Park West Gallery art appraisals off by 90%
The company, which does a brisk business selling art on cruise lines including Carnival and Royal Caribbean, has been the subject of numerous lawsuits chronicled by the New York Times back in 2008 and more recently has been embroiled in litigation with Fine Art Registry, a private company that Park West has accused of defamation for a series of online articles and videos that accuse the company of misleading sales tactics.
90%+ off appraised prices on eBay
One concern with Park West Gallery's sale of art on cruise ships is the appraisal certificates that it offers to buyers of its art. A WalletPop investigation of secondary market prices realized for Park West Gallery-appraised art found sales prices that routinely fall well below the appraisal values:
- An Itzchak Tarkay watercolor was appraised at $14,000 by Park West on Feb. 2, 2010. On March 11, 2010, the piece sold on eBay for $1,250 with one bid -- with free shipping. That's a discount of more than 90% from the appraised value of just over a month prior to the sale.
- A watercolor by Mark Newman titled "Explosion" was appraised at $2,195 by Park West Gallery on Feb. 10, 2010. The piece sold on eBay for $178.48 with four bids -- also a discount of more than 90% six weeks after the date of the appraisal.
- A Susan Andreasen seriolithograph was appraised at $360 by Park West Gallery in 2007, according to the auction listing. The piece was listed with a minimum bid of $29.99 and failed to attract any bidders.
The appraisal certificates read "The current Park West Gallery retail replacement price for this work, including its frame, is. . . " [emphasis added]. In other words, the certificate, which is marked "Appraisal" in large, bold type-face at the top, does not make any representation as to the secondary market or insurance value for the work. It is only a certificate provided by Park West saying what Park West would sell the work for at retail.
For this service, according to the FAQ page on the company's Web site, Park West charges "$35 USD for the first appraisal and $15 USD for each additional work appraised at the same time." The company specifically notes that it offers the appraisal with artwork purchased from Park West, and includes the appraisal along with a certificate of authenticity with delivery.
Park West Gallery director of marketing communication Robin Danek did not respond to repeated e-mail and phone requests for comment on the company's appraisal policies and practices, instead referring us to the company's customer service blog and information on its philanthropic efforts.
The language used on the appraisal certificate combined with the disconnect between realized secondary market prices and appraised values raises questions about the value and validity of the appraisals, according to industry experts.
Attorney Kelly Phillips Erb of TaxGirl.com says that the appraisal certificates provided by Park West are not really appraisals -- "at least not for tax purposes." According to the Internal Revenue Code (section 170(f)(11)(E)(ii)), an appraisal for tax purposes may not be provided by a party to the transaction -- art dealers are referred to specifically in the tax code.
"An appraisal is only worth the background of the person who gave it to you", says Matthew Quinn of Quinn's Auction Galleries in Falls Church, VA. "In a Park West situation, we know that they're a discredited organization. There's been a consistency that the secondary market does not live up to what their appraisals say."
That raises the question: What good are the appraisals if they aren't indicative of a piece's secondary market value or useful in establishing a value for tax purposes? What exactly are consumers getting for their $35?