77 N.Y.2d 311, Solomon R. Guggenheim Foundation v. Lubell

Citation:77 N.Y.2d 311, 567 N.Y.S.2d 623
Party Name:Solomon R. Guggenheim Foundation v. Lubell
Case Date:February 14, 1991
Court:New York Court of Appeals

Page 311

77 N.Y.2d 311

567 N.Y.S.2d 623



Mrs. Jules LUBELL, Appellant. (And Third- and Fourth-Party Actions.)

New York Court of Appeals

February 14, 1991.

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[567 N.Y.S.2d 624] Norman A. Senior, Harry Torczyner and Gary B. Friedman, New York City, for appellant.

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Jeffrey Barist, F. Ellen Zeifer and Glenn M. Kurtz, New York City, for respondent.

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Janis Ettinger, Franklin Feldman and Brian M. Cogan, New York City, for Intern. Foundation for Art Research, amicus curiae.


WACHTLER, Chief Judge.

The backdrop for this replevin action (see, CPLR art. 71) 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. The Solomon R. Guggenheim Foundation, which operates the Guggenheim Museum in New York City, is seeking to recover a Chagall gouache worth an estimated $200,000. The Guggenheim believes that the gouache was stolen from its premises by a mailroom employee sometime in the late 1960s. The appellant Rachel Lubell and her husband, now deceased, bought the painting from a well-known Madison Avenue gallery in 1967 and have displayed it in their home for more than 20 years. Mrs. Lubell claims that before the Guggenheim's demand for its return in 1986, she had no reason to believe that the painting had been stolen.

On this appeal, we must decide if the museum's failure to take certain steps to locate the gouache is relevant to the appellant's Statute of Limitations defense. In effect, the appellant argues that the museum had a duty to use reasonable

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diligence to recover the gouache, that it did not do so, and that its cause of action in replevin is consequently barred by the Statute of Limitations. The Appellate Division rejected the appellant's argument. We agree with the Appellate Division that the timing of the museum's demand for the gouache and the appellant's refusal to return it are the only relevant factors in assessing the merits of the Statute of Limitations defense. We see no justification for undermining the clarity and predictability of this rule by carving out an exception where the chattel to be returned is a valuable piece of art. Appellant's affirmative defense of laches remains viable, however, and her claims that the museum did not undertake a reasonably diligent search for the missing painting will enter into the trial court's evaluation of the merits of that defense. Accordingly, the order of the Appellate Division should be affirmed.

[567 N.Y.S.2d 625] The gouache, known alternately as Menageries or Le Marchand de Bestiaux (The Cattle Dealer), was painted by Marc Chagall in 1912, in preparation for an oil painting also entitled Le Marchand de Bestiaux. It was donated to the museum in 1937 by Solomon R. Guggenheim.

The museum keeps track of its collection through the use of "accession cards," which indicate when individual pieces leave the museum on loan, when they are returned and when they are transferred between the museum and storage. The museum lent the painting to a number of other art museums over the years. The last such loan occurred in 1961-62. The accession card for the painting indicates that it was seen in the museum on April 2, 1965. The next notation on the accession card is undated and indicates that the painting could not be located.

Precisely when the museum first learned that the gouache had been stolen is a matter of some dispute. The museum acknowledges that it discovered that the painting was not where it should be sometime in the late 1960s, but claims that it did not know that the painting had in fact been stolen until it undertook a complete inventory of the museum collection beginning in 1969 and ending in 1970. According to the museum, such an inventory was typically taken about once every 10 years. The appellant, on the other hand, argues that the museum knew as early as 1965 that the painting had been stolen. It is undisputed, however, that the Guggenheim did not inform other museums, galleries or artistic organizations of

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the theft, and additionally, did not notify the New York City Police, the FBI, Interpol or any other law enforcement authorities. The museum asserts that this was a tactical decision based upon its belief that to publicize the theft would succeed only in driving the gouache further underground and greatly diminishing the possibility that it would ever be recovered. In 1974, having concluded that all efforts to recover the gouache had been exhausted, the museum's Board of Trustees voted to "deaccession" the gouache, thereby removing it from the museum's records.

Mr. and Mrs. Lubell had purchased the painting from the Robert Elkon Gallery for $17,000 in May of 1967. The invoice and receipt indicated that the gouache had been in the collection of a named individual, who later turned out to be the museum mailroom employee suspected of the theft. They exhibited the painting twice, in 1967 and in 1981, both times at the Elkon Gallery. In 1985, a private art dealer brought a transparency of the painting to Sotheby's for an auction estimate. The person to whom the dealer showed the transparency had previously worked at the Guggenheim and recognized the gouache as a piece that was missing from the museum. She notified the museum, which traced the painting back to the defendant. On January 9, 1986, Thomas Messer, the museum's director, wrote a letter to the defendant demanding the return of the gouache. Mrs. Lubell refused to return the painting and the instant action for recovery of the painting, or, in the alternative, $200,000, was commenced on September 28, 1987.

In her answer, the appellant raised as affirmative defenses the Statute of Limitations, her status as a good-faith purchaser for value, adverse possession, laches, and the museum's culpable conduct. The museum moved to compel discovery and inspection of the gouache and the defendant cross-moved for summary judgment. In her summary judgment papers, the appellant argued that the replevin action to compel the return of the painting was barred by the three-year Statute of Limitations because the museum had done nothing to locate its property in the 20-year interval between the theft and the museum's fortuitous discovery that the painting was in Mrs. Lubell's possession. The trial court granted the appellant's cross motion for summary judgment, relying on DeWeerth v. Baldinger, 836 F.2d 103, an opinion from the United States Court of Appeals for the Second Circuit. The trial court cited New York cases holding that a cause of action in replevin

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accrues when demand is made upon the possessor and the possessor refuses to return the chattel. The court reasoned, however, that in order to avoid prejudice [567 N.Y.S.2d 626] to a good-faith purchaser, demand cannot be unreasonably delayed and that a property owner has an obligation to use reasonable efforts to locate its missing property to ensure that demand is not so delayed. Because the museum...

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