## Facts

- Kerstin Lindholm, a private collector, bought Andy Warhol’s *Red Elvis* in 1987 through Anders Malmberg, a Swedish art dealer and her long-time art advisor.
- For decades, Malmberg handled the Lindholms’ art transactions and frequently possessed *Red Elvis* to arrange museum loans and transportation.
- *Red Elvis* was loaned to major museums through Malmberg; the painting was released to him for transport consistent with museum practices, reinforcing his apparent authority.
- Around 2000, Malmberg offered to sell *Red Elvis* to Peter M. Brant, an experienced collector, representing that he owned the work after purchasing it from Lindholm.
- Brant retained counsel to conduct due diligence, including searches of UCC lien records and the Art Loss Register, which revealed no adverse claims.
- Brant insisted on a written agreement in which Malmberg warranted good title and agreed to indemnify Brant; Brant did not contact Lindholm directly.
- Malmberg later was criminally convicted in Sweden for unlawfully selling *Red Elvis*.
- Lindholm sued Brant for conversion, claiming Malmberg lacked authority and thus could not convey good title.

## Issues

1. Whether Lindholm’s repeated delivery of *Red Elvis* to Malmberg constituted “entrustment” to a merchant who deals in goods of that kind under Conn. Gen. Stat. § 42a-2-403, giving Malmberg power to transfer Lindholm’s rights.
2. Whether Brant qualified as a “buyer in the ordinary course of business,” including whether he purchased in good faith, without knowledge the sale violated another’s rights, and consistent with reasonable commercial standards of fair dealing for a merchant-buyer.

## Decision

- The Connecticut Supreme Court affirmed judgment for Brant.
- The court held Lindholm entrusted *Red Elvis* to Malmberg, a merchant dealer, within the meaning of § 42a-2-403.
- The court held Brant bought in the ordinary course of business and took Lindholm’s rights in the painting because he acted in good faith, lacked actual knowledge of a title defect, and satisfied reasonable commercial standards in the high-end art market.
- As a result, Lindholm’s conversion claim failed.

## Legal Principles

- Under Conn. Gen. Stat. § 42a-2-403(2)–(3), entrusting goods to a merchant who deals in goods of that kind gives the merchant power to transfer the entruster’s rights to a buyer in the ordinary course of business, even if the merchant’s conduct is fraudulent.
- “Entrusting” is broadly defined to include delivery or acquiescence in retention of possession, regardless of conditions and regardless of whether the entrustment was procured by criminal conduct.
- A buyer in the ordinary course must purchase in good faith and without knowledge that the sale violates another person’s rights.
- For a merchant-buyer, good faith includes honesty in fact and observance of reasonable commercial standards of fair dealing in the trade; suspicion or awareness of risk does not equal knowledge of a rights violation.
- Reasonable commercial standards are trade-specific; in high-end art transactions, reliance on reputable intermediaries and confidentiality norms may make extensive provenance demands atypical.
- The UCC does not impose a categorical requirement that a purchaser contact the last known owner; the inquiry is contextual and based on commercial standards.
- The entrustment rule allocates loss between innocent parties by placing the risk of a dishonest intermediary on the owner who entrusted possession to that intermediary, rather than on a qualifying good-faith purchaser.

## Conclusion

Because Lindholm entrusted *Red Elvis* to a merchant art dealer who later sold it, and because Brant purchased as a buyer in the ordinary course under the UCC’s merchant good-faith standard and trade-specific commercial practices, Brant took good title and Lindholm could not recover for conversion.


Lindholm v. Brant, 283 Conn. 65, 925 A.2d 1048 (Conn. 2007)