The Gerald Peters Gallery is being sued by its former director, Talley Dunn, in a battle that may result in many of the gallery's top artists joining Dunn in her own business.
The Gerald Peters Gallery is being sued by its former director, Talley Dunn, in a battle that may result in many of the gallery's top artists joining Dunn in her own business.

Unfinished business

From the looks of things, the Gerald Peters Gallery is as placid as its neighbors, a collection of renovated vintage homes and tasteful commercial buildings lining Dallas' "gallery row" on Fairmount Street. The gallery's spacious and quiet rooms offer a soothing experience to patrons, who can enjoy a tranquil stroll among the artwork untroubled by gallery employees, who disappear after a brief, cordial welcome. The gallery's alliance with an A-list of Texas-based, nationally recognized artists is legendary, and the fact that most of its works sell before the opening night of their exhibitions is apparent, as a predictable rash of red dots pop up next to each painting or sculpture or drawing, like an enviable case of measles. The gallery's ability to move artwork is unmatched by competitors on Dallas' commercial gallery scene; its record for professionalism unblemished; its up-turned nose fairly clean.

Until now.

Suddenly, all is not calm at Gerald Peters Gallery. Behind the scenes and beyond its reputation as Dallas' most profitable commercial gallery, a festering abscess of ill will has burst into public view. On August 23, Talley Dunn, the Gerald Peters director who resigned in June amid speculation that she would begin her own gallery, has played her hand by filing a $1.4 million lawsuit against the gallery, seeking to invalidate the noncompetition clause in her 5-year-old employment contract. She now claims that the 1993 covenant she signed is overly restrictive as to time (it forbids her from working at another gallery for three years) and geographic scope (she cannot work with any Dallas, Fort Worth, or Santa Fe gallery, or any New York gallery that represented a Peters artist). In short, she says the contract is too "oppressive, inequitable, and unconscionable" for her to bear.

The suit also demands an accounting of Peters' Dallas gallery sales, claiming Dunn has not been paid all of the commissions and profit-sharing due her, which court papers allege is between $623,626 and $666,224 for 1994-1998. She is further seeking an additional $800,000 in damages that she says resulted from Peters' failure to honor the terms of her contract.

If the court were to invalidate the no-compete clause and allow Dunn to ply her trade, the ruling might be Gerald Peters' worst nightmare. Dunn and her attorney, Dan Hartsfield, neither of whom returned the Observer's phone calls, must firmly believe in the merits of their case, because at least one gallerist-member of the Dallas Association of Art Dealers has been told by Dunn that she already has plans to open a new gallery on McKinney Avenue as early as October. And Dunn, in her own gallery, would be an art force to be reckoned with.

Dunn's rise to power and respect at the Dallas gallery is a Cinderella story about how a young, low-level registrar, hired just out of college in 1990 to catalog, handle, and install art work at Gerald Peters, could be named its director at age 25, after three years on the job. Gerald Peters himself made the call, after Marguerite Steed, the gallery's director who hired Dunn, left in 1993. Dunn had been selling art for about a year and fostering personal relationships with gallery clients, artists, museum curators, collectors, and the art community at large. She began planning exhibitions with artists, developing their projects, and building a fresh approach to Texas contemporary art for a gallery that was suffering, as all galleries were, through the early-1990s decline of the art market. After she became director, she worked to develop the gallery's current stable of 20 mid-career, established artists that commanded critical respect and often five-figure prices for their work, and according to her strongly worded petition, she believes she got most of them by herself.

Dunn, now 32, may have been the face of this gallery as its director, but Gerald Peters' name is on the letterhead, and he's no slouch, creating a mini-empire in Manhattan, Santa Fe, and Dallas with three successful art galleries. Peters travels the world in search of art, patronizing and pacifying the art world's elite.

For 25 years, Peters, while largely absent from the Dallas gallery, focused on New Mexico and New York, opening a 32,000-square-foot showplace of a gallery in July 1998 on Camino del Sol in Santa Fe. People called it a museum, or a "supermarket of art," and they lined up -- some 15,000 in the first week -- to see Peters' acclaimed collections, including contemporary painting and sculpture, examples of modernism, photography, Western art, wildlife art, and works by artists of the Taos and Santa Fe schools. Criticized by his peers as approaching his life's work with a peddler's mentality, Peters has called himself a "little old art dealer" who's as happy to sell "cowboys and Indians" as he is to amass what is reported to be the world's largest collection of Georgia O'Keeffe paintings. Earlier in 1998, he expanded his New York division into a high-rent, five-story brownstone off Madison Avenue. Gerry, to those who know him, is both loved and hated. He and Talley Dunn, it seemed, had at least that much in common.

