Landmark Schiele Ruling Could Pave Way For Return Of Other Artwork

A landmark decision is being hailed by Holocaust survivors and their heirs for making it easier for families to recover their ancestors’ Nazi-looted art collections that until now were largely out of reach because of the statute of limitations.

In a 16-page decision, Manhattan Supreme Court Justice Charles Ramos scoffed at the defendant’s claim that the Holocaust Expropriated Art Recovery (HEAR) Act of 2016 — which extends the statute of limitations in which a claim on Nazi-stolen art may be brought to six years from the time the claimants discover the artworks — was not applicable in this case.

“This argument is absurd,” he wrote, “as the act is intended to apply to cases precisely like this one, where Nazi-looted art is at issue.”

At stake are two works of art by the renowned 20th-century Austrian artist Egon Schiele, “Woman in a Black Pinafore” and “Woman Hiding Her Face.” The suit was brought by attorney Raymond Dowd in behalf of Timothy Reif of Washington, D.C., and David Fraenkel of Pennsylvania. They are the co-heirs of the estate of Fritz Grunbaum, a Viennese cabaret performer who was arrested by the Nazis in 1938 and imprisoned at the Dachau concentration camp where he was murdered in 1941.

It is the first time the HEAR Act has played such a pivotal role in deciding a case and it gives new life to other Nazi-looted art cases now pending in U.S. courts. One such case involves the same two plaintiffs who are seeking a Schiele artwork called “Girl with Black Hair” that was bought in 1958 by Oberlin College from a New York gallery. Dowd said the drawing may be worth millions today and that the college bought it for only $4,000.

In the case of the two works of art decided last week, the defendant, art dealer Richard Nagy, insisted he bought them — along with 51 other Schiele works — from a Swiss art dealer who had in turn bought them in 1956 from Grunbaum’s own sister-in-law. Dowd said he is convinced that story is contrived.

What is known is that in 1938 Grunbaum was forced to sign over power of attorney to his wife, Elisabeth. Before she too was murdered by the Nazis in 1942, the Nazis had her inventory the family’s 449 works of art and to sign a piece of paper claiming she was voluntarily turning them over to the Third Reich.

Dowd told The Jewish Week that he has asked the court to transfer custody of the two works of art to the Christie’s auction house.

“They would like to sell them in a November auction that would coincide with the 100th anniversary of the death of Egon Schiele,” Dowd said. “Half of the proceeds from the sale would go to a charity that would be dedicated to the memory of Fritz Grunbaum.”

Donating half the proceeds to charity, Dowd said, would demonstrate that they are not “greedy Jews” bent on simply getting money. Such claims, he said, “come from the grandchildren of Nazis who wish to hang onto their plunder – they don’t exactly have a high moral ground. … Every article [from them] is very pernicious and hateful.”

Nagy’s lawyer, Thaddeus Stauber, said in a statement that he planned to appeal because Judge Ramos “ignored” the testimony of three Holocaust provenance experts, none of whom said the artwork had been owned by Fritz Grunbaum and was stolen by the Nazis. Had even one of them made that determination, Stauber said, his client would have restituted the artwork.

Another expert in these cases said he found Judge Ramos had not only considered the HEAR Act but the international conferences that led up to the law, the Washington Conference on Holocaust Era Assets in 1998 that was attended by 44 countries, and the Terezin Declaration issued in 2009 following the Prague Holocaust Era Assets Conference attended by 46 nations.

“At the end of the day, you have to do more than reset the statute of limitations. You have to look at it in an historic light and you can’t let technical defenses eliminate these cases.”

“They were a kind of soft law,” he said. “They said there should be a fair and just solution [to Nazi-looted art cases]. Sometimes witnesses are gone and provenance material [is lacking], but one can generally find out what happened. Every country participating in the conferences was to go home and make their own laws or form art commissions to set up a mechanism for these countries to decide these cases. … At the end of the day, you have to do more than reset the statute of limitations. You have to look at it in an historic light and you can’t let technical defenses eliminate these cases.”

