Monday, July 12, 2010

Objects of Desire

The Cincinnati Enquirer has the story of the local Hamilton County Common Pleas case playing out over one of the ultimate objects of desire: a 1954 375 Ferrari Plus Grand Prix Roadster (pic), a 12-cylinder power monster with top speed of 180 mph that had 4,340 miles. It was one of only six made; one of four that exist.

This is from Kimball Perry's story on the car and the case:

"On one side of the suit is fabled Belgian racer, Ferrari importer/distributor and classic car collector Jacques 'Jack' Swaters. He said he paid Westwood's Karl Kleve $625,000 for the car and its parts 11 years ago.


On the other side is Kristine Kleve-Lawson, a beneficiary of her father's estate. Her father agreed to sell the car for $2.5 million, she said, but he never was paid. Swaters, a millionaire, sued Kleve-Lawson in February in Hamilton County Common Pleas Court, accusing her of failing to transfer the title to him, breaching a 1999 contract. He seeks to prevent her from selling parts to the car, which she retained.

'The reason they are so valuable is they are strictly racing cars. They were never road cars,' said R. Joseph Parker, Cincinnati attorney for Joseph Ford.  Ford came to the controversy late. He is a Boca Raton, Fla., architect who 'is into classic cars,' Parker said. Ford acquired Kleve-Lawson's interest in the car in exchange for Ford's help in getting it back to the U.S.

The story started in 1958, when Karl Kleve paid $2,500 for the charred chassis and parts of the 1954 375 Ferrari Plus. It was cheap because it had caught fire from a problem in the wiring system. Kleve stored hundreds of cars on property in Westwood and Green Township. Kleve discovered it stolen between 1985 and 1989. The theft was reported to Green Township police, the FBI and Interpol, the international police agency, and the car was located being imported into Belgium.  'That's one of the big mysteries here, how it ended up in Belgium,' Parker said.

A year later, Belgian police released it, saying it wasn't Kleve's because it had a different chassis number. Eventually, it was bought by Swaters, who made millions as the sole importer and distributor of Ferraris in Belgium.  'He's very wealthy, worth between $200 (million) and $300 million,' said Daniel Randolph, attorney for Kleve-Lawson. 'And my client is working two jobs to try to make ends meet. It's like they've taken this huge anvil and dropped it on her.'

Swaters, via Cincinnati attorney Michael Hirschfeld, refused comment. Swaters and a business partner bought the title from Kleve in 1999 and restored the car 'for the sole purpose of racing it throughout Europe,' Swaters' suit noted. Swaters, 84, said he paid $625,000 to Kleve and a company Kleve hired to find it.  Not so, Kleve-Lawson's lawyer said.

While no one disputes that Kleve signed the three-page document transferring ownership to Swaters, Randolph said, the first two pages of the documents were altered. The original deal, Randolph insisted, was for Kleve to be paid $2.5 million.  'Instead,' Randolph said, 'Kleve received nothing, so he kept some of the car's parts, including the fuel tank, steering wheel, three wheels, engine cover and rear wing. Later, his daughter received a duplicate Ohio title for the car and transferred it to herself.' But the car stayed with Swaters, who insists someone cashed the checks he wrote.

After Kleve died in 2003, his daughter tried to auction some of the car's parts in 2005, but was contacted by Swaters' attorney, who said Swaters owned the car and wanted all of its parts returned. She withdrew the parts from the auction, then Swaters sued. 'She would prefer to have the car back,' Randolph said of Kleve-Lawson. 'She wants to uphold what her father tried to do ... to protect the dignity of her father.'

Now, Common Pleas Judge Norbert Nadel will decide whether the car must be returned to the U.S. He is expected to make that decision this month."
____________________________
I love Daniel Randolph's claim that Kleve-Lawson is "[trying] to protect the dignity of her father."  This claim is of course a variation on the old canard "it's not about the money, it's the principle of the thing." 

