Chapter 230 Oregon Laws 2011

AN ACT

HB 2708

Relating to art law; amending ORS 79.0109, 359.205, 359.210, 359.220, 359.225, 359.230, 359.235, 359.240 and 359.250; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 359.205 is amended to read:

359.205. (1) Notwithstanding any custom, practice or usage of the trade to the contrary, whenever [an artist] a consignor delivers or causes to be delivered a work of [the artist’s own creation] fine art to an art dealer in this state for the purpose of exhibition or sale, or both, on a commission, fee or other basis of compensation, the delivery to, and acceptance [thereof] by, the art dealer of the work of fine art constitutes a consignment unless the delivery to the art dealer is pursuant to an outright sale for which the [artist] consignor receives or has received compensation for the work of fine art upon delivery.

(2) A work of fine art is trust property in the hands of the art dealer, who is trustee for the benefit of the [artist] consignor until the work of fine art is sold to a bona fide third party.

(3) The proceeds of the sale of a work of fine art are trust property in the hands of the art dealer who is trustee for the benefit of the [artist] consignor until the amount due the [artist] consignor from the sale is paid. Nothing in this subsection requires a separate trust account for each [artist] consignor.

(4) A work of fine art that is trust property when initially accepted by the art dealer remains trust property notwithstanding the subsequent purchase of the work of fine art by the art dealer directly or indirectly for the art dealer’s own account, until the purchase price is paid in full to the [artist] consignor.

(5) The trust relationship described in this section imposes no duty greater than the duties described in ORS 359.200 to 359.210, 359.220, 359.225, 359.250 and 359.255 and does not give rise to any general trust or fiduciary relationship.

SECTION 2. ORS 359.210 is amended to read:

359.210. (1) A consignment of a work of fine art has the following effect:

(a) The consignee, after the delivery of fine art, [shall be considered to be] is the agent of the consignor for the purpose of the exhibition or sale, or both, of the work of fine art within this state.

(b) The work of fine art, or the [artist’s] consignor’s portion of the proceeds from the sale of [such] the work, [shall not be] is not subject to the claims of a creditor [or] of the consignee.

(c) A consignee is liable for the loss of or damage to the work of fine art while it is in the consignee’s possession [where such] if the loss or damage is caused by the failure of the consignee to use the highest degree of care. For the purpose of this subsection, the value of the work of fine art is the value established in a written agreement between the consignor and consignee prior to the loss or damage or, if no written agreement regarding the value of the work of fine art exists, the [artist’s] consignor’s portion of the fair market value of the work of fine art.

(d) The consignee [shall] may not be held liable for the loss of[,] or damage to the work of fine art if the [artist] consignor fails to remove the work within a period of 30 days following the date agreed upon for removal of the work in the written contract between the [artist] consignor and the consignee or, if no written agreement regarding a removal date exists, 30 days after notice to remove the work of fine art is sent by registered mail or by certified mail with return receipt to the [artist] consignor at the [artist’s] consignor’s last-known address.

(2) Upon written demand from the consignor, the consignee shall furnish the consignor with the name and address of the purchaser of the consignor’s work, and the date of purchase and the price paid for the work, for any sale totaling $100 or more.

(3) The consignee’s failure to furnish the information specified under subsection (2) of this section [by the consignor shall entitle the artist] entitles the consignor to obtain an injunction [prohibiting such conduct and in addition,] ordering the disclosure of the information and money damages in an amount equal to three times the [artist’s] consignor’s portion of the retail value of the work.

SECTION 3. ORS 359.220 is amended to read:

359.220. [(1)] An art dealer may accept a work of fine art, on a fee, commission or other compensation basis, on consignment from [the artist who created the work of fine art] a consignor only if, prior to or at the time of acceptance, the art dealer enters into a written contract with the [artist] consignor establishing:

[(a)] (1) The retail value of the work of fine art;

[(b)] (2) The time within which the proceeds of the sale are to be paid to the [artist] consignor, if the work of fine art is sold;

[(c)] (3) The minimum price for the sale of the work of fine art; and

[(d)] (4) The fee, commission or other compensation basis of the art dealer.

[(2) An art dealer who accepts a work of fine art on a fee, commission or other compensation basis on consignment from the artist may use or display the work of fine art or a photograph of the work of fine art or permit the use or display of work or photograph only if:]

[(a) The art dealer gives notice to users or viewers that the work of fine art is the work of the artist; and]

[(b) The artist gives prior written consent to the particular use or display.]

