Opinion
No. X04 MMX CV 0-5 4003439 S
January 13, 2006
MEMORANDUM OF DECISION
The American impressionist John Singer Sargent painted "Carmencita Dancing" in 1890, if representations are accurate. The work appeared in the catalogue of an exhibit in Chicago in 1911. Its whereabouts for the next seventy years are unknown. In the late 1970s or early 1980s, depending on who is believed, the work, badly in need of restoration, surfaced at a tag sale on Main Street in Middletown. The purchaser, lucky in this regard at least, was Sal D'Amico. D'Amico was disabled from working as a result of a head injury in 1960, and he spent considerable amounts of time patronizing tag sales and the like. According to one relative, he also spent time at libraries reading up on art history, and he may have had some knowledge of the field. In any event, he bought the painting for three dollars. He was convinced that the work was a Sargent and worth a lot of money. In the 1980s he sent correspondence to a number of galleries and experts seeking to authenticate the work, and at one time he arranged to have the painting taken to New York City, where Mark Borghi, a dealer, examined it. Borghi suspected the painting was indeed a Sargent, but he was unable to persuade the leading authorities, which group included Warren Adelson of the Adelson Galleries in New York. D'Amico died in 1992. The painting remained unauthenticated and, as a result, virtually valueless.
The saga, however, did not die with him. Complicating the task of the many lawyers and several judges who have dealt with the problem of "Carmencita Dancing" is the existence of several variations of the saga. Different players tell different stories, and a key player is, as noted above, deceased. The D'Amico family members say that the painting was returned to Sal D'Amico after the effort at authentication and was in the house Sal lived in when he died. They claim that the painting was stolen from the house shortly after his death, and they suggest that the defendant Corneroli must have been the culprit, because the painting showed up in New York with Corneroli not long after Sal D'Amico's death in 1992. In a New York action, which will be discussed in somewhat greater detail below, Corneroli testified, in general, that he and Sal D'Amico were partners in the painting and that Sal had entrusted the painting to him for the purpose of authentication and possible sale.
The painting surfaced in New York, and Corneroli placed the painting in Borghi's possession. Borghi brought the painting to Adelson, who purchased it from Borghi for about $175,000. The details of this transaction are fairly complex and don't matter a great deal for the purpose of this motion. Shortly after the transaction, Borghi claimed that he had been defrauded by Adelson. His position was that the premise of the purchase price was that authentication was unclear, whereas at the time of purchase Adelson really did know that the work was painted by Sargent. Adelson, or Adelson Galleries, allegedly sold the painting for a sum in the neighborhood of four to five million dollars to a "John Doe." In a "preemptive strike," so termed by a New York judge in the second action, Adelson sued Borghi in New Jersey. Borghi counterclaimed. The New Jersey action was settled in approximately 1997; Adelson ended up paying Borghi about $1.2 million, though other paintings figured into the transaction.
The evidence suggests that several paintings were delivered by Corneroli to Borghi. One, a Lancret, is also claimed by the D'Amico family to have been converted by Corneroli. Only the Sargent passed through Adelson, however, and only the Sargent is a subject of this motion for summary judgment.
Corneroli, in the meantime, was, by his testimony, wondering where "Carmencita Dancing" was. He made sporadic efforts to track down Borghi. After he discovered the gist of what had happened, he brought an action in the New York Supreme Court against Borghi, Adelson and "John Doe." The premise of the action was that Borghi had no authority to sell the painting. The action as to Adelson and Doe sought replevin. Judge Ira Gammerman of the New York Supreme Court conducted a bench trial over several days in July 2003. The hearing began as a "framed issue" hearing devoted to the issue of whether Corneroli had an actionable interest in the painting, but, as pointed out by Judge Gammerman, the hearing went beyond the framed issue. Judge Gammerman ultimately dismissed the action as to Adelson and Doe. He reasoned that regardless of any other transaction, it was clear from Corneroli's testimony that he had delivered possession of the painting to Borghi with the intention of splitting a purchase price. As a result, Adelson, buying from the dealer Borghi, became a buyer in the ordinary course of business and was protected against any action by Corneroli. Judge Gammerman's decision was affirmed in a brief opinion by the Appellate Division. See Corneroli v. Borghi, 11 A.D.3d 409, 783 N.Y.S.2d 572 (2004). Judge Gammerman did not decide any issue other than Adelson's rights vis-a-vis Corneroli. In order to make this decision, he did not need to decide whether Corneroli was the "true owner" as possibly opposed to D'Amico and no D'Amico interest was a party. The judge referred the remaining portion of the dispute to another judge for settlement discussions, and the remaining issues between Corneroli and Borghi, the remaining defendant, were settled.
