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NY Court Applies Holocaust Statute in Art Dispute

April 27, 2018

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<p style="text-align: justify;">There have been many cases regarding disputes over property taken from Jewish art owners by the Nazi regime during World War II. These cases have all centered on whether the transfer of the property was valid, and many cases involve highly valuable works of art. Some of these cases end up dismissed due to statute of limitations issues.</p>
In <a href="https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=CVF_PLUS_ByQtcgFwfx25zGs/Aw==&amp;system=prod,"><em>Reif v. Nagy,</em></a> a New York County Supreme Court was faced with such a dispute. The case involved competing claims of ownership of two works by the celebrated Austrian artist Egon Schiele.
<p style="text-align: justify;">After more than two years of litigation, both parties sought summary judgment. In a 17 page decision, Judge Ramos determined that the two paintings at issue, “Woman in Black Pinafore” (1911) and “Woman Hiding Her Face” (1912), rightfully belonged to the plaintiffs, heirs of Fritz Grunbaum,</p>
<p style="text-align: justify;">The Court found that the plaintiffs established a prima facie case that the paintings were the property of Grunbaum, and that the entirety of his property was looted by the Nazis during World War II, and that the defendants failed to establish a superior claim to the Artworks, or to at least raise a triable issue of fact.</p>
<p style="text-align: justify;">The defendants failed to come forward with evidence or a triable issue of fact to show that Grunbaum voluntarily transferred the subject artworks during his lifetime. The Court noted that the Nazis confiscated Grunbaum’s artworks by forcing him to sign a power of attorney to his wife, who was herself later murdered by the Nazis.  As such, the act was involuntary, and the Court determined that “a signature at gunpoint cannot lead to a valid conveyance.”</p>
<p style="text-align: justify;">Judge Ramos applied the Holocaust Expropriated Art Recovery Act. The Act, adopted unanimously by Congress in 2016, expanded the statute of limitations for heirs of Holocaust victims seeking to recover their family’s stolen artwork. The primary purpose of the statute was to encourage more judicial decisions on the merits, rather than on time-based parameters, especially in light of the fact that Nazi-looted art pieces can be especially difficult to find and trace back.</p>
<p style="text-align: justify;">There have also been interesting developments following the entry of the order awarding custody of the paintings to the plaintiffs. The plaintiffs sought to have the artwork transferred from the custodian appointed during the pendency of the lawsuit to Christie’s auction house, seemingly in order to place the paintings for auction. The defendants have opposed this request, and asked the court to deny the request and keep the paintings with the custodian while they pursue an appeal of the underlying order. We will continue monitoring this interesting case on Of Interest.</p>
<p style="text-align: justify;">Thank you to Jorgelina Foglietta for her contribution to this post and please write to <a href="mailto: mbono@wcmlaw.com">Mike Bono</a> for more information.</p>

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