Analysis

Estate of Nelson v. Rice

Ariz. Ct App.

2000

Pg. 369

Facts: After Martha Nelson died in February 1996, Newman and Franz, the co personal representatives of her estate, employed Judith McKenzie-Larson to appraise the Estate's personal property in preparation for an estate sale. McKenzie-Larson told them that she did not appraise fine art and that, if she saw any, they would need to hire an additional appraiser. McKenzie-Larson did not report finding any fine art, and relying on her silence and her appraisal, Newman and Franz priced and sold the Estate's personal property. Responding to a newspaper advertisement, Carl Rice attended the public estate sale and paid the asking price of $60 for two oil paintings. Although Carl had bought and sold some art, he was not an educated purchaser, had never made more than $55 on any single piece, and had bought many pieces that had turned out to be frauds, forgeries or to have been created by less popular artists. He assumed the paintings were not originals given their price and the fact that the Estate was managed by professionals, but was attracted to the subject matter of one of the paintings and the frame of the other. At home, he compared the signatures on the paintings to those in a book of artists’ signatures, noticing they appeared to be similar to that of Martin Johnson Heade. As they had done in the past, the Rice’s sent pictures of the paintings to Christie's in New York, hoping they might be Heade's work. Christie's authenticated the paintings, Magnolia Blossoms on Blue Velvet and Cherokee Roses, as paintings by Heade and offered to sell them on consignment.   Christie's subsequently sold the paintings at auction for $1,072,000. After subtracting the buyer's premium and the commission, the Rice’s realized $911,780 from the sale. Newman and Franz learned about the sale in February 1997 and thereafter sued McKenzie-Larson on behalf of the Estate, believing she was entirely responsible for the Estate's loss. The...