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SJC-11519

         EVE PLUMB & others1   vs.   DEBORA A. CASEY, trustee.2



           Suffolk.    April 8, 2014. - September 8, 2014.

Present:    Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, &
                              Lenk, JJ.3


                         Art.    Consignment.



     Certification of a question of law to the Supreme Judicial Court
by the United States Bankruptcy Court for the District of
Massachusetts.


     Andrew Z. Schwartz (Joshua S. Pemstein with him) for the
plaintiffs.
     Kathleen R. Cruickshank for the defendant.
     Steven B. Levine, Nicolas M. Dunn, William D. Currie, & Jessica
T. Lu, for Arts & Business Council of Greater Boston & another, amici
curiae, submitted a brief.



     1
       Karen Hollingsworth, John Kuhn, Marjie Kuhn, Cynthia
McCallister, William McCarthy, Elizabeth Mumford, Deborah
Quinn-Munson, Anne Neely, John Schieffer, Kat Scott, Dylan Stark,
Robert W. Stark, Jr., and Susan Sugar.
     2
       Of the bankruptcy estates of Kenneth Wynne, III; Allyson
Wynne; and Wynne Fine Art, Inc.
     3
       Chief Justice Ireland participated in the deliberation on this
case prior to his retirement.
                                                                   2

     DUFFLY, J.    The consignment of fine art is governed by G. L.

c. 104A, which provides that, upon delivery of a work of fine art

to a consignee, the consignor shall provide a written statement with

specified information about the work.4   See G. L. c. 104A, § 2 (b).

A judge of the United States Bankruptcy Court for the District of

Massachusetts has certified the following question pursuant to

S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981), concerning

the effect of a consignor's failure to deliver a written statement

as required by G. L. c. 104A, § 2 (b):

          "Under Mass. Gen. Laws. c. 104A, the Massachusetts fine
     art consignment statute ('Chapter 104A'), must a consignor
     transmit a written 'statement of delivery' to a consignee as
     a necessary prerequisite to the formation of a 'consignment';
     or, alternatively, under Chapter 104A does a consignment arise
     upon the delivery by a consignor, and acceptance by a consignee,
     of a work of fine art for sale on consignment, regardless of
     whether a written 'statement of delivery' is sent by the
     consignor?"

For the reasons we discuss, we answer, "No, a written statement of

delivery is not a prerequisite for the formation of a consignment

under G. L. c. 104A."

     Background.   We summarize certain undisputed facts in the order

of certification and in the record before us.    Kenneth Wynne, III,

and Allison Wynne (the Wynnes) owned and operated Wynne Fine Art,

Inc. (Wynne Gallery), in Chatham.   Wynne Gallery accepted art works

     4
       We acknowledge the amicus brief of Arts & Business Council of
Greater Boston and Volunteer Lawyers for the Arts of Massachusetts
filed in support of the creditor artists.
                                                                     3

that the creditor artists delivered to the gallery, and agreed to

sell the art works and pay fifty per cent of the proceeds to the

creditor artists.   In 2013, the Wynnes filed for personal bankruptcy

under Chapter 7 of the United States Bankruptcy Code, and the

appointed bankruptcy trustee of the bankruptcy estates moved to sell

many of these art works.5

     Seeking to enjoin the sale, the creditor artists commenced an

adversary proceeding against the bankruptcy trustee in the United

States Bankruptcy Court for the District of Massachusetts.     The

creditor artists sought a declaration that the art works are held

in trust under the Massachusetts fine art consignment statute, G. L.

c. 104A, and therefore are not the property of the bankruptcy

estates.   The bankruptcy trustee filed a counterclaim seeking a

declaration that G. L. c. 104A is inapplicable to the art works at

issue because, when the creditor artists delivered their work to

Wynne Gallery, they did not provide a written statement describing

the art work as required by G. L. c. 104A, § 2 (b).     The creditor

artists argue that the delivery and acceptance of the art work alone

sufficed to create a consignment relationship protected under the

fine art consignment statute.    Acknowledging that the parties'

opposing interpretations of G. L. c. 104A raise a dispositive

     5
       The bankruptcy trustee moved to sell approximately 130
paintings; the creditor artists claim an interest in approximately
eighty-five of these works.
                                                                    4

question as to which there is no controlling precedent, the judge

certified the above question to this court.

