Opinion
No. 2024-51041 Index No. E2019008883
08-01-2024
Robert Owen Lehman Foundation, Inc., Plaintiff, v. Israelitische Kultusgemeinde Wien, MICHAEL BAR, ROBERT RIEGER TRUST, JACOB BARAK, as Trustee of the Robert Rieger Trust, SUSAN ZIRKL MEMORIAL FOUNDATION TRUST, And MICHAEL D. LISSNER, as Trustee if the Susan Zirkl Memorial Foundation Trust, Defendants. Michael Bar, ROBERT RIEGER TRUST, JACOB BAKAR, as Trustee of the Robert Rieger Trust, Third-Party Plaintiff, v. Robert Owen Lehman, Third-Party Defendant.
For Plaintiff/Third-Party Defendant- Thaddeus J. Stauber, Esq., Aaron Brian, Esq., Zachary C. Osinski, Esq. Nixon Peabody LLP. For the Rieger Heirs- Raymond J. Dowd, Esq., Claudia G. Jaffe, Esq. Dunnington Bartholow & Miller LLP. For the Mayländer Heirs- Oren J. Warshavsky, Esq., Tatiana Markel, Esq., Michelle R. Usitalo, Esq., Victoria L. Stork, Esq. Baker & Hostetler LLP.
Unpublished Opinion
For Plaintiff/Third-Party Defendant- Thaddeus J. Stauber, Esq., Aaron Brian, Esq., Zachary C. Osinski, Esq. Nixon Peabody LLP.
For the Rieger Heirs- Raymond J. Dowd, Esq., Claudia G. Jaffe, Esq. Dunnington Bartholow & Miller LLP.
For the Mayländer Heirs- Oren J. Warshavsky, Esq., Tatiana Markel, Esq., Michelle R. Usitalo, Esq., Victoria L. Stork, Esq. Baker & Hostetler LLP.
Daniel J. Doyle, J.
HONORABLE DANIEL J. DOYLE Supreme Court Justice.
This action relates to the contested ownership of Portrait of the Artist's Wife, a 1917 portrait by the late Austrian artist, Egon Schiele (the "Drawing") and seeks to resolve a three-way dispute as to the ownership of the Drawing. The Bench Trial in this matter was held on May 7-10, 14- 17, 20-23, and 29, 2024.
Portrait of the Artist's Wife (1917) is identified as D1908 in expert Jane Kallir's catalogue raisonné, Egon Schiele: The Complete Works (Expanded Edition) ("Kallir's Catalogue Raisonné"). In addition to being referred as "the Drawing" herein, the Drawing may also be referred to as D1908. A review of the Kallir Catalogue Raisonné reveals that Schiele made numerous works depicting his wife, including at least two paintings and dozens of drawings and watercolors.
For the reasons set forth herein, the Court DECLARES that the Mayländer Heirs have a valid claim to the Drawing, that the Mayländer Heirs are the rightful owners of the Drawing, and that the Drawing must be returned to the Mayländer Heirs.
Citations in the Findings of Fact are to exhibits received into evidence and testimony given at trial.
Egon Schiele
Egon Schiele ("Schiele") was an Austrian artist born in 1890 to middle class parents; Schiele showed an early gift for drawing and art. Schiele studied at the Academy of Fine Arts, a prestigious institution for visionary and cerebral artists. Notable Austrian artist Gustav Klimt became a mentor for Schiele during his young career as an artist, and Schiele also garnered the attention of other modern artists at the time who admired his work. Schiele's poignant point of view as an artist also led to him being put on trial for charges related to exposing minors to his salacious art.
Day 7 Testimony, 34:18-22; M-A at 13.
Day 7 Testimony, 35:1-11.
Id. at 35:13-22.
Id. 35:23-25. While the Drawing is an undeniably modest portrayal of Schiele's wife, a review of Kallir's Catalogue Raisonné reveals that Schiele also drew a plethora of nude portraits of women, men, children and himself.
Schiele died at 28 years of age in 1918 of the Spanish flu, three days after his pregnant wife, Edith, died of the same affliction.
In Kallir's Catalogue Raisonné, D2232 depicts Edith Schiele on Her Deathbed, a sketch purportedly made just hours before she died at six months pregnant.
While Schiele had a relatively brief career and died at a young age, he produced an extensive body of work. Schiele's oeuvre includes approximately 300 oil paintings and 3,000 watercolors and drawings, a copious output marked by scant documentation and unnamed works. Schiele drew and colored daily. During Schiele's life, his watercolors and drawings had little market value; the market value for Schiele's watercolors did not begin to rise until the 1960's-1970's. Having mastered his craft by the age of 20, Schiele developed his extraordinary artistry over the next eight years with a prolific abundance of art. He has been referred to as the greatest Austrian graphic artist of the century. The group of Schiele collectors during his lifetime, however, was small.
R-43 at 6.
Day 11 Transcript, 22:8-10.
Expert Jane Kallir testified that alleged new Schiele works turn up every year. Kallir assesses the alleged new works and deems some authentic and finds others to be inauthentic. For example, between 1990 and 1998, she states that a few hundred watercolors and drawings were added to the accepted body of Schiele work. Id. at 29:19-25, 30:1-3.
Id. at 27:6-7.
Id. at 22:11-15.
M-I at MAYL02573-MAYL02574.
Id. at MAYL02574.
Day 9 Transcript, 113:10-11.
Schiele began his drawings with studies of nature for large portraits and nude compositions in 1910. In 1911, he produced large quantities of drawings adorned with watercolor, while in 1912-1914 he sought out a more sculptural enhancement to the human form as well as landscapes. Schiele's creativity was briefly interrupted during 1915 due to World War I, but thereafter he created beautiful portraits "unparalleled in terms of psychological acumen and warm human empathy," concluding the aforementioned drawn portrait of his dying wife.
M-I at MAYL02574.
Id. at MAYL02574-MAYL02575.
Id. at MAYL02575.
Otto Kallir compiled the first catalogue raisonné of Schiele's work in 1930. In the early 1980's Jane Kallir and Otto's long-time business partner, Hildegard Bachert, decided to compile and publish the first comprehensive Schiele catalogue raisonné. The first catalogue raisonné was published in 1990 and was thereafter expanded in 1998. Prior to Kallir's Catalogue Raisonné, there were a number of other Schiele catalogues raisonné: three on Schiele's oil paintings (two written by Otto Kallir and one by Rudolf Leopold) and a catalogue raisonné of Schiele's prints, also by Otto Kallir.
A catalogue raisonné is a comprehensive record of an artist's body of work and a fundamental reference for collectors, art historians, and curators. Day 11 Transcript, 21:16-19. It brings the total work of an artist together and puts those works in a certain order. Day 3 Transcript, 55:16-19. Jane Kallir's Catalogue Raisonné was the first catalogue that focused not only on Schiele's paintings, but also on his enormous body of works on paper. Id. at 56:1-5. A catalogue raisonné gives descriptions, literature, the exhibition history, an overview of ownerships and provenances. Id. at 56:13-25, 57:1-3.
Day 7 Transcript, 39:3-4.
Day 11 Transcript, 18:24-25, 19:1-4. Only the 1998 expanded version of the Kallir Catalogue Raisonné was received into evidence. See M-TT.
Day 11 Transcript, 21:24-25, 22:1-4.
The Drawing
The Drawing, D1908 cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image1.pdf, was created by Schiele one year before he and his wife succumbed to the flu pandemic in 1918:
The description of D1908 in Kallir's catalogue raisonné, accompanied by a black and white reproduction, is cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image2.pdf.
The verso of D1908 reveals the number '5', the dimensions (26.6 x 43.6) and a smudged, illegible pencil marking, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image3.pdf.
The Court has zoomed in on the number "5" on the verso in the second photo for the ease of the reader.
The Drawing was a study for a larger oil painting of Schiele's wife, which was the first Schiele painting acquired by an Austrian State Museum: the Austrian National Gallery in Schloss Belvedere. That oil painting is labeled P316 in Kallir's Catalogue Raisonné.
R-91 at 2-3.
While details of the whereabouts of the Drawing before 1964 are the subject of great debate in this litigation and will be analyzed in depth infra, at some point in its history the Drawing came to the Galerie Galatea in Turin, Italy. Galerie Galatea was founded by bankers Mario Tazzoli and Enrico Colombitto Rosso and exhibited and sold many works by Schiele in the 1950's and 1960's. From Galerie Galatea, the Drawing was purchased by London's Marlborough Gallery from Mario Tazzoli on July 9, 1964 for 1,800,000 Italian Lira. At the Marlborough Gallery, the Drawing was in an exhibition of Schiele works in October-November 1964 attended by Plaintiff, Robin Lehman, and his father, Robert Lehman, Sr. Robin saw the Drawing at the exhibition and fell in love with it; Robert Lehman, Sr. purchased the Drawing at the exhibition on November 16, 1964.
Ex. 114, at 64-65.
Id. at 65.
Id. at 65-66; Day 1 Transcript, 49:11-20.
The Anschluss
Years after Schiele's death and years before Lehman came upon the Drawing in London, the Nazis rose to power in Germany. The Third Reich commenced with Adolf Hitler's appointment as Chancellor in January 1933. Taking advantage of a state of emergency following the Reichstag (German parliament) fire, Hitler extended his power and established a dictatorship by claiming a violent communist uprising. From the outset, Nazi policies were characterized by attacks on German Jews, marked by economic boycotts and social ostracism. James G. MacDonald ("McDonald") was the League of Nations High Commissioner for Refugees (Jewish and Other) Coming from Germany. Commencing in April 1933, McDonald witnessed the boycott procedures and social ostracism of the Jews first hand. In September 1935, the Nuremberg Laws deprived German Jews of citizenship and fundamental civil liberties. Frustrated by the lack of support and compassion he encountered in trying to perform his duties, in December 1935, McDonald resigned as chair of the High Commission for Refugees (Jewish and Others) Coming from Germany and warned of the alarming trend in the Nazi's treatment of Jews. Conditions for Jews in Germany worsened after McDonald's departure.
R-91, at 14.
Id.
Id. at 15.
Id.
Id.
The High Commission was an autonomous organization that received no financial support from the League of Nations, with which it was affiliated. In his position, McDonald was tasked with rescuing suffering German Jews. McDonald resigned this position after being unable to find new homes for numerous displaced Jewish refugees.
Id. In his letter of resignation, MacDonald stated: "In the period of over two years since the establishment of the office, conditions in Germany which create refugees have developed so catastrophically that a reconsideration by the League of Nations of the entire situation is essential... Condemned to segregation within the four corners of the legal and social Ghetto which has not closed upon them, they are increasingly prevented from earning their living. Indeed more than half of the Jews remaining in Germany have already been deprived of their livelihood, In many parts of the country, there is a systematic attempt at starvation of the Jewish population." Id. at 15-16.
Id. at 16. The start of World War II in 1939 intensified the violence against German Jews, and while the Nazi killing reached it apogee in 1942, the genocide continued until the war ended in May 1945. Id.
Also at this time in March 1938, Nazi Germany made its first act of territorial expansion when it annexed Austria in the Anschluss (the political union of Austria and Germany). Prior to 1938, the Nazis were banned in Austria, but with the Anschluss the Nazis demonstrated disdain for the post-World War I European order and entered Austria, transformed the country, and terrorized Austrian Jews with ferocious violence. While Aryanization - the taking of Jewish property - was already implemented by the Nazis elsewhere in Europe, Vienna in 1938 saw "wild Aryanization," a particularly terrorizing and unprecedented level of violence which ultimately became a model for the rest of the Third Reich. Wild Aryanization was the improvised and spontaneous seizure of Jewish assets wherein the Nazis entered an abode, grabbed Jewish residents, threw them out into the street, and claimed ownership of that which had previously belonged to the Jews. A hallmark of Nazi Germany was gradual radicalization: the Nazis became more repressive and more violent over time, and Jews found themselves in an increasingly dangerous predicament.
Day 7 Transcript, 23:10-11.
Id. at 24: 1-9. The Rieger Heirs' expert, Dr. Jonathan Petropoulos, testified at trial that the violence of the Austrian Nazis shocked even Heinrich Himmler, the head of the SS. Id. The SS (Schutzstaffel, or Protection Squads) was originally created to be Hilter's personal bodyguard unit and morphed into a paramilitary organization, an executive force tasked with carrying out security-related duties. The SS became a powerful and feared organization in Nazi Germany.
Id. at 24:13-25, 25:1-17.
Id. at 28:21-24.
In November 1938, the Nazis unleased a series of pogroms called Kristallnacht (the Night of Broken Glass) , which was a rampage against Jews leading many Jews to seek escape from areas under Nazi control. The hallmarks of Kristallnacht were the "organized physical violence" and public nature of the pogrom. By December 1938, 44,000 Jewish apartments in Vienna had been Aryanized out of a total of 70,000. The climate in Vienna has been described as follows:
Id. at 29:2-8.
R-91 at 20.
Id.
[T]o impose progressively severe restrictions on Jews, and to widen the range of prohibitions until they infused every sphere of life. Any subject could be on the table. Jewish physicians were not allowed to have German patients. Jewish entrepreneurs were deprived of their industrial enterprises. Jews were prohibited from wearing a uniform or sending out carrier pigeons... In December 1938, Heinrich Himmler... availed himself of this access to newspapers for the publication of a provisional police ordinance invalidating drivers' licenses held by Jews.
Id. at 21 (citation omitted).
The persecution was steadfastly linked throughout with the theft of Jewish property. Hence, Jews seeking to flee Austria had a very difficult time getting permission to export possessions such as artworks.
Id.
Day 7 Transcript, 29:8-10.
Simultaneously, during this time Jews were also required to provide an accounting of all of their property pursuant to the 1938 Decree for the Reporting of Jewish Owned Property (the "Decree"). The impending, systematic process of stealing Jews' wealth and possessions hinged in the first instance upon ascertaining what property they possessed. As a result, the Decree required Jews possessing property valued at 5,000 Reichsmarks or more to register their property as of April 1938. The Nazis then used discriminatory taxes, including the Judenvermögensabgabe, to strip the Jews of their property. Likewise, the Atonement Tax that followed Kristallnacht forced Jews to pay for damages caused by that pogrom.
R-91 at 18.
Day 7 Transcript, 25:21-23.
Id. at 25:23-25, 26:1-2.
Judenvermögensabgabe is a Jewish capital levy, an arbitrary tax imposed on Jews under Nazi dictatorship.
R-91 at 23.
Id.
Adolf Eichmann was transferred to Vienna in the summer of 1938 to systemize the plunder by organizing the Central Office for Jewish Emigration. Jews came to the Central Office seeking permission to flee the Reich; they left with emigration authorization but were also despoiled of all property. The Order Concerning the Utilization of Jewish Property from December 1938 proffered additional mechanisms to loot Jews, including the imposition of trustees for Jewish enterprises.
Id. at 18-19.
Id. at 19.
Id. It has been estimated that 8-9% of Germany's entire government budget in 1938-1939 was stolen from Jews. Id.
In stark contrast to the brutality they ushered in, the Nazi leaders liked art, fancied themselves collectors and sought to keep the artworks they preferred. As a result, the Jews' property registrations often included appraisals of art collections. While the physical, life changing and overwhelmingly life-ending atrocities inflicted upon Jews is well-documented and infamous, the Nazis also undertook a notorious campaign of art confiscation that saw the theft of one-fifth of all Western art then in existence. See Howard N. Spiegler, Recovering Nazi-Looted Art: Report from the Front Lines, 16 Conn. J. Int'l L. 297, 298 (2001). Indeed, "[t]he Holocaust was not only the greatest murder, it was the greatest theft in history." Michael J. Bazyler, Nuremberg in America: Litigating the Holocaust in United States Courts, 34 U. Rich. L. Rev. 1, 5 (2000).
Day 7 Transcript, 29:11.
Day 9 Transcript, 104:5-8.
The Nazi's focus on art began even before Hitler's rise to power in 1933, when they staged exhibitions defaming modern art and denouncing Jewish art dealers. These exhibitions reinforced Nazi values, including anti-Semitism and anti-modernism. R-91 at 16-17. The Nazis strove to amass impressive art collections; "the regime was a kleptocracy from top to bottom." Id. at 17.
Many Jews seeking to escape the increasingly vicious Nazi conditions sought to sell their artworks to liquidate their assets prior to fleeing the country but were met with opportunistic dealers seeking to take advantage of the desperate plight of the Jews. The pressures on Jews during 1938 and 1939 were building exponentially, as Jews were faced with losing their homes, their professional ability to work and their possessions (including artworks) while simultaneously being placed in communal apartments (sammelwohnung) to live in squalid poverty with other displaced Jews. Thus, the Jews that were not successful in fleeing the areas controlled by the Nazi regime were forced to live in the s ammelwohnung, the anteroom for the concentration camps. The program of displacement and simultaneous thefts undeniably violated international laws; the brutality of the Anschluss violated not only international law, but the looting of Jews' cultural property by the Nazis was also an additional egregious act in defiance of international law.
