In 1988, wine collector William Koch purchased $400K of wine under the guise that it was from Thomas Jefferson’s personal collection.  Long after learning that was not true, in 2010, he filed suit, alleging civil RICO conspiracy and common law fraud claims. The Second Circuit ruled that the statute of limitations had passed, and thus affirmed the trial court’s dismissal of the suit. The lynchpin of the Court’s decision was that the standard for both claims hinged on “inquiry notice,” as opposed to actual notice.

In November and December of 1988, Koch purchased the bottles through wine selling intermediaries. Christie’s advertised bottles from the same cache as “assumed to have been the property of Thomas Jefferson,” thus bolstering Koch’s belief that the wine was authentic.

It was the early 1990’s when Koch first read articles casting doubt on the authenticity of the Thomas Jefferson wine. The reports were enough to incite Koch to hire a group of attorneys in 1993 to investigate these rumors. He sought further legal advice in 1993 and 1995, and by 2005, Koch had seen an official report from Monticello declaring that it was doubtful the wine actually belonged to Jefferson. Despite years of warning signs, Koch did not file suit against Christie’s until March 30, 2010.

The District Court ruled that the statute of limitations for RICO cases begins to run as soon as there are warnings that should have prompted inquiry into a potential injury. A similar rule applies to New York common law fraud claims. The appellate court affirmed the trial court’s decision in respect of both claims, holding that Koch had reasonable inquiry notice at least 10 years prior to filing suit.  Finally, the Court ruled that Koch could not argue fraudulent concealment by Christie’s because Koch did not use reasonable diligence in pursuing discovery of his legal injury, a key element of this claim.

Thanks to Thalia Staikos for her contribution to this post.

If you would like further information, please write to Mike Bono at

Anyone dealing in the world of jewelry, fine art, or specie is all too aware of the limitation of liability clauses that appear in shipping contracts.  That issue was front and center in a recent appellate court decision in New York, Maxine v. Brinks.

Plaintiff, a jewelry retailer, used Brinks to ship 157 “ornate pieces of handmade jewelry” from plaintiff’s New York City facility to a department store in Virginia. The items were contained in a soft-sided rolling suitcase, and the airbill listed a declared value of $2 million. The retail value, according to invoices, was more than $6,000,000, with a wholesale value about half that amount.

While in transport, the shipment was damaged, and plaintiff’s claim was over $600,000.  In the trial court, Brinks was awarded summary judgment and the complaint was dismissed.

The airbill contained a provision limiting Brink’s liability to lost shipments, unless specific items were identified and their values declared – which would have required plaintiff to pay additional charges for the shipment.  On appeal, plaintiff claimed that the limitation of liability was ambiguous, because it required identification of a “fragile” item — a term not defined anywhere in the Brink’s airbill.

But in its decision, the appellate court pointed out that plaintiff was unable to overcome the other provision in the airbill that excluded breakage for jewelry.  Specifically, the provision excluded “BREAKAGE of statuary, marble, glassware, bric-a-brac,’ porcelain, decorative items including jewelry and similar fragile articles…”

Plaintiff tried to claim that provision was buried in small print and was also ambiguous because it lumped together a number of items in an unclear manner, and appeared to only apply to breakage of “fragile jewelry” or certain decorative items.   But the Court rejected plaintiff’s claims, finding that the list clearly excluded the enumerated items, including jewelry, and that a definition for fragile only needed to be applied if an item was not specifically listed.  Thus, the trial court’s decision to dismiss the complaint was upheld.

If you would like more information about this case, please write to .

In its recent decision in Fleming v. Graham, the Court of Appeals articulated a standard for assessing claims of “permanent and severe facial disfigurement ” for the purpose of qualifying as a “grave injury” exception to the Workers’ Compensation bar. The Court ruled that “an injury disfigures the face when it detrimentally alters the plaintiff’s natural beauty, symmetry or appearance, or otherwise deforms. A disfigurement is severe if a reasonable person viewing the plaintiff’s face in its altered state would regard the condition as abhorrently distressing, highly objectionable, shocking or extremely unsightly. In finding that a disfigurment is severe, plaintiff’s injury must greatly alter the appearance of the face from its appearance before the accident.”

http://www.nycourts.gov/ctapps/latdec.htm