Nicholas O’Donnell, another lawyer handling such cases, agreed that Ramos in this case was doing more than stretching the statute of limitations, he was “reading it as a change in the way these cases should be assessed. … Ramos clearly looked at Grunbaum and the circumstances of his arrest.”

Another attorney involved in Nazi art looting cases, Markus Stotzel, said by phone from Germany that this was “the first court to use the remedy of the HEAR Act and it is encouraging to see that judges and courts in the U.S. are picking up on this. This is exactly what the act was for – to bring more relief and late justice to the victims. It is heartwarming and encouraging to see it, and all of our clients — especially those with pending claims in the U.S. – see it as a light on the horizon after almost 80 years.”

He noted that in his decision, Ramos not only extended the statute of limitations but considered the circumstances of the “sale.”

“Defendants have neither presented evidence nor raised a triable issue of fact to show that Mr. Grunbaum voluntarily transferred the subject artworks during his lifetime,” Ramos wrote. “Although the Nazis confiscated Mr. Grunbaum’s artworks by forcing him to sign a power of attorney to his wife … the act was involuntary. A signature at gunpoint cannot lead to a valid conveyance.”

The HEAR Act was also cited by a federal judge in a decision last year involving the Guelph Treasure, a collection of medieval German church art bought in June 1929 from the Duke of Brunswick by a consortium of four German Jewish art dealers. Shortly after buying it, art prices plummeted and they ended up selling 40 of the 82-piece collection in 1935 during exhibits in Germany and the United States. The remainder was sold to the Dresdner Bank in Germany, which was acting on behalf of Hermann Goering — the second most powerful man in Nazi Germany — who in turn presented it to Adolf Hitler, according to Stotzel.

The heirs of the art dealers are now suing Germany, contending that the Nazis, who rose to power Jan. 30, 1933, with the election of Hitler as chancellor, forced the dealers to sell. Germany denied their accusation and argued that it could not be sued in the U.S. because of the Foreign Sovereign Immunities Act (FSIA), which limits suits against foreign countries. But on March 31, 2017, U.S. District Court Judge Colleen Kollar-Kotelly cited the HEAR Act in rejecting that and other arguments in letting the case proceed. The case is being appealed to the U.S. Circuit Court of Appeals and a hearing is slated for May 2.

Some of the same heirs of the Guelph Treasure are also suing Germany to get back another Nazi-looted artwork known as the Danzig Tapestry. But Stotzel said that in a major about-face, German officials have informed him that researchers they hired found that the former Jewish owners “were clearly among those persecuted by the National Socialists in the period after 1933, and that they demonstrably suffered a significant loss of assets.”

“Germany is at a crossroads now… Does it want to stay on the wrong side of history or do the right thing?”

Such a pronouncement is a reversal, Stotzel said, of the German government’s position it initially argued in the Guelph Treasure case. Stotzel said he understood the defendants as initially saying that the 1935 sale by the Jewish owners was legal and not coerced because the Holocaust did not start until several years later.

However, counsel for the government said that was a misreading of his  papers and that he was simply arguing that this particular sale was not coerced.

Mel Urbach of New Jersey, Stotzel’s co-counsel, said this new pronouncement from the government “to a large extent vindicates our clients, who are for the first time being recognized for their family’s suffering and the looting of their family’s assets.”

Stotzel added: “Germany is at a crossroads now. They should give in now [in the Guelph Treasure case] and do the right thing. … Does it want to stay on the wrong side of history or do the right thing?”

He noted that when he first started working on the Guelph Treasure case 10 years ago, an elderly aunt of one of the plaintiffs was still alive.

“She passed away a few years ago at the age of 102,” Stotzel said. “She had hoped to see justice done to her family, but to our great disappointment she did not live to see it.”

Ramos, he added, “gives other courts a guidepost in how to decide cases. … If judges take into account the circumstances, we will get better decisions.”