A yearslong fight between two antique dealers over a “Dominique” chest, auctioned online for $275, has appeared in state courts from New York to California, and finally landed before the New Jersey Appellate Division.
In David Rago Auctions v. Hutchinson and Idyllic Studios, the Appellate Division affirmed the denial of reconsideration of a summary judgment order entered in favor of David Rago Auctions. The underlying case began when Rago, a Lambertville auction house, sold a chest to Dexter Hutchinson, a vintage furniture dealer in Los Angeles, and his business, Idyllic Studios. At that time, Rago was doing business as Rago Arts & Auction Center, according to the opinion.
After Idyllic picked up the chest at its own expense, Rago received notice from its owner, Elizabeth Ray, that the auction house was not authorized to sell it and demanded its return. Rago investigated and discovered that it sold the chest by mistake, without authorization from Ray. Rago and Hutchinson initially negotiated a buyback price of $1,700. But Hutchinson then learned that the chest was a “Dominique,” a valuable piece of furniture popularized in the 1920s and ’30s. The chest was valued at $15,000 to $20,000 in its currently damaged condition, and could be worth as much as $40,000 to $50,000 if restored, according to the opinion.
Rago offered Hutchinson a replacement chest, which he declined. Then David Rago notified Hutchinson that he was invoking his right to rescind the sale according to Section 27 of the terms of sale in their agreement, and requested the chest back. When Hutchinson refused, multistate litigation ensued, according to the opinion.
About a year after the auction in November 2019, Ray sued Rago in Ray v. Rago Auctions.com, in the Supreme Court of New York for monetary relief. That case was stayed by consent of the parties pending a decision in the New Jersey appeals court matter, according to the opinion.
In December 2019, Rago sued Hutchinson and Idyllic in Hunterdon County, New Jersey, Superior Court, alleging breach of contract and requesting injunctive relief in the form of return of the chest to Rago, who could in turn return it to Ray, who allegedly wants the chest back for sentimental reasons, according to the opinion. The Superior Court granted Rago’s motion for summary judgment, ordered the chest returned at Hutchinson’s expense, and awarded attorney fees to the company of $19,588.69.
Seven months went by and Hutchinson did not return the chest. Rago filed an application in the Superior Court of California, Los Angeles County, where Idyllic is domiciled, under the Sister-State Money Judgments Act. The California court granted Rago’s application and entered judgment in California against the defendants, according to the opinion.
When Hutchinson still did not return the chest, Rago requested an officer aid in removing the chest. The same day, Hutchinson moved for the California court to vacate or stay enforcement of the sister-state judgment for three reasons: “plaintiff’s trade name, ‘Rago Arts & Auction Center,’ was not registered in New Jersey in violation of N.J.S.A. 14A:2-2.1 at the time the auction was held; plaintiff’s alleged ‘misconduct’ in seeking to have the chest returned under false pretenses; and defendants’ dissatisfaction with their former counsel’s representation in the New Jersey action.”
The California court agreed with Hutchinson on the issue of Rago’s name and concluded that the action ”appears to have been barred.” The court further noted that “this issue was never raised before the New Jersey court despite defendants’ filing of two motions to dismiss and the court does not know how the New Jersey court would have addressed this issue.”
Rago filed a certificate of registration under the trade name, Rago Arts & Auction Center, and then successfully moved, in the New Jersey Superior Court, to amend the order granting summary judgment. Hutchinson moved to stay the judgment that granted possession of the chest to Rago, which was also granted.
The Appellate Division panel of Judges Francis J. Vernoia, Lisa A. Firko and Arnold L. Natali Jr. heard Hutchinson’s appeal of the Superior Court order denying reconsideration of the summary judgment order entered for Rago. Hutchinson argued that because Rago conducted the auction under a trade name that was not registered in New Jersey, that motion court lacked jurisdiction over the proceedings, according to the opinion.
“We are convinced plaintiff never deceived defendants,” the per curiam appellate opinion said. “When the auction of the chest took place, David Rago Auctions Inc. was a duly formed New Jersey corporation and used its corporate name in the subject auction with defendants.”
The two parties are both auctioneers, according to the opinion, and they have dealt with one another for a long time. And the defendants, Hutchinson and Idyllic, never established that Rago concealed its corporate identity. The appeals court further held that Hutchinson mischaracterized the California decision as voiding the New Jersey Superior Court’s orders. Instead, the Appellate Division held that the California court merely vacated its own order, which was a sister-state judgment.
As to Hutchinson’s final argument that interstate comity requires that the Appellate Division respect the decision of the California court, again, the appeals court disagreed.
“Here, New Jersey had jurisdiction first and adjudicated the matter,” the opinion said. “The California court could not retry the matter or conduct an appellate review of this State’s orders and judgment. We reject defendants’ argument that Cal. Civ. Proc. Code § 1710.40 can be interpreted to create an opportunity to raise defenses to the merits of the underlying claims resolved in New Jersey.”
The Appellate Division affirmed the trial court ruling and vacated the stay.
Counsel to Rago, Kasey T. Mahoney of Gordon Rees Scully Mansukhani, did not immediately return a request for comment.
“My clients obviously are disappointed in the panel’s decision,” said counsel to Hutchinson, Robert J. Donaher of Herold Law. “The California court’s ruling that the judgment against my clients was not enforceable appeared to correctly apply New Jersey law, something the trial court seemed to acknowledge albeit in reinstating the judgment. My clients are considering their legal options in the wake of the decision.”