Gowen v. Helly Nahmad Gallery, Inc.

• Decision Date: 08 May 2018
• Docket Number: 650646/2014
• Citation: 77 N.Y.S.3d 605
• Parties: Geore GOWEN as Limited Ancillary Administrator of the Estate of Oscar Stettiner, Plaintiff, v. HELLY NAHMAD GALLERY, INC., David Nahmad, Helly Nahmad, International Art Center, S.A., Defendants.
• Court: New York Supreme Court

60 Misc.3d 963

77 N.Y.S.3d 605

Geore GOWEN as Limited Ancillary Administrator of the Estate of Oscar Stettiner, Plaintiff,

v.HELLY NAHMAD GALLERY, INC., David Nahmad, Helly Nahmad, International Art Center, S.A., Defendants.

650646/2014

Supreme Court, New York County, New York.

Decided on May 8, 2018

Attorneys for Plaintiffs: Landrigan and Aurnou, LLP., 235 Mamaroneck Avenue, Suite 201, White Plains, N.Y., Joel M. Aurnou, Esq., Phillip C. Landrigan, Esq.

Attorneys for Defendant: Aaron Richard Golub, Esquire, P.C., 35 East 64th St, Suite 4A, New York, NY 10065, Nehemiah S. Glanc, Esq., Aaron Richard Golub, Esq., Russell I. Zwerin, Esq.

Eileen Bransten, J.

Defendants move to dismiss the complaint based upon CPLR 3211(a)(1), CPLR 3211(a)(2), CPLR 3211(a)(3), CPLR 3211(a)(4), CPLR 3211(a)(5), CPLR 3211(a)(7), CPLR 3211(a)(8), CPLR 3211(a)(10), CPLR 327 (forum non conveniens), CPLR 1001 and 1003, CPLR 3025, and CPLR 306–b.

Defendants further move to have this court take judicial notice of foreign laws pursuant to CPLR 4511.

I. Background¹

This is a case involving Amadeo Modigliani's Seated Man with a Cane, 1918 ("the Painting"), a painting that was allegedly taken by the Nazis and was lost for over a half-century. See Amen. Comp. ¶¶ 1, 3, 34–58. This action is brought by George Gowen as the Ancillary Administrator for the Estate of Oscar Stettiner, the original owner of the painting. Id at ¶ 4.

A. Historical Background

Oscar Stettiner was a Jewish art dealer who both lived and worked in Paris, France in the 1930's. Amen. Comp. ¶ 38. The Painting was part of Oscar Stettiner's private collection. Id at ¶¶ 38–40.

Commencing in 1933 and lasting until their defeat in 1945, the Nazi Reich enacted laws which confiscated the possessions of Jewish persons in occupied territory. Amen. Comp. ¶¶ 34–37. In 1939, as the Nazi's advanced toward France, Oscar Stettiner fled his Paris home, leaving behind many possessions, including the Painting. Id at ¶ 42. He took up residence at a home he owned in La Force, Dordogne, France, this area remained unoccupied by the Nazis through the end of World War II. Id at ¶ 43.

During the period of the Nazi occupation of Paris, possessions which had belonged to Jewish individuals were assigned to a Temporary Administrator for auction. Amen. Comp at ¶¶ 47, 48. Oscar Stettiner's property, including the Painting, was taken into custody by Marcel Philippon who was appointed to be the Temporary Minister of Oscar Stettiner's Parisian Estate. Id at ¶ 49. Marcel Philippon held four public auctions in 1943 and 1944; the Painting was sold at one of these auctions on July 3, 1944. Amen. Comp. at ¶¶ 50–51.

In 1946, forced sales of property by the Nazi regime were declared null and void; Oscar Stettiner is alleged to have obtained an order granting the return of the Painting from the courts of France on July 31, 1946. Id at ¶ 52. Subsequent to obtaining that Order Oscar Stettiner, and his heirs, attempted to locate the Painting to no avail. Id at ¶¶ 57—58. In 1948, Oscar Stettiner died at his home in La Force, leaving behind a wife and two children without having discovered the location of the Painting.² Id at ¶¶ 43, 44.

B. The Elusiveness of the Painting and Ownership by IAC

In 1930, Oscar Stettiner exhibited the Painting at the Venice Biennale.³ The evidence of ownership as catalogued by the Venice Bienale provides the basis for Stettiner's claim of title to the Painting. See id at ¶ 58. Despite the reasonable efforts of Oscar Stettiner and his heirs to locate the Painting, it eluded them for years. Amen. Comp. ¶ 57–58 During a 1996 auction at Christies in London, the Painting was misidentified as being a different painting, with an owner other than Stettiner, where it was bought by Defendant International Art Center. See id. at ¶ 59. At the 1996 auction, the Painting was identified as having been sold by an Anoynmous seller between 1940 and 1945 to a J. Livengood in Paris and "thence by descent to the present owners". Amen. Comp. ¶ 62.

