Appeal of art sale lawsuit 'frivolous,' museum attorney says

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By Larry Parnass
The Berkshire Eagle

Editor's note: This story was updated Aug. 20 to clarify who will appear before the Massachusetts Appeals Court on behalf of Attorney General Maura Healey and to add the office's reason for opposing the appeal.

PITTSFIELD — A Berkshire Museum lawyer wants three justices to dismiss the only remaining legal challenge to its ongoing art sales. 

The judicial big dog has spoken, the museum's lawyer says in effect. 

On April 5, a Supreme Judicial Court decision authorized the museum to raise up to $55 million by selling works from its collection after a single justice agreed with Attorney General Maura Healey that the institution faced an otherwise insurmountable financial crisis.

Opponents of the sales continue to question that, saying the museum's hand was not forced. 

In a letter Wednesday to the Massachusetts Appeals Court, attorney Mark C. Fleming said the SJC ruling undercuts the remaining legal challenge. It is being pursued by three Lenox residents who tried unsuccessfully to stop art sales through a lawsuit at the superior court level, then sought redress in a December filing with the appeals court.

Their lawsuit, filed in the Business Litigation Session of Suffolk Superior Court, argued that, as members of the museum, they held a right to participate in its management. 

The appeals case is scheduled to be heard at 9:30 a.m. Sept. 4 in the John Adams Courthouse in Boston. 

But Fleming's letter asks the justices handling it to see the appeal as no longer relevant.

The ruling by Justice David A. Lowy, Fleming wrote, "forecloses and moots [the] Appellants' claim that the sale of objects violates the Museum's governing statute or other obligations."

"The SJC's decision makes plain that this appeal is wholly insubstantial and frivolous," wrote Fleming, an attorney with the Boston firm WilmerHale. "The SJC confirmed the Attorney General's `exclusive province to ensure that a charitable trust established for the benefit of the public is properly administered.' "

The filing of the letter comes after the briefing period had closed for the case.

Attorney Nicholas O'Donnell, who represents James and Kristin Hatt and Elizabeth Weinberg, all of Lenox, replied Thursday with a letter to the appeals court. 

He called the museum's letter "defective," "out of order" and said it should be "stricken from the docket" as the court moves to hear arguments as planned.

"It presents no cognizable basis to dismiss a fully-briefed case that is scheduled for argument in less than three weeks," O'Donnell said of Fleming's letter. "The Trustees' desperation to avoid scrutiny for their mismanagement may be understandable, but it is no excuse to deprive the Member Plaintiffs of their case."

O'Donnell wrote that while the art sales were the clearest example of what his clients saw as the museum's breach of contract with its members, that wasn't the only reason for their lawsuit. 

"The sale of the works already auctioned cannot be enjoined, but everything else about the case remains in play," he wrote. "This is a case of ongoing and tremendous public importance ."

In an interview this week, O'Donnell said his clients' lawsuit remains valid.

"The claim that it brings is the rights of members to participate in the governance of the nonprofits in which they are members," he said. "It's a point not mooted by the sales."

The appeal seeks to overturn Berkshire Superior Court Judge John Agostini's Nov. 7 finding that the plaintiffs lacked standing to bring their complaint. 

The court plans to allow 15-minute arguments on both sides.

Healey's office, in a letter to the court  Aug. 10, said that Courtney Aladro, head of its charities division, will use five minutes of the museum's alloted time to appear.  An earlier docket listing said that Adam Hornstine, an assistant attorney general, was expected to represent the office.

“The AGO has a substantial interest in this appeal because it has exclusive standing to see to the due application of charitable assets,” says the letter, signed by Aladro and Hornstine. According to state law, they write, “The Attorney General has the duty to ‘enforce the due application of funds given or appropriated to public charities within the commonwealth and prevent breaches of trust in the administration thereof.’ Accordingly, Plaintiffs’ claims – and the outcome of this appeal – implicate the AGO’s exclusive standing in this subject matter.”

The case will be heard by Justices Diana Maldonado, Gregory I. Massing and Eric Neyman.

The museum has so far netted $47 million from art sales in April and May. A second batch of works is being marketed. The museum declined a request by The Eagle to provide an update on the status of those transactions. 

In his letter to the clerk of the appeals court, Fleming said the museum "is in the process of completing the sale" of those additional works.

He also wrote that his firm asked O'Donnell to drop the appeal, but learned Tuesday that he would not.

Fleming's letter closes: "The Superior Court was right to dismiss this case, and this Court should do likewise."

Larry Parnass can be reached at lparnass@berkshireeagle.com, at @larryparnass on Twitter and 413-496-6214.




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