## Facts

- After Martha Nelson died, the estate’s co-personal representatives hired an appraiser to value personal property for a public estate sale.
- The appraiser told the representatives she did not appraise fine art and that a separate appraiser would be needed if fine art was present.
- The appraiser did not identify the two oil paintings as fine art; the representatives relied on the appraisal and conducted the sale, pricing the paintings at $60.
- Carl Rice attended the advertised public sale and bought the two paintings for the asking price.
- After purchase, the Rices investigated the signatures, obtained authentication from an auction house, and sold the works as paintings by Martin Johnson Heade.
- The paintings sold at auction for over $1 million; the Rices netted $911,780.
- The estate sued for equitable relief to undo or revise the sale.

## Issues

1. Whether the $60 sale should be rescinded or reformed for mutual mistake about the paintings’ identity and value when the estate proceeded without a fine-art appraisal.
2. Whether enforcing the sale was unconscionable due to the disparity between the sale price and the later auction proceeds.

## Decision

- The court affirmed summary judgment for the Rices.
- Even assuming a mutual mistake about the paintings’ nature and value, the estate bore the risk of the mistake by proceeding despite known limits in its information and appraisal.
- The sale was not procedurally unconscionable because it occurred at an advertised public estate sale with no deception, pressure, or hidden terms.
- The sale was not substantively unconscionable because unconscionability is assessed at contract formation, and the later windfall did not make the original bargain oppressive.

## Legal Principles

- Rescission or reformation for mutual mistake is unavailable when the party seeking relief assumed or bore the risk of the mistake, including by consciously proceeding with limited knowledge.
- A party bears the risk of mistake when it is aware of uncertainty or informational limits yet closes the transaction without further investigation.
- Unconscionability requires procedural and/or substantive unfairness measured at the time of contracting; subsequent events and later-discovered value alone do not establish unconscionability.
- Equity generally will not reallocate gains based solely on a later-discovered misvaluation absent overreaching or other inequitable conduct at formation.

## Conclusion

The court enforced the estate sale because the estate assumed the risk of misidentifying and mispricing the paintings by selling without a fine-art appraisal, and the extreme later profit did not render the transaction unconscionable when made.


Estate of Nelson v. Rice, 198 Ariz. 563, 12 P.3d 238 (Ct. App. 2000)