COA affirms return of model Picasso sculpture to original bidder

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A scaled model of a Picasso sculpture possessed by the Gary Community School Corporation is returning to the original bidder after the Court of Appeals of Indiana concluded the statute providing the mayor of Gary receive 30 days advance notice of the sale was not a mandatory requirement.

Jean-Christopher Scheere participated by telephone in a January 2019 auction of the 12 ½-foot high wooden model of the Chicago Picasso sculpture which had been donated to Gary schools. Scheere placed the highest bid of $20,000 and the auctioneer, Kraft Auction Service LLC, announced the item had been sold.

However, a problem arose because the school had been designated as a distressed political subdivision, and Gary Schools Recovery, LLC, had been appointed to serve as the emergency manager. The mayor of Gary was not given 30-days’ advance written notice of the sale of the model as required in Indiana Code § 6-1.1-20.3-8.5.

In March 2019, Scheere received an email from Kraft informing him the Picasso had been put back on the auctioneer’s website and the bidding had been reopened. A day later, Paul Terrault submitted a bid of approximately $40,500 and was able to pick up the model.

Scheere filed a lawsuit in Porter Superior Court claiming the January 2019 auction and sale to him were valid. In April 2022, the trial court granted partial summary judgment in favor of Scheere for breach of contract against the school as well as action in replevin and declaratory judgment against Terrault.

Consequently, Terrault was ordered to relinquish the model to Scheere.

Terrault and the school challenged the ruling, arguing the statute uses the word “shall” in requiring the 30-day notice to the mayor. The Court of Appeals affirmed in Paul Terrault and Gary Community School Corporation v. Jean-Christopher Scheere, et al., 22A-PL-914, agreeing with the trial court that the Legislature intended the notice provision to be directory rather than mandatory.

The appellate court supported its reasoning by citing to several cases including Hancock Cnty. Rural Elec. Membership Corp. v. City of Greenfield, 494 N.E.2d 1294, 1295 (Ind. Ct. App. 1986) (citations omitted), reh’g denied, trans. denied. In addressing the statute that provided the Public Service Commission shall rule on a petition within 90 days, the 1986 Court of Appeals made several observations. Namely, the statute did not specify any adverse consequences that would follow the missed-90-day deadline; the intent of the language was for the matter to be acted upon promptly and expeditiously; and mandatory construction would frustrate the Legislature’s purpose.

In the case at hand, the emergency manager statute holds the emergency manager shall provide notice to the mayor of the city of Gary at least 30 days before the selling of the assets and, if the mayor objects, the emergency manager “must confer” with the mayor. But the statute does not restrain the emergency manager from selling the asset if the notice was not timely given and does not specify any adverse or invalidating consequences for failure to provide at least 30 days’ notice.

“Further, while the conditions to which Scheere agreed when registering for the auction provided that the auctioneer may determine the successful bidder, continue bidding, cancel the sale, or reoffer an item, they do not provide that the School and Kraft Auction were able to take such actions after the winning bidder was determined,” Judge Elaine Brown wrote for the court. “Indeed the terms provide that the highest bidder acknowledged by the auctioneer will be the purchaser and Kraft Auction acknowledged Scheere as the highest bidder and received payment from him.”

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