G & G Prods. LLC v. Rusic

Decision Date29 August 2018
Docket NumberNo. 16-56107,16-56107
Citation902 F.3d 940
Parties G AND G PRODUCTIONS LLC, a California Limited Liability Corporation, Plaintiff-Appellant, v. Rita RUSIC, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Brent Herbert Blakeley (argued), Blakeley Law Group, Manhattan Beach, California, for Plaintiff-Appellant.

Scott S. Humphreys (argued), Burt M. Rublin, and Peter L. Haviland, Ballard Spahr LLP, Los Angeles, California, for Defendant-Appellee.

Before: M. Margaret McKeown and Kim McLane Wardlaw, Circuit Judges, and James Donato,* District Judge.

OPINION

McKeown, Circuit Judge:

What happens when you cross an Academy Award-winning Italian film producer, a Croatian actress-turned-producer, a bitter divorce, an oil painting worth millions of dollars, and dozens of pages of untranslated Italian law in the court of appeals? The answer, we conclude, is a procedural morass and a remand to the district court.

G&G Productions, LLC ("G&G"), a California limited-liability company, appeals the district court’s order granting summary judgment in favor of Rita Rusic, a citizen of Italy, in G&G’s suit asserting various state-law claims. G&G alleges that sometime in 1999 or 2000, Rusic stole Wine of Babylon —a large, valuable oil painting by the late American artist Jean-Michel Basquiat—from Rusic’s former husband and G&G’s predecessor-in-interest, Vittorio Cecchi Gori. The district court held that G&G’s claims were barred by California’s borrowing statute, Cal. Civ. Proc. Code § 361, because the applicable ten-year Italian statute of limitations would bar those claims in an Italian court.

We affirm the district court’s order with respect to G&G’s conversion claim because the district court properly determined that this claim accrued sometime in 2000 and was time-barred under both the Italian and California statutes of limitations. We vacate and remand the district court’s order with respect to G&G’s replevin and unjust enrichment claims, however, because there is no indication that the district court determined when those claims accrued. We also vacate and remand the district court’s order with respect to G&G’s claim for declaratory relief because the disputed facts on this claim defeat summary judgment in favor of Rusic.

BACKGROUND

Vittorio Cecchi Gori is a well-known film producer and former Italian politician.1 In 1983, Gori married Rita Rusic, a Croatian-born actress, singer, and film producer who is now a citizen of Italy. At the time they married, Gori and Rusic agreed to keep their assets separate under Italian law.

In June 1998 Gori purchased a large oil painting entitled Wine of Babylon (1984) by the late American artist Jean-Michel Basquiat from the Tony Shafrazi Gallery in New York for $330,000. In late 1998 or early 1999, the Shafrazi Gallery shipped the painting to Gori and Rusic’s residence in Rome, Italy, where it hung with other artworks.

Mere months later, the marriage deteriorated. Rusic filed for divorce from Gori in May 1999, accusing Gori of physical abuse and infidelity. Around the time that Rusic filed for divorce, Wine of Babylon vanished from the couple’s home. Gori contends that Rusic smuggled the painting out of the residence and stashed it elsewhere. Rusic counters that she did not take—and, because of a head injury

allegedly caused by Gori, could not have taken—the painting, which actually disappeared "when Mr. Gori caused movers working for him to remove numerous items of personal property from [the residence] in 1999 or possibly 2000."

In the meantime, Basquiat’s works have continued to appreciate in value. In 2017, for example, Basquiat’s 1982 oil-stick and spray-paint creation, Untitled , set a record for any work by a U.S. artist sold at auction, fetching $110.5M at Sotheby’s.

Gori has never wavered in his belief that Rusic took Wine of Babylon . On several occasions, he initiated legal action in Italy to recover the painting. On May 16, 2000, Gori’s attorney sent Rusic a letter demanding the painting’s return. Two months later, Gori’s attorney filed a brief in Italian court in connection with the divorce proceedings, petitioning for the painting’s return. The Italian court rejected Gori’s petition in an August 2006 divorce decree, which found Gori at fault for spousal abuse.2 Undeterred, Gori’s attorneys sent another letter to Rusic on February 24, 2009 threatening to initiate criminal proceedings if Rusic failed to return the painting. Gori’s attorneys sent similar letters to Rusic later in 2009 and in 2010.

When nothing came of the letters, Gori filed a criminal complaint against Rusic in Italian court on March 22, 2010. On February 13, 2014, the court ruled in Rusic’s favor and acquitted her of the charges. The court first determined that Rusic and Gori had not legally separated when Gori filed his complaint, thus barring the criminal action under Italian law. The court further determined that because Gori suspected Rusic stole the painting as early as 2000, Rusic’s purported crime was "subject to the Statute of Limitations" of seven years and six months, which expired on January 10, 2008—over two years before Gori initiated the criminal action.

