Reif v. Nagy

• Decision Date: 09 July 2019
• Docket Number: 8172,Index 161799/15
• Citation: 175 A.D.3d 107,106 N.Y.S.3d 5
• Parties: Timothy REIF, et al., Plaintiffs–Respondents, v. Richard NAGY, et al., Defendants–Appellants.
• Court: New York Supreme Court — Appellate Division

175 A.D.3d 107
106 N.Y.S.3d 5

Timothy REIF, et al., Plaintiffs–Respondents,
v.
Richard NAGY, et al., Defendants–Appellants.

8172
Index 161799/15

Supreme Court, Appellate Division, First Department, New York.

ENTERED: JULY 9, 2019

Nixon Peabody LLP, New York (Thaddeus J. Stauber and Kristin M. Jamberdino of counsel), for appellants.

Dunnington Bartholow & Miller LLP, New York (Raymond J. Dowd and Samuel A. Blaustein of counsel), for respondents.

John W. Sweeny, Jr., J.P., Rosalyn H. Richter, Peter Tom, Cynthia S. Kern, Anil C. Singh, JJ.

SINGH, J.

175 A.D.3d 109

This controversy stems from art allegedly looted by the Nazis during World War II. We are asked to decide whether Supreme Court properly granted plaintiffs, Timothy Reif and David Frankel, as co-executors of the estates of Leon Fischer and Milos Vavra (collectively plaintiffs), summary judgment on their claims for conversion and replevin. We find that plaintiffs made a prima facie showing of entitlement to judgment as a matter of law that they have superior title to two pieces of art by Egon Schiele, "Woman Hiding Her Face (1912)" and "Woman in a Black Pinafore (1911)" (collectively the Artworks), and that defendants Richard Nagy and Richard Nagy Ltd. (collectively defendants) failed to raise a triable issue of material fact.

Background

Plaintiffs are the legally declared heirs of Fritz Grunbaum (Grunbaum), a well-known Jewish Viennese cabaret artist and art collector.¹ Grunbaum admired the Viennese modern artist, Egon Schiele, and amassed an 81–piece collection of his work before World War II. After the Nazi invasion of Austria on March 12, 1938, Grunbaum attempted to escape with his wife, Elisabeth "Lilly" (nee Herzl) Grunbaum (Elisabeth), to Czechoslovakia, but was apprehended and arrested by the Nazis on or about March 22, 1938. From the time of his arrest until his

175 A.D.3d 110

murder on or about January 14, 1941, Grunbaum remained imprisoned in various concentration camps, including Buchenwald and Dachau.

Throughout Grunbaum's imprisonment Elisabeth endeavored to secure his release so that they could flee to family abroad.

106 N.Y.S.3d 8

Her sister, Mathilde Lukacs (Mathilde), and brother-in-law, Sigmund Lukacs (Sigmund) (collectively the Lukacses) had fled Vienna to escape Nazi persecution of the Jews. Sigmund had been arrested at the same time as Grunbaum but was released two months later on condition that he would leave Austria. He and Mathilde escaped to Belgium on August 26, 1938, where they resided until 1941 when they fled to Brussels. Elisabeth remained in Austria hoping Grunbaum would be released, as promised by certain German officers. However, starting on Kristallnacht² and continuing throughout the war, the Nazis passed a series of laws targeting the Viennese Jewish community, directly impeding Elisabeth's efforts to secure Grunbaum's release as well her own ability to flee Nazi persecution.

On July 16, 1938, while Grunbaum was imprisoned at Dachau, the Nazis forced him to execute a power of attorney in favor of Elisabeth. Just four days later, pursuant to the purported power of attorney, Elisabeth was compelled to permit a Nazi official named Franz Kieslinger (Kieslinger) to inventory Grunbaum's property, including his art collection, which contained the 81 pieces by Schiele. Kieslinger determined Grunbaum's entire art collection of over 400 pieces to be valued at 5,791 Reichsmarks (RM).³ Kieslinger inventoried the Schiele pieces as follows: he first listed the five oils by name, then he

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listed together 55 sheets of "large hand drawings," 20 pencil drawings, and one etching, but gave no more details, nor their titles. Grunbaum's collection also included French watercolors and pieces by artists such as Rembrandt, Degas, Rodin and Durer, all identified by name in the Kieslinger inventory. Only Grunbaum's name appears on the inventory. Elisabeth had her own property and filed a separate declaration on behalf of herself on or about April 27, 1938.

