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Art Expert Awarded $11 Million in Malicious Prosecution Case

In a decision that reverberates through the art expert world, the Montana Supreme Court recently came down on the side of the experts, to the tune of $11 million. The unusual lawsuit pitted Steve Seltzer, an established artist, art authenticator and expert in Western art against Morton’s salt heir Steve Morton and his blue-chip law firm, Gibson, Dunn & Crutcher (GDC).

In a nutshell: Morton, desiring to sell at auction the signed painting “Lassoing a Longhorn,” hired expert Steve Seltzer to authenticate it as having been painted by prominent Western artist Charles M. Russell. The value of a genuine Russell painting in 2000 was estimated at approximately $650,000 by the auction house, but Seltzer believed that it actually was created by his own grandfather, O.C. Seltzer. (Also a prominent genre painter and close friend of Russell, but considered to be of lesser stature, with works estimated at a value of approximately $65,000.)

After Seltzer and another art expert both certified “Lassoing a Longhorn” as a genuine O.C. Seltzer, owner Morton called in the big guns. He hired attorney Dennis Gladwell of GDC to convince Steve Seltzer to recant his opinion about the work’s authenticity and compensate Morton for its loss in value due to Seltzer’s published opinion. In a letter to Seltzer, Gladwell wrote: “We expect immediate cooperation or litigation will be filed without any further discussion. And, given the opportunity afforded you to rectify this wrong, and your refusal to do so, punitive damages will be requested.”

Seltzer did not reply to Gladwell’s letters, and Gladwell filed suit against him, asking for $750,000 plus punitive damages. Moving for a summary judgment, Seltzer provided no fewer than 10 affidavits from art experts, saying that the painting was not authentic. With no expert available to testify to the alternative, Morton agreed to drop the suit.

Seltzer, however, wasn’t finished with the matter. He filed his own suit against Morton, Gladwell and GDC, alleging malicious prosecution and abuse of process. During discovery, a number of discrepancies also were found that hurt the defense’s case. Finally, at trial, Steve Seltzer was awarded $21 million in compensatory and punitive damages, which subsequently was reduced to $11 million.

Both sides appealed, and the case advanced to the Montana State Supreme Court, which upheld the damages (Seltzer v. Morton, 2007 MT 62) and found that the defendants, in an example of “legal thuggery,” had used their suit “as an instrument of coercion, rather than a legitimate means to resolve a genuine dispute” and that their “highly reprehensible” behavior was indifferent to Seltzer’s financial, psychological and physical health and his personal and professional reputation.

This case has far-reaching implications for experts, the attorneys who seek their opinions, and the art market in general, for without the ability to authenticate a work of art, fakes, undetected, will continue to be bought and sold.