For present purposes, Adelson and the Adelson Gallery may be treated as one party and referred to as "Adelson."
Apparently Borghi paid Corneroli with cash and several other paintings. Two of Sal D'Amico's sisters, Esther and Jennie, testified before Judge Gammerman. Neither was allowed to say anything of substance about any business arrangement between D'Amico and Corneroli because of evidentiary rulings made by the court. It was clear, however, as noted by Judge Gammerman, that they voluntarily appeared to support, in some fashion, Corneroli's version of his transactions with Sal D'Amico.
Either shortly before or shortly after the trial in New York, two other D'Amico siblings, the plaintiffs Louis D'Amico and Rita D'Amico Willis, visited Corneroli's lawyer in New York. They were subsequently appointed co-administrators of Sal D'Amico's estate by the Probate Judge and brought an action in the United States District Court for the District of Connecticut in December 2003. The original defendants were Corneroli and two John Doe's; in January 2004, the complaint was amended in order to drop Corneroli, who was, after all, not a diverse party, and to add Borghi and Adelson. The action claimed that Corneroli had stolen the painting and sought a declaratory judgment to that effect and to replevy of the painting. Judge Underhill dismissed the action on January 20, 2005, on the ground that Corneroli was an indispensable party to the litigation. He of course made no finding on the merits of the action. He denied a motion for reconsideration on April 11, 2005.
The present action was then brought in this court. The plaintiffs are Louis D'Amico and Rita Willis, the co-administrators of Sal D'Amico's estate. The defendants are Corneroli, Borghi, Adelson, Adelson Galleries and John Does 1 and 2. The complaint seeks money damages on a number of theories and return of the painting. The concept underlying the replevin action, which I will accept without qualification for the purpose of this motion, is that an ultimate possessor of goods who buys from a dealer is protected from claims arising in the prior chain of ownership, unless the chain has been interrupted by a theft. In the case of a theft, the "true owner" may recover the goods from a later possessor, who otherwise would be protected. See General Statutes § 42a-403.
Adelson has moved for summary judgment in his (and the gallery's) favor. Adelson's theory is that the action as to him is barred by considerations of issue preclusion and claim preclusion: because Judge Gammerman implicitly determined that Corneroi had not stolen the painting from D'Amico, or from the estate, and because members of the D'Amico family knowingly participated in the New York action, then the estate is barred from pursuing the claim again. There are insurmountable obstacles to this argument's success, and the motion is denied.
The standards for deciding motions for summary judgment are well defined:
"Summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact . . . a party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court [in support of a motion for summary judgment]." (Citation omitted; internal quotation marks omitted.) Home Ins. Co. v. Aetna Life Casualty Co., 235 Conn. 185, 202, 663 A.2d 1001 (1995); see also Practice Book § 17-49. "Our review of the trial court's decision to grant [a] motion for summary judgment is plenary." (Internal quotation marks omitted.) Barry v. Quality Steel Products, Inc., 263 Conn. 424, 450, 820 A.2d 258 (2003). "To oppose a motion for summary judgment successfully, the non-movant must recite specific facts . . . which contradict those stated in the movant's affidavits and documents." (Internal quotation marks omitted.) Reynolds v. Chrysler First Commercial Corp., 40 Conn.App. 725, 729, 673 A.2d 573, cert. denied, 237 Conn. 913, 675 A.2d 885 (1996).
Gannon v. Housatonic Valley Tourism District Comm., 92 Conn.App. 835, 840-41 (2006).
I have reviewed the transcripts and pleadings of the prior proceedings. Though many facts are in dispute, what happened in the prior proceedings is clear.
