Kalmich v. Bruno

• Decision Date: 14 October 1975
• Docket Number: No. 74 C 3187.,74 C 3187.
• Citation: 404 F. Supp. 57
• Parties: Hayim KALMICH, Plaintiff, v. Karl BRUNO, Defendant.
• Court: U.S. District Court — Northern District of Illinois

404 F. Supp. 57

Hayim KALMICH, Plaintiff, v. Karl BRUNO, Defendant.

No. 74 C 3187.

United States District Court, N. D. Illinois, E. D.

October 14, 1975.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Norman A. Handelsman, Layfer, Cohen, Handelsman & Mora, Ltd., Chicago, Ill., for plaintiff.

Lester E. Munson, Sr., Smith & Munson, Ltd., Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

FLAUM, District Judge:

This is an action for damages arising from the allegedly tortious seizure of the plaintiff's textile business in Belgrade, Yugoslavia in 1942. The plaintiff invokes this court's diversity jurisdiction pleading that he is a citizen of Quebec, Canada and the defendant, Karl Bruno, is a citizen of the state of Illinois. 28 U.S.C. § 1332. This cause of action is based on a Yugoslavian statute entitled "Law Concerning the Treatment of Property ... Taken Away From the Owner by the Enemy or its Helpers" which created a civil cause of action for persons whose property was confiscated by the German occupation forces during World War II.

The complaint alleges that in June of 1941, the Field Commander of the German Army in Belgrade issued orders for the seizure of the plaintiff's business to effectuate a general program of confiscation of the Jewish-owned industries of occupied territories. The plaintiff in this cause, Hayim Kalmich, owned a textile business in Belgrade which was allegedly seized by the defendant Bruno in his capacity as a subordinate to the General Plenipotentiary for the Economy of Serbia. The complaint alleges that from June of 1941 until March of 1942, the defendant served as an administrator (Kommisar Leiter) of the plaintiff's business. Thereafter, the defendant allegedly converted and appropriated the plaintiff's business for his own personal use and possession by acquiring it from one Karl Foerster, another official of the General Plenipotentiary for the Economy in Serbia, at less than its actual value. The complaint also alleges that the sole reason for the seizure and confiscation of the plaintiff's business was his religious beliefs and not military purpose or necessity. Subsequent to these events, the defendant allegedly left Yugoslavia and he was located by the plaintiff in this state in 1972.

Four Yugoslavian statutes provide the basis for the cause of action plaintiff seeks to assert in this federal forum. As an analysis of these statutes is critical for the resolution of the pending motions, they are set forth verbatim as pleaded in the complaint.

¶19. That at a time unknown to the Plaintiff but after the termination of World War II the nation of Yugoslavia enacted Article 125 of its Criminal Code which provides that anyone who confiscated belongings of another, during World War II, for non-military purposes, would be subject to criminal prosecution.

¶ 20. That in 1965, the nation of Yugoslavia enacted Article 134(a) of its Criminal Code which provides that there shall be no statute of limitations upon the prosecutions of violations of Article 125.

¶ 21. That on or about August 16, 1946 Section 1 of the "Law Concerning the Treatment of Property ... Taken Away From the Owner by the Enemy or its Helpers" became effective in Yugoslavia, said law providing a civil cause of action for those whose belongings were confiscated by the German occupation force.

¶ 22. That, in 1953, Section 20 of the Yugoslavian Statute of Limitations, as amended, became effective, said section providing that the statute of limitations upon criminal actions shall serve as the statute of limitations upon civil actions if the conduct complained of in the civil action could subject the defendant to a criminal prosecution.

For purposes of the pending motions these foreign statutes will be taken as true in the form in which they have been pleaded. F.R.C.P. 44.1. See generally, Crespo v. United States, 399 F.2d 191, 185 Ct.Cl. 127 (1968).

Before the court are the defendant's motion to dismiss the complaint and the defendant's motion to strike certain paragraphs of the complaint. The motion to dismiss advances three grounds for dismissal: failure to institute this action within the applicable statute of limitations, failure to join Karl Foerster as an indispensible party,¹ and res judicata by virtue of a previous award of damages in favor of this plaintiff by the Yugoslavian War Crimes Commission in 1946.² The motion to strike contends that certain paragraphs of the plaintiff's complaint contain extraneous and scandalous matter. For the reasons set forth herein, the court finds the statute of limitations defense to be dispositive, thus the remaining issues in the motion to dismiss and the motion to strike need not be addressed.

