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| | All of the facts recounted here are the conclusions and determinations of United States federal judges in two different litigations, one in the [[United States District Court, Central District of California]], and the other in the [[United States Bankruptcy Court]] sitting in Los Angeles. | | All of the facts recounted here are the conclusions and determinations of United States federal judges in two different litigations, one in the [[United States District Court, Central District of California]], and the other in the [[United States Bankruptcy Court]] sitting in Los Angeles. |
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| − | ==The facts in brief==
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| − | Sorayama made three different contracts with Bane in the 1990s, the last one being in 1999. In October 2000, Sorayama's agent notified Bane that she wished to conduct a physical audit of the paintings provided by Sorayama at the next scheduled show at TBG. The gallery promptly cancelled, however, and the audit was held the following April.
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| − | As a result of the audit, Sorayama’s agent discovered that eight works of art were missing and unaccounted for. As the court stated, "Bane offered different explanations for the loss: that they were in a warehouse, that they were stored in a garage, that [they were lost or stolen and] that he would make an insurance claim for them."<ref>''Sorayama v. Robert Bane Ltd., Inc., Robert S. Bane, Tamara Bane Gallery'', United States District Court, Central District of California, Case No. 05-1431 (FMC) (hereinafter ''Sorayama v. Bane''), Order Granting In Part Plaintiff’s Motion for Summary Judgment, pp. 1-2; see also, ''In Re: Robert Bane'', Debtor, Case No. LA07-19570-BB, Transcript of Proceeding, December 23, 2008, pp. 78-79.</ref> As Sorayama discovered during Bane’s deposition in federal court, Bane had actually sold the work in January 2000.<ref>''Sorayama v. Bane'', Order Granting In Part Plaintiff’s Motion for Summary Judgment, p. 2-3; and Deposition of Robert Bane, p. 20.</ref>
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| − | In the meantime, with the downturn in the market in late 2001, Bane returned most of Sorayama's original paintings, but advised Sorayama that he wished to "retain" 16 of them for sale. In fact, as revealed in the litigation, most or all of those had also already been sold a year or two earlier.<ref>''Sorayama v. Bane'', Findings of Fact and Conclusions of Law, p. 3, footnote 2.</ref> The litigation also uncovered the fact that a "bulk" sale of 9 works that Bane claimed he made to a single collector at a discount, wasn't a bulk sale at all, but separate sales of Sorayama's work at full price.
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| − | When Sorayama’s contract with Bane expired in March, 2002, he did not renew it, but asked Bane to pay him what he was owed and to return any remaining work. Months of negotiation ensued.
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| − | On September 9, 2002, Robert Bane, Ltd, Inc. d/b/a Tamara Bane Gallery, Inc. / Exotica agreed to pay Sorayama $148,800 as the balance due for the 24 paintings whose sale Bane had kept hidden from Sorayama, as well as the 9 works which Bane had lied about being a "bulk" sale.<ref>''Sorayama v. Bane'', Order Granting In Part Plaintiff’s Motion for Summary Judgment, p.3.</ref> Sorayama entered into this agreement without knowing that he had been defrauded.
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| − | Bane made irregular payments under the September 9, 2002 agreement and a year later, in September, 2003, asked Sorayama to take lithographs and glicees in partial settlement of the debt. Sorayama agreed to take 830 pieces (representing 44 different works) for a credit of $35,000. However, by January 2004, Bane still owed more than $93,000 to Sorayama.<ref>''Sorayama v. Bane'', Order Granting In Part Plaintiff’s Motion for Summary Judgment, p.3.</ref>
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| − | Then Sorayama discovered that Bane was auctioning off scores of his limited editions on eBay and other websites for $100 or less. In the Court's phrasing, he was "dumping" the work, all the while falsely claiming that he was still Sorayama's exclusive publisher. Dumping the work online had two direct consequences: first, it depressed prices for Sorayama's work, and second, it ensured that Sorayama was unable to sell more than a handful of the limited edition pieces he had taken in exchange for the $35,000 credit. At this point Sorayama had no choice but to sue.
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| − | In September of 2007, after a four-day non-jury trial before United States District Judge Florence-Marie Cooper, in the Central District of California, verdict was reached against Robert Bane, Ltd., Robert S. Bane, individually, Tamara Bane Gallery, and Exotica.<ref>''Sorayama v. Bane'', Final Judgment, p. 2.</ref> (The latter two were designated in the case as businesses of "unknown type.") Recognizing that Bane had acted intentionally to harm Sorayama and the market for his work, the judge not only awarded Sorayama compensatory damages of over $960,000, but also imposed punitive damages of $1,000,000 against Bane personally. The following is a detailed account of the District Court's judgment.
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| | ==Breach of Contract against Robert Bane Ltd.== | | ==Breach of Contract against Robert Bane Ltd.== |