Asserting Rights Obtained through Inheritance from a Foreign Decedent

In New York, individuals who wish to assert rights obtained through inheritance from a foreign decedent without first obtaining the required documentation may likely find that they do not have standing to pursue their claims in New York courts without first obtaining required letters or filing an affidavit. While this additional proof does not guarantee standing, it does allow for the presentation of a more complete record to be made upon which the court can make a determination of standing.

In 1935, Paul von Mendelssohn–Bartholdy, a descendant of the composer Felix Mendelsshon and a member of a prominent German Jewish family, was forced to sell under duress a Picasso painting “The Absinthe Drinker (Angel Ferdinand de Soto)” to the Nazis.  In 1995, Sotheby’s sold the painting to The Andrew Lloyd Webber Art Foundation at an open auction.  The Foundation then sought to sell the painting in 2006 at auction at Christie’s in New York. Julius Schoeps, a German national and a great-nephew of Bartholdy and an heir to 12.5% of the estate, filed suit against the Foundation in the United States District Court for the Southern District of New York, seeking temporary restraining orders to stop the sale of the painting and preventing the Foundation from taking the painting out of the United States (Schoeps v. Andrew Lloyd Webber Art Foundation, 66 A.D.3d 137, 884 N.Y.S.2d 396, 2009 N.Y. Slip Op. 06155)

For its part, the Foundation claimed that Schoeps lacked standing in New York to pursue his claim because he had not been appointed a personal representative of the estate pursuant to Estates, Powers and Trusts Law §§ 11–3.2(b) and 13–3.5.  Schoeps argued that, under German law, ownership rights vest immediately in the heirs, making the appointment of a personal representative of the estate unnecessary.

Section 11–3.2(b) of the Estates, Powers and Trusts Law provides, in pertinent part, that an action for injury to person or property belonging to a decedent may be maintained by a personal representative of the decedent.  EPTL 13–3.5(a)(1) provides that a personal representative of a foreign decedent who seeks to maintain a cause of action in New York must, within 10 days after commencing the action, file a copy of the letters issued to the representative, duly authenticated as prescribed by CPLR 4542. If the action is not brought by a personal representative, the individual is required to submit an affidavit setting forth the facts which authorize him to act for the decedent, along with such other proof as the court may require.

For his part, Schoeps relied on an outlier case, Roques v. Grosjean, that was nonetheless on point.  (Roques v. Grosjean, 66 N.Y.S.2d 348, [Sup. Ct., N.Y. County 1946]).  Roques remains the only New York decision holding that letters are not needed by a nonresident to maintain a cause of action in New York, when the law of the plaintiff’s domicile vests title to personal property in the heirs at the time of death. Such was the case for Schoeps.  The Roques court had based its holding in part on a Ninth Circuit decision in California, holding that the public administrator was not a necessary party to an action for fraud by the heirs of a French resident and California property owner (see Anglo California Natl. Bank of San Francisco v. Lazard, 106 F.2d 693 [1939], cert. denied 308 U.S. 624, 60 S.Ct. 379, 84 L.Ed. 521 [1939] ).  However, the Ninth Circuit added a footnote that laid out the appropriate method for an heir to a French estate to establish his/her standing, namely by filing all testamentary instruments with a Notary, and then having the Notary execute a written instrument known as an “acte de notariété” (id. at 699 n. 2). A proceeding before a French Notary was still necessary for standing.

In Schoeps, the court denied Schoeps standing to pursue his claim against the Foundation because he had not complied with the procedures set out in either Estates, Powers and Trusts Law §§ 11–3.2(b) or 13–3.5.

Schoeps and the Andrew Lloyd Webber Foundation reached an out-of-court settlement that allowed the foundation to retain ownership of the painting and to be free to sell the work.  On 23 June 2010, the painting was sold at auction for £34.7 million.

