Reif v. Nagy - 2019 NY Slip Op 05504, 175 A.D.3d 107, 106 N.Y.S.3d 5 (App. Div. 1st Dept.)

Rule:

Artwork stolen during World War II still belongs to the original owner, even if there have been several subsequent buyers and even if each of those buyers was completely unaware that she was buying stolen goods. In New York, a thief cannot pass good title. 

Facts:

Plaintiffs Timothy Reif et al., were the legally declared heirs of Fritz Grünbaum, a well-known Jewish Viennese cabaret artist and art collector. Grünbaum admired the Viennese modern artist, Egon Schiele, and amassed an 81-piece collection of his work before World War II. After the Nazi invasion of Austria, Grünbaum attempted to escape with his wife but was apprehended and arrested by the ***. While Grünbaum was imprisoned, the *** forced him to execute a power of attorney in favor of his wife. Days later, pursuant to the purported power of attorney, Elisabeth was compelled to permit a Nazi official to inventory Grünbaum's property, including his art collection, which contained the 81 pieces by Schiele. When Grünbaum was murdered, Elisabeth signed a declaration before an Austrian notary in connection with obtaining her husband's death certificate, stating, "there is nothing left," in other words, there is no estate. Therefore, because of a lack of goods or property, there was no estate proceeding for inheritance before the Dachau Probate Court. Elisabeth was also murdered at a death camp. Grünbaum was survived by Elisabeth and two siblings, one of whom was Elise Zozuli. Zozuli was the only heir who survived World War II. Zozuli was directly related to Milos Vavra, a plaintiff in this action. Defendant Richard Nagy, who has been an independent art dealer since 1980, first obtained a 50% share in an artwork the day after its unsuccessful auction. He voided his interest, given the ambiguity and problems with the provenance. However, he reacquired his interest in the piece soon after the Second Circuit affirmed the dismissal of the plaintiffs' claims in a case.  Additionally, pursuant to the terms of the Agreement, defendant purchased title insurance for the artwork which acknowledged that the piece was registered as "Lost Art" and that claims had been made by Grünbaum's heirs that it was looted by the *** during World War II. Defendants moved to dismiss the action pursuant to CPLR 3211, arguing that plaintiff were estopped from pursuing their claims, but it was denied. On appeal, the Supreme Curt New York County modified the decision by dismissing plaintiffs General Business claims. Thereafter, plaintiffs moved for summary judgment on their claims for replevin and conversion, supported by an expert report which was granted. 

Issue:

Were the plaintiffs’ claims for conversion and replevin properly granted?

Answer:

Yes.

Conclusion:

The Court held that plaintiff as the heirs of a Jewish art collector imprisoned in Nazi concentration camps were entitled to summary judgment on their conversion and replevin claims against defendant who had possession of two artworks owned by the collector because the collector owned the artworks prior to World War II, the collector did not voluntarily relinquish the artworks, and the power of attorney signed by the collector while he was under Nazi control was a product of duress, and, therefore, any subsequent transfer of the artworks did not convey legal title. The Court also ruled that laches was not a bar to the plaintiff heirs' claims to the artworks because defendant acquired both pieces in 2013 and was on notice of the plaintiffs’ claims to the collector's artworks prior to the purchase.