"Autocephalous Greek-Orthodox Church of Cyprus V. Goldberg
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Vanderbilt Law Review Volume 43 Issue 6 Issue 6 - Symposium: Law, Literature, Article 11 and Social Change 11-1990 "Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc".: Entrenchment of the Due Diligence Requirement in Replevin Actions for Stolen Art Stephen L. Foutty Follow this and additional works at: https://scholarship.law.vanderbilt.edu/vlr Part of the Intellectual Property Law Commons, and the International Law Commons Recommended Citation Stephen L. Foutty, "Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc".: Entrenchment of the Due Diligence Requirement in Replevin Actions for Stolen Art, 43 Vanderbilt Law Review 1839 (1990) Available at: https://scholarship.law.vanderbilt.edu/vlr/vol43/iss6/11 This Symposium is brought to you for free and open access by Scholarship@Vanderbilt Law. It has been accepted for inclusion in Vanderbilt Law Review by an authorized editor of Scholarship@Vanderbilt Law. For more information, please contact [email protected]. RECENT DEVELOPMENT Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc.: Entrenchment of the Due Diligence Requirement in Replevin Actions for Stolen Art I. INTRODUCTION ......................................... 1839 II. STATUTES OF LIMITATIONS IN REPLEVIN ACTIONS ......... 1842 A. Background.............................. 1842 B. Accrual upon Wrongful Possession .............. 1843 C. Demand Requirement .......................... 1844 III. EMERGENCE OF THE DUE DILIGENCE REQUIREMENT ...... 1845 A. N ew York ..................................... 1846 1. Menzel v. List ........................... 1846 2. Kunstsammlungen zu Weimar v. Elicofon.. 1847 3. DeWeerth v. Baldinger ................... 1848 B. Indiana: Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc ... 1851 IV. ANALYSIS OF THE DUE DILIGENCE REQUIREMENT ........ 1857 V. CONCLUSION ........................................... 1860 I. INTRODUCTION Art prices are reaching spectacular heights. Current estimates place annual worldwide retail sales between ten billion and forty billion dol- lars;' each auction season, bidders smash previous price records. For ex- ample, at a May 9, 1989 Sotheby's auction, a buyer paid 47.9 million 1. See Lee, Greed Is Not Just for Profit, FORBES, Apr. 18, 1988, at 65, 68. 1839 1840 VANDERBILT LAW REVIEW [Vol. 43:1839 dollars for Picasso's self-portrait "Yo-Picasso"; Gaugin's "Mata Mau (In Olden Times)" sold for 24.2 million dollars.2 The next day at Chris- tie's, an investor purchased a Monet for 14.3 million dollars, twice its estimated value.' The inflated prices have inspired people without a prior interest in art to conceive a sudden passion for collecting by any 4 multibillion dollar business, available means. As a potentially lucrative, 5 art collecting has attracted a full range of unscrupulous individuals. Although it is difficult to assemble accurate art theft statistics, ex- perts estimate that approximately 53,0006 worldwide thefts occur annu- ally, with losses valued at between five billion and ten billion dollars.7 The increasing magnitude of art theft has raised concerns with regard to the difficulty of locating stolen art; experts estimate that recoveries are as low as two percent.8 An international passion for acquiring po- tentially valuable artworks contributes to the problem of recovering stolen art.9 Buyers in the high demand market rarely probe the origins of desirable pieces.' 0 Thieves frequently smuggle and trade stolen art internationally through organized rings of brokers and middlemen." Smuggled pieces eventually filter into otherwise legitimate markets. 12 A cooling off period after the theft may complicate recovery attempts fur- 13 locating and recovering a particular piece of ther. Not surprisingly, 14 stolen art in this environment may require several years. 2. Dickey, Missing Masterpieces, NEWSWEEK, May 29, 1989, at 65. 3. Id. 4. Id. 5. DeGraw, Art Theft in Perspective, 31 INT'L J. OFFENDER THERAPY & COMP. CRIMINOLOGY 1 (1987). 6. Id. at 3. 7. Heisting Buyers on Their Own Petards,U.S. NEWS & WORLD REP., May 15, 1989, at 16. 8. The International Association of Art Security has estimated that recoveries of stolen art are approximately 2%, while the publication Art Gallery has estimated 5% recovery, and the In- ternational Foundation of Art Research has estimated 13% recovery. DeGraw, supra note 5, at 4. 9. Comment, The Recovery of Stolen Art: Of Paintings,Statues, and Statutes of Limita- tions, 27 UCLA L. REv. 1122, 1124 (1980). 10. Id. 11. See Note, DeWeerth v. Baldinger: Making New York a Haven for Stolen Art?, 64 N.Y.U. L. REV. 909, 910-11 (1989). 