The black letter law regarding issue and claim preclusion, or res judicata and collateral estoppel, is similarly conventionally defined:
The applicability of the doctrine of collateral estoppel . . . presents a question of law . . . The fundamental principles underlying the doctrine of collateral estoppel are well established. The common-law doctrine of collateral estoppel, or issue preclusion, embodies a judicial policy in favor of judicial economy, the stability of former judgments and finality . . . Collateral estoppel means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit . . . Issue preclusion arises when an issue is actually litigated and determined by a valid and final judgment, and that determination is essential to the judgment." (Citations omitted; internal quotation marks omitted.) Cumberland Farms, Inc. v. Groton, 262 Conn. 45, 57-58, 808 A.2d 1107 (2002). "In other words, [the doctrine of] collateral estoppel precludes a party from relitigating issues and facts actually and necessarily determined in an earlier proceeding between the same parties or those in privity with them upon a different claim . . . An issue is actually litigated if it is properly raised in the pleadings or otherwise, submitted for determination, and in fact determined . . . An issue is necessarily determined if, in the absence of a determination of the issue, the judgment could not have been validly rendered . . . If an issue has been determined, but the judgment is not dependent upon the determination of th[at] issue, the parties may relitigate the issue in a subsequent action. Findings on nonessential issues usually have the characteristics of dicta."
[fn 13] (Internal quotation marks omitted.) Id., 58 n. 17.
DaCruz v. State Farm Fire Cas. Co., 268 Conn. 675, 686 (2004).
Similarly, as to both issue and claims preclusion:
"The doctrine of res judicata holds that an existing final judgment rendered upon the merits without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated as to the parties and their privies in all other actions in the same or any other judicial tribunal of concurrent jurisdiction . . . If the same cause of action is again sued on, the judgment is a bar with respect to any claims relating to the cause of action which were actually made or which might have been made." (Citations omitted; emphasis added.) Wade's Dairy, Inc. v. Fairfield, 181 Conn. 556, 559-60, 436 A.2d 24 (1980). "Res judicata, as a judicial doctrine . . . should be applied as necessary to promote its underlying purposes. These purposes are generally identified as being (1) to promote judicial economy by minimizing repetitive litigation; (2) to prevent inconsistent judgments which undermine the integrity of the judicial system; and (3) to provide repose . . ." (Emphasis added; internal quotation marks omitted.) Statewide Grievance Committee v. Presnick, 216 Conn. 135, 139, 577 A.2d 1058 (1990).
"Claim preclusion (res judicata) and issue preclusion (collateral estoppel) have been described as related ideas on a continuum." (Internal quotation marks omitted.) Dowling v. Finley Associates, Inc., 248 Conn. 364, 373, 727 A.2d 1245 (1999). More specifically, collateral estoppel, or issue preclusion, is that aspect of res judicata that prohibits the relitigation of an issue when that issue was actually litigated and necessarily determined in a prior action between the same parties or those in privity with them upon a different claim. Cumberland Farms, Inc. v. Groton, 262 Conn. 45, 58, 808 A.2d 1107 (2002); RR Pool Patio, Inc. v. Zoning Board of Appeals, 257 Conn. 456, 466, 778 A.2d 61 (2001). "An issue is actually litigated if it is properly raised in the pleadings or otherwise, submitted for determination, and in fact determined . . . 1 Restatement (Second), Judgments § 27, comment (d) (1982). An issue is necessarily determined if, in the absence of a determination of the issue, the judgment could not have been validly rendered. F. James G. Hazard, Civil Procedure (3d Ed. 1985) § 11.19." (Emphasis in original; internal quotation marks omitted.) Dowling v. Finley Associates, Inc., supra, 374.
Efthimiou v. Smith, 268 Conn. 499, 506-07 (2004).
Adelson's argument is twofold: he argues first that the issue of Corneroli's ownership interest in the painting, or, stated alternatively, his not having stolen the painting, was necessarily determined in the proceeding before Judge Gammerman, and second that, by virtue of the participation of two of the D'Amico siblings in the New York proceedings, the estate was privy to the New York action. For the sake of simplicity, I consider the privity issue first.
