Greenberg vs Koch Trial: Part 8

Day Four: Monday 1 April 2013 (continued)

Witness: Eric Greenberg (re-direct)

John Hueston rose to redirect Eric Greenberg.  He noted that Greenberg had great faith in Zachy’s judgement, and relied on them to inspect his wines.  He had great faith in their professional judgement – which Hueston suggested was because they got higher prices for his wines.

Greenberg confirmed that he hadn’t told Zachy’s about Edgerton’s inspection and conclusions, because he did not believe they needed to know.  In Greenberg’s opinion, he was extremely confident in their abilities to inspect and catch counterfeit wines.

Hueston then asked if it was not true that before the auction Greenberg had said to Zachy’s he had little faith that their inspections were conducted well.  Greenberg claimed he had no recollection of this, other than a sarcastic email (he said) about an auction in 2004.  In this email, from 28 October 2004, Greenberg wrote “You have wine in here that is not mine and you are missing [….] all my old Bordeaux and Burgundy and lots 1368 and 1387 are not mine”.  On questioning, Greenberg confirmed that he meant this; it wasn’t a laughing matter.

Greenberg had then written, “I have little faith that these inspections and estimates were conducted well based on what I see here”.   He agreed it was no laughing matter, but did claim to Hueston that he “knew they would get it right”.  Hueston replied that he wrote the email to make sure they did, because they had gotten it wrong.

Moving to the Egan report, which Cialone had taken Greenberg through, Hueston asked if Greenberg remembered the 12 magnums of supposed Lafleur wines at issue in this case, and being shown portions of those reports.  Greenberg queried whether these wines had come from him, but did agree that he had testified that Egan is a very professional man.  Hueston noted that Greenberg’s attorney had focused on only one portion of the report, and he wanted to ensure that the jury saw what the conclusions were on those 12 magnums.

Cialone objected to this, on the grounds that Hueston could put his own expert up, and shouldn’t be asking Greenberg about Egan’s opinions, saying that he (Cialone) was only asking about specific observations regarding corks.  Judge Oetken queried where Hueston was going with the line of questioning, and Hueston replied that when he had objected, the judge had said he would have a chance to complete the record, which is what he wants to do.  Cialone put up a select portion of the document; he wants to make sure that the jury has no confusion that Egan concluded each of these bottles was counterfeit.  Oetken asked if it was not better done on Egan’s testimony, with Hueston replying that he felt it was directly on point, and would be quick.  Oetken allowed it.  Hueston then took Greenberg through the report, pointing out each counterfeit conclusion, with Greenberg grudgingly acknowledging them, adding frequently that Egan’s conclusion differed from Zachy’s, “That’s what he wrote”, or that the conclusion “as of today” is what Egan believed.  Greenberg once again denied selling the magnums, retorting that Zachy’s sold them.

Greenberg also acknowledged that Gil Lempert-Schwarz’s conclusion on all 12 bottles was that it is not possible to recommend that these bottles could be sold on the market.

Greenberg denied that John Kapon had said a similar thing, despite being shown an email from 28th November 2004, in which Kapon wrote “So I cannot offer these Lafleurs in good conscience.”  Again, Greenberg denied that these were the same wines; Hueston noted that the jury would refresh his testimony on the matter.

Hueston then produced the marketing agreement with Zachy’s for the sale, noting the full page New York Times ad, the cover photo in the NYT, ads in the Wine Spectator, on Zachy’s website, and various email blasts.  The marketing agreement also referred to the auction catalogue, to be distributed internationally to over 2000 top collectors.  This would include a two-page introduction to his consignment, to highlight the quality and condition of the cellar.  Hueston argued that Greenberg hoped and expected that buyers would read that cover letter.  Greenberg replied that he was not sure if he expected it.  He believed the wine spoke for itself; the letter at the front of the catalogue is not, in his view, material to the sale.  He noted that out of the 2600 bottles that Bill Koch had bought, 20% to 25% of them were rated 100 points by Robert Parker.

