Gallery owner alleges major US Western art sale defamed him

This photo provided by the Autry Museum of the American West, shows an early 1900s Gelatin silver print of Iowa-born artist Frank Tenney Johnson. Tenney Johnson was a one-time illustrator for Field and Stream magazine who became famous for his oil paintings of nighttime frontier scenes. Gerald P. Peters, the head of fine art galleries in New Mexico and New York City has filed a defamation suit against one of the world's largest Western American art auctions and a Reno gallery accusing them of falsely claiming a $1 million painting he sold by Tenney Johnson is a fake. (Donated by Lois L. Ash/Autry Museum of the American West via AP)

The head of fine art galleries in New Mexico and New York City has filed a defamation suit against the world's largest Western American art auction and a Reno gallery accusing them of falsely claiming a $1 million painting he sold is a fake

RENO, Nev. — With Western American art long dismissed as unworthy of the fine art world, few collectors would have even cared 25 years ago if an early 20th century oil painting of cowboys or Indians on the frontier was authentic or not.

Now, the owner of galleries in New Mexico and New York City is suing one of the world's largest Western American art auctions, a Nevada gallery and others for defamation, accusing them of falsely claiming a $1 million painting he sold is a fake.

Gerald P. Peters of Santa Fe seeks unspecified damages from Peter Stremmel Galleries of Reno, the Coeur D'Alene Art Auction of Nevada and auction partner Mark Overby of Hayden, Idaho. The defendants' lawyers say the claims have no legal basis. They filed motions in federal court in Reno last week to dismiss the suit.

The high-society legal battle offers a glimpse into the high-stakes Western art market that's evolved from California to Manhattan, with many millions of dollars in sales of paintings, sculptures and pottery annually.

"It wasn't really until the late 1980s or mid- to early-1990s that a lot of art historians and museums began to start taking Western American art seriously," said Amy Scott, chief curator of the Autry Museum of Western Art founded in Los Angeles in 1988.

The lawsuit centers on "The Rain and the Sun," which Peters says is the work of Iowa-born Frank Tenney Johnson (1874-1939), a one-time illustrator for Field and Stream magazine who became famous for his oil paintings of nighttime frontier scenes.

Peters sold it years ago for $750,000 as part of a trade with other artwork to R.D. Hubbard, a well-known Western art collector, business tycoon and horse-track owner.

Peters says he took back the painting from Hubbard last year after Stremmel, of Reno, repeatedly insisted it was a forgery.

In its current tainted state, the painting is worthless, his lawsuit says.

"Word travels quickly within this small community when a work of art is called a fake," the suit says. "It is hard, if not impossible, to unring that bell."

Peters should know. He was at the center of an unrelated forgery caper 30 years ago and ended up refunding $5 million to a Kansas City, Missouri, museum after a series of watercolors that were purported to be the work of Georgia O'Keefe turned out to be fakes.

In this case, he insists the work is that of Johnson, dubbed the "master of moonlight" for his nocturne paintings known for their remarkable depth and color.

Court documents don't include an image of the painting, and Peters' lawyers declined to describe it to The Associated Press.

But Johnson almost exclusively painted scenes of cowboys, Native Americans and their horses. More than a dozen have sold at Nevada's massive annual Coeur D'Alene Auction, most recently "Cowboys Roping the Bear" for $965,250 in 2012.

In 2008, when the auction sold a record $36.8 million worth of art, Johnson's "The Sheriff's Posse" went for nearly $1.1 million.

Less famous than Frederic Remington and Charles Russell, Johnson is of special interest because he worked with Hollywood studios to create backdrops after he moved to Los Angeles in the 1920s when the Western movie genre was being invented, said Scott, of the Autry Museum.

Hubbard founded the Hubbard Museum of the American West in Ruidoso, New Mexico, in 1992 and is a former chairman of the board of the Pinnacle Entertainment Group, a Las Vegas-based casino holding company.

Before this dustup, Peters said, he and Hubbard traded art worth millions and were friends and neighbors at Hubbard's Palm Desert, California, golf development.

That started to change in 2013 when Hubbard sent Stremmel images of art he wanted to sell at the Coeur D'Alene Auction, and Stremmel replied one was "not, in fact, by Frank Tenney Johnson."

A Hubbard associate sent a clearer image, but according to the lawsuit, Stremmel responded in an email, "We wouldn't touch it for our auction."

Beyond a signature that looked "labored," nothing about the painting suggested it was Johnson's, he wrote. "I really hope he (Hubbard) didn't pay a lot for it."

After another email exchange, Stremmel said he wanted to modify his statements because he hadn't seen the painting firsthand, the lawsuit said.

"Our position is that this painting would not be acceptable for the Coeur d'Alene Art Auction. Let's leave it at that," Stremmel wrote in November 2015.

Days later, a Hubbard Museum lawyer demanded Peters' gallery buy it back.

The embarrassing allegation was an insult to Peters' reputation, according to the suit filed April 28.

Peters said he reaffirmed the painting's authenticity but agreed to exchange it for another to "preserve a valued friendship and business relationship." But the men haven't done business since.

Lawyers for Stremmel and Overby, his auction partner, said there's no evidence anyone has been defamed and no way Peters can prove he's been harmed.

"If they can prove the painting is authentic, then they will not have suffered any damages," Reno lawyer Mark Gunderson wrote in a May 22 motion to dismiss.

Colette Loll, founder of the Washington-based consulting firm Art Fraud Insights, said lawsuits over forgeries are rare. But in criminal cases, prosecutors carry a "very heavy burden" to prove a work is fake, and judges and juries often have difficulty sorting out the claims, Loll said.

"You can have experts on each side, and one says it's real and one says it's not," said Loll, who has trained U.S. Homeland Security agents in forgery investigations. "A lot of experts are afraid to even testify at such a trial because they're afraid they could face their own litigation."

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