Day 7 Transcript, 29:17-24.
Id. at 31:3-15.
Id. at 31:16.
Id. at 31:21-25, 32:1-19, 33:1-17. Dr. Jonathan Petropoulos, an expert historian of this era, testified that legitimate wartime loot is limited to items such as uniforms, flags, military items, tanks, and gasoline.
While art theft by confiscation and looting by the Nazis during this time was rampant, Jews also were dispossessed of their art collections through duress sales and transfers. A duress sale was a dispossession under pressure. Austrian art historian, Sophie Lillie wrote in "A Legacy Forlorn: The Fate of Egon Schiele's Early Collectors":
Day 10 Transcript, 146:20-23; 147:1-2.
Id.
The most important private collections of early Austrian modernism were ravaged by the Nazis. Many of the early collectors of Schiele were killed in the Holocaust, among them Drs. Heinrich Rieger and Oskar Reichel, two of Schiele's most avid supporters, as well as Karl Mayländer and Fritz Grunbaum, the erstwhile owner of Tote Stadt III. Their properties were divested through a succession of forced sales, expropriation, and dispersal. Others, such as Max Roden, Karl Grünwald, Jenny Steiner, and her nephew Erich Lederer, managed to escape but suffered the partial or complete loss of their property. Our knowledge of these collections is at best fragmentary, their contents having been recorded by the Nazis only as a prelude to their destruction or diffusion. Particularly with regard to works on papers (which, being of low value, were especially ill documented), the fragmentary nature of Nazi records makes it almost impossible to identify individual pieces- a significant problem in view of Schiele's myriad drawings and watercolors, which often treat the same or similar subjects.
R-49, at RIEGER001770-001771.
The Austrian Advisory Board, applying the principles of the Art Restitution Act, determined that restitution can be made of items that were the subject of a legal transaction or a legal act that is null and void pursuant to section 1 of the Annulment Act of 1946 (Nichtigkeitsgesetz 1946):
The Art Restitution Act was adopted in 1998 with the aim of returning to the original owners or legal successors objects and artworks in the collections of the Austrian federal museums.
Section 1 of the Annulment Act of 1946 stipulates that legal transactions, for consideration or without consideration, and other legal acts carried out during the German occupation of Austria are null and void if they were carried out in the course of the political or economic penetration by the German Reich to seize property or property rights from natural or legal persons who were entitled to such property or property rights on March 13, 1938...
Irrespective of the personal intention of the acquirer, the legal transactions made by a persecuted person must in any event be seen in the context of persecution aiming at the transfer of property... Therefore, gifts can, in principle, also be qualified as seizure....
M-J at 5.
Indeed, the Board determined that a seizure is established even in the event "the persecuted person might have had additional motives as well." Accordingly, Austria recognized that while sales made under duress are prime targets for restitutions claims, so too are gifts made by doomed Jews seeking to preserve possessions having only sentimental value in the course of the Nazi penetration of Austria.
Id. at 6.
Id. at 7.
Acknowledging the peril facing Europe's cultural heritage, art historians mobilized to protect key cultural sites and objects. These efforts resulted in the allied nations' creation of the Monuments, Fine Arts and Archives officers (the "Monuments Men") charged with safeguarding and restituting millions of cultural artifacts.
R-91 at 17.
Karl Mayländer
Karl Mayländer ("Karl") was born on October 2, 1872 to a Jewish family in Vienna. His father was a textile merchant, and Karl eventually inherited that company. Karl never married and did not have any children.
M-A at 40.
Day 3 Transcript, 67:18-20.
M-J at 1.
In the 1920's, Karl was on the Board for the Volksheim-Ottakring, an adult and cultural education center in Vienna. Karl was passionate about ensuring that children of lower income families who did not receive a proper education had opportunities to become better educated as adults.
Day 3 Transcript, 68:3-7.
Ex. 92 at 1.
Karl was an important art collector of Schiele and other artists. In 1928, to commemorate the ten year anniversary of Schiele's death, various Viennese institutions and private galleries featured Schiele in memorial shows. Karl organized his own Schiele exhibition which was advertised in a handwritten poster. In the poster, Karl described himself as a "private art lover" and advertised that his exhibition would display "over 30 original works by the artist (watercolors, sketches and hand drawings)," the entire graphic oeuvre of Schiele, two portfolios and "a fairly complete collection of Schiele publications to date."
Day 3 Transcript, 68:8-10.
M-A at 40.
Id.
Id.; see also M-D.
Karl was acquainted with Schiele, who made at least two portraits of Karl in 1917, the year Karl likely began to build up his Schiele collection.
M-A at 41.
When Austria was occupied by the Nazis in 1938, Karl was an Austrian national living in Vienna. As such, he was required to make a property declaration to the Nazi authorities. In the "List of Jewish Property- Verzeichnis über das Vermögen von Juden" of July 15, 1938, Karl responded to item IV seeking information relative to "Objects of precious metal, jewelry and luxury items, art objects and collections" as follows: "library and paintings, the latter only by young Austrian artists (not currently saleable at all!)" and valued the library and paintings at RM 5,000. Thereafter, on December 14, 1938 Karl wrote to the Nazi authority in charge of Jewish property to alert that his earlier estimate of the total value of his property was too high. Karl wrote:
Id. at 40.
Id.
Id. at 41-42. See also M-E.
M-A at 42.
In April, I optimistically assumed the market value to be RM 5,000, but, despite various attempts, these items are completely unsalable at the moment. The paintings are by young, mostly unknown artists from Austria; the library cannot be sold as a whole, as it includes many works by Jewish authors, and it is impossible to sell books at any price at all. The Dorotheum auction house no longer accepts paintings and books.
M-J at 2.
Subsequently, Karl made an advertisement in a Vienna newspaper, "Neues Wiener Tagblatt," trying to sell artworks and hoping to use the proceeds to flee Austria to Shanghai. In the advertisement, works by several artists were listed by name but the advertisement did not list Schiele.
M-A at 42.
On December 11, 1939, Karl deregistered from his address and moved in with his sister.
Id. Karl was evicted from his apartment. See M-J at 2.
Karl gave a "Special Power of Attorney" to the Central Authority for Jewish Emigration on October 21, 1941, as this was a standard requirement at the time. The declaration of property accompanying the "Special Power of Attorney" does not include a reference to any works of art. On October 23, 1941, Karl was deported to a ghetto in Łódź, Poland and was subsequently murdered by the Nazis. On April 5, 1943, the Gestapo in Vienna officially seized all of Karl's remaining assets for the benefit of the German Reich. No proceedings to obtain a declaration of death were ever conducted for Karl. It is unknown when and where Karl died.
M-A at 42.
Day 3 Transcript, 68:10-12.
Ex. 114 at 54.
M-K at 6.
R-49 at 119.
Etelka Hoffman
By the time Karl provided the "Special Power of Attorney" - which did not list his art collection - to the Central Authority for Jewish Emigration in October of 1941, Karl's art collection was in the possession of Etelka Hoffman, a woman Karl met at Volksheim-Ottakring. Testimony and evidence at trial established that Etelka had Karl's art collection because, post-war in 1948, Etelka loaned art works from the Karl Mayländer collection to an exhibition at the Albertina Museum in Vienna.
Ex. 21; Day 3 Transcript, 79:1-25; 80:18-22; 81:3-17; 82:4-25; 83:1-25; 84:17-23; M-H.
The exact nature of Karl and Etelka's relationship is unknown. While Etelka claimed marriage plans with Karl and ownership of the art after 1945, it was in her interests to do so; Etelka's purported personal views of the events during the time of Karl's persecution do not replace a legal assessment of the circumstances surrounding Karl's status as a Jew in Vienna during the Nazi regime. Etelka allegedly claimed that she and Karl were to be eventually married. But it is noteworthy that her purported post-War statements contain no information relative to the specific circumstances of Karl's persecution, which would be a striking experience to have endured and witnessed of her betrothed. Likewise, despite the alleged plans to marry, Karl's emigration card index showed no evidence of Karl and Etelka's plans to flee Vienna together. The evidence in the record supports the inference that Karl transferred his art collection to Etelka before he was deported- as she was someone he knew in an undetermined capacity- because of the persecution he was enduring during the dark years of Hitler's reign and to prevent his collection from ultimately being seized by the Nazis. The exact circumstances of the transfer from Karl to Etelka are unknown. The record reveals, however, that the transfer to Etelka occurred only after Karl tried unsuccessfully to sell the artworks to finance his departure from Vienna, and the transfer was made in the context of his persecution by the Nazis, even if Karl had alleged additional motives in making the transfer to Etelka.
M-A at 37. Etelka allegedly recounted that she was Karl's partner and hoped to marry him. There is no evidence of a marriage or having shared an address. See M-J at 3-4.
M-K at 7.
Id.
Id. at 7-8.
Id. at 8. The Court questions whether it is reasonable to believe that Karl gave the art collection to Etelka to provide for her in old age. As noted, Karl has tried to sell the artworks to finance his escape from Vienna without success because the art collection had low economic value at the time. The Court is not convinced that Karl, who could not successfully sell the art, then gifted the art to Etelka to provide for her in her old age, with the earnest hope that the Nazi regime would come to an end and "due to a paradigm shift in artistic taste," the value of his art collection would increase so as to constitute sufficient monetary provisions for Etelka in her old age. Id. at 8, 11. "There is no evidence to suggest that Karl Mayländer would have given the collection as a gift at all if he had not been persecuted, and the available statements by Etelka Hoffman also do not permit the conclusion that the property was transferred merely for safekeeping purposes or that the transfer represented any other kind of joint action to preserve the property." Id. at 11.
Id. at 10.
The close relationship between Etelka and Karl- regardless of the exact nature of the relationship- is further evidenced by the post-war writings of Bernard Foster, the son of Karl's sister, Ottilie Fleischmann ("Ottilie"). Bernard Foster named Etelka as a witness to his persecution when applying pursuant to the Victims' Welfare Act, adding that Etelka was "friends with me and my family." Etelka, who was not Jewish, survived the Nazi era unscathed in Vienna and began loaning pieces from Mayländer's collection to museums after the war in 1948. Etelka loaned several pieces to the Albertina Museum in Vienna ("Albertina") for a major Schiele retrospective in 1948, and in 1960 she signed a contract with Rudolf Leopold for the sale of seventeen works of art, including five Schieles (the "1960 Contract," discussed infra). Etelka sold several Schieles to the Albertina, but the art was subsequently restituted to the Mayländer Heirs. In 2016, the Leopold Museum restituted to the Mayländer Heirs two out of the five Schiele drawings originating from Karl and Etelka. When Etelka loaned artworks, she indicated that the loans were coming from the Karl Mayländer collection.
M-J at 4.
M-A at 37.
When Etelka loaned the works to the Albertina, she declared the art as originating from the Karl Mayländer collection. Id. at 38.
Id. at 37.
Id.
Id.
Id. at 43.
Etelka died on November 2, 1966 in Vienna. Her estate did not include any works of art.
Id. at 37.
M-K at 5.
The 1960 Contract
Etelka sold five Schieles and several other artworks to Rudolf Leopold in the 1960 Contract. The provision of the 1960 Contract at issue in this litigation is cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image4.pdf. Translated the provision states: Edith Schiele, seated (Edith Schiele, sitzend) watercolored drawing (aquar. Zeichn.), signed and dated 1917.
M-L.
Rudolf Leopold, a prolific Schiele collector and expert, found the dating of artworks to be of the utmost importance. In his catalogue raisonné, Rudolf Leopold notes that Schiele sometimes signed and dated his art years after their creation, a choice which led to some inaccurate results as it was dependent upon his memory. In assessing a previous Schiele catalogue put together by Otto Kallir ("Otto"), Rudolf Leopold notes that Otto failed to sufficiently take Schiele's post-dating into account, and that in his second catalogue Otto misstated undated art up to four years. Rudolf Leopold was critical of Otto's dating errors and inconsistencies. Thus, in crafting his own catalogue raisonné of Schiele's paintings, Rudolf Leopold sought "to use all available references both of a stylistic and those of a documentary nature, in order to secure the most competent chronology possible." Rudolf Leopold acknowledged that "chronological order" was a "main concern" of his catalogue.
M-QQ at 3.
M-Z at 513.
Id.
Id.
Id.
The 1960 Contract was paid in installments, with Rudolf meeting Etelka allegedly between 20 and 30 times over the years to pay her.
Ex. 123 at 22:13-17.
Lányi Postcards
Richard Lányi was a publisher in Vienna and published the Lányi postcards. There are 35 Lányi postcards, and each is a reproduction of a different artwork. Out of the huge body of Schiele artworks (close to 3,000, considering about 300 oil and canvas paintings and 2,500 works on paper), 35 were chosen by Lányi to be reproduced in the postcards. Out of those 35 chosen, five of the artworks depicted on the Lányi postcards originated from Karl Mayländer's art collection. One of the Lányi postcards from the Mayländer art collection is D2095, The Art Critic Karl Mayländer. No evidence was presented at trial that any of the Lányi postcards came from the art collection of Dr. Rieger.
Day 3 Transcript, 117:21-25.
Id. at 118:2-11.
Id. at 118:13-20.
Id. at 118:22-24.
The five postcards attributed to the Mayländer art collection are cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image5.pdf.
M-SS.
This postcard is D2079, Portrait (Head of a Young Man).
This postcard is D2095, The Art Critic Karl Mayländer. D2095 and D1908 were hung next to each other at the 1964 Marlborough Exhibition.
The Drawing, D1908, is also depicted in the Lányi postcards, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image6.pdf.
Day 3 Transcript, 119:1-2; M-SS.
Both D1908 and D2095 were displayed at the Marlborough Gallery for the 1964 Exhibition; in the catalogue for the exhibition, both D1908 and D2095 were pictured on page 52.
M-AA.
D2095 is also Number 3 in the 1960 Contract, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image7.pdf. Translated, Number 3 in the 1960 Contract reads: "Portrait head (Porträtkopf) Karl Mayländer, watercolored drawing (aquar. Zeichn.), signed and dated 1917."
M-L.
D2079 was also a subject of the 1960 Contract, according to expert Tobias Natter, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image8.pdf. Translated, Number 4 in the 1960 Contract reads: "Male head with hand (Männlicher Kopf mit Hand), crayon drawing (Kreidezeuchnung), signed and dated 1917."
Id.
D2079 was previously restituted to the Mayländer Heirs, and has a "2" on the verso, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image9.pdf.
The Court has zoomed in on the number "2" on the verso in the second photo for the ease of the reader.
M-III.
Restitution to the Mayländer Heirs
Austria, a pioneer in restitution matters, restituted Schiele drawings from the Albertina to the Mayländer Heirs. Though a private foundation not subject to the Austrian Art Restitution Law, the Leopold Museum settled a restitution claim with the Mayländer Heirs with the assistance of the Minister for Art and Culture. Austrian public bodies have assessed claims by the Mayländer Heirs and concluded that Karl's art collection is to be considered looted art; as a result, the Austrian government has restituted art in the past to Eva Zirkl, an heir of Karl.
Ex. 98.
Id. at CHR003992
Ex. 99, at 2.
Heinrich Rieger
Dr. Heinrich Rieger ("Dr. Rieger") was born on December 25, 1868 in Sereth an der Waag, in what is now the Republic of Slovakia. After earning a doctorate in medicine at the University of Vienna in 1892, Dr. Rieger began working as a dentist and married Bertha Klug one year later. They had two children.
M-A at 44.
Id.
Ex. 105 at CHR004867.
During his lifetime, Dr. Rieger was a prolific art collector, with a particular focus on young contemporary art. Heinrich Rieger was "possibly the most important early collector of Schiele's works." In 1938, Dr. Rieger owned 120-150 Schiele drawings and watercolors and at least 12 oil paintings. The first evidence of Dr. Rieger's interest in Schiele's works is a letter from Schiele to Dr. Rieger in July, 1914 wherein Schiele requests a down payment for an artwork. Further evidence of their acquaintance is revealed by the fact that Schiele paid for dental work performed by Dr. Rieger with his artworks, and Dr. Rieger is portrayed by Schiele in several of his drawings. Dr. Rieger's Schiele artwork was the core of his art collection. Indeed, Dr. Rieger's collection was deemed a "cultural monument" by the Austrian Monuments Office in 1921.
M-A, at 44.
R-91 at 8 (citation omitted).
Id. Dr. Rieger owned over 800 works of art in total. M-A at 44.
M-A at 45.
Id.
Id. at 44.
R-49 at 114.
Dr. Rieger was also known to be a generous lender to Schiele exhibits happening during his lifetime. Schiele's art collection was on display both in Dr. Rieger's home and in his dental office and was accessible by public guided tours. When several commemorative exhibits were organized on the tenth anniversary of Schiele's death in 1928, Dr. Rieger was a willing lender, including at the most important of the memorial exhibitions held at the Hagenbund and Neue Galerie in Vienna (the "1928 Memorial Exhibition"). While Dr. Rieger was a generous contributor to the 1928 Memorial Exhibition at the Hagenbund and Neue Galerie, he was not the only contributor. It was announced that 120 works on paper would be lent from Dr. Rieger's collection, but in the end 125 were lent, and 105 of those were actually exhibited.