C. Discovery of the Painting by Oscar Stettiner's Heir

Between 2005–2006, the Defendants exhibited the painting at Defendant Helly Nahmad Gallery. In 2008, the Painting was offered at auction at Sotheby's in New York City. Id at ¶¶ 64–67. After failing to sell the Painting at the 2008 auction, Defendants purportedly moved the painting to a warehouse in Switzerland.⁴ See id at ¶ 70 . On February 28, 2011, and again on March 29, 2011, Phillippe Maestracci, a French resident and sole heir to the Estate of Oscar Stettiner, wrote the Defendants through counsel demanding the return of the Painting. See id ¶ 72–73. The Defendants did not respond to this demand. Id at ¶ 74. Thereafter, Philippe Maestracci commenced an action in the Southern District of New York for the return of the Painting. Id at ¶ 75. It was during the discovery phase of the federal action that International Art Center was revealed to be the owner of the Painting, jeopardizing diversity jurisdiction. Id at ¶ 76. Maestracci then withdrew the federal action without prejudice. Id at ¶ 78. In 2014, the Plaintiff commenced the present action seeking the return of the Painting. Id at ¶¶ 79–80.

II. Discussion

Given the complexity of the issues involved in this decision the court has subdivided this opinion into a number of sections. Section A addresses the general legal standards of a motion to dismiss pursuant to CPLR 3211 and, given the extensive documentary evidence submitted by both parties, the heightened standards of CPLR 3211(a)(1). Section B of this decision addresses Defendants' argument that there is no personal jurisdiction over Defendants Davide Nahmad and International Art Center pursuant to CPLR 3211(a)(8). Section C examines the amendment of the complaint without first seeking leave of the court. Section D discusses the Defendants' argument that there is no subject matter jurisdiction over the Painting pursuant to CPLR 3211(a)(2). Section E addresses a later filed turnover proceeding, pending before the Surrogate Court of New York County, wherein Plaintiff George Gowen, in his capacity as limited ancillary administrator of the estate of Oscar Stettiner, and Defendant International Art Center are also parties. Section F discusses the Defendants argument that there are missing, necessary parties, pursuant to CPLR 3211(a)(10). Section G addresses a related argument made by the Defendants that the Plaintiff lacks capacity to assert claims under CPLR 3211(a)(3). Section H then examines the general argument that the Plaintiff has failed to state claims for Declaratory Judgment, Conversion, and Replevin under CPLR 3211(a)(7). Section I discusses the applicable statute of limitations. Section J addresses the Defendants' foreign affairs arguments including the Act of State Doctrine, the principle of international comity, the conflict of laws, and the effect of judicially noticing foreign law pursuant to CPLR 4511. Section K examines the Defendants' argument that New York is an inconvenient forum. Last of all, Section L addresses the Defendants' arguments raised under the doctrine of champerty.

A. Legal Standards of CPLR 3211⁵

The Court, recognizing the multiple provisions under CPLR 3211 by which the Defendants seek dismissal, notes that the general legal standard of a motion to dismiss brought under CPLR 3211 is to afford the pleading a liberal construction, accepting the facts as alleged to be true, and according the Plaintiff the benefit of every possible favorable inference. See Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 (1994). Under CPLR 3211(a)(1), even where documentary evidence seems to controvert the pleadings, dismissal is warranted only where that documentary evidence conclusively establishes a defense to the asserted claims as a matter of law. Id. (emphasis added). The caveat to this treatment, however, is that the allegations can neither consist of bare legal conclusions, nor can the factual claims be flatly contradicted by documentary evidence. See Myers v. Schneiderman , 30 N.Y.3d 1, 11, 62 N.Y.S.3d 838, 85 N.E.3d 57 (2017)reargument denied , 30 N.Y.3d 1009, 66 N.Y.S.3d 229, 88 N.E.3d 390 (2017)citing Simkin v. Blank, 19 N.Y.3d 46, 52, 945 N.Y.S.2d 222, 968 N.E.2d 459 (2012).

These standards, which govern the favorable treatment given to the complaint, underlie this Court's consideration as to each of the Defendants' arguments. Given the vast number of exhibits proffered by both parties, and the need to address this documentary evidence throughout, this Court also considers the standard set forth under CPLR 3211(a)(1), wherein documentary evidence conclusively establishes a defense as a matter of law, to underlie each of its considerations.

B. CPLR 3211(a)(8) —Personal Jurisdiction over the Defendants⁶

Defendants International Art Center and Davide Nahmad argue that this court lacks personal jurisdiction over them as they are neither residents nor domiciliaries of New York nor have they conducted business in New York sufficient to establish personal jurisdiction over them. Defendant Davide Nahmad, in particular, states he does not have a residence in New York, does not conduct business in New York, and was not served properly through an affidavit. The court initially notes that this is not conclusive documentary evidence warranting dismissal under CPLR 3211(a)(1). See generally David Nahmad Aff ; see also Tsimerman v. Janoff , 40 A.D.3d 242, 242–243, 835 N.Y.S.2d 146 (1st Dep't 2007) (holding affidavits do not constitute conclusive documentary evidence).

Personal jurisdiction is conveyed over a Defendant under CPLR 302. Here Plaintiff argues that CPLR 302(a)(1) conveys personal jurisdiction over the Defendants by virtue of their conducting business in the state of New York. Plaintiff further argues that, under CPLR 302(a)(2), personal jurisdiction is also acquired over the Defendants through their committing a tortious act in the state of New York.

As to Defendant Davide Nahmad,...