Vineberg v. Bissonnette, CA 06-211ML.

• Decision Date: 27 December 2007
• Docket Number: No. CA 06-211ML.,CA 06-211ML.
• Citation: 529 F.Supp.2d 300
• Parties: Robert S. VINEBERG, Michael D. Vineberg, Sydney Feldhammer, as Trustees of The Dr. and Mrs. Stern Foundation, Plaintiffs, v. Maria-Louise BISSONNETTE and Estates Unlimited, Inc., Defendants.
• Court: U.S. District Court — District of Rhode Island

529 F.Supp.2d 300

Robert S. VINEBERG, Michael D. Vineberg, Sydney Feldhammer, as Trustees of The Dr. and Mrs. Stern Foundation, Plaintiffs, v. Maria-Louise BISSONNETTE and Estates Unlimited, Inc., Defendants.

No. CA 06-211ML.

United States District Court, D. Rhode Island.

December 27, 2007.

L. Eden Burgess, Thomas R. Kline, Andrews Kurth LLP, Washington, DC, Samuel D. Zurier, Tillinghast Licht LLP, Providence, RI, for Plaintiffs.

David A. Levy, Providence, RI, for Defendants.

MEMORANDUM AND ORDER

MARY M. LISI, Chief Judge.

This is an action to recover personal property, for declaratory and injunctive relief, and for money damages. Plaintiffs, Robert S. Vineberg, Michael D. Vineberg, and Sydney Feldhammer, as Trustees of the Dr. and Mrs. Stern Foundation ("Plaintiffs" or "Stern Estate"), have moved for summary judgment on the replevin and conversion claims against Defendant Maria-Louise Bissonnette ("Defendant").¹

1. Summary Judgment

Summary judgment is only appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "A factual issue is genuine if it may reasonably be resolved in favor of either party and, therefore, requires the finder of fact to make a choice between the parties' differing versions of the truth at trial." DePoutot v. Raffaelly, 424 F.3d 112, 117 (1st Cir.2005) (citation and internal quotation marks omitted). A fact is "material" if it "has the capacity to sway the outcome of the litigation under the applicable law." Nat'l Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir.1995).

The moving party bears the burden of demonstrating that no genuine issue of material fact exists. Clifford v. Barnhart, 449 F.3d 276, 280 (1st Cir.2006). "In determining whether that burden is met, a court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor." Id. Once the moving party has made this preliminary showing, the nonmovant "may not rest upon the mere allegations or denials of [its] pleading," Fed.R.Civ.P. 56(e), but must "produce specific facts, in suitable evidentiary form, to ... establish the presence of a trialworthy issue." Triangle Trading Co., Inc. v. Robroy Industries, Inc., 200 F.3d 1, 2 (1st Cir.1999) (citation and internal quotation marks omitted). "Nor may the court accept the nonmovant's subjective characterizations of events, unless the underlying events themselves are revealed." Simas v. First Citizens' Federal Credit Union, 170 F.3d 37, 50 (1st Cir.1999). "[A]s to any essential factual element of its claim on which the nonmovant would bear the burden of proof at trial, its failure to come forward with sufficient evidence to generate a trialworthy issue warrants summary judgment to the moving party." Clifford, 449 F.3d at 280 (citation and internal quotation marks omitted). "[A]ny fact alleged in the movant's [s]tatement of [u]ndisputed [f]acts shall be deemed admitted unless expressly denied or otherwise controverted by a party objecting to the motion." DRI LR Cv 56(a)(3).

II. Background

The majority of the salient facts are undisputed. In or about 1913, Dr. Max Stern's ("Dr. Stern") father, Julius Stern, opened an art gallery in Dusseldorf, Germany. Julius Stern died in 1934, leaving the art gallery and its inventory to Dr. Stern. Dr. Stern was of Jewish descent and, under the Nuremberg laws,² was subject to official persecution by the German government. In 1935, the Reich Chamber for the Fine Arts ("Reich Chamber"), an organization of the Nazi government, sent letters to Dr. Stern demanding that he liquidate his inventory and gallery. On or about September 13, 1937, Dr. Stern received a final order to sell his inventory immediately through a dealer approved by the Reich Chamber.³ Dr. Stern consigned most of his inventory and private collection, constituting hundreds of works, to the Lempertz Auction House ("LAH"), in Cologne, Germany. On or about November 13, 1937, LAH auctioned the items consigned to it by Dr. Stern, including the property that is the subject of the dispute in this matter, a nineteenth century painting by Franz Xaver Winterhalter entitled "Madchen aus den Sabiner Bergen" ("Girl from the Sabiner Mountains") ("the Painting"). The items consigned to LAH by Dr. Stern were sold at well below market value.

