Case 3:10-cv-02553-G Document 1 Filed 12/14/10 Page 1 of 8 PageID 1

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

STEVE SELL, §
Plaintiff §
§
VS. § CIVIL ACTION NO. ______________
§
GERALD PETERS GALLERY, §
INC. §
Defendant. §
§

PLAINTIFF’S ORIGINAL COMPLAINT

TO THE HONORABLE JUDGE OF SAID COURT:

Plaintiff Steve Sell hereby files this, his Original Complaint, against Defendant Gerald

Peters Gallery, Inc., and in support thereof state the following causes of action:

I.

PARTIES AND SERVICE

1.01 STEVE SELL (“Plaintiff” or “Sell”) is currently a citizen and resident of Dallas,

Dallas County, Texas.

1.02 Defendant GERALD PETERS GALLERY, INC. (“Defendant” or “Gerald Peters”)

is a corporation that is incorporated under the laws of the State of New Mexico. Defendant has its

principal place of business in the State of New Mexico. Defendant does not have a registered agent

for service of process in the State of Texas. Service on the Defendant may be made according to the

laws of the State of Texas by serving the Texas Secretary of State, 1019 Brazos Street, Austin,

Texas 78701, as its agent for service because defendant engages in business in Texas but does not

maintain a regular place of business in Texas or a designated agent for service of process, and this

suit arose from Defendant’s business in this state.

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II.

JURISDICTION AND VENUE

2.01 The Court has jurisdiction over this lawsuit based upon diversity jurisdiction

under 28 U.S.C. §1332 (a)(1) because the Plaintiff and the Defendant are citizens of different

states and the amount in controversy exceeds $75,000.00, excluding interest and costs. This

provision further provides jurisdiction to this Court for purposes of 28 U.S.C. §§ 2201, 2002.

2.02 Venue is proper in this District, pursuant to 28 U.S.C. §1391 (a)(2) as all or a

substantial part of the events or omissions giving rise to this claim occurred in Dallas County,

Texas.

III.

FACTS

3.01 In March of 2008, Plaintiff SELL, purchased a painting from Defendant

GERALD PETERS by artist N.C. Wyeth entitled "Sheriff" for $1,500,000.00. Plaintiff SELL

purchased this painting as an investment and intended to resale the painting at a later date.

3.02 During the negotiations leading up to the sale of the painting, representatives from

Defendant GERALD PETERS represented to Plaintiff SELL, both orally and in writing that the

painting had appeared on the August 1, 1908, cover of the Saturday Evening Post. Plaintiff

SELL relied on representations and was lead to believe that by being on the cover of the

Saturday Evening Post the painting would have a higher resale value.

3.03 As a renowned art dealer, Defendant GERALD PETERS is fully aware that the

appearance of a piece of art on the cover of such a prominent and respected magazine adds to the

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provenance of the piece. In fact, Defendant GERALD PETERS believed that information to be

so important that it was the first item listed in the brochure for the "Sheriff" painting after the

artist and title of the painting were identified.

3.04 The painting Plaintiff SELL purchased was not, in fact, on the cover of any

edition of the Saturday Evening Post. Defendant GERALD PETERS acknowledged this fact and

attempted to characterize this conduct as mere confusion and a mistake. (See Gerald Peters Art

Assistant, Ana Archuleta’s, e-mail communication to Plaintiff SELL attached hereto as Exhibit

“A”.) Defendant GERALD PETERS’ tactics were, at best, negligent and, at worst, calculated,

deceptive and/or intentional misrepresentations that were made to inflate the value of the

painting and help consummate the sale of the painting. Plaintiff SELL would not have purchased

the painting had he known it was not on the cover of the Saturday Evening Post.

IV.

CAUSE OF ACTION: BREACH OF CONTRACT

4.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

4.02 Defendant GERALD PETERS failed to perform its contractual obligation under

the agreement. Plaintiff performed all of his duties and obligations under the agreement and all

conditions, covenants, and promises required under the contract to be performed on Plaintiff’s

part by paying the full sales price despite Defendant’s misrepresentations that the N.C. Wyeth

painting entitled "Sheriff" appeared on the cover of the August 1, 1908 Saturday Evening Post.

4.03 Defendant GERALD PETERS breach of the agreement has caused Plaintiff to

suffer actual damages.

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V.

CAUSE OF ACTION: FRAUD

5.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

5.02 Defendant represented that the N.C. Wyeth painting entitled "Sheriff", had

appeared on the cover of the August 1, 1908 Saturday Evening Post. At all relevant times,

Plaintiff SELL relied upon Defendant’s representations, which Plaintiff now knows to be false.

5.03 The representations that Defendant made were material and false and made so that

Plaintiff would be induced to enter into the transaction of buying the painting from Defendant.

As a result of Defendant’s fraudulent representations, Plaintiff SELL purchased the N.C. Wyeth

painting. When Defendant made the false representations to Plaintiff, Defendant knew the

representations were false or were made recklessly without knowledge of their truth.

5.04 Additionally, Defendant made false representations with the intent that Plaintiff

would rely on them, and that these representations would induce Plaintiff to purchase the

painting, which Plaintiff ultimately did do.