"You have to respect her," one local art competitor says, echoing sentiment among many Dallas gallery owners, all of whom asked to remain anonymous. "But you don't have to like her. She's consummately arrogant, a real dilettante."

Dunn's dedication and hard work were rewarded, with Peters agreeing to pay her a base salary of $45,000 ($5,000 as an advance against commissions) plus one percent of the Dallas Gallery's gross sales, plus 10 percent of its annual net profit. From January 1994, through June 1998, Dunn was paid $59,271 in commissions. The gallery's revenues looked better every year she was in charge, growing from $1.1 million in 1994 to $1.7 million in 1995; $2.8 million in 1996; nearly doubling to $5.2 million in 1997; and topping out with an impressive gross of $8.3 million in 1998, according to Dunn's records detailed in the lawsuit. Peters owes her money, she contends, and if he didn't honor that part of their employment agreement, she shouldn't have to abide by its no-compete clause.

Certainly comments that Dunn made to the media when she resigned were a harbinger of her lawsuit. "I really want to remain involved in the art world," she told The Dallas Morning News. "I just want to rethink what I'm doing. I've spent my whole working career at Gerald Peters, and now I'd like to try something on my own." But with a lengthy no-compete clause in her contract, just how she might accomplish this seemed a bit uncertain. To wait out the three years might mean giving up 10 years of cultivating solid art-scene relationships; building a roster of artists, including David Bates, James Surls, and Linda Ridgway; and amassing a Rolodex of local private collectors, like Tim and Nancy Hanley, Sonny Burt, and Bob Butler. How long would these hard-won contacts respect her if she got too far out of the loop? How quick would she get stale, with a reputation only as fresh as the last sale, the last show, or the last acquisition? Many art-scene types believed that Dunn wasn't the kind who would quietly slip into the background. She had too much going for her in art, too much to lose to simply roll over for the fine print in an employment contract with Peters. If there was a way to turn a decade of building the top art business in Dallas to her own advantage, Talley Dunn would find it.

"Talley is the Gerald Peters Gallery," says one Dallas collector, who also wished to remain anonymous. "She's worked consistently as if it were her gallery and these were her artists. That's her ambition talking, and her ability. She wouldn't walk away from it even if she could, and I don't think she should."

If Dunn makes her case, or if the threat of more than $1 million in damages is enough to get Peters to waive the noncompetition covenant, it's not only likely that she'll start her own gallery, but that a majority of Gerald Peters' represented artists may go with her. David Bates and Dunn are good friends. Contacted after Dunn's resignation, Bates indicated he'd had "problems" with Peters, but was reluctant to enumerate them and wouldn't say whether he'd commit to representation by Dunn alone. James Surls, from his home in Colorado, says, "I don't have anything at the gallery now. I don't have much to say, except I like Gerald Peters and I like Talley Dunn." Both Surls, who received the Dallas Visual Arts Center's first "Legend" award, and Bates, whose hot-selling paintings have given way to hot-selling bronze sculptures, are such high-profile artists, sought after by national collectors, that their work alone could get a new gallery off to a better than average start.

Sam Gummelt pulled all of his art from the gallery within days of Dunn's resignation. "I'd been with the gallery for years, since Marguerite [Steed] was director, and I think I'd met Gerald Peters twice. I never had a written contract with him, or with any other gallery that represented me, ever." Gummelt, who creates geometric abstracts in oils and polyurethane enamels, says Dunn, with her former assistant Lisa Hirschler Brown, who also left Gerald Peters Gallery on Dunn's heels, were the people he worked with over the last several years, and wherever they go, he'll go. "They're going to represent me. Lisa's already had a few clients over to look at my work." Gummelt says he knows that Brown and Dunn have been looking at potential gallery space, but he hasn't talked to Dunn in a couple of weeks and hasn't heard about the McKinney Avenue property.

Will Gerald Peters fold his tent here, and concentrate on his multimillion-dollar art oasis in New Mexico? Or, to differentiate his Dallas gallery from a high-profile competitor like Dunn who appears likely to continue with Texas-based talent, could Peters franchise his New York relationships and Santa Fe-based inventories of 19th- and 20th-century art into a new direction with a new gallery director? He's not talking, although gallery spokesperson Beth Taylor says Peters is "about two weeks away" from naming Dunn's successor. But fellow Dallas Association of Art Dealers members speculate that if Talley Dunn is successful in court, there may not be much of a gallery left to direct.

"What we're wondering," says one local gallery owner, "is that if the artists go with her, what will Gerald Peters sell? If there's no artists, there's no art, and if there's no art, there's nothing. Just an empty gallery."


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