As noted in the above recitation of black letter law, a party is bound by a prior proceeding only if she was a party to the proceeding or was in privity with a party to that proceeding. The concept of privity is not altogether susceptible to a simple definition. Perhaps the idea has been best expressed in Mazziotti v. Allstate Ins. Co., 240 Conn. 799, 813-14 (1997):
The present case presents a question of issue preclusion, which requires an identity of issues between the prior and subsequent proceedings and operates only against the same parties or those in privity with them. "While it is commonly recognized that privity is difficult to define, the concept exists to ensure that the interests of the party against whom collateral estoppel [or res judicata] is being asserted have been adequately represented because of his purported privity with a party at the initial proceeding . . . A key consideration in determining the existence of privity is the sharing of the same legal right by the parties allegedly in privity . . . Aetna Casualty Surety Co. v. Jones, [ supra, 220 Conn. 304]." (Internal quotation marks omitted.) Weiss v. Statewide Grievance Committee, supra, 227 Conn. 818. "This is to ensure that the interests of the party against whom collateral estoppel is being asserted have been adequately represented because of his purported privity with a party at the initial proceeding." State v. Fritz, 204 Conn. 156, 173, 527 A.2d 1157 (1987). [fn 12]
Privity is a difficult concept to define precisely. Commissioner of Environmental Protection v. Connecticut Building Wrecking Co., 227 Conn. 175, 193, 629 A.2d 1116 (1993). There is no prevailing definition of privity to be followed automatically in every case. It is not a matter of form or rigid labels; rather it is a matter of substance. In determining whether privity exists, we employ an analysis that focuses on the functional relationships of the parties. Privity is not established by the mere fact that persons may be interested in the same question or in proving or disproving the same set of facts. Rather, it is, in essence, a shorthand statement for the principle that collateral estoppel should be applied only when there exists such an identification in interest of one person with another as to represent the same legal rights so as to justify preclusion. Joe's Pizza, Inc. v. Aetna Life Casualty Co., 236 Conn. 863, 868, 675 A.2d 441 (1996).
Privity may, then, be decided by analyzing the nature of the interests of the parties and by undertaking the functional inquiry of whether those interests were substantially identical and adequately represented at the prior proceeding so that equitable results follow. Under any test, it is difficult to see how the D'Amico estate can be said to be in privity with the Corneroli interest at the New York hearing. Putting aside for the moment the considerations that the D'Amico estate did not exist at the time of the New York proceeding and that only two of the siblings "participated" in the New York proceedings, this court has difficulty understanding how Corneroli adequately represented the D'Amico interests in New York. Although both parties wanted the painting returned from the Adelson and Doe parties, there the paths depart. Adelson seems to argue that because the siblings who later were named administrators of the estate knew about the action at about the time it took place and did not object to it, they are now bound by it. This is not the law.
An examination of some of the case law in the area is illustrative. In Joe's Pizza, Inc. v. Aetna Life Casualty Co., 236 Conn. 863 (1996), one of the issues was whether the plaintiff corporation was in privity with its shareholders, who had maintained a prior action against the defendant Aetna. In the circumstances of this case, the Supreme Court upheld the trial court's determination that there was privity and that summary judgment had therefore been properly granted. Although ordinarily actions by shareholders do not bind corporations, and vice versa, in circumstances where the only two shareholders of the corporation both brought the prior action and the interests of the shareholders and the corporation coincide, then they are in privity. Id., 868-70. Citing the comments to the Restatement (Second) of Judgments, § 59, our Supreme Court held that the commonality of interest was sufficient to "give rise to a presumption that the [shareholders'] opportunity to litigate issues that concern them in common [will] sufficiently protect both." Id., 870 (internal quotations omitted). Joe's Pizza, then, is a straightforward application of the doctrine, in that the shareholders involved in the prior litigation essentially were the corporation involved in the second.
Adelson refers to two other cases which come closer to supporting his position in this matter. Buechel v. Bain, 97 N.Y.2d 295, 740 N.Y.S.2d 252, 766 N.E.2d 914 (2001), is a fairly complex dispute between former clients of a law firm and several partners in that firm. In a prior action, one of the partners, Rhodes, had received an adverse ruling as to the validity of a trust agreement. Two other partners, Bain and Gilfallen, had been parties to the action but had not been parties to the specific counterclaim in which the invalidity of the trust agreement had been decided. The trial court found that Bain and Gilfallen were nonetheless bound by the prior determination. The interests of Bain and Gilfallen under the trust were identical to those of Rhodes under the trust, Bain and Gilfallen were parties to the action, and were aware of and had the opportunity to litigate the issue in the prior action. They were held, then, to be bound by the prior determination.
