United States: Rightful Heirs In Nazi-Era Cases: What We Can Expect For Gurlitt Claims

Mondaq 24 September 2014
By Yael M. Weitz, Herrick Feinstein LLP

Yael Weitz of Herrick, Feinstein LLP discusses the importance of locating the rightful owner, and his or her heirs, of artworks misappropriated by the Nazis as this is the only way forward in the resolution of these claims. In the event a claim is filed, courts in the U.S. will only allow the case to proceed where the claimant is the proper representative of the estate.

In virtually all Holocaust-era claims, locating the rightful owner – and his or her heirs – of an artwork that was misappropriated by the Nazis is an issue of utmost importance to the resolution of a claim. Not only because the artwork should logically be returned to its rightful owner, but because in the event a claim is filed, courts in the U.S. will only allow the case to proceed where the claimant is the proper representative of the estate.

We saw this in the case Schoeps v. Andrew Lloyd Webber Art Found., 2007 NY Slip Op 52183 (N.Y. Sup. Ct. 2007). The court in that case dismissed the action, finding that pursuant to the Estates, Powers and Trusts Law, the claimant failed to take the necessary steps to be appointed representative of the estate. Thus, the claimant lacked standing and the case was dismissed. The claimant in Schoeps subsequently filed a new case in federal court against a different party, and this time made sure to include all of the heirs of the original owner[s] as claimants. In contrast to the state court decision, the court in Schoeps v. Museum of Modern Art, 594 F.Supp.2d 461 (S.D.N.Y. 2009) found that the claimants had the legal capacity to pursue the claim, even without first having been appointed as representatives of their respective estates. Under German law, which was held to govern the issue, the decedent's assets vest immediately in his or her heirs at death; there is no "estate" as there is under U.S. law. Since the claimants represented all possible heirs entitled to the artworks at issue, the court found that the heirs represented the proper parties in interest, even though there was no official estate. Thus, the claimants were not obligated to take additional steps before litigating the case.

As Schoeps demonstrates, identifying the proper heirs is critical to Nazi-era claims, and we are likely to see this issue come up in one of the most recent cases of Nazi-looted art – the curious case of Cornelius Gurlitt.

In 2012, German customs investigators seized approximately 1,400 pieces of artwork from Gurlitt, a German recluse whose father was Hildebrand Gurlitt, a dealer who was approved by the Hitler to buy "degenerate" works of art deaccessioned by the Nazi authorities from German museums. The authorities entered Gurlitt's apartment pursuant to an unrelated allegation of tax evasion and found a remarkable collection of art, including works by Picasso, Chagall, Renoir and Matisse, which was then seized as part of the tax investigation. When the discovery was revealed to the public, over a year after the authorities found the trove, the case sparked an international uproar. A task force with experts from around the world was established to research the works and investigate whether any were misappropriated in connection with Nazi persecution. Thereafter, approximately sixty more artworks were discovered in Gurlitt's house in Salzburg, Austria.

Upon Gurlitt's death in May 2014, Gurlitt left the entirety of his art collection to the Kunstmuseum Bern in Switzerland. Despite earlier statements that he would not voluntarily restitute any looted artworks, one month before his death, Gurlitt entered into an agreement with the German government whereby artworks found to be indisputably looted by the Nazis would ultimately be returned. Should the Swiss museum decide to accept the collection, it will abide by the deceased's prior agreement with the German government.

In the meantime, heirs of the late French art dealer Paul Rosenberg have made a claim to a Matisse portrait allegedly stolen from the family's bank vault during a 1941 Nazi raid. Shortly before his death, Gurlitt agreed to return the painting, but German authorities revealed that a rival claim to the Matisse has been made. The ultimate fate of the painting is currently undecided, presumably leaving it to the interested parties to prove their rightful ownership. In addition, last March, a lawsuit was filed in the U.S. against Germany and the Free State of Bavaria to recover an artwork from the Gurlitt cache.

The magnitude of the Gurlitt discovery and the ongoing efforts to research the collection ensure that additional claims to artworks will be made. A threshold issue in any such claim will be to show not just who originally owned the painting, but whether the proper heirs of that owner have been identified. Indeed, merely showing that a family member once owned a painting does not mean that the claimant, as a blood-relative, is the proper heir. Moreover, as exemplified in Schoeps, all proper heirs must be represented in order for a claim to be heard by a U.S. court. Therefore, resolving this issue is fundamental to any Holocaust-era art claim.

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