Artist-Dealer disputes: Jeffrey Gibson v Kavi Gupta Gallery
Recent litigation in the New York courts between artist Jeffrey Gibson and former dealer Kavi Gupta Gallery highlights the importance of clear written agreements
Whilst disputes between artists and dealers are not uncommon, most are resolved privately without going to court. The few cases that reach the courts in the UK, US and beyond are usually settled before a court decision is handed down. In May 2023, leading artist Jeffrey Gibson (who represented the US at the 2024 Venice Biennale and joined Hauser & Wirth in October 2024) filed proceedings in the New York courts against the Kavi Gupta Gallery (the Gallery) alleging non-payment of over USD 630,000 in artwork sale proceeds. After 21 months of public litigation, the case settled on 27 February 2025. We consider the claims on each side and the lessons for artists and dealers alike.
Legal Proceedings
According to Gibson’s Complaint [1], he began consigning art works to the Chicago-based Kavi Gupta Gallery in late 2017 with neither party proposing a written agreement detailing the consignment terms. The Gallery paid him on time initially but he became concerned when it fell behind. Gibson began chasing in April 2022, hired a lawyer in December 2022 and felt he had no choice but to file legal proceedings on 8 May 2023 claiming withheld sale proceeds of $638,919.31 [2]. Gibson filed a schedule to the proceedings detailing what he considered were the sale proceeds owed to him for completed sales including “acceptable deductible costs”. For sold works, Gibson’s position was that the Gallery had his authority to deduct framing costs paid by the Gallery “off the top” of the purchase price before allocating the balance 50/50 between the Artist and Gallery; but that no other costs besides framing costs were to be reimbursed “off the top”.
In its August 2023 Answer with Counterclaims, the Gallery claimed it had incurred significant production costs on Gibson’s behalf to fabricate the consigned works and that the artist agreed - as it said was “a well-settled industry standard” - “that production costs and expenses associated with the production of the work would be taken off the top when the particular piece or production was sold… at no time were such reimbursable costs limited to framing ”.
In addition to unspecified production costs, the Gallery went further, claiming it was also entitled to “repayment of all funds expended to build and promote Plaintiff’s [Gibson’s] career” which it said exceeded $786,000 (i.e. more than Gibson claimed in unpaid sale proceeds). The artist filed a schedule of sale proceeds paid by the Gallery from June 2019 to July 2023 which totalled $2,797,576 (suggesting the Gallery had earned at least this amount as its 50% commission from the relationship). According to the schedule, the Gallery paid Gibson over $700,000 from February to May 2023 including $86,500 after Gibson filed the proceedings. The artist noted it would have been against the Gallery’s interests to pay him these funds if it believed its claim for marketing expenses had any merit; and that Kavi Gupta had stated in his affidavit that the oral agreement he believed his Gallery had with Gibson only allowed recoupment of production (not marketing) costs from sale proceeds.
Settlement
In late 2024, the parties completed a session with a court-appointed mediator and informed the presiding Judge Hummel that they were engaged in settlement discussions. Artnet published an article in January 2025 suggesting the Gallery was in financial difficulty [3] and the parties settled their dispute confidentially on 27 February 2025.
Lessons
Like many artist-dealer disputes, there was no written agreement on a commercial point which became contentious: in this case, the treatment of production costs expended by the Gallery [4]. The Artist’s Complaint said: “At no time did the Gallery ever prepare or propose a written contract setting forth any of the terms that would govern the consignment”. Whilst that may be true, artists can and should propose a written agreement if the gallery does not. This is particularly important given the artist’s relative weakness in a consignment relationship where they hand over possession of valuable artworks without payment.
The Gallery’s claim for reimbursement of marketing costs is surprising since such costs are typically borne by the dealer (whether works sell or not). That said, like most jurisdictions, English law leaves parties free to allocate expenses as they wish and well-advised artists and dealers will therefore spell-out the allocation of all costs in a clear written agreement to minimise the risk of dispute.
In terms of production costs, artists and dealers often agree that the paying party will be reimbursed “off the top” of the purchase price before the “net” profit is shared but this is again a commercial question to be agreed in writing. Parties should also decide if and how production costs expended by the gallery will be recovered if a work remains unsold at the end of the consignment period. Is such expenditure a loan which remains outstanding, or an investment which the gallery loses having failed to sell the work and generate a return during the consignment period (the latter seems to have been Gibson’s position in the recent proceedings)? In its 2022 dispute with the artist Diana Al-Hadid, the Marianne Boesky Gallery argued before the New York Courts that it had an ownership interest in a sculpture that it had helped fund over a decade earlier when it represented the artist [5]. In a rare artist-dealer dispute to reach a Court decision, the New York court rejected the gallery’s argument, holding that the consignment agreement did “not confer or transfer an ownership interest in the sculpture” to the gallery. The gallery appealed the decision unsuccessfully [6].
Finally, artists risk being left unpaid if their gallery becomes insolvent after selling and receiving payment for consigned works. To minimise this risk, artists should require their dealers to pay their share promptly upon payment by the buyer and be very mindful of late payments. They should also consider the inclusion of provisions in the consignment agreement to encourage timely payment and improve their position in the event of the gallery’s financial difficulty.
[1] Jeffrey Gibson v K R J S Corporation d/b/a Kavi Gupta Gallery, Case No. 1:23-cv-00557-LEK-CFH, United States District Court, Northern District of New York.
[2] In accordance with § 12.01 of New York Consolidated Laws, Arts and Cultural Affairs Law, Gibson argued that these sale proceeds were trust property (see here).
[3] “The Rise and Fall of Kavi Gupta: Chicago Dealer Faces Lawsuits, Claims of Mismanagement”, Artnet, 9 January 2025 (see here).
[4] Written agreements were similarly missing in Frank Bowling v Hales Gallery Ltd before the English courts in 2020-21; and in Howardina Pindell v N’Namdi Galleries before the New York courts in 2020-22, both of which also settled confidentially (see our earlier reports here).
[5] Art Works, Inc. v. Diana Al-Hadid, New York County Supreme Court, 651267/2021 (see our earlier report here and the court’s May 2022 decision here).
[6] See New York Appeal Court decision dated 6 October 2022 here.
Main image: The Two Fridas, 1939 by Frida Kahlo
This Insight and any information accessed through the links is for information only and does not constitute legal advice. Please contact us if you need advice on your particular circumstances.