5.05 Defendant intended that Plaintiff would rely on the false representations, which

Plaintiff did. Defendant’s misrepresentations caused damage to Plaintiff SELL.

VI.

CAUSE OF ACTION: NEGLIGENT MISREPRESENTATION

6.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

6.02 GERALD PETERS possesses specialized expertise in the field of art.

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6.03 By reason thereof, GERALD PETERS had a duty to make representations to

prospective buyers based on fact, exercising care, honesty and due diligence with respect to the

painting's history, specifically when GERALD PETERS represented to Plaintiff SELL that the

N.C. Wyeth painting entitled "Sheriff" appeared on the August 1, 1908 cover of the Saturday

Evening Post.

6.04 Plaintiff SELL justifiably relied upon GERALD PETERS' representations

regarding the painting, including the provenance of the painting and the value of the painting.

6.05 GERALD PETERS negligently supplied false information to Plaintiff regarding the

N.C. Wyeth painting entitled "Sheriff". The information supplied was for the guidance of Plaintiff

in making the purchase.

6.06 GERALD PETERS failed to exercise reasonable care or competence in obtaining

or communicating the proper comprehensive history of the painting to Plaintiff SELL. As a result,

Plaintiff sustained financial damages as a proximate cause of justifiable reliance upon Defendant's

misrepresentation.

VII.

CAUSE OF ACTION: RESCISSION/RESTITUTION

7.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

7.02 Additionally and/or in the alternative, Plaintiff SELL seeks rescission of the

parties contract and/or restitution of benefits provided by Plaintiff SELL to the Defendant,

because of Defendant fraudulent and/or negligent behavior. A party can recover restitution when

one person has obtained a benefit from another by fraud, duress, or taking of an undue

advantage. Defendant defrauded and/or took advantage of Plaintiff SELL by negligently and/or

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fraudulently supplying false information regarding the N.C. Wyeth painting entitled "Sheriff". The

information supplied was for the guidance of Plaintiff SELL in making the purchase. Pursuant to ¶5

of the contract of sale, Plaintiff SELL requested that Defendant GERALD PETERS return the

purchase price of $1,500,000.00 for the painting in full; however, Defendant wrongfully refused and

continues to refuse to refund the money. (See the contract of sale for the "Sheriff" painting attached

hereto as “Exhibit B”.) The Plaintiff is entitled to rescission of the parties contract and restitution of

$1,500,000.00, the amount paid to the Defendant for the painting.

VIII.

ATTORNEY’S FEES

8.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

8.02 As the result of the Defendant’s failure to comply with the terms of the contract,

Plaintiff has found it necessary to employ an attorney to prosecute this action against Defendant.

Pursuant to Section 38.001, et seq. of the Texas Civil Practice and Remedies Code, and under

Texas Business & Commerce Code 17.50(d), Plaintiff is entitled to recovery of his reasonable

attorney’s fees as are equitable and just.

IX.

DAMAGES

9.01 Plaintiff re-alleges and incorporates by reference all preceding paragraphs as if set

out in full.

9.02 As a result of Defendant’s knowing conduct, Plaintiff has suffered actual

economic damages in the amount of $1,500,000.00, plus interest at the maximum rate of interest

permitted by law.

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9.03 As a result of Defendant’s knowing conduct, Plaintiff has suffered mental anguish

in an amount not less then the minimum jurisdictional limits of this Court.

9.04 As a result of Defendant’s knowing and intentional conduct, Plaintiff is entitled to

recover exemplary damages in an amount not less then two times the actual economic damages

incurred by Plaintiff.

9.05 Pursuant to Section 17.50(d) of the Texas Business and Commerce Code, Plaintiff

is entitled to recover his reasonable and necessary attorney's fees to prosecute this action against

Defendant.

9.06 Plaintiff is also entitled to recover pre and post judgment interest, at the statutory

rate or at such other rate as set by the Court.

X.

PRAYER

WHEREFORE, Plaintiff requests that Defendant be citied to appear and answer and that

on final hearing Plaintiff be awarded the following:

a). Damages in the principal sum of at least $1,500,000.00.

b). Interest on the principal sum amount at the maximum rate of interest
permitted by law.

c). Mental anguish damages in the amount not less then the minimum
jurisdictional limits of this Court.

d). Additional exemplary damages for Defendant’s knowing and intentional

conduct in the amount not less then two times the actual economic
damages incurred by Plaintiff.

e). Attorney’s fees.

f). Pre-Judgment interest at the maximum rate of interest permitted by law.

g). Costs of suit.

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h). Post-judgment interest at the legal rate.

i). Rescind the contract and refund Plaintiff SELL the purchase price of
$1,500,000.00.

j). Such other and further relief to which Plaintiff may be just entitled,
whether at law or in equity.

Respectfully submitted,

By: /s/ Levi G. McCathern, II__________________

Levi G. McCathern, II
Texas State Bar No. 00787990
lmccathern@mm-llp.com

MCCATHERN | MOOTY, L.L.P.

Regency Plaza
3710 Rawlins, Ste. 1600
Dallas, Texas 75219
214-741-2662 – Telephone
214-741-4717 – Facsimile

ATTORNEYS FOR PLAINTIFF

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