In case you haven’t forgotten…

Storage clients don’t tend to forget where they have stored valuable art. Those pesky bills we send every month are a pretty good reminder, for one thing. Many clients also have their own independent insurance on stored property, and if something happens to them the insurer has a record of what is where. Similarly, corporate collections, estates, and institutions keep records which survive and surpass the knowledge of any one individual; and heirs to potentially valuable holdings tend to have a pretty good idea where Mom & Pop have been keeping the good stuff. There are stories of mixups and deaths where it has taken heirs or other principals years to track down and be reunited with family stored art, but those scenarios are not common.

Your balance is currently.. yikes!

The truth is, a warehouse operator would rather have your timely payment than be forced to deal with items you have abandoned. Even valuable or potentially valuable art or antiques. And this is because, although specific provisions of the law vary from state to state, warehouses are very closely regulated as to the lawful manner in which they must, or can legally, dispose of abandoned property or contents of past due storage accounts. It’s a time consuming process, expensive, and results (i.e. getting paid in full) are not guaranteed. In addition, every step of the process exposes the warehouse operator to potential liability if correct procedures are not followed.

So even though that Lichtenstein with the red cherries in the bowl would look super nice over my mantle, and the owner is three or four months, or even a year behind on storage payments, I can’t have it and don’t want it.

Warehouseman’s lien

A warehouse operator does inherently have a “warehouseman’s lien” on stored property, which permits the operator to retain the goods unless or until all outstanding charges are paid. If the warehouse releases the goods, the lien is lost. So in practice you don’t get the Grandma Moses back, or for that matter even grandma’s old sofa, if you have an open balance. Makes sense. But from that point on the law typically favors the depositor of the goods. Statutes have been written specifically to prevent abuse by warehouses, which could otherwise “convert” goods to their own use, or, in layman’s terms, just walk away with stuff. If accounts remain unpaid, goods can be sold in accordance with the law.

Here’s a nice little tidbit you might enjoy from the California Commercial Code, Section 7209:

(a) A warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods,
and for expenses necessary for preservation of the goods or
reasonably incurred in their sale pursuant to law. If the person on
whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is
stated in the warehouse receipt or storage agreement that a lien is
claimed for charges and expenses in relation to other goods, the
warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its
possession for those charges and expenses, whether or not the other
goods have been delivered by the warehouse. However, as against a
person to which a negotiable warehouse receipt is duly negotiated, a
warehouse's lien is limited to charges in an amount or at a rate
specified in the warehouse receipt or, if no charges are so
specified, to a reasonable charge for storage of the specific goods
covered by the receipt subsequent to the date of the receipt.

Got that?

What happens next?

In a subsequent post I’ll discuss what happens next in the process, which is typically that the goods are sent to auction, but only after the warehouseman has satisfied a chain of legal requirements and selected an auction venue suitable to the type of goods held in the account.

When you store with a reputable warehouse, the law protects you from unscrupulous practices, which is as it should be. So, if  that was your next question, no, we can’t sell the goods to our pals off the loading dock, hock the Hockney, or take the Thiebaud to a thrift shop where our favorite aunt happens to be a frequent browser. Section 7210 of the California Commercial Code is watching.

Betsy Dorfman

As the Los Angeles Times and other news outlets have recently reported, the Sam Francis Foundation and other artists or their estates are suing for repeat sale royalties under the California Resale Royalties Act. This legislation, apparently honored more in the breach than in actuality, returns a 5% royalty to artists upon profitable reselling of works at values above $1000. The California law applies to artists living in the state, estates of artists going back 20 years, and/or to sales taking place in the state.

Galleries, major auction houses, and even Ebay are being targeted in lawsuits seeking payment of royalties by well known artists such as Chuck Close, Laddie John Dill and Robert Graham Estate . Similar to “droit de suite” resale royalties laws on the books in many European countries, artists are hopeful that such suits, if successful, will lead to adoption of a national law. The royalty is based on the retail sale price of the artwork, less whatever was originally paid for the work by the current seller. So works purchased years ago and held during decades of appreciation, as often occurred with the top tier of artists, can result in some whopping assessments.

The royalty can apply even if the artist lived in California for as little as two years, and also applies to barter or exchange of works as well as outright sale. Yikes. The fine print can be found in the California Commercial Code, section 986, always our first stop for a rousing read.

Betsy Dorfman

But sometimes the best thing we can say is no, or don’t.

Some examples:

An artist or gallery wants to ship a cardboard soft-packed painting overseas via air freight, as it is, without the protection of a wooden crate. In that case, we respectfully advise against it. If they insist, we politely insist back, and perhaps send them a few photos of the crates we routinely receive with footprints all over them. Or mention the percentage of crates returned to us with the shock watches triggered, suggesting the crate has been dropped or roughly handled.

Or, a potential client who is shipping a very valuable work overseas wants to declare a significantly lower value for customs purposes, sometimes far lower than the insurance coverage they have purchased on the piece. While shying away from using a hot button term like “fraud” we simply advise against it, as the undervaluation, if detected by customs, could result in seizure of the work or other unpleasantness involving financial penalties.

A favorite of our “please don’t” examples comes at holiday time. During peak travel times many airlines which normally carry packages and freight actually “bump” those cargoes in favor of carrying additional passengers. The result is often a glut of freight which can turn 2 day freight for example into 3 or 4 day freight, or worse. And “next day” becomes the next day they have room. We counsel callers during this time to add contingency days to their shipping schedule, especially where they have exhibition or other critical dates to meet. Where the time frame can’t be adjusted, we work with them to place the shipment with a specialty cargo shipper where a firm booking can be obtained in advance. Sometimes this costs more, but “costs more” is a lot better than “still sitting at the airport on the day show opened.”

