Hollywood Watches Art World Battle

Courtesy of the Artist and Blum & Poe, Los Angeles

An extra 5 percent? L.A.'s top collectors fret as a royalty dispute over a million-dollar painting stands to impact a hot resale market.

For years, famed art collector and former UPN chief dean valentine was known for discovering and supporting young artists. Now, his settlement of a high-profile lawsuit might have an even broader effect on artists' incomes. When Valentine sold an oil painting known as Blue Face Grotjahn in 2008 for $1,217,000, the artist who created the work, Mark Grotjahn, stepped up and cited an obscure only-in-California law passed in 1976 that allows artists to collect 5 percent of resale royalties on any work sold for more than $1,000. Valentine resisted, prompting a yearlong legal battle. On Feb. 6, Valentine finally agreed to pay Grotjahn $17,000 plus legal fees to end a case that was expected to go to trial in March. Will the settlement lead to other artists being paid royalties in the rich secondary market? The fear of profit lost to royalties, plus a pending class-action lawsuit by major artists including Chuck Close and Laddie John Dill against Sotheby's, Christie's and eBay, could dampen collecting enthusiasm within the booming Los Angeles art scene, which has expanded in recent years as such stars as Leonardo DiCaprio, James Franco and Tobey Maguire have made art acquisition cool. Valentine, for one, believes the law needs to be changed, saying, "This only makes rich collectors pay already rich artists."

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