Nature of the Case
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Facts
Dr. Stern was of Jewish descent and, under the Nuremberg laws, was subject to official persecution by the German government. In 1935, the Reich Chamber for the Fine Arts demanded that he liquidate his inventory and gallery. Dr. Stern consigned most of his inventory and private collection, constituting hundreds of works, to the Lempertz (LAH) and they auctioned the items. Of course, the items consigned to LAH by Dr. Stern were sold at well below market value. Dr. Stern fled Germany, and the German government issued an order freezing his assets. Dr. Stern never received the proceeds of the LAH sale. Dr. Stern eventually emigrated to Canada and became a preeminent art collector and dealer there. LAH was heavily damaged by wartime bombing, and its Nazi-era records were destroyed. Post-war efforts to locate paintings from the LAH auction were hindered by the near-total destruction of LAH records. Dr. Stern made numerous attempts to locate his art collection. Dr. Stern recovered some paintings and also filed a claim for restitution for artwork through the British military government in post-war Germany. In 1949, Dr. Stern traveled to Europe in an attempt to locate some of his art collection. In 1948, and 1952, Dr. Stern placed advertisements in two publications, 'Canadian Art' and 'Die Weltkunst.' In 1958, Dr. Stern initiated proceedings in Germany for the recovery of paintings and other property seized by the Nazi government. In the early 1960's Dr. Stern pursued claims for monetary compensation for his art losses through the German restitution courts. In 1964, a court in Germany awarded Dr. Stern partial damages for his loss of profits resulting from his being forced to sell his gallery's inventory at prices that were below market value. Upon his death in 1987, Dr. Stern bequeathed all residue of his estate to the Stern Estate. In April 2003, Estates Unlimited, Inc. received the Painting on consignment from D. In April 2004, on behalf of the Stern Estate, the Art Loss Register('ALR') agreed to list the lost inventory of Dr. Stern's gallery auctioned by LAH on its Holocaust-related database. The Painting was to be auctioned by Estates Unlimited at a public auction scheduled for January 6, 2005. The Stern Estate learned from ALR that the Painting was on consignment at Estates Unlimited. ALR contacted Estates Unlimited and informed Estates Unlimited of the Stern Estate's claimed ownership of the Painting. Estates Unlimited agreed to withdraw the Painting from the auction. Estates Unlimited then informed D of the Stern Estate's claim of ownership. The Stern Estate made a claim for restitution of the Painting with the Holocaust Claims Processing Office of the state of New York Banking Department. They sent a demand letter to D seeking restitution of the Painting. D refused to return the Painting to the Stern Estate. The painting was sent to Germany and D obtained an appraisal of the Painting in the range of 50,000 to 70,000 Euros. P sued on May 8, 2006. P has moved for summary judgment against D on its claims for replevin and conversion. Dr. Karl Wilharm acquired the Painting through the LAH auction. D has had the Painting in her possession since and inherited the Painting, from her mother's estate, in 1991.
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