It’s a cautionary tale for any collector who mistakes a dealer’s longtime friendship as a promise to act in the collector’s interest.
In a bitter dispute involving four lawsuits, Richard McKenzie alleged that New York’s Forum Gallery and its owners, Robert and Cheryl Fishko, orally agreed to sell him art at terms favorable to him: the works by artists Forum handled would be sold to him at a 20% discount, and works Forum found in the secondary market would be sold at cost plus a 5% commission. Instead, McKenzie alleged, they sold him some $11.8 million of art at much higher rates, breaching the agreement.
McKenzie also claimed he had a special, fiduciary relationship with the defendants, including trips to Europe, that required them to act in his best interests. The Fishkos “manufactured this personal relationship...[to] foster a false sense of trust...that a personal friend would not take advantage of me,” his papers say. The defendants breached their fiduciary duties, he claimed, when they acted in their interests instead of his.
In February Manhattan federal judge Laura Taylor Swain ruled against him on both claims. The unwritten agreement was too vague to be called a contract, she said, and “even a longstanding relationship of 50 years is insufficient to establish a fiduciary relationship.”