Hueston returned to his question, asking if Greenberg was saying that he didn’t think this cover letter was very important.  Greenberg replied that it wasn’t, because it was the wine that was important, and the catalogue, not the letter, was the description of the wine.  He denied taking the time to review the letter before it went into the catalogue, saying he had simply added a few comments.

Cialone objected, saying that this was going well beyond the scope of his direct (sic.  Interesting that even the lawyers are getting mixed up as to what is direct and what is cross…).  Oetken asked if Cialone had asked about the language in the catalogue, and Cialone replied that he hadn’t asked who wrote it; it was shown to correct the statement in the record about the domaines.  Hueston replied that Cialone had spent a lot of time on the catalogue and cover letter and meaning of the words and argued that this was fair re-cross (again, confusion as to what is cross and what is direct).

Oetken asked Hueston to move on.

Hueston submitted into evidence an email from Jeff Zacharia to Eric Greenberg, subject “your intro”, dated September 29 2005.  Hueston reminded Greenberg of his “all caps writing” commenting on the cover letter, and which he specifically said he wanted to review the next draft as well.  He had sent this email on 23rd September, and re-sent it on 29th.  Hueston claimed this was to make sure that Zacharia got the comments; Greenberg stated it was simply because he was clearing out so many emails, not something of major importance.

Hueston remarked that Greenberg had said at least three times, probably more, that Zacharia never sent the new draft after that to him.  Greenberg did not recall it.  Hueston produced an email dated 30 September, from Greenberg to Jeff Zacharia.  Judge Oetken allowed it, over Cialone’s objection.  In the email from Greenberg, replying to the “Updated intro”, Greenberg wrote back “Giving him his OK”.  He claimed this was just clearing emails (and bizarrely referred again to proposing to his clearly long-suffering wife).  Greenberg stated that none of this showed that either Zachy’s or he thought any single bottle was counterfeit, adding that Hueston seems to ignore this repeatedly.  Hueston replied that it was Greenberg’s testimony that Zachy’s controlled the entire auction.  Greenberg accused Hueston of trying to trick him, which Hueston denied, and put up his testimony, which did clearly say “They ran the auction, they did the entire thing.  I wasn’t even there.”  Greenberg accepted he had said that.

Hueston argued that, in contrast, Greenberg was actively involved in deciding which wines were included and in which order they would be sold.  Greenberg acknowledged this, but argued that this did not mean he wrote their catalogue.

Hueston then produced another email (to which Cialone again objected, but Oetken allowed) from Greenberg to Michael Jessen of Zachy’s.  In it, he writes “Guys, Thierry [Lovato] made a couple of mistakes in the pulling process”.  Further down, he wrote “We need to resolve all of this before we go to press with the catalogue”.  Hueston asked if that did not mean him too; Greenberg replied that the “we” here was in the same sense he used for when his basketball team won – he’s not on the team, he’s not involved in managing or coaching, he’s just a season ticket holder, but “we” still won.

Hueston produced another email in which the lotting of the wines was discussed.  Greenberg had suggestions on the size and flow of lots in the sale, as he did with all his single seller auctions.  He had specific comments on wanting it by producer, not vintage, and not to start the sale with the 1900 Burgundies (the most valuable wines), because not everyone will be there.  The email also indicated that there were some missing bottles of 1961 Latour, which Greenberg wrote “I personally pulled”.  He claimed in his testimony that this really meant that Thierry Lovato would have him come into the wine cellar from time to time to personally approve which bottles got included.  He emphasised that Koch had bought these bottles, and that he was not suing over them.

Hueston commented that Greenberg was not going to contest that he had submitted a sworn declaration that he didn’t know what he did with the Royal wines he identified as fake.  Greenberg claimed that his attorneys had done it, complaining it was oppressive and unduly burdensome.  There were close to a thousand filings in the case, and he can’t say that he even had read the interrogatories.  Cialone objected, saying that if they were going to display the response without the complete response… at which point Hueston interjected to say that he was going to display the complete response, but first he would establish that Greenberg had verified it.

