Opinion
No. 99 Civ. 2622 (BSJ)
January 30, 2001
Memorandum Opinion
Introduction
On April 9, 1999, plaintiff United States of America filed this interpleader action pursuant to 28 U.S.C. § 1335 and 1345 and Fed.R.Civ.P. 22 petitioning the Court to determine which of the defendants is entitled to a painting by George Benjamin Luks entitled "Night Market" ("the painting"). Defendants Lawrence and St. Lifer answered, claiming no beneficial interest in the painting, and they were dismissed from the action. Lifton now moves for summary judgment pursuant to Fed.R.Civ.P. 56, requesting that the Court declare him the beneficial owner upon payment of $24,089.00 to Fireman's Fund. Only Sait opposes the motion.
Background
The following facts are undisputed unless otherwise noted. Defendants Lifton and Sait both claim ownership of the painting. Defendant Lifton purchased the painting from the now-defunct Bernard Dannenberg Galleries, Inc. ("the Dannenberg Galleries") in New York City on or around November 23, 1971. As evidence of the purchase, Lifton has provided a letter and an unsigned consignment sheet from the Dannenberg Galleries. See Ex. A to Lifton Mot. In addition, Samuel Casper, the manager of the Dannenberg Galleries from 1968 through 1972, has provided an affidavit that Lifton purchased the painting for $15,500 on January 8, 1972. Casper's affidavit is corroborated by a copy of the painting's bill of sale, a sheet from the Dannenberg Galleries' record book, and a copy of the Galleries' file card on the painting. See Casper Aff. and Ex. A thereto.
After purchasing the painting, Lifton insured it with Fireman's Fund. After hanging in Lifton's home for more than seventeen years, the painting was stolen from Lifton's residence in Old Westbury, New York on June 10, 1989. Lifton promptly reported the theft to the Old Westbury Police. Lifton then filed a claim with Fireman's Fund and received $24,089 to cover the loss of the painting.
In his affidavit Sait asserts only that his gallery, without mentioning a name or address for it, purchased the painting in 1989 or early 1990, but does not provide any information regarding the purchase price or the seller. See Sait Aff. ¶ 11. In January 1995, Sait consigned the painting to St. Lifer, another gallery owner, and St. Lifer shipped the painting to Lawrence, a prospective purchaser in Florida. In or about March 1995, a purchasing agent for Lawrence contacted Casper, the aforementioned manager of the Dannenberg Galleries, to inquire about the status of the painting. Casper told Lawrence's agent that the painting had been stolen, and notified Lifton that the painting had been located in Florida.
After speaking with Casper, Lifton contacted the art recovery squad of the FBI. The FBI recovered the painting in March 1995, and kept custody of it as evidence in a criminal proceeding. Fireman's Fund agreed to return the painting to Lifton if and when the FBI released the painting, provided that Lifton paid back the $24,089 that he received from Fireman's Fund at the time of the theft. Lifton contacted the FBI on several occasions to request that the painting be returned to Fireman's Fund, and the FBI responded that the painting would be returned upon completion of a criminal investigation into the matter. The United States then filed this action and Lifton filed the instant motion for summary judgment on August 10, 1999.
I. DISCUSSION A. Summary Judgment Standard
A court may grant summary judgment only when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the intial burden of "informing the district court of the basis for its motion" and identifying those portions of the record that it "believes demonstrate the absence of genuine issue of material fact."Celotex Corp. v. Catrett, 477 U.S. 242, 323 (1986). If the moving party meets its burden, the burden then shifts to the non-moving party to "demonstrate to the court the existence of a genuine issue of material fact." Lendiono v. Trans Union Credit Info. Co., 970 F.2d 1110, 1112 (2d Cir. 1992); see also Fed R. Civ. P. 56(e).