SECTION 4. ORS 359.225 is amended to read:

359.225. The proceeds from a sale of a work of fine art on consignment shall be paid to the consignor within 30 days of receipt by the consignee unless the consignor expressly agrees otherwise in writing. If the sale of the work of fine art is on installment, the funds from the installment shall first be applied to pay any balance due the consignor on the sale, unless the consignor expressly agrees in writing that the proceeds on each installment shall be paid according to the percentage established by the consignment agreement. The [artist’s] consignor’s portion of funds received on the sale of the work of fine art or on installment [shall not be] are not subject to the claims of a creditor of the consignee.

SECTION 5. ORS 359.230 is amended to read:

359.230. Any provision of a contract or agreement [whereby] pursuant to which the consignor waives any of the provisions of ORS 359.200 to 359.255 is void.

SECTION 6. ORS 359.235 is amended to read:

359.235. (1) Nothing in ORS 359.200 to 359.255 is intended to affect any written or oral contract or agreement in existence prior to November 1, 1981, unless the parties agree by mutual written consent that ORS 359.200 to 359.255 [shall apply] apply or the contract is extended or renewed after November 1, 1981.

(2) ORS 359.200 to 359.255 is applicable notwithstanding the absence of, or conflict with, any written agreement, receipt, note or memorandum entered into on or after November 1, 1981, between the consignor and the consignee concerning any matter covered by ORS 359.200 to 359.255. ORS 359.200 to 359.255 controls over any conflicting provisions of the Uniform Commercial Code.

SECTION 7. ORS 359.240 is amended to read:

359.240. (1) It [shall be] is unlawful for a consignee willfully and knowingly to secrete, withhold or appropriate a work of fine art or the proceeds from [sale thereof] the sale of a work of fine art for the consignee’s own use or the use of any person other than the consignor, except pursuant to a bona fide sale or as otherwise consistent with the terms of consignment.

(2) Violation of this section is a Class C felony.

SECTION 8. ORS 359.250 is amended to read:

359.250. (1) An art dealer [violating] who violates ORS 359.220 is liable to the [artist] consignor for $100 plus actual damages, including incidental damages sustained as a result of the violation.

(2) If an art dealer violates ORS 359.220, the [artist’s] consignor’s obligation for compensation to the art dealer is voidable by the [artist] consignor.

SECTION 9. ORS 79.0109 is amended to read:

79.0109. (1) Except as otherwise provided in subsections (3) and (4) of this section, this chapter applies to:

(a) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;

(b) An agricultural lien;

(d) A consignment;

(e) A security interest arising under ORS 72.4010, 72.5050, 72.7110 (3), or 72A.5080 (5), as provided in ORS 79.0110; and

(f) A security interest arising under ORS 74.2100 or 75.1180.

(2) The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.

(3) This chapter does not apply to the extent that:

(a) A statute, regulation or treaty of the United States preempts this chapter;

(b) Another statute of this state expressly governs the creation, perfection, priority or enforcement of a security interest created by this state or a governmental unit of this state;

(c) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; [or]

(d) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under ORS 75.1140[.]; or

(e) A provision of this chapter conflicts with a provision of ORS 359.200 to 359.255.

(4) This chapter does not apply to:

(a) A landlord’s lien, other than an agricultural lien;

(b) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but ORS 79.0333 applies with respect to priority of the lien;

(d) A sale of accounts, chattel paper, payment intangibles or promissory notes as part of a sale of the business out of which they arose;

(e) An assignment of accounts, chattel paper, payment intangibles or promissory notes which is for the purpose of collection only;

(f) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;

(g) An assignment of a single account, payment intangible or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;

(h) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but ORS 79.0315 and 79.0322 apply with respect to proceeds and priorities in proceeds;

(i) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;

(j) A right of recoupment or setoff, but:

(A) ORS 79.0340 applies with respect to the effectiveness of rights of recoupment or set off against deposit accounts; and

(B) ORS 79.0404 applies with respect to defenses or claims of an account debtor;

(k) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, or a seller’s or purchaser’s interest in a land sale contract and the proceeds thereof, except to the extent that provision is made for:

(A) Liens on real property in ORS 79.0203 and 79.0308;

(B) Fixtures in ORS 79.0334;

(D) Security agreements covering personal and real property in ORS 79.0604;

(L) An assignment of a claim arising in tort, other than a commercial tort claim, but ORS 79.0315 and 79.0322 apply with respect to proceeds and priorities in proceeds; or

(m) An assignment, in a consumer transaction, of a deposit account from which, under the terms of the account agreement, third party payments may be made by means of a check, draft, negotiable order of withdrawal or other order, but ORS 79.0315 and 79.0322 apply with respect to proceeds and priorities in proceeds.

SECTION 10. This 2011 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2011 Act takes effect on its passage.

Approved by the Governor June 2, 2011

Filed in the office of Secretary of State June 2, 2011

Effective date June 2, 2011

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