R-91 at 8.
M-A at 46.
Id. at 47.
M-NN. Exhibit M-NN demonstrates many individuals contributed Schiele artwork for the 1928 Hagenbund/Neue Galerie exhibition: including Dr. Otto Benesch, Heinrich Mayer, Fritz Gruenbaum, and Marie Schiele.
M-A at 51.
A detailed list of Dr. Rieger's collection was made on July 29, 1921, in order for him to take advantage of a tax exemption for private art collections dedicated to public viewings. The list of more than 800 works of art by mostly young Austrian artists lists ten Schiele oil paintings and 52 Schiele works on paper, two of which are described as watercolors. The two watercolor drawings are listed as "nr. 301: Portrait of his Legal Guardian (watercolor)" and "nr.300. Portrait of his wife (watercolor)." In January 1928, Dr. Rieger wrote to the Austrian Ministry of Education seeking rooms within which he could store his art collection. The list provided in association with this request demonstrated that Dr. Rieger likely had a dynamic collection that changed over time. The letter to the Austrian Ministry of Education in January 1928 highlighted that Dr. Rieger intended to hand over his dental practice to his successors by August 1928 and needed a new location for his art collection. Dr. Rieger's art collection was also memorialized in an insurance list in 1935 noting 70 drawings, and a personal list in December 1938 noting 80 drawings and an unknown number of maps with graphics.
Id. at 46.
Id. at 47.
Id. at 53. See also Ex. 4.
M-A at 54.
Id. at 55-56.
Ex. 105 at CHR004869.
The Riegers, like all Austrian Jews, were required to report all privately owned property to the Vermögensverkehrsstelle. This inventory list has been lost.
R-49 at 114. The Vermögensverkehrsstelle was a department of "assets control" within the Nazi Ministry of Economic Affairs. The assets reports were used by the Nazis to calculate discriminatory taxes and charges, such as the Reich Flight Tax and the Judenvermögensabgabe. Id. The Vermögensverkehrsstelle also required the registration of any private art collection owned by Jews. Dr. Bruno Grimschitz was assigned by the Nazis to appraise the Riegers' collection in 1938. Id.
Id.
To avoid Nazi persecution, Dr. Rieger tried to donate his art collection to the Tel Aviv Museum and to emigrate to Palestine; those efforts were not successful. The two primary eventual "buyers" of Dr. Rieger's art collection were Friedrich Welz ("Welz") and painter/dealer Luigi Kasimir. Kasimir resold many of Dr. Rieger's works through the Halm & Goldmann gallery, which Kasimir and his business partner had taken over from Jews in 1938. Dr. Rieger relinquished much of his art collection to Welz. In 1948, Welz "Aryanized" Lea Bondi Jaray's Kunsthandlung Würthle (Galerie Würthle). After the war ended, Welz was arrested and detained by U.S. forces who seized his property, including artworks acquired from Dr. Rieger's collection. During the war, Welz worked closely with Nazi leaders in Salzburg to create a government museum using plundered art. Welz's interactions with Nazi art plunderers and participation in the Aryanization of galleries resulted in Welz being placed on the "red flag" list of individuals complicit in Nazi art looting at the end of the war. Welz was a Nazi dealer who trafficked in looted art and acquired art from Jews under duress at below market prices.
R-91 at 23.
Id. at 22.
Id.
Id. at 24.
"Aryanization" is the transfer of Jewish-owned property to non-Jews.
R-49 at 116. Upon Aryanization, Kunsthandlung Würthle became Galerie Welz.
R-91 at 22.
Id. at 24-25.
Id. at 26.
Following the Anschluss, Dr. Rieger and his family were victims of the Nazi terror. After his unsuccessful attempts to leave Vienna, Dr. Rieger lost his dental license and was forced to give up his practice. He and his family were forced to relocate several times from their homes in Vienna and Gablitz in 1938 and 1939 before being forced into the Theresienstadt concentration camp outside of Prague. On October 17, 1942, Dr. Rieger was murdered in Theresienstadt. Bertha was subsequently murdered in Auschwitz in 1944. Dr. Rieger's son, Robert Rieger, left Vienna with his family for France in 1938 and then came to the United States in 1939.
M-A at 44.
R-91 at 19.
M-A at 44.
R-91 at 24.
Id.
Id.
Ex. 105 at CHR004874.
Following the War, the Rieger Heirs, represented by German attorney Christian Broda, sought to recover artwork, including the "Portrait of his Wife" on pre-war lists of Dr. Rieger's art collection. "Portrait of his Wife" was believed to have been acquired by Welz and possibly sold thereafter. The Rieger Heirs received a decision in their favor and against Welz with respect to "Portrait of his wife," described as a drawing.
R-91 at 26-27.
Ex. 23.
Lawyers for the Rieger Heirs made a list of missing artworks after World War II, with Portrait of the Artist's Wife (watercolor), mentioned specifically by title. Oskar Müller and Broda continued to try to restitute Dr. Rieger's Schiele paintings, but it is less certain whether they also actively sought the Schiele drawings. As noted throughout this Decision, Schiele made many works which have since been labeled Portrait of Artist's Wife or Wife or Edith Schiele.
Ex. 105 at CHR004876.
Ex. 113 at 6.
Parnassus
The Rieger Heirs rely heavily on a Parnassus article from 1930 in asserting their claim to the Drawing. Parnassus is an art magazine edited by the College Art Association of America that ran from 1929 to 1941. In January 1930, Parnassus published a picture of the Drawing (D1908) in an article entitled "Recent Art Activities in Vienna," written by Viennese art historian Heinrich Glück ("Glück"). That article includes a reproduction of the Drawing, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image10.pdf.
M-A at 73.
Ex. 8.
Id.
As demonstrated by the image from Parnassus, the legend below states only that it is a portrait by Egon Schiele and that it was "Recently shown in the Neue Galerie in Vienna." Neither the legend below the image nor the article gives any further indication of when the Drawing was shown at the Neue Galerie and does not attribute ownership of the Drawing to anyone. The Parnassus article discusses several exhibitions in Vienna occurring "recently"; "recently" is undefined, with some of the mentioned exhibitions occurring nearly two years prior to the article being published. Glück was an art historian and beginning in 1928 he was also the curator of the Austrian Museum of Industry and Economy; he was very familiar with Dr. Rieger's art collection.
Cf. M-A at 74 (there is some indication that Dr. Rieger was a willing lender who insisted on being named as such in illustrations of works from his collection, likely due to the luxury tax considerations). Moreover, the captions in Parnassus generally named a lending owner and, as noted, Glück knew Dr. Rieger. Id.
Ex. 104 at MAYL02137.
Post-World War II
Immediately following World War II, the focus of society was on the restoration of economies, property, homes and factories; the cornerstone of the post-war efforts hinged upon more general and fundamental pursuits, as those who survived the terror of the war strove to put the pieces of a broken civilization back together. Then over time, the next generations began to more clearly hone in on lost cultural connections and began to learn and digest the scope of losses by Jewish families that extended beyond the horrendous loss of life. While many archives were inaccessible -citing privacy concerns of Holocaust victims- in the years following the Holocaust, over time, the rules of data privacy for those materials loosened. Today there is a new generation working on these issues and networking together in efforts to gather and share information.
Day 10 Transcript- 153:4-10.
Id. at 153:11-16.
Id. at 154:4-14.
The Drawing came to the Marlborough Gallery from Galerie Galatea in Turin, Italy in 1963 or 1964, prior to the Marlborough Exhibition. Galerie Galatea was founded in 1957 by Mario Tazzoli and Enrico Colombotto Rosso, who would travel abroad to buy artworks. Galerie Galatea hosted three Schiele exhibitions: in June/July 1963, January/February 1964, and May/June 1967.
R-68. Ex. 126.
Ex. 87.
Id.
The Marlborough Gallery was founded in 1946 by Frank Lloyd, a Jewish immigrant, who partnered with Harry Fischer and David Somerset.
Ex. 116.
Lehman
In 1964, Robert Owen Lehman Jr. ("Robin Lehman" or "Robin") was 28 years old and living in London when he was visited by his father, Robert Lehman. One of Robin Lehman's friends worked at the Marlborough Gallery, and Robin asked his father to accompany him to Marlborough's 1964 Schiele exhibition. Robin Lehman saw the Drawing there and thought it was magnificent, so his father bought it for 2,000 pounds. That Christmas season when Robin Lehman was visiting his father in New York, Robert Lehman gave Robin the Drawing as a gift. When Robin returned to London, he took the Drawing with him and put it on the wall.
Day 1 Transcript, at 49:6-10, 66:19-21.
Id. at 49:11-18, 50:2-12.
Id. at 50:15-17.
Id. at 50:23-24.
At this time, Robin was married to Aki Lehman ("Aki"). While Robin was often traveling and making films, Aki moved to Paris with their children and brought Robin's artworks with her; despite being away for long period of time traveling and making films, Robin wanted his artworks kept on the walls of their home for the benefit of their children. Robin and Aki were divorced in 1976, and in the course of those legal proceedings Robin was declared to be the owner of the Drawing in the context of the dissolution of his marriage to Aki. At this point the Drawing had vanished, and Robin listed it with lost art organizations. No claims were made to the Drawing during the years it was missing. When Aki died, their daughter, Kate, found the Drawing under Aki's deathbed in Paris. At that point, Robin had remarried, and he and his new wife, Marie Rolf ("Marie"), were living in Rochester, New York. The Drawing was retrieved by Robin and Marie on a trip to Paris and brought to New York. The Drawing, which is fragile, was sent to the Metropolitan Museum of Art for storage.
Robin Lehman is an Academy Award winning film maker. Id. at 45:10-14.
Id. at 51:18-25; 52:1.
Id. at 52:2-8, 114:20-24, 116:5-7.
Id. at 52:9-18.
Id. at 52:23-25, 53:1.
Id. at 53:4-13.
Id. at 53:19-22, 46:10-25; 47:1-3. Day 5 Transcript, 26:13-16.
Day 1 Transcript, 53:23-25, 54:1-11.
Robin provided testimony at trial which the Court found to be very credible. Initially, Robin considered a sale to Schiele expert, Jane Kallir, but thought the price she estimated for the sale of the Drawing to be low. Thereafter, Robin and Marie formed the Robert Owen Lehman Foundation ("ROLF") to further music education and support the appreciation and dissemination of classical music at large, both in isolation or in combination with visual arts, sculpture, film, and dance. They funded ROLF by selling artworks, as well as, to a much lesser extent, through donations. On March 29, 2016, Robin executed a Deed of Gift to donate the Drawing to ROLF; Robin signed the Deed of Gift as both the donor, in his individual capacity, and donee, as President of ROLF. On the same date, Robin, as President of ROLF, signed the Acceptance of Gift.
Id. at 55:3-6.
Id. 47:14-22; Day 5 Transcript, 13:3-8.
Day 1 Transcript, 47:24-25; 48:1-5.
Day 5 Transcript, 17:17-18:2; Ex. 74.
Ex.75; Day 5 Transcript, 17:24-25; 18:1-5.
Robin then approached Christie's to sell the Drawing on consignment, insuring the Drawing for $10 million. Christie's thereafter contacted Robin to notify him of a possible claimant and possible connection to the Holocaust and looted art; Robin gave Christie's his permission to investigate the claimed ownership from first one and then a second claimant: the Defendants herein. Christie's research did not result in a clear and uncontested narrative. Both the U.S. Attorney in the Southern District of New York and FBI became involved in the investigation. With documents from the Rieger Heirs in hand, an FBI representative contacted Robin indicating that a claim was being made and requested his side of the story; after Robin shared what information he had, the FBI indicated to Robin that they were not getting further involved in the dispute over the Drawing. The IKG, on behalf of Eva Zirkl, notified the U.S. Attorneys' office of the Mayländer Heir's claim to the Drawing and the potential U.S. import regulations that had been violated in bringing the Drawing to the United States.
Day 1 Transcript, 57:4-14; 58:14-22, 94:7-11, 95:10-25, 96:1-2, 105:8-18. Robin also asked Jane Kallir to investigate the claims. Id. at 61:21-22.
Ex. 98 at CHR003994.
Day 1 Transcript, 60:7-18.
Ex. 99.
This pending action ensued.
Provenance
Provenance is the history of ownership of a work of art or other valued object. See Merriam-Webster (2024), www.merriam-webster.com/dictionary/provenance. The evolution of provenance research since the 1950's has seen a growth from "a tradition of highlighting distinguished collections to an effort to record a full chain of ownership and ownership transfers." With respect to artwork that may have changed hands during the Nazi era, since 1998, provenance research has matured into a specialized field wherein the researcher seeks to record complete ownership histories. "This new field combines the traditional provenance focus on distinguished collection histories with a new goal to close open ownership gaps as in title transfer." The evolution of the provenance research was a reaction to Nazi era art claims in the late 1990's at museums in the United States and Europe, the publication of works shedding light on the looting that occurred during World War II, and the reunification of East and West Germany which spurred property claims in East Germany. In or about 1998, new guidelines were established for researching World War II era art losses by the American Association of Museum Directors, the American Association of Museums, and in the Washington Principles. Additionally, in the last 20 years new provenance resources became available in archives or archival holdings from Holocaust victims or their heirs.
Ex. 114 at 67.
Id. at 67-68.
Id. at 68.
Id.
Id. The Washington Principles encourage fair and just resolutions that "make allowances for the difficulties of presenting clear documentation due to the overriding circumstances of loss." Ex. 96 at 2. "[T]he Washington Principles were agreed-upon, non-binding principles entered into by 13 nongovernmental organizations and 44 governments that encouraged nations to develop national processes, including alternative dispute resolution processes, to implement these principles." Philipp v. Fed. Republic of Germany, 248 F.Supp.3d 59, 79 (D.D.C. 2017), aff'd and remanded, 894 F.3d 406 (D.C. Cir. 2018), vacated and remanded, 592 U.S. 169, 141 S.Ct. 703 (2021). "Though non-binding, the Principles reflect a consensus reached by the representatives of 13 nongovernmental organizations and 44 governments, including both the United States and the Netherlands, to resolve issues related to Nazi-looted art. The Principles provided first that 'Art that has been confiscated by the Nazis and not subsequently restituted should be identified' and that '[e]very effort should be made to publicize' this art 'in order to locate pre-War owners and their heirs.' The signatories agreed that '[p]re-war owners and their heirs should be encouraged to come forward and make known their claims to art that was confiscated by the Nazis and not subsequently restituted.' The Principles also provided that when such heirs are located, 'steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to facts and circumstances surrounding a specific case.' Finally, the Principles encouraged nations 'to develop national processes to implement these principles,' including alternative dispute resolution." Von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d 712, 721 (9th Cir. 2014).
Ex. 114 at 68.
"In provenance research today, the role of the expert specialist is to attempt to locate all the discoverable facts, information and documentation possible, to illuminate the circumstances relevant to transfer of ownership of any artwork, as far as such factual materials can be found so many decades after the events under investigation." The foundation of provenance research is primary source material, which is located through specialized research in archival documentation, art historical resources and other historical resources.
Id.
Id. at 68-69.
The restitution of looted art is a complex and challenging undertaking. The art community has followed the philosophies espoused in the Washington Principles and the Austrian Art Restitution Law enacted in the same year.
Ex. 92, at 2.
Id.
It is not uncommon for there to be gaps in the historical reconstruction of an artwork's ownership path in the Holocaust era, due to both the passage of time and a lack of surviving evidence. Each artwork's provenance must be assessed separately, and the passage of time and absence of living witnesses results in some information being simply lost. Provenance researchers for Holocaust-era matters respect and rely upon the facts that can be found after the passage of time and the death of individuals with knowledge. "The individuality of every story of art loss and transfer provides us with an understanding of the challenges of the Nazi era, of the tragic events, and of the remarkable rare examples of survival of family and property." Each of those stories must be judged based on the quality of the information the current possessor can provide, documentary evidence, and corroboration from surviving individuals with recollections.
Ex. 114, at 69.
Ex. 113, at 9.
Ex. 114, at 69.
Id.
Day 11 Transcript, 28:21-25, 29:1-4.
Provenance research begins with the object and the verso, searching for stamps, labels, markings, or any other information and assessing what is original and what is not. The first step involves looking at what the universe of information reveals, and the "entirety" of what is divulged must be evaluated. After that evaluation is complete, if gaps in the provenance persist, "it does not mean that the gap can be filled with speculative allegations clothed as fact." However, the failure to find evidence of the type normally relied upon by a provenance researcher does not foreclose the possibility of ownership by a claimant; cases will arise where, due to the constraints of available documentation and surviving witnesses, a provenance researcher will be unable to make a determination as to past ownership.
