Brief Fact Summary.
A Chagall gouache was stolen from the Solomon R. Guggenheim Foundation’s (Plaintiff) Museum in the late 1960s. It was eventually sold to Mr. and Mrs. Lubell (Defendants) who kept the painting until Plaintiff discovered its location in 1986. Plaintiff requested the piece’s return and Defendants refused in 1987. Plaintiff brought an action in replevin and Defendants asserted a statute of limitations defense.
Synopsis of Rule of Law.
The true owners of stolen artwork do not have a duty to exercise reasonable diligence to recover the item in order to defeat a statute of limitations defense to a replevin action.
The backdrop for this replevin action is the New York City art market, where masterpieces command extraordinary prices at auction and illicit dealing in stolen merchandise is an industry all its own.View Full Point of Law
Plaintiff owned a Chagall gouache, valued at $200,000. Sometime between 1965 and 1967, the painting was stolen by a museum employee. Plaintiff noticed the painting was missing in the late 1960s but did not discover that it was stolen until 1969 or 1970. Plaintiff took no steps to contact law enforcement or art galleries or dealers to inform them of the theft. Defendants purchased the painting in 1967 from a gallery and owned it for 20 years. In 1986, a former museum employee saw a transparency of the painting and recognized it. Plaintiff traced the gouache to Defendants and demanded its return. Defendants refused and Plaintiff brought an action in replevin to recover the painting. Defendants pled a number of defenses, including a statute of limitations defense based upon Plaintiff’s lack of diligence in recovering the piece. The trial court granted Defendants’ motion for summary judgment based upon this defense, but the appellate court reversed on the grounds that delay alone does not make a replevin action untimely. Defendants appealed.
Do the true owners of stolen artwork have a duty to exercise reasonable diligence to recover the item in order to defeat a statute of limitations defense to a replevin action?
(Wachtler, J.) No. The true owners of stolen artwork do not have a duty to exercise reasonable diligence to recover the item in order to defeat a statute of limitations defense to a replevin action. The three-year period of time in which to bring a replevin action begins when the true owner demands the return of the item and the current possessor refuses. The “discovery rule” which would impose a duty on an owner of property to use due diligence to recover it has been rejected in this state. In a replevin action, demand and refusal are substantive elements of the cause of action. Placing a duty to recover stolen artwork on the true owner would encourage the illicit trafficking of stolen art and make recovery more difficult. [The court further opined that Plaintiff’s inaction would be much more relevant to other issues in the case, especially as to Defendants’ defense of laches.] Affirmed.
The court decision placed the burden upon Defendants to show that the painting was not stolen. A duty to notify art galleries and dealers would seem prudent, as the gallery that sold the painting to Defendants would have been in a position to prevent the sale and litigation, had they been notified by Plaintiff of the theft. Defendants may also have had a remedy in an action against the gallery.