Judge throws out defamation lawsuit over alleged fake Western painting

RENO, Nev. (AP) – A federal judge has thrown out a defamation lawsuit a Western art collector filed against a prestigious auction house and the owner of a Reno gallery who claimed an early 20th-century cowboy painting he sold for $750,000 was a fake.

The judge in Reno dismissed the lawsuit last week against Peter Stremmel Galleries, the Coeur d’Alene Art Auction of Nevada and its partner Mark Overby of Hayden, Idaho.

Gerald Peters, who owns galleries in New York City and Santa Fe, New Mexico, said in the lawsuit filed last year that the defendants told his longtime friend and business partner R.D. Hubbard a 1937 oil painting wasn’t an original work of Frank Tenney Johnson.

Lawyers for the defendants argued Peters wasn’t maligned because the statements about the authenticity of “The Sun and the Rain” didn’t refer directly to Peters. Rather, they were contained in private communications with associates of Hubbard, a business tycoon who owns the Bighorn Golf Club in Palm Desert, California. Most of the associates were contacted at a time when they had no idea Peters was even involved.

U.S. District Court Judge Miranda Du agreed and granted their motions Friday for summary judgment.

“It would have been unreasonable as a matter of law for Mr. Hubbard or his associates to infer that Mr. Stremmel intended to disparage plaintiffs,” Du wrote.

“Under the circumstances here, where Mr. Hubbard and his associates solicited Mr. Stremmel’s opinion about the painting and kept him in the dark about plaintiff’s involvement, a finding that Mr. Stremmel engaged in deceptive trade practices would border on absurdity,” she said.

Defense lawyer Mark Gunderson said they “trust that this dismissal with prejudice will be the end of this inappropriately brought lawsuit.”

But Kurt Wihl, a lawyer for Peters, said they intend to appeal to the 9th U.S. Circuit Court of Appeals in San Francisco.

Authentic Frank Tenney Johnson paintings, like the 1935 work above, titled ‘Don, the Horse Wrangler,’ often command six-figure prices at auction. This painting, which is unrelated to the court case and is shown for illustrative purposes only, sold for $250,000 at Dallas Auction Gallery. Courtesy Dallas Auction Gallery and LiveAuctioneers.com Archive

Johnson, a one-time illustrator for Field and Stream magazine who became famous for his oil paintings of nighttime frontier scenes, was born in Iowa in 1874 and died in Los Angeles in 1939.

More than a dozen of his works have sold at the massive annual Coeur D’Alene Auction in Reno over the years, including “The Sheriff’s Posse,” for nearly $1.1 million in 2008.

Less famous than Frederic Remington and Charles Russell, Johnson is of special interest because he worked with Hollywood studios to create backdrops after he moved to Los Angeles in the 1920s when the Western movie genre was being invented.

Hubbard founded the Hubbard Museum of the American West in Ruidoso, New Mexico, in 1992 and is a former chairman of the board of the Pinnacle Entertainment Group, a Las Vegas-based casino holding company.

Before this dustup, Peters said, he and Hubbard were friends and neighbors at Hubbard’s golf development and traded art worth millions — including “The Sun and the Rain.”

That started to change in 2013 when Hubbard’s associate sent Stremmel images of art he wanted to sell at the auction and Stremmel replied the one in question was “not, in fact, by Frank Tenney Johnson.”

Peters said the embarrassing allegation was an insult to his reputation and that in its current tainted state, the painting was worthless. “Word travels quickly within this small community when a work of art is called a fake,” his suit said.

Stremmel argued that if the painting really was the work of Johnson, then it still carries the value Peters claimed so he hasn’t suffered any damages.

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By SCOTT SONNER, Associated Press

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