Day 9 Transcript, 129:22-25, 130:1-4.
Day 10 Transcript, 96:4-8.
Ex. 114, at 71.
See e.g., Day 10 Transcript, 112:18-114:22.
LEGAL ANALYSIS
Burden of Proof
The burden of proof in this matter is a preponderance of the evidence. See Kurz v. Doerr, 180 NY 88, 90 (1904). A preponderance of the evidence requires a finding that the evidence presented in this trial "more nearly represents what actually happened than the evidence which is opposed to it." NY Pattern Jury Instr.-Civil 1:64. Thus, the burden of establishing a fact in this trial means that the Court must have been persuaded that the existence of the fact is more probable than the non-existence of that fact. A preponderance of the evidence is "the greater part of the evidence." NY Pattern Jury Instr.-Civil 1:23.
Unless otherwise noted as to a particular issue.
The Rieger Heirs' Claim
Having thoughtfully and carefully reviewed the evidence presented at the trial of this action and taking into account the relative credibility of the witnesses presented, the Court determines that the Rieger Heirs failed to establish entitlement to the Drawing by a preponderance of the evidence.
The Rieger Heirs consist of Nava Bar (the widow of Heinrich Rieger's great-grandson, Michael Bar) the Robert Rieger Trust (a charitable trust created by Henrich Rieger's son, Robert Rieger) and Jacob Barak (Trustee of the Robert Rieger Trust). Avi Bar, the son of Nava and Michael Bar, offered credible and moving testimony at trial with respect to the Rieger family.
At the outset, the Court notes that proof was presented at trial that demonstrated that Dr. Rieger owned a Portrait of Edith (watercolor). See e.g., Exs. M-GG at RIEGER000950, M-II at MAYL00131, Ex. 13 at RIEGER000855. However, the record is bereft of a demonstration by a preponderance of the evidence that D1908 (the Drawing) was owned by Dr. Rieger.
As discussed briefly infra, the evidence at trial revealed much more compelling evidence that Dr. Rieger owned D1709 than D1908.
The Rieger Heirs' claim stems from both Dr. Rieger's extensive Schiele collection and the 1928 Memorial Exhibition held in remembrance of Schiele, wherein Dr. Rieger lent watercolors and drawings to the exhibit. The Rieger Heirs note that the 1930 U.S. magazine Parnassus included an article, pictured supra, with a copy of D1908 displayed; the Rieger Heirs consider the Parnassus article powerful empirical evidence of Dr. Rieger's ownership. However, the D1908 reproduction in Parnassus does not attribute ownership to Dr. Rieger, merely noting instead that it was "recently" shown at the Neue Galerie in Vienna, as confirmed by the Rieger Heirs' expert, Dr. Petropoulos. See Day 8 Transcript, 113:10-13. The Court notes that the depiction's use of the word "recently" also does not denote that D1908 was shown at the Neue Galerie in the 1928 Memorial Exhibition. In the Parnassus article, the author notes that Otto Nirenstein (later known as Otto Kallir and discussed supra) arranged a memorial exhibit for Schiele at the Hagenbund and the Neue Galerie, a reference to the 1928 Memorial Exhibition. However, the annotation of a "recent" showing at the Neue Galerie is, at best, ambiguous, as there was nearly a two-year lapse between the 1928 Memorial Exhibition and the Parnassus article. Moreover, the Parnassus article also makes mention of many other exhibitions, mostly from 1929, and dedicated very little of the article to discussing the Neue Galerie portion of the 1928 Memorial Exhibition. The small portion of the article that discusses the Neue Galerie and the 1928 Memorial Exhibition does not mention D1908. On cross examination, Dr. Petropoulos admitted that the Neue Galerie continued to operate as a gallery after the 1928 Memorial Exhibition and that additional opportunities to display Schiele's works for exhibitions or sales other than the 1928 Memorial Exhibition could have occurred at the Neue Galerie. See Day 10 Transcript, 19:25-20:9. Plaintiff's expert, Laurie Stein, confirmed this and testified that between 1928 and 1930, the Neue Galerie mounted several exhibitions beyond the 1928 Memorial Exhibition. See Day 10 Transcript, 144:15-25; 145:1-4, 17-25; 146:1-4.
The cover of the Parnassus magazine depicts Portrait of Maximilian Sforza, Duke of Milan, and the depiction of that art specifically notes that the painting is from the collection of Mr. Henry Goldman and denotes where it is currently being shown. In contrast, the image of D1908 recites where D1908 was recently shown but makes no indication of ownership to any person in particular.
Furthermore, Dr. Rieger's name is not mentioned in the Parnassus article in any respect, though the author of the article was acquainted with Dr. Rieger.
Particularly damning to the Rieger Heirs' proffer of proof and reliance on the Parnassus article was the evidence presented at trial relating to contributors to the 1928 Memorial Exhibition. While the Rieger Heirs' argument was premised in large part on Dr. Rieger being the only contributor of drawings and watercolors to the 1928 Memorial Exhibition, the proof adduced at trial demonstrated that the contrary was true. Documentary proof at trial demonstrated that Otto Benesch, Heinrich Mayer, Melanie Schuster, Marie Schiele, and Fritz Grunbaum also lent drawings and watercolors to the 1928 Memorial Exhibition. See M-NN and M-OO.
The Rieger Heirs also presented evidence of numerous articles contemporaneously written about the 1928 Memorial Exhibition in an effort to prove that Dr. Rieger was the sole contributor to the Neue Galerie portion of the 1928 Memorial Exhibition. For example, one such article submitted by the Rieger Heirs, R-9, indicates that the 1928 Memorial Exhibition included most of the works owned by Dr. Rieger, but the article does not indicate that Dr. Rieger was the only art collector who lent works to the exhibition. See also Day 8 Transcript, 136:4-25; 137:1-25; 138:4-25; 139:20-25; 140:1-25; 141:1-16; 142:2-14. Likewise, other articles submitted by the Rieger Heirs also indicate that Dr. Rieger's entire Schiele collection was exhibited at the Neue Galerie during the 1928 Memorial Exhibition but do not intimate in any regard that Dr. Rieger was the only contributor to the exhibition. See R-4; R-5. The article exhibits proffered by the Rieger Heirs in this regard fall woefully short of establishing that Dr. Rieger was the sole contributor of drawings and watercolors to the 1928 Memorial Exhibition. Rather, they merely highlight that Dr. Rieger, one of the best known Schiele collectors at the time with one of the best known collections (which he regularly and uniquely exhibited), would be displaying his extensive collection at the exhibition. See Day 8 Transcript, 148:9-25, 149:1-5. None of the proof presented forecloses others from also having contributed drawings and watercolors to the 1928 Memorial Exhibition. Likely as a nod to Dr. Rieger's exquisite Schiele collection, the 1928 Memorial Exhibition catalogue specifically noted the well-known collection of Dr. Rieger. See R-3.
Testimony was adduced at trial that part of the reason the 1921 list was compiled was to facilitate a tax deduction recognizing significant collections that were shared with the public. Day 3 Testimony, 133:4-15; Day 8 Testimony, 148:9-20.
The varied articles highlighted by the Rieger Heirs that discuss Dr. Rieger's collection of drawings and watercolors at the 1928 Memorial Exhibition fail to prove that Dr. Rieger was the sole contributor, particularly in light of the unassailable evidence directly to the contrary in the trial record. There is no evidence in the record that Dr. Rieger was the sole contributor to the Neue Gallery during the 1928 Memorial Exhibition; the evidence to the contrary is unchallenged.
One such article submitted for the Court's consideration by the Rieger Heirs provides that the 1928 Memorial Exhibition is "substantially supplemented by the collection of 120 watercolors and drawings by Schiele from the estate of the Chief Medical Officer Dr. Heinrich Rieger...." R-8. Providing a substantial supplement to an exhibition does not equate with being the sole contributor of artwork to the exhibition.
The Rieger Heirs' claims that D1908 is documented to be in Dr. Rieger's art collection during the period 1921 to 1938 fares no better in light of the evidence and testimony adduced at trial. Several records and contemporaneous lists of Dr. Rieger's art collection were entered into evidence, and none of those lists prove that Dr. Rieger owned D1908. See, e.g., Ex. 9 at ROLF003316 ("Schiele, Egon The artist's wife watercolor"), Ex. 13 at RIEGER000855 ("Schiele... Port. of his wife (watercolor)"), M-GG at RIEGER000950 ("Schiele Portrait of his wife (watercolor)"), M-II at MAYL00131 ("Watercolor Schiele Egon Portrait of the Artist's Wife "), M-JJ at ROLF003316 ("Schiele, Egon The artist's wife watercolor"). Dr. Rieger's lists also generically list "54 drawings," "14 color drawings," and other groupings and numbers of drawings with no additional identifying characteristics provided. See e.g., Ex. 9 at ROLF003316, R-13 at RIEGER000855, R-99 at 4. While Dr. Rieger's lists demonstrate the impressive breadth of his Schiele collection at various times throughout his life, the lists offer nothing material or relevant by a preponderance of the evidence in support of the Rieger Heirs' claim for D1908.
The Advisory Commission report assesses Dr. Rieger's collection as follows: "An exact list of the collected Schiele works probably does not exist. Dr. Heinrich Rieger always refers to the works as bundles (1921 notarial deed: 50 drawings; list from 1928: 150 drawings and three oil paintings; list from November 1938: approximately 80 drawings and one Schiele binder). Later research mentions between 120 and 150 sheets. In 2011, the Austrian Art Restitution Advisory Board assumes that 130 to 150 drawings by Schiele were still in Dr. Heinrich Rieger's possession in 1938 (decision dated June 9, 2011). Dr. Heinrich Rieger, in his letter to the Tel Aviv Art Museum of May 28, 1939, mentions a collection of 70 drawings and watercolors by Schiele, while in 1928 the collection amounted to 150 objects, so that 80 Schiele works had been released between 1928 and 1939." R-99 at 4.
Lastly, a catalogue from the Exposition D'Art Autrichien in Paris 1937 is cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image11.pdf. Translated, this entry reads: "Portrait of the Artist's Wife. - Watercolor Drawing" from the Dr. Rieger art collection. See M-KK at ROLF003428. Also reproduced in the Paris catalogue is a reproduction of Schiele's Portrait de la femme (dessin), cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image12.pdf. The reproduction of the Portrait of the Artist's Wife listed in the Paris catalogue is D1709 in the Kallir Catalogue Raisonné. See Day 10 Transcript, 141:7-14. Dr. Rieger definitely owned a drawing denominated Portrait of the Artist's Wife, but the only compelling evidence adduced at trial demonstrated that he likely owned D1709.
The evidence and testimony at trial failed in all respects to establish by a preponderance of the evidence that D1908 was part of Dr. Rieger's art collection.
Laches
Though not necessary to this Decision given the determination made supra, the Court is mindful of the likelihood of future appeals in this matter and the guidance previously provided to the Court by the Fourth Department, particularly on the issue of laches. See Robert Owen Lehman Found., Inc. v. Israelitische Kultusgemeinde Wien, 211 A.D.3d 1540, 1542 (4th Dept. 2022). Thus, the Court offers the following assessment of whether laches would preclude a sustainable claim for the Drawing by the Rieger Heirs. ROLF contends that even if the Drawing would otherwise be subject to forfeiture to the Rieger Heirs, the equitable doctrine of laches should apply to bar the claim.
As the Court determined supra, the Rieger Heirs' claim to the Drawing has not been sustained by a preponderance of the evidence.
Discussion of laches requires a brief background relative to the Holocaust Expropriated Art Recovery Act of 2016 ("HEAR Act"). The HEAR Act was enacted to "'remedy th[e] injustice'" that is "'the unique and horrific circumstances of World War II and the Holocaust[.]'" Reif v. Art Inst. of Chicago, 2023 WL 8167182, at *5 (S.D.NY Nov. 24, 2023), reconsideration denied sub nom., 2024 WL 838431 (S.D.NY Feb. 28, 2024), citing S. Rep. No. 114-394, at 5 (2016). "In the HEAR Act, the [Washington] Principles, and the Holocaust Victims Redress Act, we are instructed to be mindful of the difficulty of tracing artwork provenance due to the atrocities of the Holocaust era, and to facilitate the return of property where there is reasonable proof that the rightful owner is before us." Reif v. Nagy, 61 Misc.3d 319, 325 (Sup.Ct. N.Y.Co. 2018), aff'd as modified, 175 A.D.3d 107 (2019).
The HEAR Act promotes restitution to Holocaust victims and converted into a statute what was previously a moral imperative:
In recent decades, with the passage of time and as the number of survivors of Nazi brutality diminishes, there has been a sense of urgency that some measure of justice, albeit incomplete, be given to those victims and their heirs. International conferences and subsequent declarations have outlined principles designed to ensure, for example, that 'legal systems or alternative processes, while taking into account the different legal traditions, facilitate just and fair solutions with regard to Nazi-confiscated and looted art'... These efforts are grounded in the recognition that the claims of survivors and their heirs must be given serious and sympathetic consideration. To facilitate the processing of such claims, the HEAR Act creates a nationwide Statute of Limitations for bringing claims to recover artwork and other property lost during the Holocaust era. The HEAR Act directs that every case be given individual attention, with special care afforded to the particular facts.Zuckerman v. Metropolitan Museum of Art, 928 F.3d 186, 189 (2nd Cir. 2019).
"'While the HEAR Act revives claims that would otherwise be untimely under state-based statutes of limitations, it allows defendants to assert equitable defenses like laches.'" Reif v. Art Institute, 2023 WL 8167182, *7 (citation omitted). "'The statute explicitly sets aside defenses at law relating to the passage of time,'" and the legislative history of the HEAR Act also exempts equitable defenses. Id. (citations omitted).
Here, upon the appeal from motions for summary judgment by ROLF and the Mayländer Heirs, the Fourth Department stated that there was evidence in the summary judgment record that the Rieger Heirs "had at least some knowledge about the collection of artwork stolen from their ancestor inasmuch as they made several restitution claims pertaining to it in the years following World War II." Robert Owen Lehman Found., Inc., 211 A.D.3d at 1542. The Fourth Department determined that there was a triable issue of fact on the laches issue as to the Rieger Heirs only because the record lacked evidence that the Rieger Heirs or their predecessors "reached out to the London art gallery that exhibited and sold the subject artwork or, in the decades that followed, to either Robin or the publisher of a 1990 catalog of Schiele's work that included the subject artwork." Id. The Fourth Department consequently returned the laches issue to this Court to determine "whether the Rieger defendants delayed in asserting their claim despite having the opportunity to do so." Id. While ultimately of marginal importance in this opinion for the reasons stated supra, the laches issue was fully litigated in the trial of this matter due to the Fourth Department's directive.
"The equitable defense of laches is governed by New York law." Republic of Turkey v. Christie's Inc., 2021 WL 4060357, *8 (S.D.NY Sept 7, 2021). "[L]aches is a defense developed by courts of equity; its principal application was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation." Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 678 (2014).
A laches defense requires proving two elements: an "unreasonable" delay in commencing the suit, and prejudice resulting from that unreasonable delay. Zuckerman, 928 F.3d at 193 (citation omitted). A successful laches defense requires a demonstration that the party "inexcusably slept on its rights so as to make a decree against the defendant unfair. Laches... requires a showing by the defendant that it has been prejudiced by the plaintiff's unreasonable delay in bringing the action." Id. "In conducting the laches analysis, courts take into account both parties' diligence." Republic of Turkey, 2021 WL 4060357, at *8. "[I]t is enough that they knew of - or should have known of - the circumstances giving rise to the claim, even if the current possessor could not be ascertained." Bakalar v. Vavra, 819 F.Supp.2d 293, 304 (S.D.NY 2011), aff'd, 500 Fed.Appx. 6 (2nd Cir. 2012). "The laches determination is a 'factual question that requires the court to weigh the equities of each case.'" AM General LLC v. Activision Blizzard, Inc., 450 F.Supp.3d 467, 488 (S.D.NY 2020) (citation omitted).
"' 'The mere lapse of time, without a showing of prejudice, will not sustain a defense of laches.'" Taberski v. Taberski, 197 A.D.3d 871, 873 (4th Dept. 2021) (citation omitted). "' '[W]here neglect in promptly asserting a claim for relief causes prejudice to an adversary, such neglect operates as a bar to a remedy and is a basis for asserting the defense of laches....'" Walton & Willet Stone Block, LLC v. City of Oswego Community Dev. Off., 175 A.D.3d 882, 885 (4th Dept. 2019) (citation omitted). "' 'A defendant has been prejudiced by a delay when the assertion of a claim available some time ago would be inequitable in light of the delay in bringing that claim.'" Zuckerman, 928 F.3d at 193.
