Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
CONVERSION: Holocaust Expropriated Art Recovery Act does not preempt laches. In a desperate effort to raise money to evade Nazi persecution, the Leffmanns sold a Picasso painting “The Actor,” even then a masterwork, for $12,000 to a Paris art dealer in 1938. Using the proceeds from the sale, the Leffmanns escaped Germany, finally settling in Brazil until the war ended. The painting was eventually sold to an art collector who donated it to the New York Metropolitan Museum of Art (Met) in 1952. Since at least 1967, the painting had appeared in the Met’s published catalogue of French paintings, and the published provenance included the Leffmanns. But neither the Leffmanns nor their heirs made a demand for the painting until 2010. When the Met refused, the Leffmann’s heirs sued the Met, asserting claims for conversion and replevin on the theory that the 1938 sale was made under duress. The district court dismissed the claim for failure to allege duress under New York law. The Second Circuit Court of Appeals affirmed the dismissal but on the ground of laches. Laches is an equitable defense that bars suit in case of unreasonable, prejudicial delay in asserting rights. Although the Leffmanns made some post-war restitution claims, they took no steps to recover the painting in the 70 years since the sale. This delay prejudiced the Met—witnesses who could testify on the circumstances of the sale (whether voluntary or not), including whether the first purchase was made in good faith, had died. Documents had disappeared and memories faded, leaving only hearsay evidence of questionable value. The court went on to hold that laches was not precluded by the Holocaust Expropriated Art Recovery Act of 2016 (HEAR), Pub L. No. 114-308, 130 Stat. 1524 (2016). HEAR sets out a six-year statute of limitations from actual discovery to commence an action to recover any artwork or other property that was lost between 1933 and 1945 because of Nazi persecution. The court explained that usually when Congress enacts a statute of limitations, laches does not bar relief. In this case, that rule did not apply because the statute explicitly sets aside “defense[s] at law relating to the passage of time,” HEAR § 5(a) (emphasis added), but makes no mention of defenses at equity. Also, Congress’s intent not to bar a laches defense is evident from legislative history. Zuckerman v. Metro. Museum of Art, 928 F.3d 186 (2d Cir. 2019).