"A fact is material when its resolution would `affect the outcome of the suit under the governing law' and a dispute about a material fact is genuine `if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" General Elec. Co. v. New York State Dept. of Labor, 936 F.2d 1448, 1452 (2d Cir. 1991) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
In determining whether a genuine material factual dispute exists, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, 477 U.S. at 255. However, a nonmovant must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the non-movant must come forward with enough evidence to support a jury verdict in his favor. In short, "conclusory statements, conjecture, or speculation" by the non-moving party will not defeat summary judgment." Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996)
B. Non-Movant Sait Presents No Genuine Material Factual DisDute
It is well settled that under New York law, and uncontested by the parties, that a purchaser of stolen property does not have proper title, even if the purchase was made in good faith. See Solomon R. Guggenheim Foundation v. Lubell, 569 N.E.2d 426 (N Y Ct. App. 1991) ("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."); Sillsbury v. McCoon, 3 N.Y. 379, 383-84 (1850) ("And if the wrongdoer sell the chattel to an honest purchaser having no notice of the fraud by which it was acquired, the purchaser obtains no title from the trespasser, because the trespasser had none to give.") Since the facts clearly indicate that Lifton is the rightful owner and that there was a thief in Sait's chain of title, his claim to the painting is inferior to Lifton's and Fireman's Fund's.
Sait contends, however, that there exist genuine issues of material fact with respect to Lifton's original title to the painting and with respect to the reasonableness of Lifton's and Fireman's Fund's post-theft conduct. The factual issues Sait presents, even when viewed in a light most favorable to him, are either not genuine or are not sufficiently material to preclude entry of summary judgment in favor of movant Lifton. Sait's memorandum in opposition to the motion and his supporting affidavit consist of speculative and conclusory allegations unsupported by documentary evidence.
Sait asserts that (1) Lifton did not purchase the painting from the Dannenberg Galleries or insure the painting with Fireman's Fund; (2) it is possible that the Dannenberg Galleries did not have good title to the painting at the time of the sale to Lifton, and (3) that Lifton and Fireman's Fund, in failing to notify the New York City Police, art galleries, museums and the International Foundation for Art Research ("IFAR") of the theft, did not act reasonably.
First, Sait's allegations that Lifton did not purchase or insure the painting are pure speculation unsupported by any evidence. Lifton on the other hand, along with his own sworn affidavit, has provided (1) the sworn affidavit of Laurence Casper, who managed the Dannenberg Galleries at the time of the purchase and who now has custody of its records, (2) purchase records, (3) police records, and (4) insurance documentation that all indicate that Lifton purchased and insured the painting. See Casper Aff. and Exs. thereto; Lifton Mot. and Exs. thereto. The Court also notes that in its interpleader Complaint, the United States alleged Lifton's prior ownership of the painting and Lifton's insurance policy as facts. See Cmplt. ¶¶ 8, 9. Moreover, Fireman's Fund admits to having insured the painting in Lifton's name in its Answer, and has agreed to return the painting to him upon repayment of the prior insurance claim settlement.See Fireman's Fund Ans. ¶ 9, Ex. F to Lifton Mot.
Second, Sait's claim that the Dannenberg Galleries did not have proper title to the painting is pure conjecture supported only by Sait's allegation that Bernard Dannenberg, the former owner of the Galleries, was notorious in the art community for unscrupulous dealing. Whatever this means, it creates no genuine issue of material fact. These assertions that the Dannenberg Galleries' title to the painting might be questionable are also belied by the documentation Lifton has provided and by the affidavit of Mr. Casper. Most notably, the file card kept by the gallery reads "10/19/71 pchs. Roderic Henderson" along the bottom, indicating that the gallery purchased the painting from Roderic Henderson a few months before it was sold to Lifton. See Ex. A to Casper Aff. It should also be noted that while impugning the documentation provided by Lifton and Casper, Sait provides no evidence whatsoever that he was a bona fide purchaser of the painting. Moreover, no one is claiming to have title prior to Lifton.
Lastly, Sait's contention that both Lifton and Fireman's Fund acted unreasonably in the wake of the theft by not reporting it to the art community at large is unavailing. Sait claims that Lifton and Fireman Fund's failure to report the theft of "Night Market" to art galleries, museums, IFAR and the New York City Police resulted in his purchase of a stolen painting. Based upon this he presses a laches defense, citingSolomon R. Guggenheim Foundation v. Lubell, supra, to argue that Lifton's allegedly unreasonable actions prejudiced him and that therefore equity should prevent the Court from granting the motion.