The defense of laches accrues when a party either knew or should have known about the ability to make a claim. See, e.g., Bakalar, 819 F.Supp.2d at 303 ("The opposing party need not have had actual knowledge of the claim; rather, it is sufficient that the opposing party should have known ") (emphasis in original). See also, Howard Univ. v. Borders, 588 F.Supp.3d 457, 479 (S.D.NY 2022); Philippine Am. Lace Corp. v. 236 W. 40th St. Corp., 32 A.D.3d 782, 784 (1st Dept. 2006); Kraker v. Roll, 100 A.D.2d 424, 432 (2nd Dept. 1984).
Citing Solomon R. Guggenheim Found. v. Lubell, 77 N.Y.2d 311, 321 (1991), the Rieger Heirs contend that laches requires actual knowledge of a claim, and that constructive notice is insufficient. That is not the holding of Guggenheim, wherein the Court of Appeals states:" Despite our conclusion that the imposition of a reasonable diligence requirement on the museum would be inappropriate for purposes of the Statute of Limitations, our holding today should not be seen as either sanctioning the museum's conduct or suggesting that the museum's conduct is no longer an issue in this case. We agree with the Appellate Division that the arguments raised in the appellant's summary judgment papers are directed at the conscience of the court and its ability to bring equitable considerations to bear in the ultimate disposition of the painting. As noted above, although appellant's Statute of Limitations argument fails, her contention that the museum did not exercise reasonable diligence in locating the painting will be considered by the Trial Judge in the context of her laches defense. The conduct of both the appellant and the museum will be relevant to any consideration of this defense at the trial level, and as the Appellate Division noted, prejudice will also need to be shown" (emphasis added). Cf. id. at 319-20 (discussing whether it is "prudent... to impose the additional duty of diligence before the true owner has a reason to know where its missing chattel is to be found" in the context of discussing the Statute of Limitations).
Joerg Rosbach, a German lawyer, testified at trial for the Rieger Heirs as to restitution matters. Rosbach testified that the Israelitische Kultusgemeinde Wien ("IKG") represented the Rieger Heirs from approximately 2002 until 2013, when Rosbach began his representation of the Rieger Heirs. See Day 6 Transcript, 86:1-25; 87:1-3. Upon commencing his representation of the Rieger Heirs, Rosbach registered Dr. Rieger's known artwork with the German art loss databank. Id. at 87:16-19. Rosbach also testified that to his knowledge, immediately after the war ended Dr. Rieger's son, Robert Rieger, retained a lawyer and began looking for his art collection. Id. at 109:12-24. Robert Rieger continued searching for his father's artwork for years. Id. at 115:10-16.
The IKG is a body that represents the Jewish community of Vienna. See generally Day 3 Transcript, 6:7-9.
Rosbach was unaware of any efforts by Dr. Rieger's heirs to recover Dr. Rieger's Portrait of Artist's Wife after 1967. Id. at 120:25-121:5.
In May 1950, the Austrian Federal Ministry of Finance consented to the BDA's restitution of several paintings, including Schiele's "Portrait of His Wife," to the Rieger Heirs. United States v. Portrait of Wally, 663 F.Supp.2d 232, 241 (S.D.NY 2009). It was later discovered that the artwork was not "Portrait of His Wife," but was the "Portrait of Wally" and had been misidentified when confiscated initially. The "Portrait of His Wife" was on a list of works owned by Dr. Rieger and acquired by Welz prior to the war but was still unaccounted for. Id. at 240. "Wally" was mistakenly restituted to Dr. Rieger's heirs despite never having been part of his collection, as it was confused for "Portrait of His Wife." Id. at 244, 263. Ultimately, "Portrait of Wally" was restituted to the heirs of its true owner, Lea Bondi Jaray. In 1967 Robert Rieger signed a declaration acknowledging that "Portrait of Wally" was never owned by Dr. Rieger. Day 6 Transcript, 120:8-24. See also, Day 12 Transcript, 46:5-11.
Eyal Dolev, a provenance researcher since 2003, also testified for the Rieger Heirs. See Day 12 Transcript, 18:14-15. Dolev met Michael Bar in 2013 and was asked to assist in their endeavors to recover lost art. Id. at 19:4-10; 21:10-12. Dolev found that Dr. Rieger's Heirs already had an existing registration with London-based Art-Loss Register, and then, as noted by Rosbach, also registered with lostart-de. Id. at 22:22-26:7. Subsequent to the initial registration and filing made with lostart.de, other filings were also made, as the registration was dynamic and was added to, amended and corrected over time. Id. at 28:23-29:1. In particular, Dolev testified that, "And as time progresses, sometimes you have new sources... And then when you get new sources, you have to amend your registration because you want to be as accurate as possible. So sometimes you add entries; sometimes you delete entries." Id. at 29:4-10. Indeed, Dolev stated that "[w]henever there is a new archive open or whenever we learn of a new source, we try to get it." Id. at 29:16-18. Dolev's efforts included searching many archives. Id. at 29:19-30:7; 31:2-8; 32:2-6; 34:7-35:11.
www.lostart.de is a lost art database of the German Lost Art Foundation for Provenance Research.
Dolev testified that around 1940 or 1941, Heinrich and Berta Rieger discussed in letters that their art collection was gone, leading their son, Robert Rieger, to register the lost art. Id. at 43:13-44:3. As also noted by Rosbach, Dolev states that in 1948, Christian Broda, an attorney, was retained and initiated efforts to recover the lost art. Id. at 44:14-25. Further, Dr. Rieger's heirs and their representatives approached the Monuments Men and filed lawsuits against Welz in Austria. Id. at 45:1-2. Dolev notes, as set forth supra, that lists of Dr. Rieger's artworks included a reference to "Portrait of Edith Schiele, watercolor" or a similar description. Id. at 45:8-15. Dolev further testified that restitution efforts lasted until at least 1964. Id. at 47:9-10; 48:16-18. Moreover, letters in the Philipp Rieger archive indicate that additional recovery efforts extended into the 1970's and beyond. Id. at 48:22-49:3. For instance, in 1998, Philipp Rieger wrote to museum directors with respect to Dr. Rieger's art. Id. at 49:17-21.
With respect to the "Portrait of Artist's Wife" that was known to have been in Dr. Rieger's possession prior to the war, Dolev testified that they knew that this artwork was missing post-war but did not know which drawing identified in the Kallir Catalogue Raisonné depicted the artwork owned by Dr. Rieger. Id. at 36:19-25. In 2014, they thought the missing "Portrait of Artist's Wife" could be D1709, and ultimately registered both D1709 and 1719 as the possible artworks belonging to Dr. Rieger before the war. Id. at 37:5-16.
Dolev testified that they mistakenly registered D1719 instead of D1709. Id. at 37:1-12.
Dolev first researched D1908 on behalf of the Rieger Heirs when he was approached by Christie's and asked if the Rieger Heirs had any claims for D1908. Id. at 38:20-23. At that point Dolev and his team undertook research into D1908, starting with Kallir's Catalogue Raisonné, which led them to the Parnassus article and the tie-in to the 1928 Memorial Exhibition at the Neue Galerie. Id. at 38:24-39:5. Dolev testified that he does not think anyone expected him to go through Kallir's Catalogue Raisonné and check the entries prior to this point in time, as it is a large book. Id. at 72:15-18.
Finally, Avi Bar also testified for the Rieger Heirs about the efforts of his family to find artworks from Dr. Rieger's collection. Id. at 85:7-25; 87:4-10; 88:5-16.
Jane Kallir, a leading Schiele expert whose testimony was presented by ROLF and Lehman, also testified at trial. The first Catalogue Raisonné was completed in 1990, and an updated version was completed in 1998. See Day 11 Transcript, 29:6-10. In her Catalogue Raisonné, Kallir purportedly grouped watercolors and drawings broadly by subject matter, and then within each subject matter, they were ostensibly organized chronologically. Id. at 27:16-19. D1908 was categorically placed under "Female Portraits," with portraits of Edith Schiele grouped together, and all of the entries in this category organized by year. Id. at 31:23-32:10. The written entry for D1908, set forth supra, lists Lehman as the most recent owner, exhibitions where D1908 was shown, and literature in which the artwork was illustrated. Id. at 32:21-34:13.
The 1998 version of Kallir's Catalogue Raisonné is marked as M-TT in this litigation. The 1990 version was not received into evidence as an exhibit.
The Court finds that if the Rieger Heirs had a sustainable claim to the Drawing, that claim would be barred by the equitable doctrine of laches. A plethora of evidence was presented at trial with respect to lists of Dr. Rieger's artworks, and the evidence further demonstrated that Dr. Rieger's heirs made post-war restitution claims to recover works lost from the collection, including for the Rieger-owned "Portrait of his Wife." Robert Rieger and Tanna Ticho made a claim in 1947 for that artwork without image or other details. Indeed, thinking they were recovering "Portrait of His Wife," the Rieger Heirs recovered "Portrait of Wally," only to subsequently acknowledge that the artwork was not from Dr. Rieger's collection. Throughout representation by Broda, Dolev, Rosbach and the IKG as recently as in the 2000's, no claim was made for D1908. Kallir's comprehensive Catalogue Raisonné included D1908, as well as the reference to the Parnassus article which the Rieger Heirs deem to be the bedrock to their claim. See Day 10 Transcript, 17:23-18:7. The Kallir Catalogue Raisonné, compiled by Jane Kallir, an individual all parties agreed is a Schiele expert, was first published in 1990 and updated in 1998 and contained the information that the Rieger Heirs now deem to be the foundation of their claim. It is not reasonable that the Rieger Heirs, or their representatives, did not make better attempts to cross check the artworks they were searching for with the artworks in Kallir's Catalogue Raisonné over the course of many years.
The Rieger Heirs express some dissatisfaction with provenance research representation they had prior to 2013. However, even considering representation only after 2013, three years passed before Christie's notified the Rieger Heirs that it had D1908 in its possession, and six years passed before this litigation was commenced. The Rieger Heirs are charged with constructive knowledge of the definitive Kallir Catalogue Raisonné compiled by leading expert, Jane Kallir. As soon as D1908 was brought to the attention of the Rieger Heirs' representatives, they found a potential link that inspired them to make a claim to the Drawing and participate in this litigation for nearly five years. The D1908 entry was available for their discovery long before 2016, and it is unreasonable that it was not found sooner. It is reasonable to expect provenance researchers looking for lost art to consult the paramount Catalogue Raisonné of Schiele's works compiled by a notable and unquestionably knowledgeable Schiele expert; the failure to do so was unreasonable and caused years delay in identifying and assessing D1908 as a possible match to the Portrait of Wife listed historically on Dr. Rieger's lists of artworks.
ROLF and Lehman are also required to demonstrate prejudice in order to have laches apply to preclude the Rieger Heirs' claim. The decades-long delay resulted in prejudice, to wit: "deceased witness[es], faded memories, lost documents, [and] hearsay testimony of questionable value." Sanchez v. Trustees of the Univ. of Pennsylvania, 2005 WL 94847, at *3 (S.D.NY Jan. 18, 2004), quoting Solomon R. Guggenheim Found. v. Lubell, 153 A.D.2d 143, 149 (1st Dept. 1990), aff'd 77 N.Y.2d 311 (1991). See also, Bakalar, 819 F.Supp.2d at 306 ("The resulting prejudice to Bakalar is clear. Defendants' delay in pursuing their claim 'makes it difficult [for Bakalar] to garner evidence to vindicate his... rights.' [citation omitted] It has 'resulted in deceased witnesses, faded memories, lost documents, and hearsay testimony of questionable value'"); In re Peters, 34 A.D.3d 29, 38 (1st Dept. 2006) ("The delay by the [claimants] and the estate in asserting any claim of ownership during the approximately 70-year odyssey of [the disputed chattel] has prejudiced the good-faith purchaser since none of the parties to the original sale... are alive."); Wertheimer v. Cirker's Hayes Storage Warehouse, Inc., 300 A.D.2d 117, 118 (1st Dept. 2002) (holding lower court properly granted summary judgment dismissing the complaint on laches grounds where the "family's lack of due diligence in seeking the return of the painting... substantially prejudiced [art gallery] by making it virtually impossible for [art gallery] to prove that any of its predecessors in interest acquired good title"). Cf. Reif v. Nagy, 175 A.D.3d 107 (1st Dept. 2019).
Here, the passage of time resulted in deaths and lost the opportunities to speak to individuals closer to Schiele's and Dr. Rieger's lifetimes who had relevant and vital information. See Day 11 Transcript. 28:7-16. Information relative to ownership could not be located prior to the Galerie Galatea. Id. at 34:17-20. Rudolf Leopold died in 2010. See Day 3 Transcript, 51:17-19; 92:11-16. Etelka Hoffman died in 1966. See M-A at 37. There are many other examples of information and witnesses lost due to the passage of time. See, e.g., Day 1 Transcript, 110:19-21 (founder of the Marlborough Gallery died before information was procured); Id. at 175:17-20 (Marlborough Gallery records destroyed); Day 9 Transcript, 19:8-10 (Marlborough Gallery records lost); Day 4 Transcript, 4:20-5:7 (Hans Dichand died); Day 6 Transcript, 107:18-20 (Michael Bar died); Day 9 Transcript, 116:15-20 (Hildegard Bachert died); Day 10 Transcript, 156:2-10 (Luise Kremlaceck, record keeper for Galerie Würthle, died). The Rieger Heirs' decades-long delay resulted in "deceased witness[es], faded memories, lost documents, [and] hearsay testimony of questionable value." Sanchez v. Trs. of Univ. of Pa., 2005 WL 94847, at *3 (S.D.NY Jan. 18, 2004), quoting Solomon R. Guggenheim Found. v. Lubell, 153 A.D.2d at 149. See also Bakalar, 819 F.Supp.2d at 306; Peters, 34 A.D.3d at 38; Wertheimer, 300 A.D.2d at 118.
Had the Rieger Heirs presented a colorable claim to the Drawing, the unreasonable delay and prejudice suffered would have prevented that claim from being ultimately successful.
Testimony and evidence were presented at trial relative to the Rieger Heirs' contention that ROLF never received a gift of D1908 and therefore lacks standing to sue. The Court considered all the testimony and evidence in this regard and declines to find that this issue has any meaningful impact on this litigation. Even if a gift was not validly bestowed upon ROLF by Lehman, all necessary parties to resolve this three-way dispute were part of this litigation (which includes, of course, the Third-Party Complaint) and all the pending causes of action of each respective party ensured that relief could be fully implemented. In the event the Drawing was not properly gifted to ROLF, then the Drawing reverted to Lehman, Third-Party Defendant herein. The Mayländer Heirs did not allege an affirmative defense of standing in their Answer and did not pursue the prosecution of this argument in any event.
At the outset, the Court notes that in the waning hours of the trial, the Rieger Heirs sought to call a rebuttal witness on the issue of the Mayländer Heirs' standing and capacity, contending that the testimony of Michael Lissner, trustee of the Susan Zirkle Memorial Foundation Trust, revealed for the first time in this litigation that a certificate of inheritance was never obtained for Karl Mayländer and no authority has otherwise been obtained to proceed as Karl's heirs from a Surrogate's Court. First, Exhibit M-K states unambiguously that "[a]fter 1945, no proceedings to obtain a declaration of death were conducted in regard to Karl Mayländer, who had remained without children." M-K at 6. M-K was submitted to the Court on NYSCEF on April 23, 2021, as Exhibit I to the Affirmation of Erika Jakubovits presented in support of the Mayländer Heirs' motion for summary judgment and in opposition to ROLF's motion for summary judgment. See NYSCEF Doc. #565. M-K was submitted on NYSCEF again on February 14, 2023 as Exhibit X to the Affirmation of Oren J. Warshavsky, Esq. in support of a Pre-Trial Memorandum. See NYSCEF Doc. #932. Thus, evidence submitted by the Mayländer Heirs during the course of this litigation revealed this information long before Mr. Lissner took the stand on May 8, 2024. Furthermore, the attempt to raise a capacity or standing argument at this stage of the proceedings was procedurally improper in a couple respects. CPLR 3211(a)(3) allows for dismissal on the ground that "the party asserting the cause of action has not legal capacity to sue." Standing falls within the realm of CPLR 3211(a)(3). See Donnelly v. Tchrs. Fed. Credit Union, 2024 WL 3058136, at *2 (2nd Dept. June 20, 2024). CPLR 3211(e) provides that "[a]ny objection or defense based upon a ground set forth in paragraphs one, three, four, five and six of subdivision (a) of this rule is waived unless raised by either such motion or in the responsive pleading" (emphasis added). The Rieger Heirs' Answer states as an affirmative defense that ROLF lacks standing to bring the causes of action alleged in the Complaint because it does not own the Drawing. See NYSCEF 162 at ¶4. The Mayländer Heirs made no claim against the Rieger Heirs, and the Rieger Heirs did not state an affirmative defense premised upon CPLR 3211(a)(3) in their Answer with respect to the Mayländer Heirs. As such, the issue was not properly raised to the Court on the last day of trial, and the proffered rebuttal witness was appropriately disallowed by the Court.