     Discussion.   General Laws c. 104A, § 2 (b), provides that:

          "A consignor who delivers a work of fine art hereunder
     shall, upon delivery of the work of fine art, furnish to the
     consignee a separate written statement of delivery of the work
     of fine art, which shall include at a minimum the following
     information: (1) the artist's name and the name of the owner
     of the work of fine art; (2) the title, if any, of the work of
     fine art; (3) the medium and dimensions of the work of fine art;
     (4) the date of completion of the work of fine art; (5) the date
     of delivery of the work of fine art; and (6) the anticipated
     fair market value of the work of fine art."

     The bankruptcy trustee argues that the word "shall" in G. L.

c. 104A, § 2 (b), should be interpreted as a mandatory obligation,

see Hashimi v. Kalil, 388 Mass. 607, 609 (1983), and, thus viewed,

the delivery of a written statement by the consignor is required to

effectuate a consignment under the fine art consignment statute.

This argument is unavailing both in considering the language of the

statute as a whole and when viewed in light of the legislative purpose

underlying the 2006 statutory amendments that inserted this

provision.   See St. 2006, c. 353, § 6.

     1.   Statutory language.   In interpreting the requirements

necessary to effectuate a consignment under the fine art consignment

statute, our objective is to discern the intent of the Legislature

from the text of the statute.    See Champigny v. Commonwealth, 422

Mass. 249, 251 (1996), quoting Lehan v. North Main St. Garage, 312
                                                                    5

Mass. 547, 550 (1942) ("The object of all statutory construction is

to ascertain the true intent of the Legislature from the words used").

We consider the text of the statute "in connection with [its]

development and history, and with the history of the times and prior

legislation," Quincy City Hosp. v. Rate Setting Comm'n, 406 Mass.

431, 443 (1990), and cases cited, in order to construe the statute

as "a consistent and harmonious whole."    EMC Corp. v. Commissioner

of Revenue, 433 Mass. 568, 574 (2001), quoting State Tax Comm'n v.

LaTouraine Coffee Co., 361 Mass. 773, 778 (1972).

     While G. L. c. 104A, § 1, defines the term "consignment" under

the fine art consignment statute,6 G. L. c. 104A, § 2 (a), sets forth

specific requirements regarding the establishment of such a

consignment:

          "Notwithstanding any custom, practice or usage of the
     trade to the contrary, or any other language herein, whenever
     a consignor delivers . . . a work of fine art to a
     consignee . . . for the purpose of exhibition or sale, or both,
     on a commission, fee or other basis of compensation, the
     delivery to and acceptance of the work of fine art by the
     consignee shall constitute a consignment, unless the delivery
     to the consignee is pursuant to an outright sale . . . ."


     6
         Under G. L. c. 104A, § 1, a "[c]onsignment" is

          "a delivery of a work of fine art under which no title to,
     estate in, or right to possession of, the work of fine art
     superior to that of the consignor shall vest in the consignee,
     notwithstanding the consignee's power or authority to transfer
     and convey to a third person all of the right, title and interest
     of the consignor in and to the work of fine art."
                                                                   6

Thus, according to the plain statutory language, three elements are

necessary to constitute a consignment of fine art7:   (i) delivery of

a work of art by the consignor, and (ii) acceptance by the consignee,

(iii) for the purpose of exhibition or sale on commission.8   General

Laws c. 104A, § 2 (a), states that, unless there is an outright sale

of the art work, the occurrence of these three elements "shall

constitute a consignment" "[n]otwithstanding . . . any other

language herein."     That the consignor provide a written statement




     7
         "Fine art" is defined as:

          "[A] painting, photograph, sculpture, functional
     sculpture, hologram, wearable art, drawing, fiber-based work,
     ceramic-based work, metal work, conceptual-based art,
     glass-based work, an installation, a work that is created or
     displayed using computer, digital devices and/or new technology
     such as, but not limited to, digital prints, digital
     photographs, CD Roms, DVDs, cyberart, a web/internet-based art
     work, a performance-based art work and the results of the
     performance such as, but not limited to, film, video, DVDs, CD
     Roms, a sound work, an electronic-based work, a work of graphic
     art, including an etching, lithograph, off set print, silk
     screen/screen print, or work of graphic art of like nature, a
     work of calligraphy, an artist's book, or a work in mixed media
     including collage, assemblage or any combination of the
     foregoing art media."

