Rothko v. Reis case
brief summary
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372 N.E.2d 291
CASE SYNOPSIS: Appellant
executors challenged the decision of the Appellate Division in the
First Judicial Department (New York), which affirmed the order
removing them as executors of the decedent's estate and awarding
appreciation damages in an action brought by respondents, the
decedent's children.
FACTS: An abstract expressionist painter whose works through the years gained him an international reputation died testate, and the principal asset of his estate consisted of 798 paintings of tremendous value. Within a period of only three weeks, the three executors had dealt with all of the paintings by virtue of two contracts with galleries in which two of the executors had an interest. The artist's children instituted proceedings to remove the executors, to enjoin the galleries from disposing of the paintings, to rescind the sales agreements, and to recover damages. The trial court, finding for the children, held that the appreciated value of the paintings at the time of trial was the measure of damages for the unreturned paintings.
HOLDING:
The court held that, due to the conflict of interest of two of the executors between the estate and the galleries, there was a breach of duty and trust to the estate.
ANALYSIS:
The third executor breached the trust by failing to exercise ordinary prudence in view of the others' divided loyalties. The use of appreciation damages was proper where estate assets were sold below value as a result of the conflict of interest.
CONCLUSION: The court affirmed the order.
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FACTS: An abstract expressionist painter whose works through the years gained him an international reputation died testate, and the principal asset of his estate consisted of 798 paintings of tremendous value. Within a period of only three weeks, the three executors had dealt with all of the paintings by virtue of two contracts with galleries in which two of the executors had an interest. The artist's children instituted proceedings to remove the executors, to enjoin the galleries from disposing of the paintings, to rescind the sales agreements, and to recover damages. The trial court, finding for the children, held that the appreciated value of the paintings at the time of trial was the measure of damages for the unreturned paintings.
HOLDING:
The court held that, due to the conflict of interest of two of the executors between the estate and the galleries, there was a breach of duty and trust to the estate.
ANALYSIS:
The third executor breached the trust by failing to exercise ordinary prudence in view of the others' divided loyalties. The use of appreciation damages was proper where estate assets were sold below value as a result of the conflict of interest.
CONCLUSION: The court affirmed the order.
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