A federal court exercising diversity jurisdiction is bound by the substantive law and the conflicts of law rules of the state in which it sits. Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L.Ed. 1188 (1938); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Thus this court must proceed as would "another court" of Illinois in evaluating the enforcibility and viability of the plaintiff's claim. See, Allstate Insur. Co. v. Charneski, 286 F.2d 238 (7th Cir. 1960). The enforcibility of a foreign cause of action and the viability of that action under the applicable statute of limitations are distinct issues, thus the two will be examined separately.

Enforcibility

Rights of action accruing under foreign law which are transitory, not penal in nature, and which do not violate public policy have been recognized and enforced in the courts of Illinois. Clubb v. Clubb, 402 Ill. 390, 84 N.E.2d 366 (1949); Mutual Service Casualty Insur. Co. v. Providence Mutual Casualty Co., 25 Ill.App.2d 429, 166 N.E.2d 316 (1960). The nature of the instant cause of action is tortious conversion, a transitory claim attaching personal obligation, which under general principles of comity may be enforced against the tortfeasor wherever he is found. Hanna v. Grand Trunk Ry. Co., 41 Ill.App. 116 (1891); United Biscuit Co. v. Voss Truck Lines, 407 Ill. 488, 95 N.E.2d 439 (1950). Although the plaintiff seeks significant monetary damages, the cause of action asserted against this defendant cannot be characterized as penal in nature because it is not equivalent to public vindication of public wrongs. Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L. Ed. 1123 (1892); Evey v. Mexican Central Ry. Co., 81 F. 294 (5th Cir. 1897); Salzman v. Boeing, 304 Ill.App. 405, 26 N.E.2d 696 (1940). Superior Laundry & Linen Supply Co. v. Edmanson-Bock Caterers, Inc., 11 Ill.App.2d 132, 136 N.E.2d 610 (1956).

Thus the focal comity issue is whether the recognition of the Yugoslavian Civil action is appropriate according to Illinois public policy considerations.³ In Hartness v. Aldens, Inc., 301 F.2d 228 (7th Cir. 1962) the Seventh Circuit Court of Appeals summarized the Illinois view on the enforcibility of foreign causes of action⁴ and adopted the broad comity standard enunciated in Loucks v. Standard Oil Co., 224 N.Y. 99, 120 N.E. 198 (1918):

A foreign statute will generally be enforced even though the forum lacks a similar statute, unless the foreign law is against public policy. Our own scheme of legislation may be different. We may even have no legislation in the subject. That is not enough to show that public policy forbids us to enforce a foreign right ... The courts are not free to refuse to enforce a foreign right. They do not close their doors unless help would violate some fundamental principle of practice, some prevalent conception of good morals, some deep rooted tradition of the common weal. 120 N.E. at 201-02.

For purposes of determining the enforcibility of a foreign cause of action, the public policy investigation is not directed toward evidence of positive condonation of that foreign cause of action by statutory or case authority in Illinois. Millsap v. Central Wisconsin Motor Transport Co., 41 Ill.App.2d 1, 189 N.E.2d 793 (1963). Rather this inquiry may be framed solely in the negative to determine whether any Illinois statutory or case authority indicates that a civil action for seizure of property during time of war is repugnant or antagonistic to Illinois policy.⁵ No authority has been cited by the parties or located by the court which would preclude the maintenance of this action in the forum. However, as the Yugoslavian statute asserted by the plaintiff was enacted subsequent to the acts alleged in the complaint, the possibility that the Yugoslavian statute is retroactive legislation, imposing ex post facto liability antagonistic to Illinois public policy, must be examined.

As a general rule the intended retroactive effect of a statute should be recognized and enforced to the extent that it modifies a pre-existing remedy rather than imposes new liability. See generally, U. S. Steel Credit Union v. Knight, 32 Ill.2d 138, 204 N.E.2d 4 (1965); Ogdon v. Gianakos, 415 Ill. 591, 114 N.E.2d 686 (1953). The intended retroactive effect of the statute plaintiff asserts is this forum, the "Law Concerning Treatment of Property ... Taken Away From its Owner By the Enemy or its Helpers", is clear from the statutory language. (Paragraph 19 of plaintiff's complaint, supra.) This intended effect may be recognized if the statutory liability is equivalent to a pre-existing, non-codified liability for seizure of personal property during wartime for personal use. The plaintiff's cogent brief on this subject traces the history of American and international law delineating the confiscation rights of belligerent nations. See, The Prize Cases, 67 U.S. (2 Black) 635, 17 L.Ed. 459 (1862); The 1907 Hague Convention Articles on Warfare, 36 Stat. 2277. On this basis the court finds it proper to conclude that the Yugoslavian statute is a codification of a pre-existing liability which is not tantamount to ex post facto legislation. As such, the intended...