G. L. c. 104A, § 1.
     8
       "Delivery" is defined in G. L. c. 104A, § 1, as "the process
of physically transporting a work of fine art from a consignor to
a consignee, whether done by the consignor personally, by a
professional transportation service, or by the services of an agent
or dealer who acts on behalf of the consignor." "Acceptance" is not
defined in G. L. c. 104A.
                                                                     7

of delivery is not among the prerequisites for establishment of a

consignment under G. L. c. 104A, § 2 (a).

     General Laws c. 104A, § 2 (b), then sets forth the requirement

of a writing upon delivery of a work of fine art.     See notes 6 and

7, supra.    The bankruptcy trustee urges an interpretation of this

provision that would make the delivery of a written statement an

additional element necessary to effectuate a consignment.     This

interpretation fails to give effect to the plain language of G. L.

c. 104A, § 2 (a), stating that the delivery and acceptance of art

work for the purpose of exhibition or sale on commission "shall

constitute a consignment" "[n]otwithstanding . . . any other

language herein," unless there is an outright sale.   If "shall" were

interpreted in its mandatory sense in both G. L. c. 104A, § 2 (a),

and G. L. c. 104A, § 2 (b), the provisions would be in conflict:

under § 2 (a), a consignment could be effective without a written

statement of delivery, and under § 2 (b), a consignment could not

be effective without a written statement of delivery.     In light of

this conflict, it cannot be the case that "shall" is intended in its

mandatory sense in both G. L. c. 104A, § 2 (a), and G. L. c. 104A,

§ 2 (b).    "Seemingly contradictory provisions of a statute must be

harmonized so that the enactment as a whole can effectuate the

presumed intent of the Legislature."   See Wilson v. Commissioner of

Transitional Assistance, 441 Mass. 846, 853 (2004).
                                                                    8

     Resolution of this apparent conflict is found in the phrase,

"[n]otwithstanding . . . any other language herein," in the opening

sentence of G. L. c. 104A, § 2 (a), which provides a clear indication

that the use of "shall" in G. L. c. 104A, § 2 (a), is intended in

a mandatory sense, whereas the use of "shall" in G. L. c. 104A,

§ 2 (b), is intended in a directive sense.9     See Attorney Gen. v.

Commissioner of Ins., 450 Mass. 311, 319 (2008), quoting Cisneros

v. Alpine Ridge Group, 508 U.S. 10, 18 (1993) ("The use of such a

'notwithstanding' clause clearly signals the drafter's intention

that the provisions of the 'notwithstanding' section override

conflicting provisions of any other section").     "A statute should

be construed so as to give effect to each word, and no word shall

be regarded as surplusage."   Ropes & Gray LLP v. Jalbert, 454 Mass.

407, 412 (2009).   To give meaning to all of the terms of G. L.

c. 104A, § 2 (a), and to harmonize those terms with G. L. c. 104A,

     9
       Our interpretation of the language in G. L. c. 104A, § 2 (a),
and G. L. c. 104A, § 2 (b), is also supported by the principle that
we "derive the words' usual and accepted meanings from sources
presumably known to the statute's enactors, such as their use in other
legal contexts and dictionary definitions." Seideman v. Newton, 452
Mass. 472, 478 (2008), quoting Commonwealth v. Zone Brook, Inc., 372
Mass. 366, 369 (1972). The definition of "consignment" in the
Uniform Commercial Code, G. L. c. 106, and in legal dictionaries when
G. L. c. 104A was enacted in 1978, see St. 1978, c. 286, and when
it was amended in 2006, see St. 2006, c. 353, are in accord that a
consignment is the delivery of goods to another for the purpose of
selling the goods; none mentions a written statement of delivery as
constituting a component of consignment. See G. L. c. 106, § 9-102
(20); Black's Law Dictionary 380 (4th ed. 1957); Black's Law
Dictionary 327 (8th ed. 2004).
                                                                    9

§ 2 (b), we read G. L. c. 104A, § 2 (b), as providing a directive

standard of practice, and not as adding an additional mandatory

element for effecting a consignment under G. L. c. 104A, § 2 (a).

