## Facts

- Al Hirschfeld was a well-known cartoonist whose works were sold through Margo Feiden and her galleries (collectively, the Gallery) beginning in 1969.
- After disputes in 2000, the parties entered a settlement agreement (the Agreement) governing their ongoing relationship.
- The Agreement covered the Gallery’s handling and sale of Hirschfeld originals and limited-edition lithographs, photostats, and giclées (high-quality inkjet reproductions).
- The Agreement appointed the Gallery as exclusive representative for selling original works, licensing certain reproductions for limited purposes through third parties, and producing a specified number of new, limited-edition prints.
- The Agreement stated that Hirschfeld (and later his successor) retained all rights not expressly granted to the Gallery.
- The Agreement permitted termination “for cause” on 90 days’ written notice; “cause” was defined as a material breach that remained uncured 30 days after notice of the breach.
- Hirschfeld died in 2003, and the Al Hirschfeld Foundation (the Foundation) succeeded to his rights and obligations under the Agreement.
- The Foundation alleged two breaches by the Gallery:
  - the Gallery made and sold giclée reproductions without authorization, infringing the Foundation’s copyright; and
  - the Gallery failed to maintain custody or control of 20 original Hirschfeld cartoons entrusted to it and could not account for their whereabouts.

- In 2016, the Foundation sued in the Southern District of New York for breach of contract and related claims and served a notice stating the breaches and giving a 30-day opportunity to cure within the Agreement’s 90-day termination notice period.
- After the 90-day period expired, the Foundation terminated the Agreement and sought summary judgment that the termination was valid; the facts supporting the two alleged breaches were not disputed.

## Issues

1. Whether the Gallery’s unauthorized creation and sale of giclée reproductions and its inability to account for 20 original consigned works constituted material breaches of the Agreement.
2. Whether, given those breaches, the Foundation satisfied the Agreement’s notice-and-cure requirements and validly terminated the Agreement for cause.

## Decision

- The court held that the Gallery committed two material breaches of the Agreement: (1) unauthorized giclée reproductions and sales and (2) failure to maintain custody or control of, and account for, 20 missing original works.
- The court found the giclée conduct exceeded any rights granted by the Agreement, which reserved to the Foundation all rights not expressly granted to the Gallery.
- The court treated the Gallery’s inability to account for missing originals as a serious violation of its contractual duties and its duties as an agent/consignee entrusted with artwork.
- The court held the Foundation complied with the Agreement’s termination-for-cause procedure by giving written notice, allowing the 30-day cure period, and waiting through the 90-day notice period.
- Because the material breaches remained uncured, the court held the Foundation validly terminated the Agreement for cause.
- The court granted summary judgment to the Foundation on the validity of termination; remaining issues, including damages, were left for later proceedings.

## Legal Principles

- Under New York law, unambiguous contract language controls, and courts enforce express “rights reserved” clauses; rights not expressly granted are not implied.
- A party materially breaches a contract when its conduct defeats the contract’s essential purpose or goes to the root of the bargain.
- Making and selling reproductions outside the scope of a contract’s grant of rights can constitute both copyright infringement and breach of contract.
- A gallery entrusted with originals as an exclusive sales agent/consignee may owe duties of care and accounting; failure to maintain custody or control of consigned originals, or to account for them, can constitute breach.
- Where a contract permits termination for cause only after written notice and an opportunity to cure, termination is effective when the terminating party provides contract-compliant notice, allows the cure period, and the material breach remains uncured.
- On undisputed facts, summary judgment is appropriate to determine material breach and the contractual validity of termination.

## Conclusion

In _Al Hirschfeld Foundation v. Margo Feiden Galleries Ltd._, the court held on summary judgment that the Gallery materially breached the 2000 settlement agreement by making unauthorized giclée reproductions and by failing to account for 20 missing original cartoons, and that the Foundation’s 2016 notice, cure opportunity, and termination complied with the Agreement, making termination for cause valid.


Al Hirschfeld Foundation v. Margo Feiden Galleries Ltd., 296 F. Supp. 3d 627 (2017)