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Honolulu Academy of Arts v. Greene

United States District Court, D. Hawaii

August 29, 2016

HONOLULU ACADEMY OF ARTS dba HONOLULU ART MUSEUM, a Hawaii non-profit corporation, Plaintiff,
JOEL ALEXANDER GREENE, et al ., Defendants.




         In 2004, the Honolulu Academy of Arts (“HAA”) contracted to pay art collector Joel Greene an $80, 000 annuity for life in exchange for five objects of Southeast Asian art. Ten years later, HAA, for the first time, demanded written provenance relating to the five objects and suspended annuity payments until Greene complied with the demand. When Greene did not comply, HAA brought this action, alleging claims for declaratory relief, breach of warranties, and unjust enrichment. Greene counterclaimed for breach of contract, assumpsit, and declaratory relief, and now moves for summary judgment on the claims brought by both sides. Dkt. No. 26. Because the Court finds that all applicable statutes of limitations have run on HAA's claims, and because HAA is in breach of the Annuity Agreement, the Court GRANTS Greene's Motion for Summary Judgment.


         I. Factual Background

         A. The 2004 Annuity Agreement

         In April 2004, Greene proposed to provide HAA with certain Southeast Asian antiquities in exchange for an annuity. Dkt. No. 32-11, Plf. Exh. 10. Stephen Little, then-Director of HAA, presented Greene's proposal to HAA's Collections Committee at its May 20, 2004 meeting. Dkt. No. 27-10, Def. Exh. H at 5. According to the minutes of that meeting, Little discussed Greene's proposal with “Eric Watanabe, Chief Financial Officer, and they agreed that it was essential to obtain an independent appraisal of the collection's current value, which would provide the base for the annuity; to do a check to determine if any pieces were illegally exported or listed as stolen; and to have a conservator review the condition of the pieces.” Id.

         At its August 5, 2004 meeting, the Collections Committee deemed “accomplished” the essential due diligence items it had set forth for the annuity agreement that had been identified at the May 20, 2004 meeting.[1] Dkt. No. 27-11, Def. Exh. I at 1. As such, the “motion to approve the annuity agreement was passed.” Id. at 6.

         On August 9, 2004, HAA and Greene completely executed a document entitled, “Honolulu Academy of Arts Charitable Gift Annuity Agreement for Joel Alexander Greene” (“Annuity Agreement”), which was drafted by counsel for HAA.[2] Dkt. No. 27-2, Def. Exh. A. The Annuity Agreement provided that HAA would pay Greene an annuity of $80, 000, in quarterly installments, for the remainder of Greene's life. Id. In exchange, the Annuity Agreement acknowledged that Greene, “as evidence of his desire to support the work of the [HAA] and to make a charitable gift, has contributed to the Academy art works valued in the amount of one million two hundred sixty-nine thousand eight hundred forty-one [dollars] ($1, 269, 841.00), receipt of which is acknowledged, for the Academy's general purposes.” Id. Although not expressly referenced in the Annuity Agreement, it is undisputed that the referenced “art works” are the five pieces of Southeast Asian art that the HAA had appraised prior to contract. See Dkt. No. 27-3, Def. Exh. B. The last paragraph of the Annuity Agreement provided: “Joel Alexander Greene and the Academy agree to execute and deliver any and all other documents necessary to carry out the terms of this Annuity Agreement and to conform the intent and purpose of this Annuity agreement with applicable laws.” Dkt. No. 27-2, Def. Exh. A at 2.

         Greene shipped the five objects of art to HAA in July 2004. Greene Decl. ¶ 5. Little acknowledged, by letter dated November 12, 2004, HAA's satisfaction and acceptance of the five works: “I have just reviewed all of the gifts received by the Academy in 2004, and wish to formally acknowledge on behalf of the Trustees and the Staff of the Academy your gift to the Academy of five outstanding works of art from the high cultures of Southeast Asia.” Dkt. No. 27-3, Def. Exh. B. HAA commenced payment under the terms of the Annuity Agreement on August 9, 2004. Greene Decl. ¶ 6.

