CNET Founder Wins $8.6 Million Verdict

By Rebecca Beyer

Daily Journal Staff Writer

SAN FRANCISCO – CNET Networks Inc. founder Halsey Minor, facing two judgments totaling nearly $30 million on claims involving his art collection, finally won a case Friday when a federal jury found that auction house Christie’s Inc. owes him $8.57 million.

The jury also found that Minor owes Christie’s $1.4 million on the auction house’s claims against the technology entrepreneur, who co-founded media company CNET in 1992 (CBS Corp. bought CNET in 2008 for $1.8 billion).
Minor claimed Christie’s wrongfully kept custody of seven Richard Prince pieces he had consigned to sell, even after he had asked for them back as their price was dropping. Christie’s claimed it had the right to hold onto the pieces as security against $12 million in art Minor had bought – but never paid for – at Christie’s auctions in New York and London. Christie’s eventually returned the artworks after learning Minor had pledged them as security for a loan.

Jurors found Christie’s liable for claims including fraud and breach of contract. It found Minor liable for breach of contract on the art he did not pay for but not on other claims of fraud.

“We’re thrilled,” said Eric M. George, Minor’s attorney and a partner at Browne Woods George in Los Angeles. “This is a terrific victory.”

Christie’s lead attorney Jose R. Allen, of Skadden, Arps, Slate, Meagher & Flom in San Francisco, said the company was “pleased” with the jury’s award to Christie’s on its breach of contract claims but “obviously disappointed” in the rest of the verdict.

He said a ruling by US. District Judge William H. Alsup limited the amount of money Christie’s could ask the jury for in damages and would be grounds for appeal. Christie’s wanted to ask for $6 million in damages.

“We are gratified by the jury’s verdict in Christie’s favor on its claims,” a Christie’s spokesperson said. “This verdict goes a long way toward protecting the integrity of the auction process. On the other claims, Christie’s is reviewing the findings and is considering its appellate options.”

Minor’s $8.6 million was based on evidence of the difference in the price he could have sold the Prince pieces for and what they were worth after they were ultimately returned. The jury awarded Christie’s slightly less than the total damages it had asked for based on the “buyer’s premium” the auction house lost when Minor didn’t pay for the other work. Minor claimed he was going to use the money from the Prince pieces to pay for the other work.

In the last seven months, Minor has been on the losing end of two other judgments. In October, a federal judge in New York ruled he owed an affiliate of Bank of America Corp.’s Merrill Lynch $21.6 million for defaulting on a loan for which Minor had offered the Prince pieces as collateral. In March, another New York federal judge ruled Minor owes Sotheby’s $6.6 million for failure to pay for art.

But in the end, the San Francisco jury “discounted” those judgments “because we didn’t know the facts of what was involved there,” said Judy F. Conard, a Lakeport attorney who was on the panel.

“The sentiment in the jury room was that there was a lot of evidence of conduct on both sides that we did not like … that we did not in any way want to condone,” said the panel’s second attorney, Wayne K. Snodgrass, a deputy city attorney in San Francisco. “In some ways, it felt like it was a wash.”