Curate the evidence: Issues of fine art in Connecticut property division

On Behalf of | Oct 11, 2021 | Property Division

In divorce, a Connecticut court has wide discretion to assign value to assets the judge will allocate to one or the other divorcing spouse. Obviously, a piece of art does not have a precise, universally accepted value like an account or a share of stock.

When paintings, drawings, sculpture, photography, antiques and other types of fine art come before the court for equitable distribution, the litigant-spouse should present reliable evidence that the court can use to establish ownership and value. In fact, if a litigant does not submit evidence of an asset’s value, that party may not later challenge the court’s valuation. Bornemann v. Bornemann, 245 Conn. 508 (1998).

Who owns the Jackson Pollock?

In Connecticut, property subject to equitable distribution includes not only assets (including artwork) gained during marriage, but also items owned individually or obtained by either spouse before marriage. First, the litigant should inventory the content and ascertain ownership of the couple’s fine art collection to determine artwork that should be part of the marital estate.

For example, Connecticuters are familiar with the ongoing divorce of former state Sen. Alex Kasser and banker Seth Bergstein. Ownership of a 1943 signed Jackson Pollock collage hanging in their home is in dispute, with Kasser’s brother alleging in a lawsuit that it is his and that he had only loaned it to his sister, reports the Hartford Courant.

Judicial discretion in asset valuation

In Bornemann, the Connecticut Supreme Court explained that in divorce, the judge must consider the “economic value” of the litigants’ estates but is not required to “assign specific values.” Still, most litigants urge precise valuation of art objects with very high worth.

The trial court in determining asset valuation weighs evidence from appraisers and the litigant as well as its “own general knowledge of the elements going to establish value.” The judge has “considerable discretion” to choose and apply a valuation method if they apply it appropriately and do not otherwise commit clear error.

Considerations in developing evidence of fine art value

Usually, each litigant will retain an experienced, respected art appraiser to evaluate the artwork and present this information to the court. In choosing an appraiser, a litigant should consider:

  • Appraiser’s use of the Uniform Standards of Professional Appraisal Practice (USPAP)
  • Appraiser’s choice of valuation method
  • Appraiser’s knowledge of the type of art at issue
  • Appraiser’s clarity and detail in written appraisal reports, including thorough descriptions of comparable sales and other factors considered as well as all data and sources
  • Appraiser’s verbal presentation skills in anticipation of courtroom testimony

The litigant and their legal counsel should discuss with their expert appraiser the presence or absence of relevant attributes that may make valuation more difficult or enhance value:

  • Prominence or popularity of artist
  • Rarity or scarcity of such a work from the artist
  • Previous celebrity ownership
  • Comparable sales or lack thereof
  • Market trends for fine art generally, for this artist’s work particularly or for subject of artwork
  • Previous appraisals and exhibitions
  • Certificates of authenticity
  • Condition and damage
  • History of restoration or cleaning, including quality of treatment
  • Inclusion of the work in the artist’s catalogue raisonné (critical catalogue)
  • Purchase price and sales history
  • Cultural significance

Dueling appraisers

A well-known divorce from another state is not binding in Connecticut, but the issues addressed are instructive. The litigation involved disputes concerning valuation and division of the litigants’ extensive modern art collection of paintings, sculpture and more, worth approximately $700 million. (While certain aspects of New York family law may vary from comparable Connecticut provisions, common issues in divorce disputes about valuable artwork are still relevant here.)

In the “extraordinarily contentious” proceedings involving 165 works by Picasso, Mapplethorpe, Warhol, Pollock, Koons, Marden, Giacometti, Rothko and other prominent artists, there were disputes about ownership, valuation and taxation, according to Artnet News. For example, the litigants each engaged their own expert appraiser, who in turn did not always agree on the worth of individual objects. Macklowe v. Macklowe, 112 N.Y.S.3d 438 (unreported 2018).

This illustrates the root of the challenge of these cases. Placing the proper price on a piece of art is a subjective exercise that leaves a lot for the judge to decide. In this case, the two appraisers sometimes looked at different comparable sales events at which the objects of art at issue were sold (such as public auctions or private sales) or used different comparable works as the bases for their appraised valuation amounts. As the trial judge said, “appraisal of art is inexact.”

The judge resolved these issues by first distributing a group of objects to the wife with an order to pay the husband an equalizing amount. For artwork in this group the judge found the two appraisals close enough to split the difference. Because larger appraisal disparities made the use of averaging to determine value “speculative … [and] not founded in economic reality,” the court ordered the sale of the remaining art with the proceeds split equally between the litigants. (The pandemic delayed the sale, so Sotheby’s will conduct a two-part auction in Nov. 2021 and May 2022, reports The Wall Street Journal.)

Connecticut judges can be equally creative. For example, in one high-profile case, the judge did not have evidence of value for a painting or valuable rug, so he ordered the parties to follow a complex process involving up to three appraisers to set the values. See Wendt v. Wendt, 1998 WL 161165 (unpublished 1998).

Final thoughts

This post introduces the complex intersection of the fine art world and family law. Another complicating factor is that people form attachments to their artwork. An object of art may be a sentimental gift or a family heirloom, or it just may speak to a person in a meaningful way. This is even more reason for submitting reliable evidence of valuation so the judge may order a well-loved artwork distributed to the party who appreciates it, rather than having to sell it and split the proceeds.