Park West Gallery Litigation Update #7:

Park West Gallery Drags Royal Caribbean into Its Cesspit of Controversy

Read the previous Park West Gallery Litigation Updates

Guilt By Association and a Solid "Contractual Relationship"

Set forth below is the latest information and exciting developments regarding the barn burner litigation between Fine Art Registry® and Park West Gallery. We also report here on the continuing sensational events swirling around the victims' lawsuit against Park West Gallery, namely Sharon Day and Julian Howard, et. al. v. Park West Gallery and Royal Caribbean and how the recent shocking Michigan Court of Appeals decision and Order weighs heavily in favor of the victims, not only in the case mentioned above, but also for all the victims involved in the six nationwide class actions currently pending. If you haven’t already done so, please be sure to read Litigation Update No. 5 and 6, on the high jinks of the self-proclaimed world's largest art gallery in the universe.

New Destino Investigation

Hot off the press is our latest investigative report on the Park West Gallery Destino commercial grade art. If you own a Destino serigraph or have friends or relatives that do, be sure to read this report to learn more about this often misrepresented and until now, altogether misunderstood series. Since the publication of this article, we have heard from insiders that will shed more light on the Destino serigraphs in part two of our investigation into the Park West Gallery Destino collection.

Michigan Court of Appeals Orders Royal Caribbean back to the Park West Gallery Litigation Party

There have been a good number of very recent court rulings and other substantive legal proceedings that will prove extraordinarily important for current (and future victims) who hold spurious, misrepresented, faked, forged, worthless, or near worthless artwork purchased over the last decade or so from Park West Gallery while at sea (and on land too) in so-called "auction" settings while onboard cruise lines including, but not necessarily limited to Royal Caribbean and Celebrity, Carnival, Norwegian, Holland America, Regent, and Disney* cruise lines.

Royal Caribbean is arguably one of the largest cruise line accounts for Park West Gallery and as far as Fine Art Registry is concerned, it is from Royal Caribbean cruise passengers that the majority of the complaints regarding Park West Gallery are generated.

(*Disney wisely and prudently ended its contractual relationship with Park West Gallery in March 2009. See the article: Disney Cruise Line Ends Relationship with Park West Gallery)

As reported in a recent press release, Royal Caribbean was recently ordered back to the litigation currently being hosted by the Oakland County, Michigan State Court, where it [Royal Caribbean] was ordered to rightfully take its place with its co-defendant, co-conspirator, and business partner, Park West Gallery, in defending claims filed against them by a number of Park West Gallery victims. (See Court of Appleals Order.) So it would seem that the Fine Art Registry foreshadowed this event some time ago in its published article: Anything Goes When it Comes to Financial Gain

Royal Caribbean boasts that it is the world's second-largest cruise line (behind Carnival), operating approximately 35 ships. Its three main cruise brands are, Royal Caribbean International, Celebrity Cruises, and Pullmantur Cruises, and they claim to carry about four million passengers a year to about 425 ports. That's a significant number of consumers that could have potentially purchased from Royal Caribbean's business partner, Park West Gallery. Then consider the sheer numbers of passengers exposed to Park West Gallery on other cruise lines as well, like Carnival (the largest) and Holland America. It boggles the mind. Accordingly, it's not difficult to see the potential tens of millions of dollars in potential refunds that could result if victims filing lawsuits against Park West Gallery and Royal Caribbean are successful in a verdict against these defendants at trial.

Imagine for a moment what the cruise lines (all of them that continue to allow Park West Gallery to operate the way that they do) stand to lose when the entire cruise ship art auction investigation finally hits its height and the light of day of a court room, never mind the negative PR that is being released to the public through Fine Art Registry and other online outlets, blogs, and cruise line discussion boards on a daily basis. The groundswell of consumer complaints is rising and more and more insiders and former insiders with Park West Gallery are coming forward to tell their horror stories. How long will Royal Caribbean and the cruise lines allow the fraud and deceptive trade practices to continue? We wonder.

