## Facts

- Cristallina S.A., a corporation engaged in buying and selling art, sought to raise about $10 million and approached Christie’s about selling Impressionist paintings.
- Christie’s president and Impressionist expert, David Bathurst, inspected paintings and advised Cristallina to consign eight works for a May 1981 New York auction.
- Bathurst provided projected proceeds comparing auction and private sale; Cristallina alleged he emphasized optimistic auction results while minimizing lower figures.
- After the consignment decision, Christie’s Impressionist department head allegedly formed a more pessimistic view, concluding some projections were not achievable.
- Christie’s allegedly publicized a lower expected sale range (about $5–9 million) than Bathurst’s earlier projections (about $8.5–12.6 million), without informing Cristallina.
- Cristallina alleged Christie’s failed to disclose (i) the changed internal assessment, (ii) the lower public estimate, (iii) internal reserve-setting constraints tied to published estimates, and (iv) adverse market information (including authenticity rumors).
- Bathurst recommended, and Cristallina accepted, an aggregate reserve around $9.25 million, allegedly exceeding the high end of the publicly announced estimate range.
- The auction performed poorly: only one painting sold; the remainder were bought in or unsold.
- Cristallina sued Christie’s and Bathurst alleging fraud, negligent misrepresentation, breach of fiduciary duty, breach of contract, and related relief; the trial court granted summary judgment dismissing the complaint.

## Issues

1. Whether an auction house acting as a consignor’s agent owes fiduciary duties of good faith and full disclosure of material information affecting the consignor’s decisions.
2. Whether alleged optimistic projections and nondisclosure of contrary internal information and market risks created triable issues of fraud or negligent misrepresentation.
3. Whether material factual disputes required denial of summary judgment on Cristallina’s claims.

## Decision

- The Appellate Division reversed the summary judgment dismissal in substantial part.
- The court held that Christie’s, as Cristallina’s agent, owed fiduciary duties of good faith and full disclosure.
- The court found triable issues of fact on alleged nondisclosure and related misrepresentation theories, making summary judgment improper on most claims.
- The court affirmed dismissal of limited, specific causes of action (including a claim concerning failure to remit proceeds and a particular statutory claim).
- The matter was remanded for further proceedings on the reinstated claims.

## Legal Principles

- An auction house selling consigned goods generally acts as the consignor’s agent and therefore owes fiduciary duties, including utmost good faith and disclosure of material information affecting the principal’s interests.
- Nondisclosure of material internal assessments, public-facing valuation statements, market concerns, or reserve-setting practices may support claims for breach of fiduciary duty and, depending on proof, fraudulent concealment.
- Expert opinions or forecasts about value or sale outcomes can be actionable as fraud or negligent misrepresentation when made by a party with superior knowledge in a context of justified reliance, particularly if contrary information is known but not disclosed.
- On summary judgment, the court does not resolve credibility disputes; where intent, reliance, materiality, and causation depend on contested facts, claims should proceed to trial.

## Conclusion

The court held that an auction house, as a consignor’s agent, may be liable for failing to disclose material information bearing on auction strategy and reserves, and that disputed facts regarding internal valuations, public estimates, market information, and related representations required trial on most of the consignor’s claims.


Cristallina S.A. v. Christie, Manson & Woods Int’l, Inc., 117 A.D.2d 284, 502 N.Y.S.2d 165 (N.Y. App. Div. 1st Dep’t 1986)