They turned to the end of the document, where Greenberg signed a sworn declaration saying he had read it.  He then claimed he had signed it from Lima Peru, where he had no access to email or anything else, because he signed it from the middle of the Amazon jungle.  (Note to the geographically literate among you.  No, Lima has not moved; it is still on the arid coast of Peru and NOT in the middle of the Amazon jungle.  And yes, they do have email there.)   Hueston noted that Greenberg might have been in Peru in the Amazon jungle, but he declared under penalty of perjury that he read it all, so he assumed he did, right.  Greenberg replied we did not commit perjury.

Hueston returned to the interrogatory, noting that the answer to the question about the Royal wines was “Greenberg is unable to state the disposition or whereabouts of each such wine, as Greenberg has not maintained an inventory system”.  It continued to say that as Greenberg reviewed his wines he decided that some of the questionable wines were or were probably genuine, and these were then returned to the main portion of the cellar.  He consumed a number of these questionable bottles, further reinforcing his belief they were genuine.

After considerable ill-natured jostling between Greenberg and Hueston, Greenberg confirmed that in his Royal Fake Wine notes, he identified a 1921 magnum of Petrus as fake and another as “maybe fake”, and that he did not return any magnums of 1921 Petrus to Royal.  Hueston noted that Bill Koch alleged that Greenberg sold him a magnum of fake 1921 Petrus:  “same rare producer, same rare vintage, same size bottle”.  Greenberg claimed that Koch sold him one that did not match what was on the sheet, to which Hueston asked “That’s another fake you had?”  They then repeated the exercise (including the snarling) with a 1928 magnum of Petrus.  Greenberg again emphasised that these had been verified by Zachy’s, and that the bottles Koch bought were not the same.  Hueston remarked “so they must be different and additional fakes from your collection, is that right?”  They repeated this with three 1950 Lafleur magnums, and two 1950 Petrus magnums.

At this point, Greenberg virtually exploded, saying he had been a victim of this too, and Hueston was trying to make him into a criminal for being a victim.  Hueston continued implacably, noting the same pattern with 1928 Latour (which Greenberg alleged was not rare), and an 1864, which Greenberg claimed he had drunk on his 40th birthday.

Hueston then reminded Greenberg of the email exchange he had had with John Kapon, in which Kapon had said he could not “offer those Lafleurs in good conscience”.  Kapon noted that the corks all have a brand that Lafleur only started using post 1966; Greenberg replied in the email that Petrus changed the cork in ’66; you are saying that Lafleur did as well?”  Greenberg claimed that he did not believe that either Petrus or Lafleur changed their cork in 1966, saying “semicolon connects thoughts together…. You understand what a semicolon is, sir.”  Hueston notes that Kapon does not mention Petrus changing the cork in 1966.  Greenberg started to go on about some article that Hueston had written, at which point Hueston complained to the judge that this was entirely inappropriate, and the judge did, telling them to stop arguing with each other (which seems unfair, really) and directing Greenberg to “just answer the question”.  Eventually Greenberg agreed that there was nothing in the email.  He argued, however, that Kapon’s information about both Petrus and Lafleur came from Rudy Kurniawan, and Greenberg did not believe what Kurniawan said (with good reason, of course).  Hueston claimed that Greenberg was saying this today because he knew that there were three bottles of pre-1966 Petrus in this case with vertical branding that he knew then was inappropriate.  Greenberg claimed this was incorrect.  Hueston then put in front of Greenberg three of Lempert-Schwarz’s photos of close-ups of the corks of the three Petrus bottles at issue, showing vertical markings.

