Dealer Settles with Artist in California Royalties Case

Artists and art dealers around the country who have argued over the legal rights of artists to collect royalties in California have been chewing over a settlement this week between the collector Dean Valentine and the painter Mark Grotjahn. A rarely enforced California law, the only one of its type in the country, requires anyone reselling a piece of fine art who lives in the state, or who sells the art there for $1,000 or more, to pay the artist 5 percent of the resale price. The law, on the books since 1977, aroused renewed attention this fall after Chuck Close, Laddie John Dill and the estate of the sculptor Robert Graham brought class action suits against Christie’s, Sotheby’s and E-bay.

Mr. Grotjahn brought suit against Mr. Valentine in 2010 over unpaid royalties related to a painting and a drawing that the collector bought and resold, and a trial was scheduled for next month. Mr. Valentine agreed to pay the artist $153,255, which accounted for 5 percent in royalties plus interest and legal fees, the Los Angeles Times reported. “I’m happy it went my way, but it wasn’t a pleasant experience,” Mr. Grotjahn said. “I had to put a lot of money on the line to do this. Hopefully there is an awareness now, so collectors will be more willing to pay artists when they resell their works.”

Mr. Valentine said he only opted for the settlement because it was cheaper than litigation. “It doesn’t change the fact that this is a terribly written law that creates massive problems,” he said.

As for the class actions suits, the auction houses have filed a joint resolution to dismiss them on various grounds, including an argument that the state law competes with the 1976 Copyright Act.

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