Aug. 26 (Bloomberg) -- Moscow-based art dealer Gary Tatintsian has sued New York’s Luhring Augustine Gallery alleging breach of agreements on $3 million of art by artists George Condo and Richard Prince, according to a complaint filed Aug. 11.

In April 2008, Tatintsian, one of the first promoters of contemporary Western art in Russia, agreed to pay $2.7 million for 12 new Condo paintings at $225,000 each, according to the complaint filed in New York State Supreme Court in Manhattan. The price reflected a 30 percent discount from Condo’s “minimum retail price” of $325,000, according to the filing.

The complaint states that the Russian dealer agreed to pay $1.35 million in June 2008, and the balance within a year of the project’s completion.

In July 2008, he gave Luhring Augustine a $1 million advance and added an amendment to their contract altering the payment and delivery schedule, court papers said. Under the amended contract, the gallery agreed to deliver two Condo paintings every two months and Tatintsian agreed to pay for the paintings as delivered, using the advance to cover the first works delivered. Tatintsian never received any Condo artworks from Luhring Augustine, the complaint states.

“We paid a year ago and haven’t seen the paintings,” Tatintsian said in a telephone interview. “During this time, I saw eight works Condo did for other collectors. I won’t let anyone treat me like this.”

Baseless Lawsuit

Attorney Roger Netzer, who represents Luhring Augustine and works for the firm Willkie Farr & Gallagher LLP, called the lawsuit baseless and said Tatintsian failed to perform his contractual obligations.

This summer, Luhring Augustine offered the dealer five Condo paintings valued at $1.04 million and matching the specifications outlined in the agreement, according to Netzer.

“Tatintsian has steadfastly refused to accept delivery of the paintings or even to look at them,” Netzer said in an e- mailed statement.

Tatintsian said the gallery offered the paintings too late and that they weren’t the ones he wanted.

The complaint also refers to a transaction in which Tatintsian allegedly paid Luhring Augustine $2 million for a Richard Prince painting with the understanding that the gallery would sell him a painting by Christopher Wool, another popular artist the gallery represents, for a discounted price of $196,000. The complaint states that Luhring Augustine failed to deliver the Wool piece.

“Tatintsian would not have agreed to purchase the Prince painting without Luhring Augustine Gallery’s promise to sell a Wool painting,” court papers said.

Dying for Wool

“I knew that I was overpaying for the Prince,” Tatintsian said in the phone interview. “But I was dying to get the Wool.”

Luhring Augustine denies making an agreement concerning the Prince-Wool package, Netzer said.

The market for Condo paintings rose sharply after 2005, in part because of demand from Russian buyers and New York collectors, including the Mugrabi family, real-estate developer Aby Rosen and hedge-fund manager David K. Ganek. In May 2008, a Condo painting sold for $1.05 million at Phillips de Pury & Co. in New York, an auction record for the prolific artist.

Since then, Condo’s auction sales have declined by 45 percent, according to Artprice.com, which tracks sales data, while the rate of unsold pieces increased by 246 percent in 2008. The most expensive Condo painting sold since May 2008 went for $316,759 at Christie’s in London.

$10 Million on Art

Tatintsian has been doing business with Luhring Augustine for several years, during which he spent more than $10 million buying art from the gallery, according to the complaint. Gary Tatintsian Gallery in Moscow had Condo’s solo show in the summer of 2008.

Tatintsian seeks the return from Luhring Augustine of his $1 million deposit for the Condo works and the $2 million he spent on the Prince, according to court papers.

In 2005, ADS Fine Arts, an umbrella company for hedge-fund manager Adam D. Sender’s art collection, sued Tatintsian in New York State Supreme Court to recover $78,000 it paid him in 2001 for three vintage prints by German photographer Albert Renger- Patzsch, (1897-1966) according to court documents.

In 2004, the photographer’s archive in Germany determined that the most expensive print wasn’t vintage. ADS Fine Arts chose not to pursue the case when Tatintsian closed his New York gallery and returned to Russia.

“The dealer moved to Moscow; the gallery is defunct,” said John A. Coleman who represented ADS Fine Arts and now works for Friedberg Cohen Coleman & Pinkas LLP. “We elected not to pursue it. The cost of collection outweighed what was at stake.”

Tatintsian said he has maintained an office at 119 W. 22nd St. in New York even as his gallery moved to Moscow.

“My gallery is registered in New York,” he said. “I pay taxes here.”

The case is Gary Tatintsian Gallery Moscow vs. Luhring Augustine Gallery, 09-602478, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net.

Last Updated: August 26, 2009 13:22 EDT