Sometime after it was inventoried, Grunbaum's entire art collection was deposited with Schenker & Co., A.G. (Schenker), a Nazi-controlled shipping company,⁴ and marked for "export." On September 8, 1938, the company formally applied for an export license for "Lilly Grunbaum." The license, however, is devoid of customs stamps, meaning that the art collection

106 N.Y.S.3d 9

never legally left Austria.⁵ In addition, a subsequently filed statement of assets dated November 12, 1938, lists Grunbaum, "formerly Vienna ... now Buchenwalde," as still possessing 5,791 RM worth of "pictures and graphics."

Prior to fleeing Austria, the Lukacses' were also forced to inventory their assets. In her property registration dated July 15, 1938, Mathilde reported a total of 22 pictures, without further detail, which were valued at 400 RM. This inventory corresponded with the Lukacses' "moving notice," which Mathilde had filed in the name of Sigmund on June 23, 1938. The notice stated that the Lukacses had, among other things, "23 various framed pictures, 1 photo frame, 16 small photo's [sic] and etchings framed." Schenker filed an export request on behalf of Sigmund on June 27, 1938, which listed for export "eleven oil paintings, three watercolors, eight graphics, five miniatures, three drawings, 20 pieces of miscellaneous porcelain and ten carpets." The items left Vienna on or about August 12, 1938, about the same time the Lukacses fled. The Grunbaum art collection,

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including the 81 works by Schiele, was not listed as part of any of the Lukacses' emigration documents.⁶

On or about January 31, 1939, attorney Ludwig Rochlitzer (Rochlitzer) was appointed as the Grunbaums' Aryan Trustee.⁷ That same day, Rochlitzer sent Elisabeth a bill for 6,500 RM for services. It appears that Elisabeth paid Rochlitzer's bill, but it is unclear from whose assets she paid it.

By early 1939, under Nazi orders, Elisabeth was evicted from her apartment. She went to live with a non-Jewish woman, Grete Hassel (Hassel). After going into hiding, Elisabeth was captured by the Nazis and sent to live in the "collective Jewish residences," a euphemism for "ghetto."⁸ In the ghetto, she was forced to live in overcrowded and squalid conditions, deprived of nearly all valuables.

While in the ghetto, Elisabeth filed an updated property declaration on behalf of Grunbaum on or about June 30, 1939. That declaration listed Grunbaum's assets as now depreciated by the Reich Flight Tax which was 17,250 RM and the Jewish Property Levy of 8,800 RM, as well as some smaller bills, but, notably, it did not include any depreciation for Rochlitzer's bill. However, it still listed the entire art collection as valued at 5,791 RM. Accordingly, Grunbaum's art collection remained in Austria after Mathilde fled.

106 N.Y.S.3d 10

On September 3, 1939, World War II broke out, making any subsequent Jewish emigration nearly impossible and highly dangerous.

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Grunbaum was murdered at Dachau on June 9, 1941. Elisabeth signed a declaration before an Austrian notary in connection with obtaining her husband's death certificate, stating, "[T]here is nothing left," in other words, there is no estate. Therefore, "[b]ecause of a lack of goods or property, there [was no] estate proceeding for inheritance" before the Dachau Probate Court. On or about October 5, 1942, Elisabeth was murdered at Maly Trostinec death camp.

Grunbaum was survived by Elisabeth and two siblings, one of whom was Elise Zozuli (Zozuli). Zozuli was the only heir who survived World War II. Zozuli is directly related to Milos Vavra,⁹ a plaintiff in this action.

Postwar Restitution Claims

On May 15, 1947, Sigmund filed two claims to reclaim his property. He had been forced by the Nazis to close his business, they had confiscated his inventory of jewels and they made him pay a number of export taxes so that he and his wife could flee Austria. In those claims, Sigmund also noted that Mathilde and he had been imprisoned in Brussels by the Nazis on October 26, 1943 and were detained in a senior citizens' home until the end of the war.

On June 16, 1954, Mathilde formerly applied to an Austrian court to declare Elisabeth to be dead and certify her heirship, but she withdrew the application on July 16, 1954. Additionally, in 1959, Mathilde made a claim for restitution on behalf of her sister Elisabeth. Her claim was for Elisabeth's bank assets and jewelry, including a large pearl necklace, a diamond and platinum brooch, and a large diamond ring. She rescinded the applications when the German government requested a certificate of her right to inheritance.

Between 1945 and 2002, other potential heirs to Grunbaum attempted to lay claim to the...