Under Delaware law, a statute of limitations is calculated from the time of the wrongful act, even if the Purchaser in Auction Sales is ignorant of the cause of action

The Court of Chancery of Delaware, New Castle , in Krahmer v. Christie's, Inc., 911 A.2d  (2006 Del) held in this case that the purchaser’s cause of action began to accrue from the day the purchaser purchased the painting from the auction house.  According to the Delaware law, the general statutes of limitations of three years apply in this case. And the statute of limitations is calculated from the time of the wrongful act, even if the Purchaser in Auction Sales is ignorant of the cause of action. 

In the instant case, Petitioners Krahmers purchased (“Plaintiffs”) a painting Interior on December 5, 1986 at an auction conducted by Respondents  Christie's, Inc., a renowned New York auction house.  The Plaintiffs believed that the painting was one painted by Frank Weston Benson in 1912.  Thereafter,    the Plaintiff learned of another painting strikingly similar to Interior.  And the Plaintiff tried to sell Interior on consignment to Sotheby's auction house in 2002.  Sotheby examined the painting and cautiously observed that it might be a forgery and declined to consign the painting. The Plaintiff allege that the Sotheby's decision finally raised their suspicion to the possibility that Interior was not genuine.  After informing the Defendant Auction house of the Sotheby's decision, the parties agreed to have the Committee determine whether or not the painting was a forgery. The Committee concluded that Interior was not Benson's work and lacked several important traits of authenticity.

Consequently, the Plaintiff asked Defendants to rescind the 1986 sale which the Defendant refused.  The Defendant stated that the six-year warranty of authenticity on the painting had expired years before. Soon the Plaintiffs filed a petition for rescission on July 29, 2004 alleging that the auction house committed fraud by intentionally concealing that the painting was not an original work of the artist. The Delaware Supreme Court subsequently denied the Plaintiff’s request for interlocutory appeal. The Defendants moved for summary judgment on the original fraud claim. 
The court found that, the record put forward by the Defendants show how it performed due diligence on the painting prior to the auction and uncovered nothing to cloud its authenticity. The Court found that, the Defendant did not possess the scienter necessary for fraud. Id at 404.

The Court found that the statute of limitation barred the Plaintiffs’ claim. Id. at 407.   The Court stated that a statute of limitations is calculated from the time of the wrongful act "even if the plaintiff is ignorant of the cause of action." Id.   The Court observed that the purchaser in this case purchased the painting on December 5, 1986.  Therefore, the cause of action accrued on December 5, 1986, when they purchased Interior.  The Court stated that it was on that date that Defendant allegedly injured the Plaintiffs by misrepresenting the authenticity of the painting. Thus, the general three-year statute of limitations found in 10 Del. C. § 8106 expired on December 5, 1989. 
Additionally, the Plaintiffs could not establish tolling of the statute of limitations under the doctrine of fraudulent concealment because they were not successful in showing any action by the auction house to conceal the alleged fraudulent nature of the painting.  Also the Plaintiffs did not exercise reasonable due diligence to investigate the authenticity of the painting. Therefore the Court found that the Plaintiffs, cause of action was time-barred.

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