Despite being ordered back into the lawsuit by the Court of Appeals, Royal Caribbean is seriously behind the eight ball in the litigation race to trial. Without a doubt, Royal Caribbean thought they were home free, having originally taken the position with the trial court that it only leases space on its ships to Park West Gallery (much like a store mall owner leases space) and if there was any wrong doing or deceptive and unfair trade practices going on with Royal Caribbean's passengers, then it's Park West Gallery's problem, not Royal Caribbean's. The Michigan Court of Appeals took serious issue with the trial court's decision to dismiss Royal Caribbean and the panel of Appellate Judges swiftly overturned the trial court's decision and ordered Royal Caribbean to return to the bash. The Michigan Court of Appeals' decision was dead on and Fine Art Registry applauds the panel of Judges that made this very important and precedent setting decision.

Royal Caribbean has not performed any discovery in the case and although trial was set for February 2010, Park West Gallery recently filed a Motion to Adjourn the trial. The reasoning behind Park West filing this motion to delay the trial came before they knew that Royal Caribbean was back in the game. Park West does not want this case going before a jury. The odds are against them and the Park West Gallery lawyers know it. (See Litigation Update No. 5 for more on this subject.)

Given the fact that Royal Caribbean is now ordered back to the trial court, Judge Nanci Grant (the trial judge who was overturned by the Court of Appeals) agreed to move the trial date to July 2010, giving Royal Caribbean a chance to catch up, which will be a tall task, given all the water that's gone under the bridge and given the sheer complexity of the documents, facts and players in the pending litigation.

We understand that Royal Caribbean's lawyers plan to appeal to the Michigan Supreme Court in an attempt to escape liability. Good luck with that one Royal Caribbean. More wasted time, money and court resources. Instead, why not do the honorable thing and just instruct Park West Gallery to refund the victims they ripped off and call it a day? Oh, that's right. If Royal Caribbean were to do this, it would be an admission of wrong doing on the part of Park West Gallery and because of Royal Caribbean's agency relationship with Park West Gallery, Royal Caribbean would also be vicariously* liable and then it could turn into a virtual run on the bank. It's almost a foregone conclusion that Park West Gallery would go bankrupt if this happened and then Royal Caribbean would be left holding the bag. Not so good for Royal Caribbean's bottom line or for its shareholders, is it Royal Caribbean?

[*Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency - respondeat superior - the responsibility of the superior [Royal Caribbean] for the acts of their subordinate [Park West Gallery], or, in a broader sense, the responsibility of any third party that had the "right, ability or duty to control" the activities of a violator [Park West Gallery].]

Fine Art Registry has been working for nearly three years now on this investigation and Royal Caribbean has been on notice (in writing) of Park West Gallery's fraudulent activity and about which we have solid documentary evidence, yet Royal Caribbean has ignored victims, turned a blind eye and has done nothing that Fine Art Registry is aware of to look into the matter of the deceptive, unfair and fraudulent trade practices of its sweetheart art vendor, Park West Gallery, not even so much as a single phone call to Fine Art Registry to see what possible resolutions there might be for Royal Caribbean cruise passengers who are suffering terribly at the hands of its business partner, Park West Gallery.

Certainly, Royal Caribbean must be aware that Park West Gallery is suing Royal Caribbean cruise passengers for nothing more than making valid claims against Park West for its sale of fake, forged and worthless artwork and appraisals - for art sales that were conducted or arranged for onboard Royal Caribbean cruise ships. How does all this reconcile with a trusted brand like Royal Caribbean? It doesn't. And the Royal Caribbean cruise brand is used by Park West Gallery as part of its deception. Cruise passengers trust in the Royal Caribbean brand when cruising on its ships. Park West Gallery uses this misplaced trust to dupe cruise passengers. How can a company with the reputation of Royal Caribbean continue to allow its brand to be tarnished by Park West Gallery’s bad business practices?

Regarding the trust she placed in Royal Caribbean, Sharon Day told Fine Art Registry, "Of course, when purchasing the Divine Comedy set, we placed our trust in the Royal Caribbean name, as a trusted cruise line. This trust was reinforced in the knowledge and belief that the household brand name was also working in conjunction with the world's largest art gallery with over 40 years in business - it was the same sort of trust as one would place in say, Tiffany's, if purchasing a diamond. However, based on all that we have discovered since filing our claim against Royal Caribbean and Park West Gallery, we believe that perhaps the Racketeer Influenced and Corrupt Organizations Act* may also be applicable to our situation."

[*The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing or active criminal organization.]

