Motion for New Trial Based on Art Valuation Experts

Written on Friday, October 2nd, 2015 by T.C. Kelly
Filed under: Expert Opinions, ExpertWitness, Working with Experts

Luke Brugnara made the mistake of representing himself in a federal criminal trial. Brugnara was convicted of mail fraud, wire fraud, and a number of lesser charges.

A lawyer would probably have hired an expert to testify for Brugnara during his trial. Expert testimony might have persuaded the jury that Brugnara was the victim of fraud rather than the perpetrator.

Brugnara’s Trial

The fraud charges were based on Brugnara’s agreement to pay millions of dollars to a New York art dealer for paintings, drawings, sketches, and sculptures by Willem de Kooning, Edgar Degas, George Luks, Joan Miró, and Pablo Picasso. The art was shipped to Brugnara in April 2014 but, according to the government, Brugnara refused to pay and refused to return the art.

An FBI search found four crates containing most of the art in Brugnara’s garage. A fifth crate, containing a Degas sculpture, was never recovered.

Brugnara, a former real estate investor and casino owner, consistently proclaimed his innocence. He represented himself in federal district court in San Francisco during a three week trial that was described as chaotic. Despite frequent outbursts that might have turned the jury against him, Brugnara managed to win acquittals on two charges of wire fraud and two charges of making false statements.

Brugnara has not yet been sentenced. With the help of counsel, he is seeking a new trial. His lawyers argue that new evidence if the form of expert testimony establishes Brugnara’s innocence.

Expert Testimony

Brugnara apparently based his defense on the argument that he did not pay the $11 million that he promised the art dealer because the art he received was “fake” and “worthless.” Unfortunately, his defense was based on his own rants rather than expert testimony. He also undermined that defense by making the arguably inconsistent claim that the dealer gave him the art as a gift.

Lawyers filed a motion for a new trial on the ground that expert testimony supports Brugnara’s view that the art dealer tried to swindle him. Brugnara’s expert testified that, viewed collectively, the art objects were worth $895,000, not the $11 million that Brugnara agreed to pay. The government’s expert agreed that much of the art the dealer sold to Brugnarra had no commercial value.

Even if the art was worth less than 10 percent of the amount Brugnarra agreed to pay, he might still have defrauded the dealer by refusing to return the art. The judge reasoned that Brugnara was not entitled to defraud the art dealer just because the art dealer tried to defraud Brugnara.

On the other hand, the jury might have resolved the charges in Brugnara’s favor if he had called an expert witness during his trial. The jury might have concluded that Brugnara’s refusal to pay $11 million for art that was worth less than $1 million was based on a desire to avoid being cheated rather than an intent to defraud.

While the judge has not yet ruled on the motion, the judge did point out that Brugnara claimed during his trial that the art was worthless. Brugnara had the opportunity to cross-examine the art dealer concerning its value but added to his woes by choosing to ask no questions. The judge suggested that Brugnara might need to live with the consequences of that decision.

Authenticity Versus Value

The government and defense experts both testified that their expertise lies in valuing art, not in authenticating it. Yet both experts expressed reservations about the genuineness of the art they inspected.

The government expert testified that the paintings by de Kooning were stylistically inconsistent with his authenticated work and that they appeared to have one signature painted over another. The defense expert testified that he had examined many paintings by de Kooning and that the artist’s signature on genuine works differed from the signature on the works that Brugnara purchased. At the same time, he testified that there is a market for art forgeries and that “suspect” de Koonings might have some commercial value.

The judge, who apparently engages in rants of his own, expressed reservations about the value of expert testimony. He told the defense expert: “All experts do is speculate” and “You’re an expert; all you’re doing is speculating anyway.” That attitude, more common among jaded judges than juries, explains why so many litigants opt for jury trials rather than allowing a judge to decide the case.

Valuing a Missing Sculpture

The value of the Degas sculpture is particularly difficult for the experts to assess, given that the sculpture was not recovered. The government claims that a similar bronze cast from the same foundry recently sold in a Hong Kong auction for $1.8 million. The defense expert testified that established auction houses like Sotheby’s and Christies refuse to sell bronzes from that foundry and questioned whether the Hong Kong buyers had an informed sense of the object’s true worth.

The defense expert was troubled that the auction house refused to disclose the auction catalog that would have established the auctioned sculpture’s value and history. The judge responded: “You’re putting this beyond the reach of any ordinary mortal to put a value on it. You’re discounting based on not knowing.”

The Value of Expert Testimony

Given the judge’s acerbic comments, it seems unlikely he will give Brugnara a new trial. It also seems doubtful that Brugnara can prove the expert evidence is “newly discovered” (the standard he must meet to win a new trial) since expert evidence was available to Brugnara and he chose not to pursue it. On the other hand, whether a conviction should be based on outright lies about value is a question that may need to be resolved on appeal.

The immediate lesson to learn from Brugnara’s case is that attempting to call an expert witness in order to win a new trial is an uphill climb. Expert witnesses should be consulted as soon as a litigant realizes that an expert opinion might influence the outcome of a trial.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.

About T.C. Kelly

Prior to his retirement, T.C. Kelly handled litigation and appeals in state and federal courts across the Midwest. He focused his practice on criminal defense, personal injury, and employment law. He now writes about legal issues for a variety of publications.