A second case relied upon by Adelson is Bridgeport Hydraulic Co. v. Pearson, 139 Conn. 186 (1952). This case does not decide an issue of privity so much as whether a person was a party to the prior action in her own right. In Pearson, the plaintiff water company sought to enjoin the defendant Mrs. Pearson from pursuing several actions she had filed against the water company. The disputes arose from the water company's condemnation of land. One prior condemnation action, involving the so-called "forge property," had been concluded. Mrs. Pearson had been a named party, had contested the condemnation and had lost. There wasn't much complication to the decision barring her from contesting the condemnation of that parcel in a subsequent proceeding.
A second parcel, the "schoolhouse" property, had also been the subject of a condemnation action, and this proceeding had been more convoluted. The water company had named as defendants a number of parties, by name and by description, that did not include Mrs. Pearson. In that action, however, "she made a special appearance in court to assert her claims to an interest in the property and to oppose the taking. She also . . . filed an objection to further proceedings until she should be served as a party." Id., 190. Mrs. Pearson received formal notice of a committee hearing to assess damages, but she did not attend. An execution issued. Mrs. Pearson filed a motion to set aside the order of execution; she claimed that she had been in possession of the property for some time and her possession had been known by the water company. Additionally, she claimed that the execution had been issued without notice to her. Her motion, however, was denied and no appeal was taken. Id., 191.
Not surprisingly, Mrs. Pearson was adjudged to be bound by the prior action. Her current claim was identical to that raised in the motion to revoke the execution. Where a person is not a formal party but who has an interest in the subject matter of a motion made in an action actively participates in the hearing on the motion, both he and his adversary are concluded by the decision thereon." Id., 199. Because Mrs. Pearson appeared, cross examined witnesses, made a motion to the court and actively participated in the adjudication of the motion, she was conclusively bound. "By filing the motion, Mrs. Pearson submitted to the court the issue whether she had any right to possession of the property which had been violated by the company." Id., 200.
The facts of the present case bear little resemblance to those of Bridgeport Hydraulic. Had the estate in our case filed a motion before Judge Gammerman, or otherwise sought to have the issue of theft resolved in that forum, and had Judge Gammerman resolved the issue on the merits, the estate presumably would be bound even if it were somehow not formally a party to the proceedings. Had Esther or Jennie made such a motion and had the issue been resolved, then they presumably would be bound. But knowledge of a proceeding does not equate to being bound by the outcome of a proceeding. And of course the estate was not a party to the prior lawsuit or participating in an analogous capacity, as in Buechel.
Several other cases merit discussion. DaCruz v. State Farm Fire Casualty Co., 268 Conn. 675 (2004), involved, among other issues, the question whether an uninsured or underinsured motorist insurer is bound by a prior determination against the tortfeasor. The Supreme Court held that it is not:
The plaintiff asserts that State Farm was in privity with Michael Bullock for purposes of the DaCruz action because State Farm and Michael Bullock "shared the common interest [of] defeating [the plaintiffs] claims." We disagree that any such "common interest" placed State Farm in privity with Michael Bullock. "Privity is not established by the mere fact that persons may be interested in the same question or in proving or disproving the same set of facts. Rather, it is, in essence, a shorthand statement for the principle that collateral estoppel should be applied only when there exists such an identification in interest of one person with another as to represent the same legal rights so as to justify preclusion." Mazziotti v. Allstate Ins. Co., 240 Conn. 799, 814, 695 A.2d 1010 (1997). State Farm's primary and overriding interest was not in establishing that Michael Bullock was not liable to the plaintiff but, rather, in obtaining a determination that it had no duty to defend or to indemnify Michael Bullock because his conduct was not covered by Susan Bullock's homeowner's insurance policy. In such circumstances, we cannot conclude that State Farm and Michael Bullock were in privity: State Farm's interest, in contrast to Michael Bullock's interest, was to demonstrate that Michael Bullock's conduct was intentional and, therefore, outside the scope of the policy.