The Deposition of Sharon Day in London on November 23, 2009, drives home the point of her reliance and trust on the Royal Caribbean brand. This exchange with one of Park West Gallery's attorneys couldn't make it any clearer:

The questioning is by Park West Gallery lawyer, Jaye Quadrozzi, at pp. 40 and 41:

To further demonstrate how Park West Gallery auctioneers use the brands of Royal Caribbean in its schemes, we look to Dr. Venkatraman Srinivasan, a respected heart surgeon, who was also ripped off by Park West Gallery who reported to Fine Art Registry the following:

[*Note: We will focus on the Park West Gallery worthless Certificates of Authenticity and how they use them in their scheme in a separate article which is coming soon.]

[**Celebrity Cruise Line is another cruise brand owned by Royal Caribbean.]

Almost all of the victims Fine Art Registry has interviewed have indicated to us that they can’t believe the cruise lines support such blatant unfair and deceptive trade practices from its business partner, Park West Gallery.

Despite all of this, the only action concerning Park West Gallery that Royal Caribbean has taken, that Fine Art Registry is aware of anyway, was to fire one of its executive employees in the UK, Samantha Algar, for demonstrating her integrity and care for the cruise line’s customers by trying to help cruise passengers (a married couple) that had been ripped off by Park West Gallery (for forged Dali works of art). (Watch our video interview with Royal Caribbean ex-employee Samantha Algar for more information on this subject). Thankfully, Samantha Algar was successful in securing a full refund for the married couple, but unfortunately, she sacrificed her employment in doing so.

Hurricane of Litigation

In light of the Michigan Court of Appeals ruling, it appears that a hurricane of litigation against Royal Caribbean and other cruise lines is certainly on the horizon and for good reason. One wonders if there is any love lost between Royal Caribbean and Park West Gallery at this point. We can't imagine Royal Caribbean is at all happy with the Park West Gallery performance, but then again, Royal Caribbean is in a superior position to make positive changes which it has yet to demonstrate. It will be interesting to observe and watch the legal gladiators representing Royal Caribbean duke it out with the Park West Gallery legal lightweights. Royal Caribbean is sure to chew Park West Gallery up and spew them out. For certain, Park West's tired gun (or is it hired gun), the "most feared prosecutor" in the galaxy, Bob Goldman, would have to strap on his civil litigation six-shooters and wax up his over-sized mustache to try to work up enough bravado to compete with the big boys representing Royal Caribbean.

Art industry knowledge will factor heavily in this litigation whatever lawyers are involved and one only has to look at Park West Gallery's track record to see how badly they have botched things. We have just begun to report on the mess that Park West Gallery lawyers have made of their client's case. The Park West Gallery lawyers simply don't know what they don't know and it seems that they aren't getting much help from Albert Scaglione who is probably too busy converting his assets and burying his cash to notice. After all, once the train runs out of track, well, it just plain runs out of track. Unfortunately, for the cruise lines, the track picks up again with them. Fine Art Registry stands firm in its commitment to continue to shed light on the truth. We had hoped and we still are hopeful that Royal Caribbean and all the cruise lines will eventually take the high road.

Establishing the Agency Relationship Between the Cruise Lines and Park West Gallery

The Court of Appeals recent order effectively positions Royal Caribbean (and potentially every other cruise line on which Park West Gallery artwork is peddled) in an "agency relationship" pickle, meaning that anyone and everyone that ever purchased a piece of artwork from Park West Gallery while sailing aboard Royal Caribbean cruise ships has a potential claim, not just against the gallery, but against the cruise line that shared hugely in the profits with Park West. There are probably thousands of cruise passengers that have purchased from Park West Gallery that are unaware of what they have purchased.

We recently learned that Royal Caribbean's share of the Park West Gallery sale of the Divine Comedy set to Sharon Day and Julian Howard was a handsome sum of approximately $140,000. That's over 30% of the nearly half million dollar sale for Royal Caribbean coffers and its shareholders. How can anyone doubt that there isn't a joint venture - a true partnership in every sense of the word with Park West Gallery? It was Royal Caribbean who distributed the money to Park West Gallery from its bank account in Texas. Now consider the hundreds of thousands of passengers that have purchased from Park West Gallery aboard Royal Caribbean cruise ships over the last 10 to 13 years and you have a boat load of money that's been gained by the cruise line. Fine Art Registry has been reporting that an agency relationship exists between the cruise lines and Park West Gallery since the start of our investigation. "Agency" as it relates to the recent Court of Appeals order is a legal term and is defined by Free Dictionary, generally as follows:

