Solomon R Guggenheim Foundation v. Lubell

77 N.Y.2d 311 (1991)

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Nature of the Case

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Facts

Guggenheim (P) sued Lubell (D) to recover a Chagall gouache. P believed that the gouache was stolen from its premises by a mailroom employee sometime in 1960. D had purchased the painting from the Robert Elkon Gallery for $17,000 in May of 1967. The invoice and receipt indicated that the gouache had been in the collection of a named individual, who later turned out to be the museum mailroom employee suspected of the theft. D bought the painting and displayed it at home for 20 years. D argued that P had a duty to use reasonable diligence to recover the gouache, that it did not do so, and that its cause of action in replevin is consequently barred by the Statute of Limitations. D raised as affirmative defenses the Statute of Limitations, her status as a good-faith purchaser for value, adverse possession, laches, and P's culpable conduct. In summary judgment papers, D argued that the replevin action to compel the return of the painting was barred by the three-year Statute of Limitations because P had done nothing to locate its property in the 20-year interval between the theft and the museum's fortuitous discovery that the painting was in D's possession. The trial court granted D's cross-motion for summary judgment, relying on DeWeerth v Baldinger. The court cited New York cases holding that a cause of action in replevin accrues when demand is made upon the possessor, and the possessor refuses to return the chattel. The court reasoned that in order to avoid prejudice to a good-faith purchaser, demand cannot be unreasonably delayed and that a property owner has an obligation to use reasonable efforts to locate its missing property to ensure that demand is not so delayed. The court issued the summary judgment. The Appellate Division dismissed the Statute of Limitations defense. It stated that P's lack of diligence argument was more in the nature of laches than the Statute of Limitations and that as a result, D needed to show that she had been prejudiced by the delay. D appealed.