The evidence presented at trial establishes by a preponderance of the evidence that the Mayländer Heirs have superior title to the Drawing and are entitled to judgment on their counterclaims for declaratory judgment, conversion, and replevin.
The evidence at trial established that Karl owned over 30 watercolor sketches and drawings by Schiele in 1928. Between 1917 and 1920, it is undisputed that five Schiele drawings that belonged to Karl were published as part of the Lányi postcard series: Self-Portrait with Raised Left Land, 1915, D1780; Standing Girl with Hands Raised, 1917, D1988; Portrait (Head of a Young Man), 1917, D2079; the Art Critic, Karl Mayländer, 1917, D2095; and Portrait of Heinrich Benesch, 1917, D2099. It is also undisputed that D1908 was also published as a Lányi postcard.
On January 10, 1960, Etelka Hofmann and Rudolf Leopold ("Rudolf" or "Rudolf Leopold") entered into the 1960 Contract, handwritten by Rudolf, for the sale of 17 artworks, including 5 Schieles. See M-L; M-A at 15. The 1960 Contract remained in Rudolf's possession and was used to record monthly installment payments. The purchase price was to be paid in 19 monthly payments:
Between Ms. Etelka Hofmann (Vienna 17, Helblinggasse 6) and Mr. Dr. Rudolf Leopold (Vienna 19, Cobenzlgassa 16): Ms. Hofmann sells as of this date to Mr. Dr. Leopold the following listed works of art, that are her property undamaged and unencumbered for a total price of 19.200 S (nineteen thousand two hundred Austrian shillings), which amount Mr. Dr. Leopold shall pay in monthly instalments of each 800,-S, starting on January 16, 1960 and then on the 16th of each month. On December 16, 1961 and must the total is paid (sic). Mr. Dr. Leopold, however, can also pay his debt earlier.M-L. Each payment received is acknowledged by Etelka with the note "received" (" erhalten ") and her signature. Id. The 1960 Contract provides that Etelka can keep certain works "on loan until her death," including "Egon Schiele, 3) Portrait head (Porträtkopf) Karl Mayländer, aquar. Zeichn., signert u.datiert 1917."
Number 5 in the 1960 Contract, "Edith Schiele, seated, watercolored drawing, signed and dated 1917," is D1908. The Mayländer Heirs' expert, Professor Tobias Natter, testified at length at trial, and the Court found Prof. Natter highly credible and his testimony compelling, both on direct and cross examination. See Matter of George L., 85 N.Y.2d 295, 305 (1995); Kerry K. v. State, 225 A.D.3d 1122, 1123-24 (4th Dept. 2024) (stating that "the court was in the best position to evaluate the weight and credibility of the conflicting [expert] testimony presented, and we see no reason to disturb the court's decision to credit the testimony of respondent's expert") (internal citation omitted). Prof. Natter, an expert in provenance research and also an expert in art history of 19th and 20th century Austrian paintings and works on paper, has particular expertise in the art of Vienna 1900 and the works of Gustav Klimt, Egon Schiele and Oskar Kokoschka. See Day 3 Transcript, 52:6-8. The Court notes that Plaintiff's provenance expert, Laurie Stein, despite her extensive research was unable to shed light on the history of D1908 prior to its arrival at the Galerie Galatea. See Day 10 Testimony, 105:13-106:6; 112:10-114:2. From a purely documentary provenance perspective, the archives, exhibition records, ownership entries, receipts and other available records did not establish proof of ownership of D1908 before World War II.
However, Prof. Natter's testimony as both a provenance researcher and art historian and expert in the art of Vienna in the 1900's bridges documentary gaps in primary source materials with research and analysis of the works of Schiele and circumstances of the relevant time frames that systematically and categorically compel the conclusion that D1908 was Number 5 in the 1960 Contract. Prof. Natter notes the specific description of Number 5 given by Rudolf Leopold in drafting the 1960 Contract and from there identifies that out of Schiele's graphic oeuvre of more than 2,500 works on paper, only seven artworks are a potential match to Number 5. See M-A, at 18-27; Day 3 Testimony, 96:10-97:6 (noting that Prof. Natter "went through the catalogue by Jane Kallir, 1990-1998 ") (emphasis added); 100:7-25; 101:1-25; 102:1-25; 103:1-25; 104:1-25; 105:1-25; 106:1-25; 107:5-25; 108:1-25; 109:1-25; 110:1-23; 111:8-16; 112:6-25; 113:1-25; 114:1-25; 115:1-16; 116:3-25; 117:1-25; 118:1-25; 119:1-2. Prof. Natter's analysis of the seven works that could be Number 5 in the 1960 Contract uses his knowledge, provenance research and the Kallir Catalogue Raisonné to methodically eliminate all but D1908 as possibilities for Number 5 in the 1960 Contract: D1907 and D1979 are confirmed to be part of current collections and their provenance accounted for; D1981 has been lost since 1948; D1982 was in New York since 1948 and thus could not have been in Etelka's possession in 1960; and, though D1977 and D1978 were at one time referred to as depicting Edith Schiele and are thus included in the group of seven possible matches, D1977 and D1978 are not portraits of Edith Schiele, nor do they reflect the other criteria listed for Number 5. Id. Other experts testifying at trial could not (and did not) point to any additional watercolor portraits in the motif of Edith Schiele seated from 1917 which are signed and dated that Prof. Natter failed to consider. See, e.g., Day 10 Transcript, 9:5-13. No evidence was adduced at trial to indicate that Prof. Natter failed to consider any other Schiele artwork that potentially was a match for Number 5 in the 1960 Contract.
Significant focus on the challenge to the 1960 Contract centers on the contention that Rudolf Leopold erred when noting the date in the description of Number 5. The 1960 Contract, as noted supra, was drafted by Rudolf Leopold, a prolific art collector whose Schiele collection eventually became the contents of the Leopold Museum in Vienna. Rudolf Leopold amassed a significant private collection of 19th and 20th century Austrian art, with Schiele at the heart of his collection. See M-A at 29. Rudolf was "especially keen on all aspects of correct chronological dating of Schiele's artwork," and believed he could date Schiele's artwork "not just to the appropriate year but to the appropriate month and to the appropriate even week without the need of seeing any dating on the artwork." Day 3 Transcript, 171:18-25. See generally M-A. Rudolf was critical of other Schiele experts and enthusiasts whom he felt failed to be chronologically consistent in their catalogues. See M-A at 32; M-Z at 513 (Rudolf Leopold's Egon Schiele Catalogue Raisonné). In crafting his own catalogue raisonné, Rudolf "attempted to use all available references both of a stylistic and those of a documentary nature, in order to ensure the most competent chronology possible." M-Z at 513. Rudolf unambiguously stated that "chronological order" was "a main concern" of his catalogue raisonné. Id. Proper dating was Rudolf's "trademark," and "he focused on dating matters with a supreme discipline." M-A at 32-33. It was a source of competition between Rudolf and Otto and Jane Kallir. See Day 3 Transcript, 173:18-20. "To prove his expertise, he really emphasized on chronology." Id. at 174:11. Likewise, Wolfgang Georg Fischer, the organizer of the 1964 Marlborough Exhibition, wrote about his meeting with Rudolf in 1964 and Rudolf's loan of major Schiele works to the Exhibition. See M-UU (The Reverse of Pictures (Die Rückseite der Bilder) by Wolfgang Georg Fischer). Fischer described Rudolf as "a beserker, an obsessive who knew the month of each print." Id. at 102.
Jurist and historian, Michael Wladika, prepared a Mayländer Dossier as part of a provenance research initiative to assess whether any of the Leopold's Museum artwork should be restituted. See M-BB. In preparing the Dossier, Wladika interviewed Rudolf Leopold, and Rudolf indicated that Number 5 in the 1960 Contract might be either D1908 or D2225. Id. at MAYL00031; Ex. 121 at 21:516-518, 25:634-635, 31:817-819. Wladika likewise confirmed this possibility in an email on April 6, 2016. See Ex. 121, at Exhibit 3. See also, Ex. 96, at 4; Day 9 Transcript, 32:2-6. When Christie's prepared its report in September 2016 for Lehman with respect to their provenance research on D1908, Christie's questioned why D2225 was given as an option for Number 5 in the 1960 Contract, as D2225 was not dated 1917. See Ex. 96 at 4.
The Mayländer Dossier's purpose arose from a poster campaign by the IKG wherein it was alleged that the Leopold Museum contained looted art, including some from Karl Mayländer's art collection. Ex. 121 at 17:400-405. The Leopold Museum ultimately restituted works to the Mayländer Heirs. See, e.g., Ex. 123 17:15-21.
With this backdrop providing insight into the utmost importance of dating to Rudolf Leopold, ROLF and Lehman proffer the deposition testimony of Elisabeth Leopold, Rudolf's wife and a former director of the Leopold Museum. See Exs. 122 and 123. Elisabeth Leopold maintains that Number 5 in the 1960 Contract was D2225, not D1908 and that she knows this because she never liked D2225. See Ex. 122 at 16:15-20; Ex. 123 at 29:6-9. It is undisputed that Elisabeth Leopold was not present during the meetings Rudolf had with Etelka Hofmann regarding the 1960 Contract and does not offer first-hand knowledge of the making of the 1960 Contract or negotiations leading thereto.
The Court sustained each objection to these transcripts raised by the Mayländer Heirs at NYSCEF Doc. #1297. Accordingly, the Court has not considered portions of the deposition transcripts at Exs. 122 and 123 that were excluded by sustaining the objections.
Elisabeth Leopold's deposition testimony was entered into evidence, and the Court has reviewed the transcripts, excepting the portions to which the Mayländer Heirs raised objections which were sustained by the Court at trial. Elisabeth Leopold did not testify in person, but her voice was heard clearly by the Court in the transcripts nonetheless. Despite Rudolf telling Wladika that Number 5 was either D1908 or D2225, based presumably on his own first-hand knowledge of what he had possessed, and despite Elisabeth Leopold not having first-hand knowledge of the 1960 Contract, Elisabeth Leopold insists that Rudolf never owned D1908.
Jane Kallir speculated in her testimony that it is possible that Rudolf owned D1908, D2225, and D1998 at one time or another, and that he simply could not recall which one he had purchased from Etelka Hoffman when discussing it with Wladika in 2009. See Ex. 100 at 3.
Even when a court as trier of fact reviews a deposition transcript, as opposed to live witness testimony, the court is in "the foremost position to assess a witness's credibility." Santiago v. Frito-Lay, Inc., 235 A.D.2d 528, 529 (2nd Dept. 1997). The lack of reliability of Elisabeth Leopold's testimony, particularly with respect to a claim by the Mayländer Heirs for a Schiele artwork, searingly teems through the pages of the transcript. The Court finds the resentment toward the Mayländer Heirs in the deposition transcripts palpable and deems Elisabeth Leopold's deposition testimony unreliable and lacking in credibility. The following is illustrative of Elisabeth Leopold's bitterness toward the Mayländer Heirs and their claims to Schiele artworks:
The contrast in Elisabeth Leopold's demeanor at the deposition by counsel for the Mayländer Heirs versus her conduct at the deposition by the attorneys for ROLF/Lehman and the Rieger Heirs is striking.
Q.... Were you present at some of the meetings between Mr. Leopold and Dr. Wladika?
A. Yes, of course. What is it you want please?
Q. In 2009, was Dr. Wladika an employee of yours?
A. To come to a settlement -
A. (In English) Settlement, yes....
THE WITNESS: (In English) Decided to make a settlement.
Q. BY MR. WARSHAVSKY: Thank you.
A. (In English) And you get two wonderful works...
THE WITNESS: (In English) You are the lawyer of Mayländer?
Q. BY MR. WARSHAVSKY: I am the lawyer of Mayländer, yes.
A. (In English) We have done what we can. We have the settlement.
Q. What do you mean by that?
A. So we settled.
Q. Who settled? I'm sorry.
A. The Leopold Collection with the Mayländer Trust.
Q. I see. Okay. Thank you, Mrs. Leopold.
A. (In English) This case, this is a fantasy idea.
Q. What do you mean -
A. 1908 is a fantasy. I don't know what to talk about it. I just say what I know.
Q. And what did you think about the settlement with the Mayländers?
A. I was glad there was an end.
Q. Okay. You made a comment earlier about it being about money. What did you mean by that?
A. So I don't know. What do you want now still?
Q. I asked what you meant by that comment.
A. So I withdraw the comment.Ex. 123 15:15-16:4; 51:25-53:3. See also, id. at 40:20-42:20.
In addition to a lack of first-hand knowledge of the 1960 Contract and memory lapses, Elisabeth Leopold's deposition transcripts give the Court ample reason to question her reliability in answering questions about the Mayländer Heirs, with whom the Leopold Museum settled and restituted Schiele artworks after protests were held at the Museum amid accusations of possessing looted art. Additionally, while Elisabeth Leopold testifies that "all" of Schiele's "main works" have been in her home at one time, she also contends that Rudolf never owned D1908, which all of the experts retained by the parties in this action agree is a notable drawing in the Schiele oeuvre. See Ex. 123 at 35:11-25.
For example, Elisabeth Leopold gave two different answers for her birthday at the depositions in this action on April 21, 2023 and May 8, 2023.
The credible testimony and documentary evidence presented at trial with respect to Rudolf's unwavering dedication to accurate dating of Schieles also calls into question the accuracy of Elisabeth Leopold's testimony regarding Number 5. ROLF, relying on Elisabeth Leopold's testimony, contends that Rudolf erred and wrote 1917 on the 1960 Contract instead of 1918. D2225 was a work from 1918, and that is the work Elisabeth contends Rudolf purchased from Etelka as Number 5 in the 1960 Contract. Such an error on an installment contract requires the Court to believe that despite his strict adherence to accurate dating and propensity for identifying lapses in accurate dating by his peers, Rudolf not only mistakenly dated Number 5 when he drafted the 1960 Contract, but he also did not opt to fix that error in any of the nearly 20 times he met with Etelka to make an installment payment. See M-L; Ex. 123 at 22:13-17 (Elisabeth Leopold testified that Etelka met with Rudolf 20-30 times). The correct dating of works within the scope of Schiele's development was of paramount importance to Rudolf, but he not only made a blatant dating mistake but repeatedly failed to fix it. "From a professional perspective, [such] an error is extremely unlikely." M-A at 35.
D2225 is purportedly in the current possession of the Dichand Family in Austria. Austrian laws would prevent the Mayländer Heirs from making a claim similar to those made in this lawsuit against a private individual in Austria.
Furthermore, Prof. Natter explained in compelling testimony why D2225 is not a match for Number 5 in the 1960 Contract. In addition to being dated 1918 instead of 1917, D2225 depicts Edith in a way that would not be characterized as "seated" in a picture title, as "there is nothing to be seen of that actual sitting motif in the bust." Id. "If one was to use the term 'seated' in the title of such a work, this would apply to such a large number of Schiele's portrait-like depictions on paper that the use of the term would no longer have any significance." Id. D2225 in the Kallir Catalogue Raisonné is depicted as cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image13.pdf.
Again, the Court notes that this was an installment contract and Rudolf Leopold was not taking possession of Number 5 immediately. As such, Rudolf was motivated to accurately describe his purchase, to not make errors, and in the unlikely event he did make an error, Rudolf had the utmost incentive to ensure the error was expeditiously corrected during any one of the many times he came to make an installment payment.
While not conclusive evidence, the Court also notes that D1908 has the number "5" written on the verso. D2079, which has previously been restituted to the Mayländer Heirs and is Number 4 in the 1960 Contract, has a strikingly similar "2" written on the verso. As noted supra, D1908 and D2079 were depicted on the same page of the Marlborough Exhibition Catalogue and hung next to each other on the wall of the Exhibition. Even if the "5" and "2" on the versos were not written by Etelka Hoffman or Rudolf Leopold as designations of works in the 1960 Contract, these two works undeniably became tied to each other numerically at some point. Additional inferential evidence demonstrated that Number 3 in the 1960 Contract is D2095 which, like D1908 and D2079, was reproduced as a postcard by Richard Lányi.
Both are depicted supra.
By 1963, the Drawing (D1908) was at Galerie Galatea in Turin, Italy. Galerie Galatea was owned by Mario Tazzoli and Enrico Colombotto Rosso. Galerie Galatea dealt in 20th century art and dedicated a solo exhibition to Schiele in June and July, 1963. See M-A at 81. Rudolf Leopold attended that exhibition and acquired some Schiele artworks. Id. The record before the Court supports a reasonable conclusion that D1908 arrived at Galatea through an exchange from Rudolf during this time frame. Id. at 81-82; Day 4 Transcript, 47:22-48:16. Kallir's Catalogue Raisonné indicates that D1908 came to the Marlborough Gallery from Galerie Galatea. The cardboard backing from D1908, located by Lehman's daughter years later, references Galerie Galatea, as well as a seated Portrait of Edith from 1917, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image14.pdf. Ex. 126. See also, Day 5 Transcript, 19:18-21:10; Ex. 132.
