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January 21, 2005

JUDGE OKS PURSUIT OF STOLEN ART
 
By Blair Clarkson
Daily Journal Staff Writer
        LOS ANGELES - Bolstering the efforts of American heirs to reclaim
artwork looted by the Nazis, a Santa Barbara Superior Court judge on
Thursday ruled that, under the state's three-year statute of limitations for
detained goods, a Boalt Hall student can pursue his quest to recover a $10
million Picasso stolen from his German grandmother during World War II.
        In denying a defense motion to dismiss, Judge Denise deBellefeuille
also found the two families who allegedly were looted by the Nazis and are
suing the former New York art dealer who sold the Picasso as well as a
second piece by Camille Pissarro, could proceed under a "constructive trust"
theory.
        Plaintiffs' attorney E. Randol Schoenberg represents Boalt student
Thomas Bennigson and San Diego resident Claude Cassirer in what he believes
is the first case attempting to recover compensation from the art dealer and
gallery owner who sold the works, Stephen Hahn. Cassirer v. Hahn, 01158698
(Santa Barbara Super. Ct., filed July 19, 2004).
        "It's a very, very big victory," Schoenberg of Burris  Schoenberg in
Los Angeles said. "It could have far-reaching consequences in the art world
that you can recover proceeds downstream from the people who deal in stolen
art."
        Hahn's New York-based attorney, Jeremy Epstein, did not return calls
for comment. He previously argued that New York, where the art was sold, was
the proper venue.
        Messages left at Hahn's home in Santa Barbara were not returned.
        After being thwarted thus far by jurisdictional limits in his
attempts to recover Picasso's 1922 "Femme en Blanc" from Chicago resident
Marilyn Alsdorf, who purchased the piece from Hahn in 1975 for $357,000,
Schoenberg took a different tack, filing suit against Hahn for the sale
proceeds, which he claims rightfully belong to Bennigson.
        Schoenberg said the case against Hahn is separate from Bennigson's
prior case against Alsdorf, which is awaiting review by the state Supreme
Court after both a trial court and appellate court ruled they lacked
jurisdiction, finding the case was properly brought in New York. Bennigson
v. Alsdorf, B168200 (Cal. App. 2nd Dist. April 15, 2004).
        In her ruling, deBellefeuille found that the use of a "constructive
trust" on the sale proceeds was a proper remedy when a person earns
compensation from the sale of property belonging to another.
        The judge added that courts have recognized a beneficiary's right to
obtain a money judgment instead of recovery.
        Schoenberg said that, because the paintings were stolen, Hahn may
not profit from their sale but must hold the funds in a trust for the
rightful owners.
        "Stolen property remains stolen property, no matter how many years
have transpired from the date of the theft," he argued in pleadings.
"Moreover, a thief cannot convey valid title to an innocent purchaser of
stolen property. The fact that Mr. Hahn no longer has possession of the
looted artworks does not limit the right of the plaintiffs to recover from
him under a constructive trust theory."
        The judge also ruled that the state's three-year statute of
limitations for recovering stolen goods, not a newer statute that allows
filing Nazi-looted art claims until 2010, applied in the case because the
plaintiffs only discovered the paintings' whereabouts recently.
        The Picasso originally belonged to Bennigson's grandmother, Carlota
Landsberg. When she fled Berlin in 1933 in fear of Nazi persecution she
shipped the print to a Parisian art dealer for safekeeping.
        But when the Nazis invaded France, they looted the dealer's
collection and seized the artwork. Landsberg never located the painting and
died in 1994, leaving Bennigson as her sole heir.
        According to Schoenberg, Hahn purchased the painting from an unknown
art dealer in Paris around 1975 and quickly sold it to Alsdorf. Bennigson
learned of its existence only in 2002 after receiving a call from the Art
Loss Register when Alsdorf offered the painting for sale through a Los
Angeles art dealer.
        The painting remained in Los Angeles for eight months before Alsdorf
had it shipped back to Chicago, the day after Bennigson filed his initial
complaint.
        Schoenberg said the case against Hahn is not connected to the
Superior Court case against Alsdorf and the L.A. dealer for transporting
stolen property out of the state.
        The 1897 Pissarro, known as "Rue de Saint Honoré Après Midi, Effet
de Pluie," originally belonged to Cassirer's grandmother Lilly
Neubauer-Cassirer, whose father had purchased it from an art dealer in 1900,
two years after the artist initially sold it.
        Neubauer-Cassirer too was forced to give up the artwork and flee
Germany in the face of the Nazi invasion, but she sold it for a mere
fraction of its current multimillion-dollar value to a German art dealer,
whom Schoenberg claims extorted from her.
        The painting passed through several dealers' hands before being
seized by the Nazis in Holland and sold to an anonymous buyer in 1943.
        After the war ended, the German government voided the initial sales
transaction under restitution laws and declared Neubauer-Cassirer the legal
owner. The painting, however, was never recovered.
        According to the lawsuit, Hahn, who obtained the Pissarro piece
through unknown means, sold it in 1976 to Baron Hans Heinrich Thyssen, whose
family allegedly had strong ties to Adolph Hitler and supplied arms to the
Nazis.
        Cassirer only recently learned of the painting's location and
connection to Hahn after seeing it in a catalogue of the Thyssen collection.
        Attorneys specializing in stolen-art recovery cases were split on
the potential impact the case could have on similar litigation.
        Kyhm Penfil, a partner at Newport Beach's Call, Jensen  Ferrell, who
filed an amicus brief in support of Bennigson's Supreme Court petition in
the Alsdorf case, believes it is "critically important."
        "Not only for Holocaust victims and survivors and both of their
heirs," Penfil said, "but also from the perspective of the art market."
        Larry Kaye, a New York art law attorney who has worked numerous
recovery cases for stolen antiquities and Holocaust victims, said he thought
each recovery case would need to be tried on its own unique circumstances.
        However Polly Towill, the Sheppard Mullin Richter  Hampton attorney
representing Alsdorf, said any new interpretation of the state's statute of
limitations could affect all recovery cases. Towill declined further comment
on the ruling without reviewing it closely.
        Schoenberg said he's simply trying to compensate his clients for
what is rightfully theirs. Following two courtroom defeats and with the case
to recover the Picasso pending a high-court review, Schoenberg hopes he can
run an end around.
        "In theory, if we can get the proceeds - what Hahn got from Alsdorf
- then perhaps we can get the painting from her by giving her back the money
she paid for it," he said.
        "We're trying to do something that no one's ever done," Schoenberg
added, "unwinding the transactions."