12. Id. at 910. Police for some time have speculated the existence of large international stolen art networks capable of transferring works among several continents through complex chan- nels. The ease with which valuable artworks find their way to legitimate markets supports this proposition. For example, Roman coins and Byzantine ivories valued in excess of $1 million origi- nally stolen from an Italian museum passed through at least four art dealers before their arrival in a New York auction gallery. Similarly, paintings housed in Holland museums were stolen in 1978, and made available to unsuspecting dealers in Los Angeles less than 24 hours later. See Comment, supra note 9, at 1124 n.9. 13. See Dickey, supra note 2, at 68 (stating that canvases may be stolen by criminal organi- zations that withhold works from the market for 100 years if necessary, provided that the networks have no immediate need for cash). 14. See Comment, supra note 9, at 1124 n.12 (observing that the lack of a cohesive interna- 1990] STOLEN ART 1841 The delays inherent in the process of locating and identifying stolen art not only hinder recovery efforts by victims of theft, but also plague innocent art purchasers. In a market in which the origin of a particular piece of work is difficult to determine, the statute of limita- tions historically has been the good faith purchaser's primary shield against liability.15 Unfortunately, inconsistent judicial interpretations of when limitations periods begin to run have generated considerable un- certainty regarding the rights of both good faith purchasers and true owners.16 No consistent guidelines instruct good faith purchasers on when their legal rights to property vest or true owners on their requisite legal obligations in replevin actions. 17 This Recent Development examines the emerging duty of due dili- gence that some jurisdictions impose on owners of lost or stolen art in replevin actions. 18 In jurisdictions that apply the due diligence require- ment, the limitations period begins to run when the true owner, through diligent search, locates or reasonably should have located the artwork or its possessor.' 9 This Recent Development concludes that the recent district court decision in Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc.20 properly places the onus of due diligence on the true owner of stolen art. Finally, this Recent Development proposes that the Goldberg rationale should entrench firmly the due diligence requirement in stolen art cases, and that continued judicial application of this duty will provide long-needed uniformity in this area of the law.2' tional enforcement effort, as well as a fragmented network available for reporting art thefts, are primary causes for such delays). 15. The delays owners of stolen art face in locating their property often push this event beyond the running of relatively short limitations periods. See Comment, supra note 9, at 1125. Typically, expiration of the limitations period not only extinguishes the owner's right to sue, but divests the owner of title in the property, vesting good title in the innocent purchaser. Id. 16. See id. at 1126. 17. The common-law action of replevin allowed owners to recover specific lost or stolen per- sonal property. In some states this form of action is known as either replevin, detinue, claim and delivery, bail, or sequestration, but "replevin" is used as a generic label for all actions to recover the property itself. In contrast, the owner seeks monetary damages for unlawful possession of per- sonal property in "conversion" actions. See D. DOBBs, HANDBOOK ON THE LAW OF REMEDIES § 5.13, at 399, § 5.14, at 403 (1973). 18. See DeWeerth v. Baldinger, 836 F.2d 103 (2d Cir. 1987), rev'g 658 F. Supp. 688 (S.D.N.Y.), cert. denied, 486 U.S. 1056 (1988); Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 717 F. Supp. 1374 (S.D. Ind. 1989). Courts have justified imposing a due diligence requirement only on owners of stolen art as opposed to any owners of stolen property because art owners are uniquely situated to mount an effective search. See DeWeerth, 836 F.2d at 109 (stating that owners of stolen art have a better chance of recovering lost items than most owners of stolen property). 19. See Goldberg, 717 F. Supp. at 1387-88. 20. Id. at 1374. 21. In replevin actions for stolen art, the law of the state having the most contacts to the 1842 VANDERBILT LAW REVIEW [Vol. 43:1839 II. STATUTES OF LIMITATIONS IN REPLEVIN ACTIONS A. Background Statutes of limitations originated from the belief that certain time constraints are necessary to make prosecution of a claim both fair and efficient.2 The punitive concept underlying limitations periods is that parties should be deprived of the right to legal redress if they fail to bring their claims to court promptly.23 Statutes of limitations implicitly condemn unnecessary delay in the filing of an action as an undue bur- den on defendants.24 Consistent with many civil actions, claimants must file their suits to reclaim stolen property within the applicable statute of limitations period.25 All statutes dictate when the limitations period begins to run; typically the period initiates upon the accrual of the cause of action.26 Determining when accrual occurs in replevin actions, however, presents some difficulties.