The Daily Journal 21 January 2005
LOS ANGELES – Bolstering the efforts of American heirs to reclaim artwork looted by the Nazis, a Santa Barbara Superior Court judge on Thursday ruled that, under the state’s three-year statute of limitations for detained goods, a Boalt Hall student can pursue his quest to recover a $10 million Picasso stolen from his German grandmother during World War II.
In denying a defense motion to dismiss, Judge Denise deBellefeuille also found the two families who allegedly were looted by the Nazis and are suing the former New York art dealer who sold the Picasso as well as a second piece by Camille Pissarro, could proceed under a “constructive trust” theory.
Plaintiffs’ attorney E. Randol Schoenberg represents Boalt student Thomas Bennigson and San Diego resident Claude Cassirer in what he believes is the first case attempting to recover compensation from the art dealer and gallery owner who sold the works, Stephen Hahn. Cassirer v. Hahn, 01158698 (Santa Barbara Super. Ct., filed July 19, 2004.)
“It’s a very, very big victory,” Schoenberg of Burris Schoenberg in Los Angeles said. “It could have far-reaching consequences in the art world that you can recover proceeds downstream from the people who deal in stolen art.”
Hahn’s New York-based attorney, Jeremy Epstein, did not return calls for comment. He previously argued that New York, where the art was sold, was the proper venue.
Messages left at Hahn’s home in Santa Barbara were not returned.
After being thwarted thus far by jurisdictional limits in his attempts to recover Picasso’s 1922 “Femme en Blanc” from Chicago resident Marilyn Alsdorf, who purchased the piece from Hahn in 1975 for $357,000, Schoenberg took a different tack, filing suit against Hahn for the sale proceeds, which he claims rightfully belong to Bennigson.
Schoenberg said the case against Hahn is separate from Bennigson’s prior case against Alsdorf, which is awaiting review by the state Supreme Court after both a trial court and appellate court ruled they lacked jurisdiction, finding the case was properly brought in New York. Bennigson v. Alsdorf, B168200 (Cal. App. 2nd Dist. April 15, 2004.)
In her ruling, deBellefeuille found that the use of a “constructive trust” on the sale proceeds was a proper remedy when a person earns compensation from the sale of property belonging to another.
The judge added that courts have recognized a beneficiary’s right to obtain a money judgment instead of recovery.
Schoenberg said that, because the paintings were stolen, Hahn may not profit from their sale but must hold the funds in a trust for the rightful owners.
"Stolen property remains stolen property, no matter how many years have transpired from the date of the theft," he argued in pleadings.
"Moreover, a thief cannot convey valid title to an innocent purchaser of stolen property. The fact that Mr. Hahn no longer has possession of the looted artworks does not limit the right of the plaintiffs to recover from him under a constructive trust theory."
The judge also ruled that the state's three-year statute of limitations for recovering stolen goods, not a newer statute that allows filing Nazi-looted art claims until 2010, applied in the case because the plaintiffs only discovered the paintings' whereabouts recently.
The Picasso originally belonged to Bennigson's grandmother, Carlota Landsberg. When she fled Berlin in 1933 in fear of Nazi persecution she shipped the print to a Parisian art dealer for safekeeping.
But when the Nazis invaded France, they looted the dealer's collection and seized the artwork. Landsberg never located the painting and died in 1994, leaving Bennigson as her sole heir.
According to Schoenberg, Hahn purchased the painting from an unknown art dealer in Paris around 1975 and quickly sold it to Alsdorf. Bennigson learned of its existence only in 2002 after receiving a call from the Art Loss Register when Alsdorf offered the painting for sale through a Los Angeles art dealer.
The painting remained in Los Angeles for eight months before Alsdorf had it shipped back to Chicago, the day after Bennigson filed his initial complaint.
Schoenberg said the case against Hahn is not connected to the Superior Court case against Alsdorf and the L.A. dealer for transporting stolen property out of the state.
The 1897 Pissarro, known as "Rue de Saint Honoré Après Midi, Effet de Pluie," originally belonged to Cassirer's grandmother Lilly Neubauer-Cassirer, whose father had purchased it from an art dealer in 1900, two years after the artist initially sold it.
Neubauer-Cassirer too was forced to give up the artwork and flee Germany in the face of the Nazi invasion, but she sold it for a mere fraction of its current multimillion-dollar value to a German art dealer, whom Schoenberg claims extorted from her.
The painting passed through several dealers' hands before being seized by the Nazis in Holland and sold to an anonymous buyer in 1943.
After the war ended, the German government voided the initial sales transaction under restitution laws and declared Neubauer-Cassirer the legal owner. The painting, however, was never recovered.
According to the lawsuit, Hahn, who obtained the Pissarro piece through unknown means, sold it in 1976 to Baron Hans Heinrich Thyssen, whose family allegedly had strong ties to Adolph Hitler and supplied arms to the Nazis.
Cassirer only recently learned of the painting's location and connection to Hahn after seeing it in a catalogue of the Thyssen collection.
Attorneys specializing in stolen-art recovery cases were split on the potential impact the case could have on similar litigation.
Kyhm Penfil, a partner at Newport Beach's Call, Jensen Ferrell, who filed an amicus brief in support of Bennigson's Supreme Court petition in the Alsdorf case, believes it is "critically important."
"Not only for Holocaust victims and survivors and both of their heirs," Penfil said, "but also from the perspective of the art market."
Larry Kaye, a New York art law attorney who has worked numerous recovery cases for stolen antiquities and Holocaust victims, said he thought each recovery case would need to be tried on its own unique circumstances.
However Polly Towill, the Sheppard Mullin Richter Hampton attorney representing Alsdorf, said any new interpretation of the state's statute of limitations could affect all recovery cases. Towill declined further comment on the ruling without reviewing it closely.
Schoenberg said he's simply trying to compensate his clients for what is rightfully theirs. Following two courtroom defeats and with the case to recover the Picasso pending a high-court review, Schoenberg hopes he can run an end around.
"In theory, if we can get the proceeds - what Hahn got from Alsdorf - then perhaps we can get the painting from her by giving her back the money she paid for it," he said.
"We're trying to do something that no one's ever done," Schoenberg added, "unwinding the transactions." http://www.bslaw.net/news/050121.html