D1908 was not in the catalogue for this exhibition.
The Court notes that in 1998, more than 70 years after the atrocities of the Holocaust, the U.S. government embraced of the Washington Conference Principles on Nazi-Confiscated Art (the "Washington Principles"). See Emden v. Museum of Fine Arts, Houston, 103 F.4th 308, 321 (5th Cir. 2024). The Washington Principles provide:
In developing a consensus on non-binding principles to assist in resolving issues relating to Nazi-confiscated art, the Conference recognizes that among participating nations there are differing legal systems and that countries act within the context of their own laws.
1. Art that had been confiscated by the Nazis and not subsequently restituted should be identified.
2. Relevant records and archives should be open and accessible to researchers, in accordance with the guidelines of the International Council on Archives.
3. Resources and personnel should be made available to facilitate the identification of all art that had been confiscated by the Nazis and not subsequently restituted.
4. In establishing that a work of art had been confiscated by the Nazis and not subsequently restituted, consideration should be given to unavoidable gaps or ambiguities in the provenance in light of the passage of time and the circumstances of the Holocaust era.
5. Every effort should be made to publicize art that is found to have been confiscated by the Nazis and not subsequently restituted in order to locate its pre-War owners or their heirs.
6. Efforts should be made to establish a central registry of such information.
7. Pre-War owners and their heirs should be encouraged to come forward and make known their claims to art that was confiscated by the Nazis and not subsequently restituted.
8. If the pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to the facts and circumstances surrounding a specific case.
9. If the pre-War owners of art that is found to have been confiscated by the Nazis, or their heirs, can not be identified, steps should be taken expeditiously to achieve a just and fair solution.
10. Commissions or other bodies established to identify art that was confiscated by the Nazis and to assist in addressing ownership issues should have a balanced membership.
11. Nations are encouraged to develop national processes to implement these principles, particularly as they relate to alternative dispute resolution mechanisms for resolving ownership issues.https://www.state.gov/washington-conference-principles-on-nazi-confiscated-art/ (emphasis added).
Years later, the Holocaust Expropriated Art Recovery Act of 2016 (the "HEAR Act") likewise sought to "ensure that laws governing claims to Nazi-confiscated art and other property further United States policy," and that "claims to artwork and other property stolen or misappropriated by the Nazis are not unfairly barred by statutes of limitations." HOLOCAUST EXPROPRIATED ART RECOVERY ACT OF 2016, PL 114-308, December 16, 2016, 130 Stat 1524. "In promulgating the HEAR Act, Congress found that (1) the Nazis 'confiscated or otherwise misappropriated hundreds of thousands of works of art' (HEAR Act § 2 [1]) from Jews and others they persecuted, and that many works 'were never reunited with their owners' (§ 2 [2]); and (2) the Nazi victims and heirs have sought legal relief to recover artwork, but they 'must painstakingly piece together their cases from a fragmentary historical record ravaged by persecution [and] war.'" Reif v. Nagy, 175 A.D.3d at 132, citing HEAR Act §2(6). "In the HEAR Act, the Principles, and the Holocaust Victims Redress Act, we are instructed to be mindful of the difficulty of tracing artwork provenance due to the atrocities of the Holocaust era, and to facilitate the return of property where there is reasonable proof that the rightful owner is before us." Reif v. Nagy, 61 Misc.3d at 325, citing (HEAR Act, Title II, at § 202).
"While this great theft may have taken place more than 70 years [before the Washington Principles], a resolution was not possible until a combination of scholarship and technology allowed for the creation of databases compiling lists of missing works, and until nations agreed to international guidelines on art restitution such as those laid out in the 1998 Washington Principles on Nazi-Confiscated Art." In re Est. of Stettiner, 148 A.D.3d 184, 186 (1st Dept. 2017). Indeed, Congress' passage of the HEAR Act at the end of 2016 reveals that- even within the last decade- the government has recognized that legislation aiding historical reparation is needed "to aid victims of Holocaust-era persecution and their heirs to recover works of art confiscated or misappropriated by the Nazis, and to ensure that claims to artwork and other property stolen or misappropriated by the Nazis are not unfairly barred by statutes of limitations but are resolved in a just and fair manner." Id. at 186-87.
In reaching this determination, the Court was mindful of the intent of the Washington Principles and the HEAR Act and the continuing dedication of the United States and other countries to correcting past injustices, providing closure to individuals and communities ravaged by cultural theft during World War II, and finding fair and just solutions for the return of art relinquished by owners prior to their murders at the hands of the Nazis. Restitution is a posthumous victory over the historical wrongs of the Holocaust. Efforts to belatedly reunite owners of artworks with artwork believed irretrievably lost during the chaos of war is defined by a painstaking process of provenance and art history marked by fragmented historical records damaged by oppression, war and genocide. The art collection of Karl Mayländer, like the artwork of many of his Jewish peers, was lost during a time of turmoil, when transactions and transfers of property involved friends, intermediaries, dealers, looters, Nazis and any combination thereof.
Taking into thoughtful consideration both these overriding principles and the evidence and testimony presented at trial, particularly the testimony of Prof. Natter who proffered not only historical and provenance insights into this matter but also the expert conclusions of an art historian specializing in Viennese art in the 1900's, the Court finds by a preponderance of the evidence that the Mayländer Heirs have established that Karl Mayländer owned D1908.
Evidence was adduced at trial as to markings and notes made on the Leopold's copy of Kallir's Catalogue Raisonné. Considering all of the evidence presented and the credibility of the witnesses testifying as to the markings and notes, the Court's decision herein was not impacted by the markings and notes nor the parties' arguments with respect thereto. Little, if any, weight has been given to evidence in this regard.
The Nature of the Transaction Whereby Karl Mayländer was Dispossessed of D1908
Here, the evidence at trial does not support a conclusion that the Mayländer art collection was forcibly taken by the Nazis or was the result of a forced sale. Rather, the evidence at trial established that, at the time the Nazis occupied Austria in 1938, Karl was a Jewish Austrian national living in Vienna. Facing increasingly violent persecution, Karl sought to leave Austria and tried to finance his escape by selling his artwork. But Karl's efforts at emigration failed, and he learned that his art collection was of negligible monetary value. On October 23, 1941, Karl was deported to the Jewish ghetto in Łódź and was subsequently murdered, though the exact date and location of his murder have never been confirmed. Prior to his deportation to the ghetto, on October 21, 1941, Karl gave a Special Power of Attorney to the Central Authority for Jewish Emigration and did not reference any artworks. Beleaguered by the increasing threat from the Third Reich, Karl's art collection - of sentimental but not pecuniary value - came into the possession of Etelka Hoffman, a non-Jew, at some point prior to his declaration of property on the Special Power of Attorney.
"[I]n New York, a thief cannot pass good title." Bakalar v. Vavra, 619 F.3d 136, 140 (2nd Cir. 2010). "New York case law has long protected the right of the owner whose property has been stolen to recover that property, even if it is in the possession of a good-faith purchaser for value." Solomon R. Guggenheim Found. v. Lubell, 77 N.Y.2d at 317. "This means that, under New York law... 'absent other considerations an 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.'" Bakalar, 619 F.3d at 141 (citing Michelle I. Turner, Note, The Innocent Buyer of Art Looted During World War II, 32 Vand. J. Transnat'l L. 1511, 1534 (1999)). "The manner in which the New York rule is applied reflects an overarching concern that New York not become a marketplace for stolen goods and, in particular, for stolen artwork." Id. "[T]itle remains with the original owner or his heirs absent a valid conveyance of the works." Reif v. Nagy, 61 Misc.3d at 326.
Here, the Mayländer Heirs have shown by a preponderance of the evidence that the Drawing was from Karl Mayländer's art collection. As such, the Court must now, as a threshold issue, determine whether ROLF and Lehman sustained their burden of establishing that Karl Mayländer voluntarily relinquished the Drawing to Etelka Hofmann, and accordingly, whether good title could be passed on to Robert Lehman at the Marlborough Gallery in 1964. See Bakalar, 619 F.3d at 147.
ROLF and Lehman presented evidence at trial that Beno Fleischmann was Karl Mayländer's nephew; Beno changed his name to Bernard Foster when he emigrated to the United States in October 1939. See Day 9 Transcript, 105:20-23; Ex. 114 at 55. Bernard Foster was arrested and sent to Dachau and then Buchenwald in the Spring of 1938. Day 9 Transcript, 106:3-5. After Barnard was released, he made efforts to locate his family and ultimately sought to manage the formalities of a death certificate for his mother, as well as matters of her estate and his own compensation claims. Day 10 Transcript, 103:7-9; Ex. 114 at 55. Ottilie was officially declared deceased in October 1947. Id.
Bernard Foster emigrated to the United States before Karl and Ottilie were deported to Łódź in October 1941.
After the war, Bernard submitted a compensation application for damages stemming from his imprisonment in concentration camps; as part of that application, he was required to provide references of people to bolster his claim of having been taken away to a concentration camp. Day 9 Transcript, 106:6-12. One of his references on that application was Etelka Hofmann, proving that Barnard knew Etelka's address in the post-war period. Id. at 106:12-14; Ex. 114 at 56. Laurie Stein testified that she did not find any claims that Bernard Foster made for restitution of property belonging to his uncle, Karl. Day 9 Transcript, 106:21-24. Stein further testified that in the course of her provenance research, she did not find any communication between Bernard and any other person concerning Karl Mayländer after Bernard went to Dachau in 1938. Day 10 Transcript, 105:2-12.
The Court's review and interpretation of the evidence and testimony compels the conclusion that there is no proof: that Bernard knew about Karl's art collection, that he knew that Karl tried and was unable to sell it, that he knew the collection ended up with Etelka, and that he knew Etelka was loaning and selling works from the collection. ROLF and Lehman did not prove a gift to Etelka by virtue of Bernard's association with Etelka post-war. No evidence or testimony at trial demonstrated that Bernard knew what happened to Karl's art collection. The Fourth Department in a previous appeal acknowledged that only speculation and conjecture was presented on the previous motions for summary judgment with respect to Karl's heirs' knowledge of any claim to the artwork. Robert Owen Lehman Found., Inc., 211 A.D.3d at 1541-42. ROLF's and Lehman's speculation and conjecture in that regard persists even after a lengthy Bench Trial.
ROLF and Lehman did not establish by a preponderance of the evidence the nature of the transfer whereby Etelka ended up with Karl Mayländer's art collection before he was murdered in the Holocaust. Indeed, ROLF and Lehman did not sustain the burden that the transfer between Karl and Etelka was voluntary in any respect. There is evidence and testimony in the record that there was a congenial relationship of some nature between Karl and Etelka. There is also an indication in the record that Rudolf and Elisabeth Leopold believed Etelka was Karl's "companion in life," that she received the art collection from Karl, and that she had the legal right to sell those artworks. Ex. 123, 21:9. See also Ex. 114 at 63-64.
The Court notes that the credibility of the Leopold's beliefs in this regard is questionable. As Dr. Jonathan Petropoulos testified: "I think his [Rudolf Leopold's] passion for Schiele robbed him of his moral compass, and he was so passionate about acquiring Schieles, he would acquire Nazi-looted Schieles... I know he collected stolen Schieles because there's been reports by the Austrian Government into the - his collecting activities. We know he's had to resolve restitution claims... That Rudolf Leopold acquired a significant number of looted Schieles." Day 7 Transcript, 158:11-159:1. It is undoubtedly much easier and cleaner to acquire a Schiele with, for example, a Mayländer provenance history if one espouses the theory that Karl told Etelka he was giving her his (nearly worthless at the time) art collection as a gift to care for her in her old age. Not only does this presuppose that Karl knew prior to being deported to Łódź and that the Third Reich would eventually fall, but also that following that fall, years in the future, his nugatory art collection would so increase in worth that it could provide for Etelka as she aged. Both Elisabeth Leopold's testimony - and any testimony presented that was based upon personal conversations with Elisabeth and her impressions and recollections on this topic - lack credibility.
Accepting this theory would certainly pave the way for valid titles to art that would otherwise be shrouded by a cloud of uncertainty and tainted by the dire circumstances imposed upon Karl at the time his art collection came into Etelka's possession.
Even if the Court were to determine that it is sufficient for ROLF and Lehman to have demonstrated that Karl gave the art collection to Etelka in some manner and that the inference is that he "voluntarily" transferred the collection, the historical circumstances of the transfer nevertheless render the transfer void.
"Voluntarily" as opposed to Etelka Hofmann having forced him in some nefarious manner. There is no evidence in the record that Etelka had iniquitous motives associated with her coming to possess Karl's art collection.
"'[F]irst, to make a valid inter vivos gift there must exist the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee. Second, the proponent of a gift has the burden of proving each of these elements by clear and convincing evidence.'" Mirvish v. Mott, 18 N.Y.3d 510, 518 (2012), quoting Gruen v. Gruen, 68 N.Y.2d 48 (1986). The record before the Court is bereft of clear and convincing evidence that Karl had the intent to make a present transfer to Etelka and "that the gift was voluntary and understandingly made by... [Karl], uninfluenced by fraud, duress or coercion." Matter of Est. of Clines, 226 A.D.2d 269, 270 (1st Dept. 1996) (citing Gordon v. Bialystoker Ctr. & Bikur Cholim, Inc., 45 N.Y.2d 692, 695 (1978)).
"The element of donative intent presupposes that the donor possesses the mental capacity to make a gift." Spallina v. Giannoccaro, 98 A.D.2d 103, 106 (4th Dept. 1983), (citing Riggs v. Am. Tract Soc., 95 NY 503, 503 (1884)), appeal dismissed 62 N.Y.2d 646 (1984). See generally, Petition of Fischer, 76 Misc.3d 1208(A) (Surr. Ct. Queens Co. 2022) ("the donor must be mentally capable of formulating the requisite intent to make a gift"); In re Est. of Romano, 8 Misc.3d 1010(A) (Surr. Ct. Nassau Co. 2005). "'[T]he hallmark of a gift is that it is a voluntary transfer of property without consideration or compensation'... and the inquiry focuses on the subjective intent of the donor at the time of the conveyance." Batease v. Batease, 71 A.D.3d 1344, 1346 (3rd Dept. 2010) (internal citations omitted). There must be evidence of "an irrevocable intent of a gift." Speelman v. Pascal, 10 N.Y.2d 313, 320 (1961).
Here, the circumstances Karl endured at the time his art collection came to be in the possession of Etelka do not in any way evidence a voluntary transfer made of Karl's own volition. The transfer from Karl to Etelka was made when Jews were enduring the atrocities of Nazi persecution, brutalization and murder with unrelenting focus. As set forth supra, the Third Reich ruthlessly isolated, impoverished and discriminated against Jews in the years leading up to World War II as a precursor to the mass murder of six million Jews in the Holocaust. Karl's transfer of his art collection to his non-Jewish acquaintance, Etelka, at a time when he was completely dehumanized and devalued by Nazi ideology in practice and in reality is not a realistic setting for a voluntary transfer of a sentimentally valuable art collection. The atmosphere of fear and brutality mounted by the Third Reich is undeniably not a fertile ground for valid donative intent. Whatever transfer occurred between Karl and Etelka was not voluntary due to the conditions of extreme duress and antisemitism suffered by Karl that existed at the moment in time when the transfer occurred. The evidence adduced at trial established that Karl Mayländer was under duress during the time period that his art collection came into the possession of Etelka Hoffman. See, e.g., Reif v. Nagy, 175 A.D.3d 107 (1st Dept. 2019); Bakalar, 819 F.Supp.2d at 300. The evidence presented at trial does not establish that Karl's transfer to Etelka was "voluntary" and "uninfluenced by fraud, duress or coercion." Matter of Est. of Clines, 226 A.D.2d at 270 (citing Gordon v. Bialystoker Ctr. & Bikur Cholim, Inc., 45 N.Y.2d 692, 695 (1978)). It has been held:
"' Freedom of the will and good faith are essential to the validity of a gift, as in the case of contracts generally. Where the donor has been induced to make a gift through fraud, force or undue influence, the gift may be set aside.' (14 Am. & Eng. Ency. of Law [2d ed.] 1011.) 'The rule is well recognized that a gift procured through means of fraud, duress or undue influence brought to bear upon the donor is void.' (20 Cyc. 1217.)"Amory v. Nason, 125 A.D. 815, 820 (1st Dept. 1908) (emphasis added). Accordingly, any "gift" or transfer that occurred between Karl and Etelka is void.