On February 22, 2010—one month before Gori filed his criminal complaint in Italy—Gori assigned any rights that he held in Wine of Babylon to his long-standing Italian attorney, Giovanni Nappi, to settle a €2M debt for unpaid legal fees. Nappi then assigned his rights to the painting to G&G, in exchange for a 50% ownership interest in the newly formed limited-liability company. The remaining interest in G&G is held by an Italian businessman and longtime friend of Gori. G&G took title to the painting "subject to any running statute of limitations."

According to G&G, Wine of Babylon was most recently observed in the Milan apartment of Canio Mazzaro, an Italian businessman who is Rusic’s former boyfriend. G&G cites the testimony of Paola Ruffolo, who purportedly saw the painting during a party at Mazzarro’s apartment in 2011. Ruffolo supposedly conveyed that fact to Nappi sometime in 2014. Ruffolo testified that Mazzaro claimed he had obtained the painting from Rusic in 2011 as part of the settlement of Mazzaro’s lawsuit against Rusic for breaching a profit-sharing agreement.

Rusic, however, submitted a declaration by Mazzaro flatly denying Ruffolo’s allegations, each of which Mazzaro dismissed as "a lie." According to Mazzaro, he has never met Ruffolo, has never lived in the apartment where Ruffolo claimed to have seen the painting, has never had possession of the painting, and has never claimed that he obtained the painting from Rusic or from any other party.

PROCEDURAL HISTORY
I. DISTRICT COURT

In 2015, G&G filed suit against Rusic in the United States District Court for the Central District of California, asserting state-law tort claims of conversion, replevin, unjust enrichment, and declaratory relief.

On cross-motions for summary judgment, the district court ruled in Rusic’s favor. The court first determined that California’s borrowing statute governed G&G’s claims, all of which "arose" from Rusic’s alleged theft of the painting in Italy. See Cal. Civ. Proc. Code § 361 (providing that "[w]hen a cause of action has arisen" in a jurisdiction other than California and is time-barred under the law of that jurisdiction, the claim is also time-barred in California).

As a result, the district court proceeded to analyze whether G&G’s claims were time-barred under Italian law. On this question, Rusic offered the declaration of Carlo Arnulfo, an experienced attorney who is licensed to practice law in Italy. Arnulfo explained that Article 2946 of the Italian Civil Code prescribes a generic, ten-year statute of limitations for any cause of action that is not subject to a shorter limitations period under a different statute. Arnulfo stated that no other statute prescribes a shorter limitations period for conversion or replevin claims, concluding that G&G’s tort claims are subject to a ten-year limitations period in Italy. Notably, Arnulfo supported his declaration with exactly the sort of materials that a court would need to decide an issue of foreign law, including relevant Italian statutes and case law in translation (in this case, by a bilingual attorney who is admitted to both the Italian and California bars).

G&G’s submission was a different story. G&G conceded that Article 2946 governed its claims in Italy, and claimed only that Gori’s various attempts to recover the painting from Rusic tolled the limitations period under Italian law. The district court rejected this argument for three reasons. First, G&G’s tolling argument was "entirely unsupported" by any citations to Italian law. Second, G&G’s only support was a declaration of Giovanni Nappi, who concededly is not an expert in Italian law and owns 50% of G&G. Third, even if the court had accepted Nappi’s claim that Gori’s actions tolled the statute, Nappi failed to quantify the duration of any tolling or the length of any suspension, "rendering it impossible" for the district court to determine whether G&G’s tort claims were timely filed. Unsurprisingly, the court agreed with Rusic that G&G’s tort claims expired in Italy ten years after those claims accrued.

According to the district court, G&G’s tort claims accrued no later than May or July 2000, when Gori first sent a demand letter to Rusic demonstrating that he "clearly knew of his claim" and that he "was entitled to sue." The court explicitly made this determination under California law.3 E.g. , Deirmenjian v. Deutsche Bank, A.G. , No. CV 06-00774, 2006 WL 4749756, at *34 (C.D. Cal. Sept. 25, 2006) ("[T]he applicability of California’s borrowing statute turns on the time plaintiffs’ claims accrued."); Dalkilic v. Titan Corp. , 516 F.Supp.2d 1177, 1184 (S.D. Cal. 2007) ("To determine where the cause of action accrued, a court must look to the time when, and the place where, the act is...

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