See Wilson v. Commissioner of Transitional Assistance, supra

(interpreting "shall" in directive sense where doing so was necessary

to harmonize statutory provisions).

     2.   Legislative context and history.    Moreover, we interpret

the word "shall" in G. L. c. 104A, § 2 (b), in a directive sense,

rather than in a mandatory sense, where doing so is necessary to

effectuate the primary purpose of the statute.     See Wilson v.

Commissioner of Transitional Assistance, supra; Boston v. Quincy

Mkt. Cold Storage & Warehouse Co., 312 Mass. 638, 646-647 (1942),

quoting Swift v. Registrars of Voters of Quincy, 281 Mass. 271, 276

(1932) (term "shall" "is not of inflexible signification and not

infrequently is construed as permissive or directory in order to

effectuate a legislative purpose").    As discussed below, one of the

legislative purposes for the enactment of G. L. c. 104A was to

protect the interests of artists in their consigned works in the event

that a consignee files for bankruptcy protection; this purpose

supports the conclusion that the word "shall" in G. L. c. 104A,

§ 2 (b), was intended in its directive rather in its mandatory sense.

     The fine art consignment statute was enacted in 1978, see

St. 1978, c. 286, and was amended in 2006, see St. 2006, c. 353, at
                                                                   10

which time G. L. c. 104A, § 2 (b), was added.   See St. 2006, c. 353,

§ 3.    In determining the intent of the Legislature in adopting the

2006 amendments, we consider "the cause of [the statute's] enactment,

the mischief or imperfection to be remedied and the main object to

be accomplished."    Commonwealth v. Wade, 467 Mass. 496, 501 (2014),

quoting Flagg v. AliMed, Inc., 466 Mass. 23, 28 (2013).    We look to

the language of preexisting statutes because, "[w]hen amending a

statute or enacting a new one, the Legislature is presumed to be aware

of prior statutory language."     Ropes & Gray LLP v. Jalbert, supra

at 412-413.

       The 2006 amendments to G. L. c. 104A were first introduced in

January, 2005; the language of the proposed § 2 (a) was identical

to that in the 1978 statute, and did not include the phrase "any other

language herein" after the term "[n]otwithstanding."     Compare 2005

Senate Doc. No. 1838 with G. L. c. 104A, as inserted by St. 1978,

c. 286.     The Legislature did not adopt this version, but instead

adopted a revised bill in March, 2006, see 2006 Senate Doc. No. 2461,

which added both the provision in § 2 (b) requiring that a consignor

furnish a written statement of delivery, and the qualification that

§ 2 (a) is to apply "[n]otwithstanding . . . any other language

herein."10    These simultaneous revisions further indicate that the


       10
       The proposed § 2 (b) stated that a "consignee who accepts a
work of fine art hereunder shall . . . furnish to the consignor a
                                                                      11

Legislature did not intend a consignment under G. L. c. 104A,

§ 2 (a), to be conditioned or altered by the provision requiring a

written statement of delivery in G. L. c. 104A, § 2 (b).       See

Campatelli v. Chief Justice of Trial Court, 468 Mass. 455, 468 (2014)

(comparing versions of proposed legislation to ascertain legislative

intent).

     The 2006 amendments to the fine art consignment statute were

enacted in the wake of the insolvency of two large art galleries in

Boston that generated wide-spread public concern about the

difficulties faced by artists seeking to reclaim their art work.     See

Ulrich & Jamieson, Muddled Waters:     An Addendum on Consignment of

Fine Art Law in Massachusetts, 37 J. Arts Mgt., L. & Soc'y 301, 302-304

(2008) (insolvent galleries' failure to keep records of consigned

art work severely jeopardized ability of artists to reclaim art work




separate written statement of acceptance" (emphasis supplied).
2005 Senate Doc. No. 1838. The revised version of § 2 (b), which
was the version that was adopted, stated that a "consignor who
delivers a work of fine art hereunder shall . . . furnish to the
consignee a separate written statement of delivery" (emphasis
supplied). 2006 Senate Doc. No. 2461. Placing the requirement to
provide a written statement on the consignor rather than the
consignee made sense in light of the recording system that the amended
statute put in place. See supra. By adding the phrase
"[n]otwithstanding . . . any other language herein" to § 2 (a) in
2006 Senate Doc. No. 2461, the Legislature evidenced its intent that
a consignor's failure to meet this requirement would not remove the
consignment from the scope of the protections provided in G. L.
c. 104A.
                                                                   12