As Lifton correctly points out, Sait's reliance on Lubell is misplaced. Lubell involved a replevin action to recover a Chagall painting that had been missing from a museum for more than twenty years. During the twenty years that the painting was missing, the museum did not inform the art community or any law enforcement authorities of the theft. See id., 569 N.E.2d at 429 (emphasis added). In fact, the museum could not say for certain when the painting had been stolen, or when it realized the painting had been stolen. Id. The museum justified its silence as a tactical decision, believing that publicity would drive the painting further underground and would diminish the possibility of recovery.
In denying the museum's motion for summary judgment, the court determined that with respect to Lubell's laches defense, the equities did not clearly favor either party because several genuine issues of material fact existed including: (1) whether the museum's response to the theft was unreasonable, (2) when the museum first realized that the painting was missing, (3) when the museum should have realized the painting was stolen, and (4) when the museum learned of Lubell's possession of the painting. Id. at 433.
In contrast to Lubell, the facts in the instant case, even when viewed in a light most favorable to Sait, do not establish a laches defense or preclude the Court from granting Lifton's motion. First, it is undisputed that Lifton contacted law enforcement officials immediately upon realizing the painting was stolen in June of 1989, and again upon learning the location of the painting in 1995. As a private owner of a work of art, his conduct was both appropriate and reasonable by any standard. In light of Lifton's undisputed actions after the theft, Sait's claim that Lifton and Fireman's Fund did not alert the art community at large to the theft of the painting is immaterial to the ruling on this motion.
Additionally, Sait fails to provide the Court with specific information, presumably available to him, that would support a laches defense. Sait's affidavit testimony concerning his purchase of the painting is extremely vague, alleging only that his gallery purchased the painting in late 1989 or early 1990. Furthermore, even assuming that Sait bought the painting from a legitimate dealer at a price consistent with the painting's value, Sait himself has provided evidence that undermines his laches claim. Sait notes in his affidavit that Samuel Lawrence, a prospective purchaser, discovered in a matter of weeks that the painting was stolen property. See Sait Aff. ¶¶ 13-14. If Lawrence was able to discover the theft so quickly, then surely Sait, a dealer in art, cannot claim that it was Lifton or Fireman's Fund's allegedly unreasonable behavior, rather than his own lack of due diligence, that prevented him from discovering the checkered history of the painting.
Sait offers to remedy these failures after additional discovery on the question of the reasonableness of Lifton and Fireman's Fund's behavior and also on the question of whether the Dannenberg Galleries had good title to the painting when it was sold to Lifton. Sait notes in his affidavit:
First, I have just filed my Answer, there has been no discovery at all in this action, and Lifton has failed to come forward with any real proof that he is entitled to possession of the Luks Painting. His motion is solely based on his naked claim that he had good title to the Luks Painting before it was stolen and that he acted reasonably after the painting was stolen. I should be permitted an opportunity to conduct discovery to show that this assertion is just not true.
Sait. Aff. ¶ 2.
The Rules of Civil Procedure provide that if the party opposing a summary judgment motion
cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had . . .
However, the Second Circuit has noted that
Rule 56(f) requires the opponent of a motion for summary judgment who claims to be unable to produce evidence in opposition to the motion to file an affidavit explaining:
1) the nature of the uncompleted discovery, i.e., what facts are sought and how they are to be obtained; and
2) how those facts are reasonably expected to create a genuine issue of material fact; and
3) what efforts the affiant has made to obtain those facts; and
4) why those efforts were unsuccessful.
Burlington Coat Factory Warehouse Corp. v. Esprit De Corp et al., 769 F.2d 919, 927 (2d Cir. 1985); see also Paddington Partners v. Bouchard, 34 F.3d 1132, 1137 (2d Cir. 1994).
Sait's affidavit, quoted above as it relates to Rule 56(f), is woefully deficient. It does not adequately describe the nature of the discovery Sait would seek, let alone how he would discover it. Nor does the affidavit describe Sait's prior discovery efforts and why they failed to uncover the desired information, because Sait has made no prior discovery efforts.
