Question: Nelson died in 1996 and Newman and Franz were appointed

Nelson died in 1996 and Newman and Franz were appointed co-personal representatives of her estate. Newman and Franz hired McKenzie-Larson to appraise the estate's personal property in preparation for an estate sale. McKenzie-Larson told them that she did not appraise fine art, and that if she saw any, they would need to hire an additional appraiser. McKenzie-Larson did not report finding any fine art, and relying on her silence and her appraisal, Newman and Franz priced the personal property and held an estate sale. Rice responded to the newspaper advertisement for the sale and attended it. At the sale, Rice bought two oil paintings for $60. Rice had bought and sold some art, but he was no expert. He had never made more than $55 on any single piece and he had bought many that turned out to be frauds, forgeries, or the work of lesser artists. He assumed that the paintings at the estate sale were not originals, given their price and the fact that the sale was being managed by professionals. Subsequently, Rice learned that the paintings were original works of Martin Johnson Heade. Rice sold the paintings on consignment at Christie's in New York for $1,072,000. After subtracting the buyer's premium and the commission, Rice realized $911,780 from the sale. Newman and Franz sued Rice, claiming that the sale contract should be rescinded on the basis of mistake. Will Newman and Franz win?

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  • CreatedJuly 16, 2014
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