United States District Court, N.D. Illinois, Eastern Division
STANLEY V. GRAFF, Plaintiff,
LESLIE HINDMAN AUCTIONEERS, INC., THE OWINGS GALLERY, INC., NATHANIEL O. OWINGS, RAY HARVEY, ZAPLIN-LAMPERT GALLERY, INC., and JIM PARKS, Defendants.
OPINION AND ORDER
L. ELLIS UNITED STATES DISTRICT JUDGE.
Stanley V. Graff brings this suit to recover paintings that
his wife pawned to Biltmore Loan and Jewelry Scottsdale LLC
(“Biltmore”), and of which Biltmore then sold two
at auction after Graff's wife defaulted on her
loan. In his third amended complaint, Graff
brings claims against Leslie Hindman Auctioneers, Inc.
(“Leslie Hindman”), and The Owings Gallery, Inc.,
Nathaniel O. Owings, Ray Harvey, Zaplin-Lampert Gallery,
Inc., and Jim Parks (collectively, the “Owings
Defendants”). He alleges claims for conversion, unjust
enrichment, replevin, detinue, promissory estoppel,
promissory fraud, and civil conspiracy. The Court previously
dismissed Graff's claims against Leslie Hindman and the
Owings Defendants, concluding that Graff had not sufficiently
pleaded that the paintings are his separate property and that
Texas law only allows him to seek recovery from his wife, and
not third parties, for the disposition of community property.
Doc. 86 at 11-13. The Court then allowed Graff to file a
third amended complaint, finding that it included sufficient
allegations to potentially overcome the community property
presumption with respect to two of the paintings. Doc. 97 at
3. Leslie Hindman and the Owings Defendants again move to
dismiss the claims against them in the third amended
complaint pursuant to Federal Rule of Civil Procedure
12(b)(6). The Court finds it appropriate to allow
all but Graff's unjust enrichment and promissory fraud
claims to proceed, with Leslie Hindman and the Owings
Defendants' arguments better suited to decision after the
parties have engaged in discovery.
who lives in Dallas, Texas, owned three pieces of Western
American art. First, on May 18, 2002, he purchased Taos
Indians and the Sangre de Cristos, an oil painting by
Oscar Edmund Berninghaus (the “Berninghaus
painting”) using his own funds. On May 13, 2006, he
purchased Snow Capped Mountains, also referred to as
Meadow with Cattle, an oil painting by William
Victor Higgins (the “Higgins painting”). He
purchased the Higgins painting with funds from a liquidating
distribution from ABRES, Ltd., in which he had acquired an
equity interest in 2001. On July 29, 2009, he purchased
By the Light of the Moon, an oil painting by Frank
B. Hoffman (the “Hoffman painting”). Graff was
the sole owner of these paintings, which remained his
separate property since their purchase. Autumn V. Kraus, a
certified public accountant, traced the Berninghaus and
Higgins paintings to Graff's separate property.
September 28, 2003, Graff married Deborah Graff. In January
2013, Deborah filed for divorce in Dallas, Texas. The Dallas
County Family District Court has a standing order applicable
to all divorce proceedings, which provides that, during the
pendency of the suit, both parties to the proceeding are to
refrain from “[s]elling, transferring, assigning,
mortgaging, encumbering, or in any other manner alienating
any of the property of either party, whether personal
property or real property, and whether separate or community,
except as specifically authorized by this order.” Doc.
106-1 at 2. But during the pendency of the divorce
proceeding, Deborah took the Berninghaus, Higgins, and
Hoffman paintings from the Graffs' marital home in Dallas
without Graff's permission and pawned them to Biltmore.
She thereafter defaulted on her loan.
Deborah defaulted, Biltmore contracted with Leslie Hindman,
located in Chicago, Illinois, to sell the three paintings at
auction. Biltmore sent the three paintings to Chicago, and
Leslie Hindman received them around September 25, 2015. At
the Leslie Hindman-organized auction, Biltmore sold the
Berninghaus painting to an individual living in Dallas,
Texas. Biltmore also sold the Higgins painting to the Owings
Defendants. Owings organized this group to purchase the
Higgins painting at the auction. The Hoffman painting did not
sell at the auction and currently remains in Biltmore's
after the auction, in November 2015, Graff learned for the
first time that Deborah had removed the Higgins painting from
their home and that the Owings Defendants had it in their
possession. He learned of this by searching Leslie
Hindman's sale records after he found out that Leslie
Hindman had auctioned off the Berninghaus painting. Graff
then called Harvey for advice and help locating a lawyer to
aid in returning his three paintings. Graff did not know that
Harvey belonged to the group that had purchased the Higgins
painting, but Harvey realized this when speaking to Graff.
Harvey informed Graff of this the next day. He told Graff
that he could not help Graff and that he had spoken to
Owings, who told Harvey that the Owings Defendants had title
to the Higgins painting, which would be sold. Graff then
contacted Owings, telling him that the Higgins painting had
been wrongly taken from him and that he wanted it back.
Owings indicated that he still had the Higgins painting, he
would not sell it, and he would contact Leslie Hindman about
it. But despite this conversation, the Owings Defendants sold
the Higgins painting. The sale has since been reversed, and
the Owings Gallery has possession of the Higgins painting.
See Doc. 48.
has regained possession of the Berninghaus painting. He has
demanded the return of the Higgins painting from the Owings
Defendants and the Hoffman painting from Biltmore. The Owings
Defendants have refused to return the Higgins painting to
Graff. In connection with the divorce proceedings between
Graff and Deborah, the divorce court in Dallas County, Texas
characterized all three paintings as Graff's separate
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
round of briefing concerning Graff's pleadings, Leslie
Hindman and the Owings Defendants do not challenge
Graff's allegations that the two paintings at issue were
his separate property but rather argue that, even so, his
claims still fail against them. First, Leslie Hindman and the
Owings Defendants contend that, because the divorce court
provided Graff with relief for Deborah's actions, he
cannot now pursue a second recovery for the same actions in
this separate case. They also argue that Graff cannot allege
wrongful possession, which underlies many of his claims,
because they were good faith purchasers of the Higgins
painting. Finally, the Owings Defendants claim that Graff has
not sufficiently alleged the elements of his claims for
unjust enrichment, promissory estoppel, and promissory
both Leslie Hindman and the Owings Defendants argue that the
Court should dismiss the third amended complaint because
Graff cannot recover a second time for the improper
dissipation of his assets. They argue that because
Graff's divorce proceedings are final and Graff alleges
that the divorce court treated the three paintings as his
separate property, Graff has already obtained recovery for
any improper dissipation of that separate property. See
Twyman v. Twyman, 855 S.W.2d 619, 625 (Tex. 1993)
(“[A] spouse should not be allowed to recover tort
damages and a disproportionate division of the community
estate based on the same conduct.”). Graff responds
that he seeks the recovery of the painting themselves, relief
that the divorce court could not provide to him. Although the
considerations surrounding double recovery may come into play
at a later stage of this case, without additional ...