Professional art handling companies like ours use their experience to guide clients to packing solutions and best carriers under a given set of circumstances. We’ve made quite a few client friends over the years by understanding when to say no and suggest an alternative. Sometimes our advice isn’t taken, and the soft-packed box shipped on December 23^rd arrives intact and on time the next day and breezes through customs without the valuation fudge being noticed. Could happen. Undoubtedly has happened, but the probabilities aren’t robust. When the object or objects are irreplaceable, we want the shipping gods and odds on our side.

So if there’s anything we can don’t for you, we’re listening.

Betsy Dorfman

On the road again...

After wildly successful outings at the Cite de la Musique in Paris and at the Montreal Museum of Fine Arts, the Miles Davis Exhibition is headed for Brazil. Scheduled to open in the next week or so, the exhibition showcases a remarkably diverse collection of musical memorabilia, scores, trumpets, synthesizers, artworks and even Miles’ personal boxing bag. Not to mention stage outfits which are quintessential Miles and as sparkling and distinctive today as ever.

FINE ART SHIPPING is pleased once again to handle loans to the show for Miles Davis Properties — nothing we like better than the chance to view these legendary artifacts and send them off to discover new and old fans around the world.

We wish the organizers, Foro Sul, all the best for a great opening. We’ll pass along updated information here as to future travels of the show and reviews of the Brazil exhibition when available. Viva Miles!

Painted crates pay tribute to Miles Davis famous "red trumpet" -- always a crowd favorite

Betsy Dorfman

Photo courtesy of the FBI

The FBI has announced recovery and return to Iraq of a variety of pots, terracotta plaques, oil lamps, and other artifacts illegally seized by Department of Defense contractors in 2004. The full article can be found here:

http://www.fbi.gov/news/stories/2011/july/artifacts_070711/artifacts_070711

Estimated at 2,500 to 4,000 years old, the looted goodies were used by the contractors as gifts and bribes, or sold to other contractors who smuggled them into the U.S.  Two of the contractors were prosecuted and are serving prison terms as a result.

Tens of thousands of such artifacts are thought to be circulating in the netherworld of black markets, with the UAE being a major hub of such activity. More than 15.000 items were taken from the National Museum in Iraq alone. Destined for purchase by European and other collectors, smugglers have proven adept at avoiding customs regulations and exporting such goods either deliberately mis-identified as modern pieces or by essentially hiding them in containers and other bulk shipments of legal commodities.

As any shipping professional can attest, there simply isn’t an affordable or rational way for every shipment to be inspected by customs officials. And with terrorism the main focus of interdiction efforts worldwide, who is going to unpack and investigate the provenance of every souvenir pot, fossil, sculpture and ceramic that travels through the worldwide freight system? Unguarded borders also exacerbate the problem, although to a lesser extent. While this latest recovery by the FBI is good news, the problem isn’t going away anytime soon.

Overseas travelers should be aware that most countries have strict laws prohibiting export of  items deemed to be part of their cultural heritage. That cute little clay vase the guy on the corner sold you cheap could get you into big trouble, and as an airline passenger your personal baggage is inevitably screened and inspected. While the law may allow for leniency where the possessor had no way of knowing the item was illegal, items purchased on the street or in a “flea market” setting, and without accompanying paperwork (provenance) may be enough to suggest that you knew, or should have known, that the artifact was possibly, or even likely, illegal. Instead of adding to your knick-knack shelf, you could end up collecting time off for good behavior.

Betsy Dorfman

OK, so you probably know this one… the lines are in fact of equal length. Different cultures, it turns out, react to the puzzle differently. Among westernized nations or where populations encounter right angles with regularity, the illusion holds. Viewers in these “carpentered” cultures are susceptible to the lie. However in more primitive cultures, the lines are more frequently correctly perceived as equal. The how and why specifics of this are of interest, and widely debated in various books and internet citations. I haven’t seen a discussion of this however through the eyes of an artist or sculptor, which thought was the genesis of this entry.

What if the figures above were sculptures rather than line drawings? If we assume that the elements of each are equal in size and weight, then there could be an expectation of parity in the shipping costs. Ah, but unfortunately we have now run afoul of the BSI – Budget Shipper’s Illusion. In fact the two sculptures are identical in shipping terms only if the right angle pieces on the ends of each main member are removable. If they are not removable, then the sculpture at the top would be more expensive to ship. It is longer overall in length, as the “feet” of the arrow or right angle portion extend past the length of the center line. Its volume is thus greater than that of the figure below, and hence it will be more expensive to ship in most cases. In fact it is relatively easy to see that the bottom figure in fact fits readily within the “footprint” of the top figure.

There is nothing in the scientific literature regarding the performance of the hunter gatherers relative to the BSI.  But since, dearth of right angles not withstanding, they had to hunt and then gather, as in lug around, a lot of things, they presumably knew to charge more for a bigger thing than a small one. Unless the big thing was light and the small thing was heavy. But that’s another corollary of the BSI for another day.

Betsy Dorfman

Crates come in all sizes.

This one is from our “extra bedroom” series.

Looks like we might need that handy expand- a-truck tool…

Just another day at the office.

Our sympathies, guys.

Betsy Dorfman