Judgment in New Orleans Painting Auction Lawsuit Annulled

ancient-painting-1550352-768x1024When a person feels wronged, they tend to turn to the judicial system in hopes to find a solution. An important part of making sure an appropriate solution is reached, is that both parties have a chance to plead their case. In a matter involving the sale of a painting, the defendants did not respond to a lawsuit brought against them but were still successful in having a judgment rendered against them annulled.

Amanda Winstead, is the owner Amanda Winstead Fine Art (AWFA), a fine art appraiser, consultant, and a broker. She has been buying and selling paintings from collectors in the New Orleans area since 1996. Stephanie Kenyon, is the president of an auction house located in Maryland, Kenyon & Associates, and Sloans & Kenyon.

In February of 2013, Ms. Winstead purchased an oil painting on canvas after winning the bid she submitted by telephone at an auction held by Sloans & Kenyon. Ms. Winstead forwarded a check to Sloans & Kenyon for the total cost of $21,500.00 via U.S. Priority Mail. The painting was never delivered to Ms. Winstead, and Sloans & Kenyon claimed to have misplaced it somewhere in the auction house.

Subsequently, Ms. Winstead filed a lawsuit against Ms. Kenyon and the companies she was affiliated with. Ms. Kenyon was served with notice as to the lawsuit but failed to appear to file an answer to the lawsuit against her and her companies.  Service was accomplished via the Louisiana long-arm statute.  La. R.S. 13:3201 et seq.

Ms. Winstead was granted a default judgment, meaning that because Ms. Kenyon did not answer the lawsuit brought against her, that the trial court heard Ms. Winstead’s case on the merits and decided in her favor. The trial court awarded Ms. Winstead $43,500.00, after factoring in the amount the painting would be resold for and damages. Ms. Kenyon and the other defendants did not appeal the case, but rather filed a separate lawsuit asserting that the original lawsuit against them should be annulled because of a vice of form and substance.  See La. C.C.P. art. 2001.

Ms. Winstead’s attorneys responded to the lawsuit against her by asking the court to find that the exception of no cause of action existed for Ms. Kenyon and the other defendants. At a hearing on the matter, the court sided with Ms. Winstead and dismissed the lawsuit brought by Ms. Kenyon and the other defendants. Specifically, the court noted: (1) Ms. Kenyon and the other defendants chose not to respond to the lawsuit brought by Ms. Winstead, (2) Ms. Winstead established that Ms. Kenyon and the other defendants were liable and that Ms. Winstead was entitled to damages, and (3) Ms. Kenyon and the other defendants could have made the decision to appeal the judgment that was rendered against them, but chose not to.

The Louisiana Fourth Circuit Court of Appeal reviewed the lower court’s decision, and ultimately reversed it. The Fourth Circuit found that Ms. Kenyon and the other defendants presented evidence that was sufficient to allow for the original lawsuit to be annulled. In making its determination, the Fourth Circuit relied on the following that was alleged by Ms. Kenyon and the other defendants: (1) at the time the default judgment was rendered against Ms. Kenyon and the other defendants, Ms. Winstead failed to present evidence of a cancelled check, or that any of the defendants had converted any funds of Ms. Winstead, and (2) Ms. Winstead offered no evidence to prove that Ms. Kenyon or the other defendants resold the painting to a third party for a price greater than Ms. Winstead’s winning bid. Ultimately, the Fourth Circuit held that the standard for a no cause of action exception requires that the Court accept the Defendants allegations as true and therefore the trial court erred in granting the dismissal of the case.

Additional Sources: AMANDA WINSTEAD, ET AL. VERSUS STEPHANIE KENYON, ET AL.

Written by Berniard Law Firm Blog Writer: Zoha Khan

Additional Berniard Law Firm Articles on Long Arm Statute: Jurisdiction and the Long-Arm Statute in Louisiana