The decision of the New York Supreme Court case in Menzel v. List, 49 Misc.2d 300 (Sup.Ct. NY Co. 1966), modified, 28 A.D.2d 516 (1967), rev'd, 24 N.Y.2d 91, 246 N.E.2d 742 (1969) (appellate practice aimed at measure of damages only), is informative for the case at bar. The Menzel decision followed a trial in a replevin action centered upon an artwork owned by Jews in Brussels who fled in March 1941, to avoid the approaching Nazis. Id. at 301. In Menzel, the artwork was seized by the Nazis as decadent art. The Menzels searched for the artwork after the war ended but did not locate it until 1962, when it was discovered in the possession of the defendant. Id. Menzel sought the return of the artwork, noting that it had been looted without compensation to her and her now-deceased husband. The jury determined the artwork, which was in the possession of the defendant and was previously owned by the Menzels in Brussels, had been looted and stolen and accordingly awarded the artwork to Menzel. Id. at 303. In finding that the artwork had not been abandoned by the Menzels in Brussels, the Court stated: "Abandonment is defined as a voluntary relinquishment of a known right... The relinquishment here by the Menzels in order to flee for their lives was no more voluntary than the relinquishment of property during a holdup." Id. at 305 (emphasis added).
Though the specific circumstances of Karl's divestiture of his art collection differ from the facts presented in Menzel, Karl's surrender of his art collection to Etelka was similarly as involuntary as "the relinquishment of property during a holdup" as it was a transfer made under duress from the escalating instability and perilousness of the conditions within which Jews were living in Vienna.
Reif v. Nagy, 175 A.D.3d 107 (1st Dept. 2019), is also instructive. In Reif, the heirs of Fritz Grunbaum filed suit against art dealer Richard Nagy and his company, Richard Nagy Limited, after Nagy exhibited two Schiele works at a show in New York City. Grunbaum was an admirer of Schiele and amassed an 81-piece collection before World War II. Id. at 109. After the Nazi invasion of Austria, Grunbaum tried to escape with his wife, Elisabeth, to Czechoslovakia but was apprehended and arrested in March 1938. Id. From this time until his murder, Grunbaum was imprisoned in various concentration camps, including Buchenwald and Dachau. Id. at 109-110. While her husband was imprisoned, Elisabeth tried to secure his release, as his release had apparently been promised by certain German officers. Id. at 110. However, starting on Kristallnacht and then continuing throughout the war, Elisabeth's efforts were impeded to both secure her husband's release and to escape. Id.
While Grunbaum was imprisoned at Dachau, the Nazis forced him to execute a power of attorney in Elisabeth's favor. Id. Four days later, Elisabeth was forced to allow a Nazi, Franz Kieslinger, to inventory Grunbaum's property, including the art collection. Id. Grunbaum's name appears on the inventory, which included five Schiele oils by name, and 55 sheets of "large hand drawings," 20 pencil drawings, an etching, and other works. Id. at 110-111. Thereafter, Grunbaum's entire art collection was deposited with Schenker & Co., A.G., a Nazi-controlled shipping company and marked for export. It does not appear that the collection ever left Austria, however. Id. at 111. Grunbaum was murdered in 1941, and Elisabeth died within the next year or two as well.
Elisabeth's sister, Mathilde Lukacs and brother-in-law, Sigmund Lukacs, had fled Vienna for Belgium before the war began. Prior to fleeing, the Lukacses were forced to inventory their assets, and that inventory did not include the Grunbaum 81-piece art collection. Id. at 111-112. Indeed, Elisabeth's updated property declaration on behalf of Grunbaum from June 1939 listed the entire 81-piece art collection. Id. at 112. Nevertheless, at some point, Mathilde obtained possession of Grunbaum's art collection, and the evidence presented to the court demonstrated that Mathilde sold paintings to the Kornfeld Gallery in Bern, Switzerland in 1956, maintaining at the time that she owned them.
While some restitution efforts were made by Elisabeth and Grunbaum's heirs after the war, none were successful. Id. at 113.
The Grunbaum heirs contended that Grunbaum's ownership of the works prior to World War II was undisputed, and that Defendants could not establish that the transfer from Grunbaum to his wife was voluntary, thus rendering all subsequent transfers void. The First Department determined there was sufficient proof of Grunbaum's ownership of the artworks before World War II had been demonstrated and that defendants had presented only speculative evidence that Mathilde had possession and title of the artworks, noting the lack of an explanation for how Mathilde was able to acquire the artworks either during the war or upon her return visits to Austria after the war. Defendants argued that the artworks belonged to Mathilde and that she had valid title that she was able to transfer. Id. at 125. Experts offered speculative testimony as to how the Grunbaum art collection ended up with Mathilde. Id. One theory posited by defendants was that Elisabeth's signature on the power of attorney conveyed good title. Id. at 129.
The First Department "reject[ed] the notion that a person who signs a power of attorney in a death camp can be said to have executed the document voluntarily." Id. The First Department further stated that "even assuming that Grunbaum transferred his collection to Elisabeth, the transfer was invalid." Id. Of crucial importance to the case at bar, the First Department also determined that the record before it lacked any evidence that Grunbaum or Elisabeth intended to make a gift of the art collection to Mathilde. Id. at 130. In addition to a lack of evidence of an intent to gift, delivery, acceptance, or any evidence as to how Mathilde acquired the collection, the First Department found a failure to raise a triable issue of fact that Grunbaum had "voluntarily relinquished possession of the Artworks, or that he did so intending to pass title." Id.
Likewise in the case at bar, the trial record is bereft of evidence or testimony that Karl Mayländer intended to gift D1908 to Etelka Hoffman. See Reif v. Nagy, 175 A.D.3d at 129-30. While it is uncontroverted that the Karl Mayländer collection ended up with Etelka Hoffman after World War II, the details of the transfer between them is shrouded in mystery. Here, ROLF and Lehman failed to establish that Karl voluntarily relinquished possession of his collection to Etelka, or that he intended to pass title to her when she obtained possession. In point of fact, while it is undisputed that Etelka possessed the Karl Mayländer art collection after World War II, when lending the collection to an exhibition post-war, Etelka lent the artworks and specifically denoted that the artworks were from the collection of Karl Mayländer. See Ex. 21; M-H; M-I at 36; Day 3 Transcript, 79:22-80:1; Day 9 Transcript, 110:16-21. As such, while Etelka possessed the art collection, the evidence adduced at trial does not demonstrate that she had the present state of mind to accept it when she received it, even if donative intent had been proven. It would be improperly speculative - and unsupported by the trial record - for the Court to conclude that Etelka acknowledged Karl's art collection as a gift.
Self-serving, hearsay evidence in this regard was offered through the Deposition Transcript of Elisabeth Leopold, but the Court granted the Mayländer Heirs' motion to exclude that portion of the transcript. As noted supra, not only is the testimony of Elisabeth Leopold lacking in credibility, but the story she tells of Etelka recounting that the collection (which was nearly worthless prior to Karl's death) was given to her as a gift to care for her in her old age would require truly incredible- and given the conditions he was enduring, improbable- foresight on the part of Karl.
Donative intent was not proven.
The Court further notes that Etelka's name is not associated with the works in Karl Mayländer's art collection. For example, D2095 was conveyed in the 1960 Contract by Etelka to Rudolf Leopold, but only Karl Mayländer's and Leopold's names appear in the provenance listed in Kallir Catalogue Raisonné, cached at https://nycourts.gov/reporter/webdocs/ROLFvWien_Image15.pdf. M-TT.
Though approaching the case from radically different procedural posture and with different facts, the New York County Supreme Court recently grappled with the issue of duress, its interplay with a transfer made in the throes of Nazi tyranny, and the precedent it was constrained to follow. See Bennigson v. Solomon R. Guggenheim Found., 2024 WL 2872552 (Sup.Ct. NY Co. June 6, 2024). The Bennigson litigation was commenced by the heirs of Karl Adler, a German Jew who owned Pablo Picasso's Woman Ironing (La repassseuse) (1904) prior to World War II. The Court in Bennigson described in heartbreaking detail the atrocities inflicted upon German Jews. Id. at *2-*6. Unlike Karl Mayländer, Karl Adler and his family escaped Germany in June 1938 and sought to obtain a permanent visa for entry to Argentina. The process of escaping and emigrating was difficult and costly, as they were forced to pay a flight tax. As part of his fundraising efforts after fleeing Germany and before arriving in Argentina, Karl Adler sold Woman Ironing on October 29, 1938 to J. Thannhauser. Id. at *7. J. Thannhauser was also Jewish and had fled Germany and the Nazi persecution for Paris. Id. In Bennigson, the Amended Complaint alleged that J. Thannhauser was aware of Karl Adler's plight, that Karl Adler would not have sold Woman Ironing for such a price absent Nazi persecution, and that J. Thannhauser was purchasing comparable artworks from other German Jews who were fleeing Germany and profiting from their misfortune. Id. The Court in Bennigson notes that Woman Ironing "was not appropriated directly by the Nazis or anyone collaborating with the Nazis." Id. at *1.
"The flight tax assessments were based on wealth tax declarations, which referred to wealth in the previous year, and which were calculated at 25% of the value of the reported assets." Bennigson, 2024 WL 2872552, at *4. "The payment of the flight tax was necessary to obtain the no-objection certification of the tax authorities, which in turn was necessary to obtain an exit permit. Payment of the flight tax, however, did not in itself give the emigrant any right whatsoever to transfer abroad any of the remaining assets after payment of the tax." Id.
Karl Adler had purchased Woman Ironing from J. Thannhauser's father in 1916. Id. at *7.
Karl Adler sold Woman Ironing by Pablo Picasso to J. Thannhauser for CHF 6,887 (approximately U.S. $1,552), a price drastically below market value. Id. at *7.
The Amended Complaint in Bennigson was "predicated on the theory that sales of artwork by Jews fleeing Nazi Germany to anyone (including those having no connection to Nazi Germany) during the Nazi era are per se void or voidable because those sales occurred in a coercive market created by the Nazis in which the persecuted Jewish sellers were preyed upon such that the artwork was snatched up at a below market price regardless of whether there was any threatened direct consequence from the Nazis or their collaborators if the sale did not occur." Id. at 2. "Inasmuch as the counterparty to the Sale is not alleged to have engaged in any type of actual duress, this appears to fail to state a claim based on 'economic duress'... and inasmuch as there does not appear to be any direct consequence which would be incurred as a result of failing to sell the painting to J. Thannhauser at the price sold or that the Adlers were in contact with Nazis who threatened consequences if they failed to sell [ Woman Ironing ] to J. Thannhauser, this appears to fail to state a claim based on third-party duress." Id. Finding no duress, among other reasons, the Bennigson court dismissed the action.
In addition to finding no actionable duress alleged in the Amended Complaint, the Bennigson court also in the first instance determined that laches barred the claim. The Bennigson court's discussion of duress was in the alternative, "[e]ven if laches did not require dismissal." Id. at *2.
As to economic duress, the Bennigson court determined that a claim was not stated because J. Thannhauser had no connection to the Nazis as a collaborator or otherwise. Id. at *13. In New York, a contract can be voided due to economic duress "where the complaining party was compelled to agree to its terms by means of a wrongful threat which precluded the exercise of its free will.." Stewart M. Muller Const. Co. v. New York Tel. Co., 40 N.Y.2d 955, 956 (1976). Citing to precedent reaching the same conclusion, the Bennigson court was constrained to find that the horrific circumstances foisted upon the Karl Adler and his family during the Nazi regime, which undeniably led to great economic pressure, were insufficient to establish economic duress. Id. See also, Zuckerman v. Metro. Museum of Art, 307 F.Supp.3d 304, 319 (S.D.NY 2018), aff'd, 928 F.3d 186 (2nd Cir. 2019); Bakalar, 819 F.Supp.2d at, 300.
Third-party duress also did not succeed under Bennigson. The Bennigson court found that the Adlers accepted proceeds from the sale to J. Thannhauser, that Adler's heirs did not repudiate the sale when the opportunity presented itself, and also determined that there was a lack of any direct consequence to Adler for failing to sell the artwork at that time or at that price and/or knowledge of such consequence for J. Thannhauser. See Bennigson, 2024 WL 2872552, at *14.
Zuckerman, relied upon by the Court in Bennigson, involved the heirs of Paul Friedrich Leffmann and their efforts to recover Pablo Picasso's "The Actor," oil on canvas, from the Metropolitan Museum of Art. Leffmann sold "The Actor" to Käte Perls, a Paris dealer, for U.S. $13,000. While the plaintiffs in Zuckerman alleged that the sale to Perls would not have occurred but for the circumstances being endured by Jews at the time under Nazi persecution, the Southern District of New York court noted that the transaction was between private individuals and was "not at the command of the Fascist or Nazi governments." Id. at 319. Despite acknowledging that the Leffmanns "felt economic pressure during the undeniably horrific circumstances of the Nazi and Fascist regimes," the court determined that those circumstances do not equate to duress when the pressure is not "caused by the counterparties to the transaction... where the duress is alleged...." Id.
Käte Perls was acting on behalf of her husband, Hugo Perls, also an art dealer, and Paul Rosenberg, another art dealer. See Zuckerman, 307 F.Supp.3d at 312.
At the outset the Court notes the stark procedural differences between the case at bar and Bennigson and Zuckerman: both Bennigson and Zuckerman came before the Court on motions to dismiss, not on fully developed trial records. Also, the pending matter relates to an undefined transfer between Karl and Etelka, whereas Bennigson and the cases cited therein related to contractual transfers, the details of which were more fully known to the courts.
In contrast, the pending matter much more closely aligns factually with Reif, a case that embraces the philosophy of the Washington Principles and the HEAR Act. The Court notes the HEAR Act, passed in 2016, "compels" courts "to help return Nazi-looted art to its heirs" and was enacted "based on a Congressional finding that victims of Nazi persecution and their heirs have faced significant procedural obstacles, due in part to State statutes of limitation, to lawsuits brought in the United States to recover misappropriated artworks and other property, and that relief is necessary due to the unique and horrific circumstances of the Holocaust and the difficulty of documenting claims." Reif v. Nagy, 61 Misc.3d at 324-25. Following the precedent set by Reif, this Court awards the heirs of a valid claimant artwork lost to him while enduring Nazi persecution and facing imminent extermination in a concentration camp. To hold otherwise would be historically deaf. To the extent Bennigson and Zuckerman strive in any respect to compel this Court to align with the conclusions drawn therein rather than the precedent set by Reif v. Nagy, the Court declines to follow Bennigson and Zuckerman.
The Mayländer Heirs' Counterclaims
In their Answer, the Mayländer Heirs state counterclaims for declaratory judgment, replevin, and conversion. As noted supra, the transfer from Karl to Etelka was void. As such, Etelka did not receive good title, and she was unable to pass good title on to a good faith purchaser for value. As the trial record lacked any credible proof of a valid conveyance from Karl to Etelka, title to the Drawing resides with the Mayländer Heirs regardless of whether ROLF, Lehman or Robert Lehman, Sr. were good faith purchasers.
Claims for conversion and replevin are similar. "Two key elements of conversion are (1) plaintiff's possessory right or interest in the property... and (2) [a] defendant's dominion over the property or interference with it, in derogation of plaintiff's rights." Colavito v. New York Organ Donor Network, Inc., 8 N.Y.3d 43, 50 (2006) (citations omitted). "'[W]here possession is originally lawful, a conversion does not occur until the owner makes a demand for the return of the property and the person in possession of the property refuses to return it.'" Jung v. Reiner & Kaiser Assocs., 220 A.D.3d 643, 644 (2nd Dept. 2023) (citation omitted). Likewise, to establish replevin, a plaintiff must show a superior possessory right to property in a defendant's possession. See Reif, 175 A.D.3d at 120 (citing Pivar v. Graduate School of Figurative Art of NY Academy of Art, 290 A.D.2d 212, 213 (1st Dept. 2002)); Staff v. Hemingway, 47 A.D.2d 709, 710 (4th Dep't 1975). "Under New York common law, a manual taking is not necessary to show that a wrongful exercise of dominion has occurred in order to claim conversion or replevin." Reif,, 175 A.D.3d at 127.
The proof at trial established the Mayländer Heirs' entitlement to a declaratory judgment in their favor and judgment on their claims for conversion and replevin.
The Mayländer Heirs made a claim for D1908 in 2016. See Day 1 Transcript, 58:14-19; Ex. 89. CPLR §5001 provides:
(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion.(Emphasis added). As this case involved a three-way dispute for the Drawing and the Mayländer Heirs were only adjudged entitled to possession of the Drawing following protracted litigation and a full Bench Trial, this matter is not an appropriate case for an award of pre-judgment interest.
The Mayländer Heirs' Answer also requests an award of attorneys' fees. "An award of attorneys' fees is within the sound discretion of the trial court." O'Mahony v. Whiston, 224 A.D.3d 609, 612 (1st Dept. 2024). "It is well settled in New York that a prevailing party may not recover attorneys' fees from the losing party except where authorized by statute, agreement or court rule." U.S. Underwriters Ins. Co. v. City Club Hotel, LLC, 3 N.Y.3d 592, 597 (2004). There is no basis in the case at bar for the recovery of attorneys' fees. Attorneys' fees are accordingly not awarded in any respect.
The Mayländer Heirs shall circulate a proposed order among counsel and then submit the order to the Court by August 22, 2024.