To put it into layman's terms, an "agency relationship" between Park West Gallery and Royal Caribbean and potentially all cruise lines on which Park West Gallery operates exists because Royal Caribbean acting as the principal entered into a contract with Park West Gallery whereby Park West Gallery would conduct sales events on ships and agreed to pay to Royal Caribbean a certain percentage of its profits made on every sale (and presumably as in Sharon Day and Julian Howard's case, a percentage of profit on every piece of artwork, including framing, that is sold to the customer by Park West Gallery post cruise as well). Therefore, Royal Caribbean expressly (deliberately) or impliedly (by implication or inference) authorized Park West Gallery to work and peddle its wares under Royal Caribbean's control and on Royal Caribbean's behalf as the entire sale of the Day/Howard set of Divine Comedy was deposited by wired funds directly into a Royal Caribbean Bank of America account located in the state of Texas, after Day/Howard received wire instructions (while at home on terra firma) which were secured and arranged for through (we just recently learned) a Royal Caribbean employee aboard a Royal Caribbean cruise ship on which Day and Howard NEVER sailed. As discovery will ultimately reveal, Royal Caribbean then distributed to Park West Gallery its share of the proceeds from the Royal Caribbean bank account.

To sum it up. In Latin the term is: qui facit per alium, facit per se, or the one who acts through another, acts in his or her own interests. Without a doubt, Royal Caribbean acted through Park West Gallery which financially benefited or enriched Royal Caribbean as well as Park West Gallery.

Further Evidence of Royal Caribbean and Park West Gallery Agency Relationship

Royal Caribbean heavily promotes on-board art auctions through its itinerary called the "Cruise Compass" as well as on the in-room television programming. The art auctions are conducted by Royal Caribbean and Park West Gallery and the art auctions are run by employees and/or agents of Royal Caribbean and Park West Gallery. Frequently, Park West Gallery uses shipboard personnel who also work directly for Royal Caribbean. This is supported by many witnesses that Fine Art Registry has interviewed over time. The same is true for other cruise lines, and Fine Art Registry has reported this from the start of our investigation.

Royal Caribbean and other cruise lines also directly encourage their cruise passengers to interact with the art salesman or art auctioneer that is onboard at the time of the cruise.

Moreover, if all the above isn't enough, Park West Gallery admitted in a filing with the United States District Court for the Western District of Washington (one of the nationwide class action lawsuits) that it [Park West Gallery] has a "relationship" with Royal Caribbean, and further stated that it should not have to turn over such [written] "agreements" between Royal Caribbean and Park West because it would "reveal the financial terms between Park West and RCCL." The truth is Park West Gallery did not want Fine Art Registry to have access to this information. But what Park West Gallery doesn't realize is Fine Art Registry already knows what the arrangement is as is evidenced by the Day/Howard sales transaction and a multitude of other sources. Later on in the same legal pleading, Park West Gallery admits to having "business agreements" with Royal Caribbean.

Further, Samantha Algar (mentioned above) reported to Fine Art Registry at the time of the referenced video interview that a then current Royal Caribbean employee (who had also worked for Park West Gallery as an auctioneer) told her that Royal Caribbean earned a substantial percentage of all the artwork sold by cruise ship auctioneers. Ms. Algar has since signed a sworn affidavit to this effect and it is now part of the court record in the Day/Howard litigation.

In an email dated February 21, 2008, from Morris Shapiro to Sharon Day, he stated:

The evidence couldn't be more crystal clear that Royal Caribbean and Park West Gallery are in bed together and share a very handsome profit and have so shared richly for at least the last decade. Fine Art Registry is in possession of much, much more evidence concerning the agency relationship between Royal Caribbean and Park West Gallery. Depending on how things play out in the next few months or weeks concerning the cruise lines, we will decide then whether to release it for public consumption.

The time is ripe for Royal Caribbean and all the other cruise lines that are in partnership with Park West Gallery to stand up and do the right thing and fully refund all victims of Park West Gallery's deceptive and unfair trade practices and to continue to refund those who come forward with spurious artwork until major reform is made and/or things are made right.

Coming soon. Litigation Update No. 8.

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— by Fine Art Registry®  |  January 7, 2010

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