A lawyer must separate bluster from truth and act accordingly: Halsey Minor’s fall.

Being an effective lawyer requires an enormous amount of confidence in one’s own judgment. As I tell my students, when you’re a lawyer, there is always someone who is telling you you’re wrong. You have to figure out the extent to which the person telling you you’re wrong is right, adjust your position accordingly, and move on. Frequently, the person telling you you’re wrong is wrong himself. It’s not always easy to tell the difference between wrong and right. But the real signs of maturity are (1) being able to adjust your position to what’s right in someone else’s words, and (2) being able to reject disagreement you judge for yourself is without merit.

[One of my pet peeves with contemporary journalists is precisely there lack of nerve -- rather than making judgments and explaining them, most journalists merely "report" the words of people who disagree without judgment.]

An example of being told I was flat-out wrong occurred over a year and a half ago, when I wrote about Sotheby’s $16.8 million lawsuit against the art collector and Internet entrepreneur Halsey Minor for refusing to pay the auction house for three paintings he bought in May” (including The Peaceable Kingdom and the Leopard of Serenity by Edward Hicks). I explained that I didn’t see merit in Minor’s claims that Sotheby’s had been in the wrong in failing to disclose to Minor that it had a security interest in The Peacable Kingdom and that the painting’s owner had agreed Sotheby’s would receive the proceeds of the sale. Minor argued that he had relied on Sotheby’s expertise in connection with the painting, and that if he had known of Sotheby’s security interest in the painting he would not have been willing to pay so much. In short, he claimed, Sotheby’s had been supposed to be working on his behalf in giving him advice regarding the painting but in fact had been acting on its own behalf and to his detriment.

Minor agreed to buy the paintings in May 2008. We all know what happened subsequently — we all experienced financial disaster. As a result, the art market collapsed, and the paintings Minor had bought were worth significantly less than he had agreed to pay. Moreover, one could presume,Minor might have suffered severe financial problems in and after 2008. I suspected strongly that Minor either no longer had the money to buy the paintings or, at least, no longer saw them as worth owning at the price he had agreed to pay.

Minor, though, made plain in a comment to my post (as he had to other people who had written skeptically of his claims) that he thought I was wrong, concluding

Sotheby’s committed Fraud and will pay for it and its disappointing to see you allow them to get away with charging outrageous fees and then blaming lack on knowledge on the victim.

What do you say to someone so vehement when you think he’s full of it? You ignore him, and you let the evidence speak for itself. Which, apparently, is what Sotheby’s did. As Donn Zaretetsky of the Art Law Blog reported over 2 months ago, the federal judge who heard the case ruled on March 30 in favor of Sotheby’s on all counts, entering judgment in Sotheby’s favor for $4.4 million plus interest, late charges, and legal fees. (Decision embedded below.)

And now Zaretsky points out  too that my suspicions regarding Minor’s financial hardships are, apparently, well-founded. According to the New York Post:

Fallen Internet tycoon Halsey Minor is so hard up for cash that he can’t even afford to send Sotheby’s his art collection to make good on his $6.6 million debt to the famed auction house. Court papers filed yesterday say the CNet.com co-founder ‘has represented that he cannot pay shippers to transport his fine and decorative art as directed.

And Elizabeth Lesly Stevens of the Bay Citizen reports that Minor has defaulted on the rent for the offices of his corporate home, offices which he has abandoned:

Minor Ventures, Minor’s investment vehicle and corporate home in recent years, has recently cleared out of its 12th-floor, 17,000-square-foot space at 199 Fremont, in San Francisco’s trendy SoMa neighborhood. Minor left behind artwork, office equipment and cubicles, says Laura Binai, a staffer with the building’s management company.

“All their mail comes here, but no one comes to get it,” she said.

Minor Ventures is technically a subtenant of insurance giant Aon Corp., which is “hunting down Minor for rent,” Binai says. An Aon spokesman declined to comment, and efforts to reach Minor have been unsuccessful.

And a second part of Minor’s design collection is set to be sold on Wednesday by some of Minor’s creditors. And a court has allowed Sotheby’s “to register the $6.6 million judgment in the Western District of Virginia and the District of Delaware, where Minor has significant assets,” including “a $6.52 million mortgage for a farm near Charlottesville, Va., that he recently brought current after it was foreclosed upon.”

So what does it seem happened? Minor suffered severe financial losses in the second half of 2008 and his emphatic assertions of wrongdoing by Sotheby’s were just so much bluster.

Sothebys v. Minor Judgment