Stettiner’s Art

The New York Appellate Division for the First Judicial Department affirmed the conclusion that New York has jurisdiction to consider claims related to Nazi art theft

The genesis of this litigation was in 1939, when, with the Nazi invasion imminent, decedent Oscar Stettiner, a Jewish art collector, abruptly fled Paris, leaving his art collection behind. His art collection was later sold by the Nazis, including an early twentieth century painting by the Italian artist Amedeo Modigliani, which Stettiner’s heir seeks to recover. The issue before this Court is whether petitioner International Art Center, S.A. (IAC), which purchased the painting in 1996 for $3.2 million, has standing to challenge the ancillary letters of administration issued to the heir’s representative for purposes of commencing litigation to recover the painting. We hold that petitioner lacks standing, and that, in any event, the limited ancillary letters were properly issued.

In the immediate aftermath of World War II, the United States and its allies took on the task of locating and returning the many great works of art systematically looted by the Nazis. While millions of works were recovered and returned to the rightful owners, individual Holocaust victims and their heirs have struggled for decades to obtain restitution.

The efforts to recover these treasures have been recently popularized in movies including 2014’s “Monuments Men,” and 2015’s “Woman in Gold,” which chronicled Maria Altmann’s pursuit of her family’s paintings looted in Austria, including Gustav Klimt’s “Portrait of Adele” (1907), of which Altmann won restitution following litigation that reached the United States Supreme Court (see Republic of Austria v Altmann , 541 US 677 [2004]).

While this great theft may have taken place more than 70 years ago, a resolution was not possible until a combination of scholarship and technology allowed for the creation of databases compiling lists of missing works, and until nations agreed to international guidelines on art restitution such as those laid out in the 1998 Washington Principles on Nazi-Confiscated Art. Even at the tail end of 2016, the United States Congress felt it necessary to pass additional legislation to aid victims of Holocaust-era persecution and their heirs to recover works of art confiscated or misappropriated by the Nazis, and to ensure that claims to artwork and other property stolen or misappropriated by the Nazis are not unfairly barred by statutes of limitations but are resolved in a just and fair manner. This legislation became law on December 16, 2016 (see Holocaust Expropriated Art Recovery Act of 2016 (Pub L 114-308, 130 US Stat 1524, amending 22 USC § 1621 et seq. ).

The painting at issue is known as “Seated Man With a Cane” (1918) and is currently owned by petitioner. It is alleged to have been confiscated by the Nazis from decedent, who resided in Paris in the 1930s.

Respondents, the Estate of Oscar Stettiner (Estate), Philippe Maestracci, and George W. Gowen, as Limited Ancilliary Administrator of the Estate of Oscar Stettiner, contend that in 1930 decedent Oscar Stettiner purchased a painting, which he subsequently loaned to the 1930 Venice Biennale, a world-famous art exhibition. The painting was listed as number 35 in the exhibition, and, according to respondents, a label on the back of the painting by the Venice Biennale establishes it is the same painting as the one at issue in this case.

Holding

IAC also challenges whether the Surrogate’s Court had jurisdiction to entertain this matter. SCPA 206(1) provides that the Surrogate’s Court has jurisdiction over the estate of any nondomiciliary decedent who leaves property in the state. The Surrogate’s Court should decline to exercise jurisdiction only when the controversy in no way affects the affairs of a decedent or the administration of the estate (see Matter of Piccone , 57 NY2d 278, 288 [1982]).

Significantly, although the authority of the Surrogate’s Court over a nondomiciliary’s estate in an ancillary proceeding is generally limited to estate assets within New York (see Matter of Obregon , 91 NY2d 591, 601 [1998]), property includes a “chose in action,” e.g. a cause of action in New York (see SCPA 103[44]).

Accordingly, contrary to IAC’s contention, SCPA 206(1) does not require the physical presence of the subject property in New York at the time the proceeding for ancillary letters was commenced. It is sufficient that the Estate had a valid “chose in action” against two New York domiciliaries (the Nahmads), a New York corporation (the Gallery), and IAC, a foreign entity alleged to be owned and controlled by New York residents and doing business in New York.

IAC’s reliance on cases where, unlike the “chose in action” here, the estate property was not located in New York is misplaced (see e.g. Leve v Doyle, 6 AD2d 1033 [1st Dept 1956]). IAC similarly misplaces reliance on Obregon which involved the estate pursuing claims against parties and trust assets in the Cayman Islands and not in New York.

Nor is there merit to IAC’s personal jurisdiction claim. Initially, Surrogate’s Court did not require personal jurisdiction over IAC in order to determine whether or not to revoke the grant of ancillary letters of administration since ICA was not a respondent in that proceeding. In any event, a court may exercise personal jurisdiction over any nondomiciliary who, in person or through an agent, transacts any business within the state or contracts anywhere to supply goods or services in the state or commits a tortious act within the state or regularly does or solicits business or engages in any other persistent course of conduct (CPLR 302[a][1] and [2]). The commission of some single or occasional acts of an agent in a state may be enough to subject a corporation to specific jurisdiction in that state with respect to suits relating to that in-state activity (see International Shoe Co. v Washington , 326 US 310, 318 [1945];Daimler AG v Bauman , __US__, __, 134 SCt 746, 754 [2014]; see also LaMarca v Pak-Mor Mfg. Co. , 95 NY2d 210, 214-216 [2000]).

In this case, personal jurisdiction was acquired based on IAC’s admitted agreement with Sotheby’s to act as its agent to sell the painting in New York in 2008. Further, personal jurisdiction over IAC may be based on respondents’ allegations that IAC transacted business in New York through the Nahmads at the Gallery’s office in Manhattan.

(Mike Frisch)