Court rules Nixon Peabody client did not act improperly in acquiring or attempting to sell two Schiele drawings; does not order a trial as to modern-day ownership

July 19, 2019

Director of Media Relations
Nicholas Braude

New York, NY. Nixon Peabody client Richard Nagy, a London art dealer, did not act improperly in acquiring two drawings by renowned artist Egon Schiele or offering them for public sale, according to a decision by the New York State Supreme Court Appellate Division, First Department.

Thaddeus Stauber, representing Mr. Nagy, argued that the artworks, Woman in a Black Pinafore (1911) and Woman Hiding Her Face (1912) were acquired “in good faith and in a commercially reasonable manner” following several findings that artworks with a similar relevant provenance had not been stolen by the Nazis as the heirs of Franz Friedrich “Fritz” Grünbaum claimed.

These findings include:

  • A 2004 letter from the Art Loss Register to Mr. Nagy concluding that he could “demonstrate that extensive due diligence has been undertaken” to show that “the chance of a title claim against [Girl in a Pinafore] is remote.”
  •  A 2005 decision in Bakalar v. Vavra, in which the U.S. District Court for the Southern District of New York and the U.S. Court of Appeals for the Second Circuit ruled in favor of a Boston businessman who had purchased a Schiele drawing with a similar relevant provenance. After a full trial on the merits, the court found “by a preponderance of the evidence that the Drawing was not looted by the Nazis,” which finding was affirmed.
  • A 2010 resolution by the Michalek Commission of the Austrian Art Restitution Commission concerning artworks with a similar relevant provenance finding that “there is no indication the owners were deprived of the art collection or parts of it by government action.”
  • A 2015 recommendation by the Austrian Art Restitution Commission Advisory Board that two Schiele artworks with similar relevant provenance not be transferred to the Grünbaum heirs from the current owner because there was no basis on which it could determine that the artworks had been stolen by the Nazis.
  • Finally, the German Lost Art Foundation database delisted the artworks acquired by Mr. Nagy.

In addition, several Holocaust provenance experts were asked to consider the claims regarding the artworks’ World War II–era history. They include Dr. Sophie Lillie, an Austrian provenance expert who provided the expert report that helped in the return of Gustave Klimt’s portrait of Adele Bloch-Bauer I (The Women in Gold) to its rightful heirs; Laurie Stein, who serves as a provenance expert to the Smithsonian Institution and the Metropolitan Museum of Art and a researcher for the German Gurlitt Commission; and Lynn Nicholas, advisor to the Presidential Advisory Commission on Holocaust Era Assets and author of the groundbreaking book The Rape of Europa, an account of Nazi plunder of looted art treasures from occupied countries. Her honors include the Légion d’Honneur by France and the Amicus Poloniae by Poland.

Before the New York State Supreme Court, First Department, on Mr. Nagy’s behalf, Nixon Peabody argued that under the Holocaust Art Restitution Act (HEAR Act) and in light of documented evidence, prior decisions finding the art collection not stolen, and the detailed expert reports that Mr. Nagy had acted reasonably in acquiring the artworks and that the question of the modern-day ownership of the artworks and whether or not the artworks had been stolen called for a trial on the merits. While the court agreed that the lower court erred in awarding a penalty of attorney’s fee against Mr. Nagy, it affirmed the lower court’s decision against holding a trial on the merits and awarding ownership to the modern-day claimants.

Following the recent decision, Mr. Stauber said, “We are pleased that the First Department Court determined that Richard Nagy did not act improperly in acquiring the artworks and offering them for public sale. We are disappointed that the Court did not rule that a trial on the merits was necessary here, and instead disregarded the careful expert reports commissioned from respected provenance experts. As numerous decisions, including from the United States District Court for the Southern District of New York, have previously found that this collection of artworks was not stolen during World War II after conducting a trial on the merits, it is hard to reconcile this recent decision and thus we are reviewing further appellate options.”

The Nixon Peabody team consists of Nixon Peabody partners Thaddeus Stauber and Kristin Jamberdino.

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