Hueston then went on to speak about Rudy Kurniawan (as I write this, it’s four years to the day since he’d been arrested; as this trial was happening, it was a little over one year).  Hueston noted that Greenberg had stated that he had marked the Kurniawan bottles because he thought they had greater long-term investment value than the others.  Greenberg agreed he’d thought this at one point, but emphasised “not today”.  Hueston asked Greenberg if, having had an email exchange with Rudy referring to “suspects Bordeaux” (sic) in October 2003, in October 2004 he believed that Kurniawan was, in fact, engaging in the business of selling fake wines.  Greenberg replied “No”.

Cialone objected vigorously to this line of questioning.  Hueston replied that they had elicited testimony that Greenberg and Kurniawan had patched things up and that everything was fine.  The deposition, in contrast, is clear that things were not fine, and that Greenberg suspected Kurniawan but kept doing business anyway – direct impeachment.  Oetken overruled Cialone’s objections, and the court played Greenberg’s deposition testimony.

Hueston then commented that Greenberg had expressed several times that he was upset Koch sued him in this case.  Greenberg replied that he thought it was a horrible waste of resources.  Hueston noted that Greenberg had created the impression that he had never sued anyone.  Greenberg replied that he recalled saying that in his deposition, but he was incorrect – he had sued someone, but had not collected the money.  Hueston again played Greenberg’s deposition (again over Cialone’s objections), and questioned Greenberg on it.  Greenberg replied (I am now imagining rattles being thrown out of prams, and much stamping of feet) “I am not litigious.  I’m not litigious.”  Hueston commented that he wasn’t asking if Greenberg was litigious or not, but about his veracity.  He noted that the deposition was in December 2010, and just three months earlier Greenberg had filed a lawsuit against Bill Edgerton.  Greenberg claimed that it was because Edgerton had been on his Royal team, and he violated his legal and professional ethics as an expert witness.  Greenberg stated he considered the Edgerton lawsuit part of his defence for the Koch suit, although as Hueston noted, the caption page did not have Koch’s name on it.  Hueston then noted that in addition to the actually filed lawsuits, there were also threatened suits against Royal, against Wine Bid, and Rudy Kurniawan.

After a short break, Hueston resumed his re-direct of Greenberg with questions about Jayer bottles that Zachy’s believed to be counterfeit.  On tasting them, Greenberg had said he thought they were village wines, and he would enjoy them as such, but that they were not the rare bottles they purported to be.  Hueston commented that Greenberg had also said they were worth $1000/bottle, not a trophy wine but a nice pinot noir.  Hueston played deposition testimony that told a different story.

Hueston then asked Greenberg to confirm that he had claimed wines were fake without tasting them, which Greenberg accepted. (This is, by the way, the only way to show that wines are fake.)  Hueston produced an email to the Wine Club of Santa Ana regarding some 1929 Cheval Blanc that Greenberg had rejected, because of lack of provenance, inappropriate cork markings, and the belief that the bottle had come from Hardy Rodenstock in Germany and was, therefore, counterfeit by definition (quite right).  Hueston then produced another two emails with the same basic tenet (including Greenberg’s refusal of Rodenstock wines).

Hueston finished by noting that Greenberg claimed he did not know where he had got his 1921 Petrus magnum from, although it could have been one of five sources, which Greenberg confirmed.  Hueston noted these could have been Royal, Wine Club of Santa Ana, Wine Library, D. Sokolin and Pritam Banerji’s company International Wine Consulting.  After the auction of October 2005, Jeff Zacharia had contacted Greenberg to say that a buyer had a question about a 1921 Petrus magnum he had sold, asking for the source.  Greenberg had not told him any of the five sources named above, but had said that a lot had come through a collector in Toronto, and many from Europe, “in many cases English royalty”.  (Greenberg should have researched the tastes of English royalty; they were far more likely to be drinking sweet hock than 1921 Petrus!)  Greenberg claimed that, according the Eddie Gelsman at Wine Library, a lot of the magnums he had bought had come from that collector.

Click here for Part 9.