Dr. Stern fled Germany for Paris in December 1937. Upon discovering that Dr. Stern left Germany, the German government issued an order freezing his assets. Dr. Stern never received the proceeds of the LAH sale.⁴ Dr. Stern eventually left Paris to join his sister in London prior to the outbreak of World War II. Dr. Stern later emigrated to Canada and became a preeminent art collector and dealer there.

LAH was heavily damaged in 1943 by wartime bombing and its Nazi-era records were destroyed. Post-war efforts to locate paintings from the LAH auction were hindered by the near-total destruction of LAH records. In spite of this, after the end of World War II, Dr. Stern made numerous attempts to locate his art collection. Immediately after the war, Dr. Stern recovered some paintings through his contact with the Canadian Military Mission and also filed a claim for restitution for artwork through the British military government in post-war Germany. In 1949, Dr. Stern and his wife traveled to Europe in an attempt to locate some of his art collection. In 1948, and in 1952, Dr. Stern placed advertisements in two publications, "Canadian Art" and "Die Weltkunst." In 1958, Dr. Stern initiated proceedings in Germany for the recovery of paintings and other property seized by the Nazi government. In the early 1960's Dr. Stern pursued claims for monetary compensation for his art losses through the German restitution courts. In 1964, a court in Germany awarded Dr. Stern partial damages for his loss of profits resulting from his being forced to sell his gallery's inventory at prices that were below market value. Upon his death in 1987, Dr. Stern bequeathed all residue of his estate to the Stern Estate. The Stern Estate primarily benefits three non-profit institutions: Concordia University and McGill University in Montreal, Canada and the Hebrew University in Israel.

Dr. Karl Wilharm ("Wilharm") acquired the Painting through the LAH auction. Wilharm was Defendant's stepfather. Wilharm kept the Painting in his private collection except for one occasion, in 1954, when it was exhibited at a museum in Kassel, Germany. Defendant has had the Painting in her possession since 1959. Defendant inherited the Painting, from her mother's estate, in 1991. Defendant has resided in the United States since at least 1956 and in Rhode Island since at least 1991.

In April 2003, Estates Unlimited, Inc.⁵ received the Painting on consignment from Defendant. In April 2004, on behalf of the Stern Estate, the Art Loss Register⁶ ("ALR") agreed to list the lost inventory of Dr. Stern's gallery auctioned by LAH on its Holocaust related database. The Stern Estate also listed the Painting with Germany's Lost Art Internet Database. The Painting was to be auctioned by Estates Unlimited at a public auction scheduled for January 6, 2005. Just prior to the scheduled auction, however, the Stern Estate learned from ALR that the Painting was on consignment at Estates Unlimited. ALR contacted Estates Unlimited and informed Estates Unlimited of the Stern Estate's claimed ownership of the Painting. As a result, Estates Unlimited agreed to withdraw the Painting from the auction. Estates Unlimited then informed Defendant of the Stern Estate's claim of ownership.

In January 2005, the Stern Estate made a claim for restitution of the Painting with the Holocaust Claims Processing Office of the state of New York Banking Department ("HCPO").⁷ In February 2005, HCPO sent a demand letter to Defendant through Estates Unlimited seeking restitution of the Painting. Defendant refused to return the Painting to the Stern Estate. From February 2005 through April 2006, HCPO and Defendant attempted to resolve the matter. On or about April 19, 2006, Defendant's former counsel notified the Stern Estate's counsel that the Painting had been sent to Germany "due to the institution of an action in German Courts to definitely determine title to the [P]ainting."⁸ Defendant's Opposition to Plaintiff s Statement of Undisputed Facts at 6. After the Painting arrived in Germany, Defendant obtained an appraisal of the Painting in the range of 50,000 to 70,000 Euros (approximately $67,000 to $94,000). The instant action was instituted by the Stern Estate on May 8, 2006. The Stern Estate has moved for summary judgment against Defendant on its claims for replevin and conversion.

III. Jurisdiction

This case is before the Court based on diversity jurisdiction. The named Plaintiffs are trustees of the Stern. Estate and are citizens of Canada. Defendant is a citizen of the state of Rhode Island. Defendant does not dispute the parties' citizenship nor does she dispute that the amount in controversy exceeds $75,000. An exercise of this Court's diversity jurisdiction is, therefore, proper. See generally 28 U.S.C. § 1332.

IV. Choice of Law

In a diversity action, the Court must apply the substantive law of the state in which it sits, including that state's choice of law rules. Hall v. Eklof Marine Corp., 339 F.Supp.2d 369 (D.R.I.2004). The Stern Estate argues that Rhode Island law governs its replevin and Conversion claims. Defendant does not address the Stern Estate's choice of law argument in its memorandum opposing summary judgment.⁹ A choice of law argument not presented to the district court in a summary judgment argument is waived. Arrieta-Gimenez v. Arrieta-Negron, 859 F.2d 1033, 1037 (1st Cir.1988); Bergin v. Dartmouth...