurance Corporation (US) and Barlan Enterprises, Ltd. D/B/A Guernseys from any and all claims, demands, legal actions, controversies, agreements, promises, damages, liabilities and causes of action of every kind and nature relating to artwork damaged...
After a couple of days I got the claims director on the phone, and he swore that this release did not preclude me from going after Guernseys for the deductable. Uh huh. Not how I read it. They made it 100% clear that if I wasn't willing to sign the release as written, I'd not see a cent without legal fisticuffs.
Before I signed, I made one last phone call to Guernseys. Once again I was shunted to the director instead of Arlan. Of course. I told her that the insurance company and I had reached an agreement that left Guernseys on the hook for the deductible and it would be nice if we could agree to some kind of an accommodation on that right now. She said they had no intention of paying me a single cent, that they didn't think I was entitled to another penny, that they didn't think the works were worth a fraction of what I claimed (um, the insurance company did and so did Guernseys when they accepted them for auction), and that they didn't even know the terms of the settlement so they couldn't discuss anything with me, anyway. (Later in that same conversation the director quoted to me the amount of the settlement check I would be receiving. Interesting, as I'd never mentioned the amount.)
Why was I not surprised?
So I shrugged, signed the release, send it back to AXA, and less than three weeks later I had a settlement check.
That's where I'm going to leave it. I could spend a few hundred dollars to have my attorney read over the release, check into New York State insurance law, and confirm what I'm 80% certain of anyway—that I have signed away my rights to go after Guernseys for the deductible. And even if I haven't, I'd have to file a claim in New York Small Claims Court, fly back to New York for the hearing, and minor other stuff. If I had the legal option to do so, I'm pretty certain I'd win. And it would be good pay, after expenses, for my time. But...
Do I need the aggravation? No. Do I need the money that badly? No. All I need for closure is getting the last word in.
I've just done that. AXA I'm pretty happy with. Guernseys? You couldn't pay me to do business with them again. As I said, speaks to character.
Ctein's regular weekly column appears on Wednesdays.
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Original contents copyright 2011 by Michael C. Johnston and/or the bylined author. All Rights Reserved.