In reality this car and this case is about ego, and ego-manifestation in the form of a car and a lawsuit. 

This Ferrari is a beautiful object, and I'm glad it exists.  I'm happy there are people in the world wealthy enough to curate these things, especially since there is great artistry and engineering involved.  Fantastic, but don't kid yourself, this court case is all about manifesting self-seeking.  Remember the summer intern and her Hermes purse?  The Chihuahuas? Same deal, different venue. 

Maybe, Jack Swaters stole this object, I hope he's held accountable.  Maybe he paid fair market value for the the car.  But once again we have a great lesson in the idea that nothing, absolutely nothing is free. 

4 comments:

  1. “This case is about stolen property. Here, adjudication of ownership flows from Ohio title law and from the “res judicata” effect of the 2006 Ohio Probate Court judgment. The conclusions of law rested in the Kleve estate thus it passed to his heirs; and 2) Swaters abandoned any contract rights he may have had due to his inaction.

    Reimbursement flows from the well-established precedent of: 1) reimbursing the price to a good faith purchaser of stolen property, but not allowing one to profit from the theft

    In any good faith analysis, the purchase was not in “good faith” because at the time the “goods” 1) had no title; 2) were missing the original VIN plate; 3) were known to be stolen and had been seized; and 4) the price was below market value. Contend that it is not “good faith” to restore and re-identify stolen goods with a counterfeit VIN number, as Swater's admitted.

    ReplyDelete
  2. Anon @ 6:20 thank you for an insightful and provocative comment. Setting aside the details of the argument over ownership of this beautiful object to make a larger argument about ego-manifestation is not to deride the subliminity of property law as a discipline of law. Your analysis of chattel principles as it plays out in this case suggests that the underlying story is worth a law review discussion at a minimum if not an international thriller.
    BL

    ReplyDelete
  3. POOR JACK. 84 YEARS OF FAME AND FORTUNE ABOUT TO GO DOWN THE TUBE !
    I SAT IN THIS 375MM PLUS BEAST IN ITALY AND "HAD MY PICTURE TOOK." THIS MAY, 2010!
    AND JACK SAYS THEY GOOFED WHEN THEY TOLD THE OHIO JUDGE THAT THE CAR WAS AT HIS PLACE IN BELGIUM. AND GEE, HERE IS THE COURT ORDER DEMANDING THAT THE CAR STAY IN BELGIUM.

    HERE'S YOUR PROBLEM JACK. YOU HAD MONTHS TO TELL THE OHIO JUDGE OF YOUR LITTLE ERROR AND THAT YOU HAD SHIPPED THE 375MM PLUS TO ITALY.
    MONTHS AND MONTHS JACK. SO HOW COME YOU NEVER CORRECTED YOUR ERROR AND THEREBY ENABLE THE JUDGE TO REVISE HIS COURT ORDER TO NOW NAME ITALY AS THE LOCATION OF THE BEAST. IT SURE LOOKS LIKE YOU WERE TRYING TO CIRCUMVENT THE JUDGE'S ORDER AND HIDE THE CAR; JUST IN CASE THE TRIAL WENT AGAINST YOU...TSK, TSK.

    ReplyDelete
  4. If I were Swatters, I would:

    a) Make an ironclad case for valuation in 1999. The "hulk" that was stolen (the chassis and few salvageable parts) was worth nowhere near what the plaintiffs are demanding or what their supposed "contract" suggests he agreed to ($2.5 million).

    b) Dismantle the car, ASAP. If the judgement goes against him, he can return the chassis (the stolen bits), and keep the new body, engine, drivetrain and all other parts he's added. Still a big loss but not an entire $4 million car.

    Ultimately, the proof that he paid $625k for clear title would seem difficult to dispute given signed contracts, checks and the simple fact that it was appropriate value at the time. Since the former owner was of questionable mental capacity, I'd think the person who cashed those checks would be the outstanding issue.

    ReplyDelete