and funds from sales of art work).11   Viewed against this backdrop,

and considered in conjunction with the other amendments to G. L.

c. 104A enacted at that time, which also enhanced protections to the

consignor,12 it is apparent that the directive of G. L. c. 104A,

§ 2 (b), to provide a written statement of delivery was designed as

     11
        A newspaper article concerning the passage of the 2006
amendment to G. L. c. 104A, describes the extensive volunteer effort
that was needed in 2003, in the aftermath of the bankruptcy of Boston
Corporate Art, to enjoin the sale of hundreds of consigned paintings,
and to help artists retrieve their works from unorganized stacks of
paintings held in a warehouse. See Artists Hunt for their Works
Rescued from Bankruptcy Firm, Boston Herald, Aug. 20, 2003, at 58.
Following these events, "a working group convened, including members
from Volunteer Lawyers for the Arts of Massachusetts (VLA), the
Artists Foundation, and the Boston Art Dealers Association, to revise
the statute. . . . [A Senator] took the revisions under advisement,
and they were successfully enacted into law in November 2006."
Ulrich & Jamison, Muddled Waters: An Addendum on Consignment of Fine
Art Law in Massachusetts, 37 J. Arts Mgt., L. & Soc'y 301, 302 (2008).

     Upon passage of the bill by the Senate, and prior to being acted
on by the Governor, Jim Grace, the executive director of VLA, who
helped draft the amendments to G. L. c. 104A, stated that "[t]he main
purpose of this statute is to protect the artists," and that "a lot
of artists were harmed" because their work was not returned or they
did not receive appropriate payment after the closure of the Boston
Corporate Art and Haley & Steele, Inc. galleries. Tougher Rules on
Fine Art Consignment Now up to Governor, State House News Service,
Oct. 31, 2006. See Adams v. Boston, 461 Mass. 602, 612 n.17 (2012)
("We employ contemporaneous news accounts not as a source of
legislative intent, but as a source of valuable context as to the
public dialogue animating the statute's passage").
     12
        These amendments included a broader definition of "fine art";
a definition of "consignor" encompassing art collectors; provisions
regulating the manner and timing of payments by consignee to
consignor; and added confirmation that a trust relationship exists
between a gallery and an artist. Compare G. L. c. 104A, as inserted
by St. 1978, c. 286, with G. L. c. 104A, as amended by St. 2006,
c. 353.
                                                                   13

part of a recording system for consigned art work, and not as a

prerequisite for a consignment.13

     General Laws c. 104A protects consignors' interests in their

art work by providing that consigned works of art are not the property

of the consignee, but are rather held in trust for the consignor.

See G. L. c. 104A, § 4.    Like statutes in a number of other

jurisdictions, G. L. c. 104A thereby "provide[s] a safe harbor for

the artist against the claims of a dealer's creditors."   R. E. Lerner

& J. Bresler, Art Law:   The Guide for Collectors, Investors, Dealers,

and Artists 41 (3d ed. 2005).     See Jay, A Picture Imperfect:   The

Rights of Art Consignor-Collectors When Their Art Dealer Files for

Bankruptcy, 58 Duke L.J. 1859, 1875-1876 & n.111 (2009) (collecting

statutes).   The bankruptcy trustee's interpretation of G. L.