         B. HAA's 2014-2015 Requests for Provenance Documentation

         Ten years later, in a letter to Greene dated August 4, 2014, Stephan Jost introduced himself as the new director of HAA. Dkt. No. 27-4, Exh. C. Jost's letter expressed concern regarding the lack of written provenance for the items HAA had received from Greene that were subject to the Annuity Agreement and requested assistance in establishing the provenance of those works.[3] Id. In late 2014, Jost followed up by meeting with Greene in Greene's San Francisco apartment to discuss HAA's request for documentation. Jost Decl. ¶ 4.

         On December 4, 2014, Jost sent Greene another letter, along with a copy of the Association of Art Museum Directors (“AAMD”) 2013 Guidelines. Dkt. No. 32-4, Plf. Exh. 3. In the letter, Jost explained that HAA is “legally obligated to confirm the provenance of all art objects it receives as a donation or as funding for annuities” and gave several examples of “provenance establishing that archeological material has been out of its country of origin since November 17, 1970, or has been legally exported after that date[.]” Id. at 1.

         On December 12, 2014, Greene responded, assuring Jost that he was searching through his papers for the requested documentation. Dkt. No. 32-5, Plf. Exh. 4.

         On May 18, 2015, Jost contacted Greene once more, reiterating HAA's request for written provenance sufficient to establish clear title to the five works (and other art works) Greene had provided to HAA. Dkt. No. 32-8, Plf. Exh. 7. Approximately one month later, on June 22, 2015, HAA's counsel sent a letter to Greene informing him, among other things, that:

[HAA's] agreement to provide you with a lifetime annuity was conditioned on the understanding that the items conveyed were authentic, that you had established the provenance of all the items, and that you had good title, as well as proper export documentation and import licenses. Absent [HAA's] receipt of any of this information from you, unless and until you can provide verifiable documentation relating to these objects, [HAA] is compelled to suspend the quarterly annuity payments currently being made to you pursuant to the terms of the 2004 Gifts Annuity Agreement.

Dkt. No. 27-5, Def. Exh. D.

         Greene's counsel responded by letter dated July 8, 2015, disputing that the AAMD's 2013 Guidelines imposed any legal obligations, and further disputing HAA's contention that Greene's lifetime annuity was “conditioned” in the manner described by HAA's attorneys. Dkt. No. 27-6, Def. Exh. E.

         C. Suspension of Annuity Payments

         On June 30, 2015, HAA suspended annuity payments to Greene, claiming that the Annuity Agreement was conditioned on Greene providing the written provenance demanded by HAA. Greene Decl. ¶ 8. Those annuity payments remain suspended.

         II. Procedural Background

         On July 31, 2015, HAA filed suit against Greene in the First Circuit Court, State of Hawaii. See Dkt. No. 1-1. HAA subsequently filed a First Amended Complaint on August 28, 2015, alleging claims for (1) declaratory relief; (2) breach of warranties; and (3) unjust enrichment. Dkt. No. 1-3.

         On September 8, 2015, Greene timely removed the action to this Court. Dkt. No. 1. Thereafter, on September 15, 2015, Greene filed his answer, concurrently asserting counterclaims for (1) breach of contract; (2) assumpsit; and (3) declaratory relief. Dkt. No. 5.

         On May 4, 2016, Greene moved for summary judgment on all claims asserted by HAA and all counterclaims asserted against HAA, arguing, in part, that HAA's claims were untimely. Dkt. No. 26. On June 17, 2016, HAA filed its opposition to Greene's Motion for Summary Judgment. Dkt. No. 31. On June 24, 2016, Greene filed his reply. Dkt. No. 34. The Court heard oral arguments on July 8, 2016. Dkt. No. 36.


         A party is entitled to summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A fact is ‘material' when, under the governing substantive law, it could affect the outcome of the case. A ‘genuine issue' of material fact arises if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Thrifty Oil Co. v. Bank of Am. ...

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