Does this Park West appraisal conform to current standards - You be the judge

Background The Fine Art Registry website describes an art purchase by Sharon Day and Julian Howard as follows: : In late December 2007 a London, UK based lawyer and his wife, Sharon Day, also a London based lawyer, and their three daughters embarked for a week on their first ever (and only) cruise aboard the Royal Caribbean Adventure of the Seas. While on that cruise, they attended Park West art auctions aboard and altogether purchased pieces of art to the tune of $97,896.50. The most expensive items they bought were eleven Salvador Dali prints from the Divine Comedy series. They were assured by the Park West auctioneer/Art Director that these were all terrific bargains and excellent investments. While talking to the auctioneer, Julian, a Dali fan, asked about the existence of a full set of the Divine Comedy prints. The auctioneer, Nicolae Dobrota, told him that he would see what he could find out.

Sharon, Julian and family finished their cruise and went home to await the arrival of their purchases.
Some time after arriving back in the UK, they received a phone call from Morris Shapiro, Gallery Director of Park West Gallery, offering to sell them a complete set of Salvador Dali's Divine Comedy prints - a full set of six books with Dante's text, and each set individually signed in pencil by Salvador Dali himself and Jean Estrade, the publisher of the French edition of Divine Comedy prints.

Some back and forth ensued between Julian and Morris which culminated in the purchase of the full set. The price was $450,040.00 plus a buyer's premium. Buyer's premiums are customary at auctions where work is consigned by a buyer to the auction house. The buyer's premium is how the auctioneer and auction house make their money.  The grand total charged by Park West for their purchase of the full Divine Comedy set was $483,828.00. They were credited for some of their purchases aboard the Adventure of the Seas which they decided not to keep. What remained to be paid was $422,601.50. An invoice was sent to them by Park West with all the above fictitious details and the amount remaining to be paid.

They were instructed by Park West to wire this amount to a Royal Caribbean bank in Texas, which they did.
The shipment of the prints was sent to Mana Fine Arts art storage facility in Jersey City, New Jersey, and they were sent a "certificate of authenticity" signed by Morris Shapiro and an appraisal also signed by Morris Shapiro. Some copies of additional documents were sent by email, including an attestation by Jean Estrade and Daniel David of Les Heures Claires in Paris and a Professional Opinion by a Santa Fe, NM appraiser, Bernard Ewell, to support the authenticity of the prints that were purchased.."

I am not a Dali expert nor have I had access to the documentation that specifically relates to the purchase of Dali's Divine Comedy set for $483,828.00. What I do have is the Park West appraisal that accompanied the sale that was provided by the purchasers to the Fine Art Registry website . The three page document is printed below. I want to examine this document in order to see if it conforms to current accepted standards of appraisal practice. The standard that is currently accepted by both real property and personal property appraisers is the Uniform Standards of Professional Appraisal Practice 2010 (USPAP).

I have only listed those elements that I fail to see included in this document. You be the judge whether this list is accurate and whether this appraisal complies with USPAP.





USPAP 2010

1. Standard 8 (b)b (i) - State the identity of the client and any intended users, by name or type - Julian Howard's name is listed on page one; however he is not identified as the client nor are any intended users listed.

2. Standard 8 (b) (ii) - State the intended use of the appraisal -  The words "retail replacement appear on page one but they are listed as "the current Park West  retail replacement price".  Is this a value for obtaining insurance coverage or confirmation of sale price.. or maybe both. It is not stated. If Park West is providing a "retail replacement price" to confirm their own sale price, it would be troublesome.

3. Standard 8 (b) (iii) - Summarize information sufficient to identify the property involved in the appraisal including the physical and economic property characteristics relevant to the assignment. The complete set is  described as 100 wood engravings. Did Dali make more than one set? What is the condition of the appraised set? What are the dimensions? No description is actually provided of the wood engravings.

4. Standard 8 (b) (v) State the type and definition of value and cite the source of the definition. There is no definition of retail replacement.

5. Standard 8 (b) (vi) State the effective date of the appraisal and the date of the report. The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market and property as of the effective date  of the appraisal was prospective, current, or retrospective. This is a very critical point because you have no idea whether Park West's value conclusion is supported by past, current, or future data. There is no effective date stated.

6. Standard 8 (b) (vii) Summarize the scope of work used to develop the appraisal. No scope of work is included in the appraisal.

7. Standard 8 (b) (viii) Summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained. There is no summary of any methodology, techniques, reasoning, analysis, opinions considered, or conclusions that supported the Park West appraisal.

