Judge Lewis A. Kaplan
Bekkerman, a New Yorker, is principal of New York-based ABA Gallery Inc., an art gallery specializing in 19th and 20th century Russian art. Through Arthur Properties S.A. (AP), which he control, Savchuk—a Ukrainian claiming no expertise with respect to art— bought 18 paintings from ABA Gallery for $9.58 million. Savchuk claimed that he later discovered that four of the paintings—for which he paid a total of $2.4 million—were forgeries, and that the prices he paid for the others was significantly higher than their market values. District court dismissed AP’s and Savchuk’s claims of fraud as legally insufficient under Federal Rule of Civil Procedure 9(b) and also because their complaint did not allege that Bekkerman knowingly or recklessly made any false statement as to the paintings’ authenticity or fair market value. Further, because there was no basis to conclude that the fair market value of any painting was other than the price Savchuk willingly paid in a voluntary transaction with ABA, a breach of warranty claim resting on the assertion that the paintings were sold at prices higher than fair market value was without merit. However, plaintiffs’ mutual mistake claim was permissible under FRCP 8(d)(2).