Setting aside the deficiencies of Sait's affidavit, Sait's discovery requests are also deficient, because they seek information that is either irrelevant or excessively speculative. First, as discussed above, no further discovery is necessary on the question of whether Lifton acted reasonably. By reporting the theft to the relevant authorities and by pursuing the return of the painting when it was recovered, Lifton acted reasonably. Second, instead of demonstrating that he is a bona fide purchaser of the painting in order to establish his own claim, Sait seeks to discover facts relating to the Dannenberg Galleries' title to the painting, vaguely asserting, that the gallery owner had a reputation for being dishonest, presumably in order to cloud Lifton's title to the painting. As discussed above, all of the indicia surrounding the sale of the painting to Lifton demonstrate a bona fide purchase conveying good title. A party's entitlement to discovery prior to a ruling on a motion for summary judgment is not unlimited, and may be cut off when the record shows that the requested discovery is not likely to produce the facts needed by plaintiff to withstand a Rule 56(e) motion for summary judgment. In light of the documentary evidence presented by Lifton that he was a bona fide purchaser and the documents provided by the gallery's former employee Mr. Casper to document and verify the sale and conveyance of good title, the Court is not persuaded to grant further discovery to Sait based on vague and unsupported allegations of unscrupulous dealing by the Dannenberg Galleries.
Sait provides no information in his papers or affidavit regarding where he bought the painting and for how much. The following facts shed some light on Sait's reluctance to divulge that information: 1) Sait's nephew, who is a lawyer and who represented Sait at the pre-trial conference, stated that Sait bought the painting in late 1989 or early 1990 for $12,500, thousands less than Lifton paid for it eighteen years earlier and less than half the amount for which Lifton had insured it eighteen years earlier. See Lifton Reply Aff. ¶ 8. Furthermore, an official Old Westbury Police report indicates that Sait had bought the painting not from an art gallery or private collector, but from a jewelry store on Canal Street in lower Manhattan. Id.
This Court is mindful that "only in the rarest of cases may summary judgment be granted against a plaintiff who has not been afforded an opportunity to conduct discovery." Hellestrom v. U.S. Dent. of Veterans Affairs, 201 F.3d 94 (2d Cir. 2000) However, in this case, Sait was not denied any opportunity to conduct discovery. Sait's nephew, a lawyer, attended the pretrial conference held on June 4, 1999, at which a case management plan setting forth discovery deadlines was established. Although Sait was on notice of the action and the discovery schedule, he did nothing in the litigation until August 17, when he submitted a letter seeking an extension of time to hire a lawyer to respond to the instant motion. Whatever his reasons, Sait failed to make any discovery request under the June 4 case management plan. Specifically, he failed to request documents or serve interrogatories before the August 6 deadline set forth in the case management plan. Indeed, Sait did not even raise the issue of discovery in his August 17 letter but waited until filing his memorandum and affidavit in opposition to Lifton's motion for summary judgment. After waiting for the August 6 discovery deadline to pass without a discovery request from Sait, Lifton served the instant motion on him on August 10.
While this Court is wary of granting summary judgment without discovery, it is also firm in its position that Sait deserves no further opportunity for discovery. "[A] party who both fails to use the time available and takes no steps to seek more time until after a summary judgment motion has been filed need not be allowed more time for discovery absent a strong showing of need." Burlington Coat Factory, 769 F.2d at 928. Because Sait has failed to submit a sufficient Rule 56(f) affidavit and because, as discussed above, his discovery requests are either irrelevant to the disposition of the present motion or are based on vague speculation, Sait has failed to make the requisite strong showing of need and his request for further discovery is denied.
C. Lifton is Entitled to the Painting
There is no genuine dispute of material fact that Lifton owned the painting and that there is a thief in Sait's chain of title, rendering Sait's claim to the painting invalid. There is also no dispute that for the consideration of being repaid the $24,089 it paid to Lifton in the insurance settlement, Fireman's Fund has agreed to in essence quitclaim any entitlement it has to the painting in favor of Lifton. Accordingly, the Court declares that upon payment of $24,089 to Fireman's Fund, Lifton is entitled to ownership and possession of the painting.
Conclusion
For the foregoing reasons, defendant Lifton's motion for summary judgment is granted and Lifton shall be awarded possession of the painting upon payment to Fireman's Fund of $24,089. Judgment shall be entered in favor of Lifton and the Clerk is directed to close the case.