c. 104A would deny this safe harbor to consignors who fail to deliver

     13
        This interpretation is also consistent with the purpose of
G. L. c. 104A, as initially enacted in 1978. See St. 1978, c. 286.
Prior to the enactment of G. L. c. 104A, the Uniform Commercial Code
(UCC), G. L. c. 106, applied to the consignment of art work, and
afforded minimal protection to consignors of art work in the event
that a consignee sought bankruptcy protection. See Ulrich, Muddled
Waters: Consignment of Fine Art Law in Massachusetts, 35 J. Arts
Mgt., L. & Soc'y 121, 123-124 (2005). Under the UCC, if a UCC
financing statement is not filed upon consignment, then a consignor
retains only an unsecured interest in the consigned item, see G. L.
c. 106, § 9-319. Commentators have noted that many artists do not
file UCC financing statements due to the "handshake culture" of the
fine art market. See, e.g., Madigan, Orphaned Art Consignors:
Confusion in the Courts and the UCC, 29 Cardozo Arts & Ent. L. J.
753, 756-757 (2011); Jay, A Picture Imperfect: The Rights of Art
Consignor-Collectors when their Art Dealer Files for Bankruptcy, 58
Duke L.J. 1859, 1862-1863, 1890 (2009).
                                                                   14

written statements; such an interpretation is inconsistent with the

Legislature's intent to enhance protections for artists' interest

in their consigned works in both the original and amended versions

of G. L. c. 104A.   Compare G. L. c. 104A, as inserted by St. 1978,

c. 286, with G. L. c. 104A, as amended by St. 2006, c. 353.

     General Laws c. 104A, § 2 (c), requires a consignee to keep a

copy of the consignor's written statement of delivery, make a record

of sale if the art work is sold, and make records available for review

upon request of the consignor.    General Laws c. 104A, § 4A (a),

requires that a consignee maintain separate accounts for each

consignor, and G. L. c. 104A, § 4A (b), requires that payment be made

to the consignor within ninety days of the sale of an art work.

Failure to make payment within ninety days renders the consignee

liable for payment of interest, costs, and attorney's fees, and

failure to make payment within 180 days entitles the consignor also

to seek treble damages.   See G. L. c. 104A, § 4A (b), (c).    In the

event of a closure of the consignee's business, G. L. c. 104A,

§ 4A (f), requires a consignee to notify consignors, return works

within ninety days, and maintain all records for four years.

     The Legislature thus intended the requirement of a written

statement of delivery in G. L. c. 104A, § 2 (b), to facilitate a

recording system that enhances protections for consignors of art

work, and not to create a barrier to such protection.   The recording
                                                                   15

system and its protections are impeded if a consignor does not provide

the consignee with identifying information about the art work, and

the name of the artist and the owner of the art work, and as required

by G. L. c. 104A, § 2 (b).   That the consignor generate the written

description of the art work makes sense because the consignor will

know the information that is required to be included in the record,

such as the work's title, dimensions, medium, and completion date,

and the consignor has a significant interest in the record being made.

By delivering a written statement that is then kept on record by the

consignee, the consignor reduces the risk that art work will be

misidentified, become untraceable, or, in the worst case, be

forfeited.14   See G. L. c. 104A, § 4 (c) (consignor forfeits art work

if in good faith consignee cannot locate consignor within one year

after decision to return unsold work); G. L. c. 104A, § 4A (e) (if

in good faith consignee cannot locate consignor, consignee shall not

be liable for penalties for failure to make payment, and after four

years from date of sale, consignor forfeits payment).     A consignor

who does not furnish a written statement of delivery thus jeopardizes

the consignor's own interest in the art work, but nevertheless

effects a valid consignment under G. L. c. 104A, § 2 (a), so long


     14
       A consignor "is solely responsible for keeping his contact
information current with the consignee," including name, mailing
address, telephone number, facsimile transmission number, and
electronic mail address. G. L. c. 104A, § 4 (c).
                                                                  16

as there is delivery of the art work and acceptance for the purpose

of exhibition or sale on commission.

     Conclusion.   We answer the reported question, "No, a written

statement of delivery is not a prerequisite for the formation of a

consignment under G. L. c. 104A."

     The Reporter of Decisions is directed to furnish attested copies

of this opinion to the clerk of this court.   The clerk in turn will

transmit one copy, under the seal of the court, to the clerk of the

United States Bankruptcy Court for the District of Massachusetts,

as the answer to the question certified, and will also transmit a

copy to each party.
