Wednesday, July 10, 2019

Superior Claim To Art Looted By Nazis

Summary judgment has been affirmed on behalf of plaintiffs seeking recovery of art stolen by the Nazis

This controversy stems from art allegedly looted by the Nazis during World War II. We are asked to decide whether Supreme Court properly granted plaintiffs, Timothy Reif and David Frankel, as co-executors of the estates of Leon Fischer and Milos Vavra (collectively plaintiffs), summary judgment on their claims for conversion and replevin. We find that plaintiffs made a prima facie showing of entitlement to judgment as a matter of law that they have superior title to two pieces of art by Egon Schiele, "Woman Hiding Her Face (1912)" and "Woman in a Black Pinafore (1911)" (collectively the Artworks), and that defendants Richard Nagy and Richard Nagy Ltd. (collectively defendants) failed to raise a triable issue of material fact.

Plaintiffs are the legally declared heirs of Fritz Grunbaum (Grunbaum), a well-known Jewish Viennese cabaret artist and art collector. Grunbaum 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 on March 12, 1938, Grunbaum attempted to escape with his wife, Elisabeth "Lilly" (nee Herzl) Grunbaum (Elisabeth), to Czechoslovakia, but was apprehended and arrested by the Nazis on or about March 22, 1938. From the time of his arrest until his murder on or about January 14, 1941, Grunbaum remained imprisoned in various concentration camps, including Buchenwald and Dachau.

This little scheme failed to pass good title

On July 16, 1938, while Grunbaum was imprisoned at Dachau, the Nazis forced him to execute a power of attorney in favor of Elisabeth. Just four days later, pursuant to the purported power of attorney, Elisabeth was compelled to permit a Nazi official named Franz Kieslinger (Kieslinger) to inventory Grunbaum's property, including his art collection, which contained the 81 pieces by Schiele. Kieslinger determined Grunbaum's entire art collection of over 400 pieces to be valued at 5,791 Reichsmarks (RM). Kieslinger inventoried the Schiele pieces as follows: he first listed the five oils by name, then he listed together 55 sheets of "large hand drawings," 20 pencil drawings, and one etching, but gave no more details, nor their titles. Grunbaum's collection also included French watercolors and pieces by artists such as Rembrandt, Degas, Rodin and Durer, all identified by name in the Kieslinger inventory. Only Grunbaum's name appears on the inventory. Elisabeth had her own property and filed a separate declaration on behalf of herself on or about April 27, 1938.

Sometime after it was inventoried, Grunbaum's entire art collection was deposited with Schenker & Co., A.G. (Schenker), a Nazi-controlled shipping company, and marked for "export." On September 8, 1938, the company formally applied for an export license for "Lilly Grunbaum." The license, however, is devoid of customs stamps, meaning that the art collection never legally left Austria. In addition, a subsequently filed statement of assets dated November 12, 1938, lists Grunbaum, "formerly Vienna . . . now Buchenwalde," as still possessing 5,791 RM worth of "pictures and graphics."


Grunbaum was murdered at Dachau on June 9, 1941. Elisabeth signed a declaration before an Austrian notary in connection with obtaining her husband's death certificate, stating, "[T]here is nothing left," in other words, there is no estate. Therefore, "[b]ecause of a lack of goods or property, there [was no] estate proceeding for inheritance" before the Dachau Probate Court. On or about October 5, 1942, Elisabeth was murdered at Maly Trostinec death camp.

The defendant 

Defendant Richard Nagy, who has been an independent art dealer since 1980, first obtained a 50% share in "Woman in a Black Pinafore" from Thomas Gibson Fine Art on or around February 24, 2005, the day after its unsuccessful auction at Sotheby's . In October 2011, he "voided" his interest, given the ambiguity and problems with the provenance. However, he reacquired his interest in the piece on or around December 9, 2013, soon after the Second Circuit affirmed the dismissal of the plaintiffs' claims in Bakalar (see Bakalar, 500 Fed Appx at 6).

Nagy acquired "Woman Hiding Her Face" on December 18, 2013. The Art Sale and Transfer Agreement (the Agreement) for "Woman Hiding Her Face" states that "the heirs of Fritz Grunbaum claim ownership of the Painting on the theory that it was stolen from Mr. Grunbaum when he was deported to a German concentration camp during World War II." Nagy agreed that he would have no claim against the seller if title were declared invalid on that basis.


The tragic consequences of the Nazi occupation of Europe on the lives, liberty and property of the Jews continue to confront us today. We are informed by the intent and provisions of the HEAR Act which highlights the context in which plaintiffs, who lost their rightful property during World War II, bear the burden of proving superior title to specific property in an action under the traditional principles of New York law. We also note that New York has a strong public policy to ensure that the state does not become a haven for trafficking in stolen cultural property, or permitting thieves to obtain and pass along legal title (see e.g. Lubell, 77 NY2d at 320; Reif, 149 AD3d at 533). It is important to note that we are not making a declaration as a matter of law that plaintiffs established the estate's absolute title to the Artworks. Rather, we are adjudicating the parties' respective superior ownership and possessory interests. We find that plaintiffs have met their burden of proving superior title to the Artworks. Defendants raise no triable issue of fact.

(Mike Frisch)

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