DaCruz, supra, at 691 n. 16.
Mazziotti, supra, is compelling. Allstate, the underinsured motorist carrier, had been informed of the underlying action against the tortfeasor before the amount of damages had been decided as to the tortfeasor. Allstate presumably had the ability to attend. Allstate was not bound by the prior determination. Among other considerations, its interests had not necessarily been sufficiently represented to avoid inequity in being bound by the decision.
"In determining whether privity exists, we employ an analysis that focuses on the functional relationships of the parties. Privity is not established by the mere fact that persons may be interested in the same question or in proving or disproving the same set of facts. Rather, it is, in essence, a shorthand statement for the principle that collateral estoppel should be applied only when there exists such an identification in interest of one person with another as to represent the same legal rights so as to justify preclusion." Mazziotti, supra, 814. "A trial in which one party contests a claim against another should be held to estop a third person only when it is realistic to say that the third person was fully protected in the first trial. State v. Fritz, supra, 204 Conn. 173. Id., 818-19.
Other cases cited by the parties mention more traditional applications of privity and need not be discussed at any length here. For example, in Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 230-31 (2003), it was stated that assignees are in privity with assignors as to the rights assigned and are therefore bound by prior judgments against assignors, and in Warner v. Lancia, 46 Conn.App. 150, 160-61 (1997), it was held that general partners are generally in privity with each other. These propositions are unexceptionable and don't help much with the current problem.
I make the following conclusions, then, as to the privity issues. It is clear that neither the estate nor Jennie and Esther were parties to the Corneroli action in New York. The estate did not exist and Jennie and Esther, though present during a portion of the proceedings, never participated functionally like parties, as was the case in Bridgeport Hydraulic and even more so in Buechel. Jennie and Esther probably did intend to support, in some as yet undefined way, Corneroli's claims against Borghi and Adelson. Their words and actions may create some problems with credibility in this action. But they don't rise to the level of being parties.
Nor are they in privity with Corneroli. Unlike the partners in Buechel or the shareholders in Joe's Pizza, the D'Amico's have no underlying uncontested relationship with Corneroli which suggests privity. And there are none of the shared interests and circumstances such that Corneroli equitably may be deemed to have so completely represented the D'Amicos' interests that they now are bound. In a consideration of all the circumstances, it simply is not realistic to find that the estate should be estopped by the prior participation of Jennie and Esther as witnesses and by its administrators' knowledge of (and perhaps disagreement with) the proceedings at a time either slightly before or slightly after the prior trial.
Adelson has suggested that Corneroli testified that there was a partnership between him and D'Amico. This is what is currently in dispute, however, and if the estate was neither a party to that determination (if made) nor privy in some way, then it is not bound. A person cannot be bound by a stranger's testimony regarding a privity-yielding relationship, even if that testimony is accepted by a court.
If, of course, a court should make a finding in a proceeding where the estate is a party that Sal D'Amico and Corneroli were partners, then the estate would be bound because it is in privity with Sal. Similarly, and obviously, if Sal had been party to a proceeding which determined that he and Corneroli were partners, then his estate would now be bound.
There is a statement in an affidavit that at least one of the administrators told Corneroli's lawyer that he did not agree with the proposition that Corneroli was a "partner" of Sal.
The remaining question, whether the issue presented in this proceeding was determined or determinable in the New York action, is largely factual. Adelson suggests that because the New York judgment "required" a finding that Corneroli was the true owner, and he could not have been the true owner if he had stolen the painting, then that proceeding has decided the issue of whether Corneroli stole the painting. An analysis of the proceedings shows that the logic breaks down.
As stated above, for collateral estoppel to apply the issue must have been actually decided in the prior action and must have been necessary to resulting decision. For res judicata, or claim preclusion, to apply, there need have been only a full and fair opportunity for the party or one in privity to have the issue decided, but a final judgment must also have occurred.
