Lawsuit Goes to the Heart of the Gossipy, High-Stakes Art World

Powerhouse dealer David Zwirner has fired back in the lawsuit against him by one of America’s better-known art collectors. In papers filed Monday in the Southern District Court of New York, he charged that he never made or violated a “first dibs” promise or one of confidentiality in a prominent art sale. His response further raises the question of whether the collector was essentially speculating on art, flipping it for profit and as a tax-break strategy.

The lawsuit, Robins v. Zwirner et al., goes to the heart of the intricate workings of the art world in recent years. Whichever side wins, it throws a spotlight on the growth of a stratified collector caste system, the rise in the practice of flipping art for profit, the development of sophisticated tax strategies to aid in art trading—and the widespread inability of any art-worlder to keep their mouth shut for long.

Lawsuits are rare in the art world, or at least they used to be. In recent months, however, there have been a spate of them. Lawyers, collectors and dealers say a couple of factors have come together to make it more tempting to sue: The boom in art prices has made art worth going to court over, and commonly sent emails create a paper trail that can make litigation easier. But most of all, the rising tide of lawsuits is about the recession. In boom times, “you figure it will all even out on the next deal,” said one art attorney. “But when times get tight, you go to court.” it’s a mark of the times.

Craig Robins, the well-known Miami real estate developer, is charging in his lawsuit that he sold a painting by noted South African artist Marlene Dumas in 2004, with Mr. Zwirner brokering the deal. Mr. Zwirner paid him in both cash and other artworks, in what’s called a like-kind transaction in the Internal Revenue Code. Mr. Zwirner agreed to keep the sale confidential, according to the suit, because the sale would be something of an affront to the artist and might prevent Mr. Robins from gaining access to her other works.

Then, Mr. Robins charges, Mr. Zwirner gossiped, and gossiped with a motive. He told Ms. Dumas of the sale. Not long after, Mr. Zwirner became Ms. Dumas’s primary representative, a coup for the art dealer, as she had a 2008 retrospective of her work at the Museum of Modern Art, among other achievements. Meanwhile, Ms. Dumas, Mr Robins said, does not want to sell him any more paintings, even though, with six to eight of her paintings in his collection, and many more drawings, he is one of her primary collectors. Further, Mr. Zwirner had agreed to put him at the top of the waiting list for her works, and did not honor that promise, he said.

Mr. Zwirner declined to comment; a spokesman for the gallery said “there is no evidence to support” Mr. Robins’ claim—and there doesn’t seem to be much of a paper trail either to confirm that a legal contract existed, which Mr. Robins said he has a witness to, or to support the implication that Mr. Robins is collecting for profit. Indeed, Mr. Zwirner’s response to the suit, filed Monday, raises the issue of “art speculation” and notes “Ms. Dumas does not want collectors to speculate in her works or flip them for profits’ sake.” He also essentially argues, somewhat surprisingly, that while confidentially is assumed during an art-world transaction, it does not extend beyond it.

Mr. Robins counters that he is not a speculator. “In nearly 30 years of collecting over 1,000 works of art, I have sold perhaps 50 of them—and I have never been in a legal dispute with a gallery or over a work of art, until now.”

Lawsuit Goes to the Heart of the Gossipy,  High-Stakes Art World