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Recovery of Lost or Stolen Art: The Case of the Missing Lipchitz

Jacques Lipchitz was a Lithuanian-born Cubist sculptor best known for abstract “transparent” sculptures.  He moved to Paris in 1909 to study at the Ecole des Beaux-Arts and thereafter joined a group of artist that included Pablo Picasso and Amedeo Modigliani.  He became a French citizen in 1924.  When the Nazis began to occupy Paris during WWII, Lipchitz who was Jewish fled France to escape deportation to the death camps.  He arrived in the US as an asylum seeker and eventually settled in 1949 in New York State in the town of Hastings-on-Hudson in Westchester County.

In 1928-29 while still in Paris, Lipchitz sculpted an erotic piece originally titled “The Couple.”  Considered shocking when it was first exhibited in Paris in 1929, Lipchitz change the title to the more ambiguous “The Cry” in order to later exhibit the sculpture in Amsterdam.  The sculpture kept this title when Lipchitz imported it to the US in order to avoid confiscation as pornography by American customs authorities.

In 1948, Lipchitz married Yulla Halberstadt, also a sculptor, with whom he had his only child Lolya. After Lipchitz died in 1973, his wife Yulla took up with a self-styled psychic and music producer Biond Fury (who also once owned John Lennon’s white suit that Lennon wore on the Abbey Road album cover) and lived with him for the last 17 years of her life until 2003.

In 1997 Yulla made an inter vivos gift to Fury of “The Cry” by inscribing the following handwritten message on the back of a photo of the sculpture:   “I gave this sculpture, ‘The Cry’ to my good friend, Biond Fury in appreciation for all he did for me during my long illness. With love and warm wishes for a Happy Future, Yulla Lipchitz/Oct. 2, 1997, New York.”  Fury subsequently sold his interest in “The Cry” in 2005 to Toronto art collector David Mirvish for $220,000.  Mirvish then sought delivery of the sculpture to Toronto.

Unbeknownst to both Fury and Mirvish, Hanno Mott, Yulla’s son by a first marriage and her executor, had loaned the sculpture to the Tuilleries Gardens in Paris in 1998, unaware of the gift.  Neither Fury nor Mirvish had any idea that the sculpture was no longer in New York.  Mott further claimed that he had sold the sculpture to the Marlborough International Fine Art Establishment, along with two other sculptures, for $1 million. 

To determine the rightful ownership of “The Cry,” Mott commenced an action in New York County Surrogate’s Court against Mirvish.   Mirvish  filed a cross motion for summary judgment asking that the court find the decedent’s inter vivos gift to be valid.  Mirvish also sued Mott in Supreme Court for replevin and conversion to recover possession of the sculpture.

The Surrogate’s Court ruled in favor of Mirvich, finding that the inter vivos gift to Fury had been completed, and that Fury thus has the right to sell his interest to Mirvish.  Mott appealed the decision and the Appellate Division, First Department found in Mott’s favor, finding that Mirvish’s claims in replevin and conversion were time-barred by the three-year Statute of Limitations and that the accrual on the Statute of Limitations began on the date that the conversion tool place, that is, on the date when the sculpture left New York for the Tuilleries Gardens in 1998.  In essence, the court found that Mirvish was too late in filing his claims.  The fact that neither Fury nor Mirvish had any knowledge that “The Cry” had been transported to Paris was immaterial. Mirvish appealed.

The New York Court of Appeals disagreed with the First Department.  The Court found that Fury’s possession of the photo with the handwritten note by Yulla meant that Yulla’s inter vivos gift to Fury had been “delivered.”  Thus all of the elements of an inter vivos gift had been satisfied:  a present transfer; a delivery of the gift, and acceptance by Fury.  Fury thus had every right to sell his interest to Mirvish who was indeed the rightful owner of the sculpture.

What lessons can we learn from this case?  First, one’s executor should be made aware of any inter vivos gifts, including artworks.  Mott, who was an attorney, would not on behalf of the Lipchitz family have loaned the sculpture or sold it to Marlborough had he been made aware of the gift. Second, to avoid having a claim for lost or stolen art dismissed because of a statute of limitations, it is best to file a claim for replevin and conversion as soon as the artwork is found missing.  And third, a buyer of artwork should examine the provenance of the artwork carefully, noticing any gaps or suspicious ownership claims.  

If you would like to discuss your own personal situation with me, if lost or stolen artwork is part of an estate,  or you would like to make an inter vivos gift  tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.