The New York complaint, for openers, does not mention any D'Amico. It does allege, or at least strongly imply, that Corneroli is the true owner. The "framed issue" before Judge Gammerman was whether Corneroli had an enforceable interest in the painting. Corneroli testified about his history with Sal, and testified essentially that he gave Sal the money to purchase "Carmencita Dancing" and that they were, in effect, 50-50 partners. It is not at all clear what Jennie and Esther would specifically have said had they been given an opportunity to testify about any arrangement between Sal and Corneroli; Judge Gammerman excluded testimony about any arrangement on hearsay grounds. New York's "dead man statute" apparently is different from ours. The court stated, at p. 262, that "there's testimony by this witness (Corneroli) and there's nobody who can dispute it, that he and D'Amico reached this agreement." (Emphasis added). When the judge suggested a resolution that would result in Borghi's receiving half the proceeds from Adelson and Corneroli and the D'Amico interests' each receiving a quarter (pp. 319-21), the attorney for Corneroli stated, "Your honor, with respect to the relationship between Mr. D'Amico and my client —" and the court rejoined, "D'Amico had no contract with him. It's irrelevant. D'Amico's role is irrelevant. There was a contract between the plaintiff (Corneroli) and Mr. Borghi and that's the contract that you are seeking to recover for breach of." (P. 323, emphasis added.) Although, perhaps ironically, Adelson's attorney seemed to be attempting to show that Corneroli had no interest to pursue against Adelson because D'Amico owned the painting (e.g., p. 25, pp. 301 et seq.), Judge Gammerman dismissed the action as to Adelson and the Does on the ground that regardless of whatever interest Corneroli may have had in the painting, he entrusted it to the dealer Borghi, who sold it to Adelson, who therefore had superior title to that of Corneroli pursuant to the Uniform Commercial Code. It was on this ground that the New York Appellate Division succinctly affirmed: "In light of the contract by which the plaintiff and defendant Borghi became partners in the sale of a valuable painting, the plaintiff had no basis on which to assert any claims against the painting's subsequent purchasers, defendants Warren J. Adelson, Adelson Galleries, Inc., and John Doe." Corneroli v. Borghi, 11 A.D.3d 409, 783 N.Y.S.2d 572, 572 (2004).
The only final judgment, and the only decision which Judge Gammerman made and the Appellate Division affirmed, was one determining the rights of Corneroli vis-a-vis Adelson and the Does. It made no difference to the decision whether Corneroli had any legitimate interest at all: either way, Adelson was protected.
In the post-judgment hearing before Judge Gammerman, requested immediately after the institution of the federal court action in Connecticut, the attorney for Adelson sought to have the New York court determine whether Corneroli gave false testimony in New York and the veracity of the D'Amico family's contentions in Connecticut. Judge Gammerman, while musing that his general recollection was that the D'Amico sisters had supported Corneroli's ownership claim, quite tersely stated that it was up to the Connecticut courts to determine such veracity. He said that the Connecticut case will come out as it will and there would be no hearing in New York. He stated he had no jurisdiction over the D'Amico sisters. There was no consideration or mention of any proposition that the Connecticut proceeding might be barred by preclusion principles.
Judge Underhill, in the federal court action, specifically wrote in his memorandum of decision of January 20, 2005, that the "New York lawsuit did not decide the rights of the D'Amico estate, which was not a party to the action." In his memorandum on reconsideration of April 11, 2005, on page 4 n. 2, he indicated that collateral estoppel would not operate to bar litigation of the action. Indeed, Judge Underhill, while expressing no opinion on the merits, specifically indicated that the matter should proceed in state court. At the very least, then, none of the other courts which have considered the problem of "Carmencita Dancing" indicated that there was any credence to any bar against the D'Amico estate going forward. Though the statements of the courts alluded to in the above recitation are largely dicta, they do provide some reinforcement for this court's conclusions.
The issue of theft, then, was not decided in the New York action, and was certainly not necessary to any actual holding of the court. There can be no claim preclusion. Whether the question could have been raised, were the D'Amico estate either a party or in privity with a party, is slightly more unclear, but there is at the very least a genuine issue. In any event it is clear that the estate was not a party or in privity with a party. The motion for summary judgment is, then, denied. No opinion is expressed as to the merits of the action or any other possible defenses.