8. Standard 8 (b) (xi) Include a signed certification in accordance with Standards Rule 8 - 3

a. I have no (or the specified) present or prospective interest in the property that is the
 subject of this report and no (or the specified) personal interest with respect to the
parties involved. Park West who signed this appraisal clearly has an interest in the property.

b.  I have no bias with respect to the property that is the subject of this report or to the  parties involved with this assignment. The individual who signed the appraisal is a major principal with Park West and must realistically be presumed to be biased.

c.  my engagement in this assignment was not contingent upon developing or reporting. I can not know Mr. Shapiro's mind;however, I would think if he had appraised this object lower than the gallery sales price it would have been most unusual.

d. predetermined results. One can only speculate whether the results were predetermined  by the sales price. What would a reasonable person assume?

e.  my compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. One can only speculate whether the results were predetermined  by the sales price. What would a reasonable person assume?

f. my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. That was not stated so there is no way of knowing whether this appraiser was aware of USPAP


g.  I have (or have not) made a personal inspection of the property that is the subject of this report. (If more than one person signs this certification, the certification must clearly specify which individuals did and which individuals did not make a personal inspection of the appraised property.)" There was no statement of inspection indicating that Mr. Shapiro of anyone not signing the appraisal report made an inspection.


h.  no one provided significant personal property appraisal assistance to the person signing this certification. (If there are exceptions, the name of each individual providing significant personal property appraisal assistance must be stated.) There was no statement indicating that anyone other than Mr. Shapiro provided assistance on this appraisal.


Comment: A signed certification is an integral part of the appraisal report. An appraiser who
 signs any part of the appraisal report, including a letter of transmittal, must also sign this  certification. The certification statement was not provided nor was it signed by Mr. Shapiro.

Clearly there is enough information here for a reasonable person to conclude that Park West appraisals do not conform to accepted appraisal industry standards. However, this is hardly a gotcha moment as can be seen in Park West's Terms of Appraisal. Park West makes it emphatically clear that  Park West  will not stand behind their appraisals: "By issuing this Appraisal, Park West makes no warranties or representations, express or implied, with respect to the artwork or its authenticity." The gallery is very much out in the open that their appraisals are not really useful for anything such as obtaining insurance, collateralizing a loan, resale,  divorce settlement, etc. So why would you the purchaser pay for an appraisal signed by Mr. Shapiro, the gallery director? The only purpose that I can see for buying this appraisal is to feel good personally about your purchase. So in this sense and in my opinion the appraisal is a marketing tool for Park West. 

The question that comes to mind is do these purchasers really understand this appraisal process. If Park West Gallery grants me a written interview this will certainly be one of the questions I ask. Undoubtedly, the lawyers in the upcoming law suits will have many questions to ask.





Park West Gallery

TERMS OF APPRAISAL
The following terms and conditions govern our Appraisal.

Method of Appraisal
The appraisal herein represents solely our opinion of  the replacement  value of the work. In making this determination we rely on many factors including the condition of the art work, gallery prices of reputable art galleries, and other  reliable price data and lists. We do not rely on third party auction prices or Internet prices to arrive at the appraisal. At any given time, including the date of your purchase, the art that is the subject of this Appraisal may sell elsewhere for more or less than our Appraisal.

Exclusions and Limitations
While we endeavor to provide accurate appraisals, Park West  disclaims  and assumes no liability or responsibility for errors or omissions in connection with this Appraisal. Without limitation:

* Park West provides a limited five year guarantee of authenticity with the original purchase of certain works of art. That limited guarantee, as set forth in the " Terms of Guarantee" is the exclusive guarantee applicable to art work sold  by Park West. By issuing this Appraisal, Park West makes no warranties or representations, express or implied, with respect to the artwork or its authenticity.

* In no event shall Park West or any of its respective parents, affiliates, subsidiaries, officers, directors, or employees be liable for claims that this appraisal is inaccurate or incorrect in any respect, or for any damage whatsoever including but not limited to incidental or consequential damages, loss of profits or loss of value or increase in value.  We disclaim any liability for: (i) insurance losses or (ii) claims for refunds or money damages based on a claim that our appraisal value is too high, too low or otherwise inaccurate in any respect. It is further understood that the remedy set forth herein, namely the rescission of the appraisal sale and refund of the price paid for the Appraisal is exclusive and in lieu of any other remedies which might otherwise be available as a matter of law or equity.