Release from the 1970s Forecloses Family’s Suit to Reclaim Art Lost During the Holocaust
So ruled Justice Andrea Masley of the Commercial Division in a recent summary judgment motion in the case Frenk v. Solomon, Index No. 650298/2013, holding that a standardized form release signed by the plaintiff’s mother in 1973 to settle a case primarily involving one piece of artwork barred the plaintiff’s present suit to recover other pieces of art that were believed lost at the time of the 1973 settlement.
The case involves the family of Paul Westheim, a Jewish art critic who fled Nazi Germany in 1933 and left his substantial art collection with a Berlin art dealer, Charlotte Weidler. After the war, Ms. Weidler claimed that Mr. Westheim’s art collection had been destroyed in a bombing raid, an allegation that prevented Mr. Westheim from receiving restitution for the art collection from West Germany because Nazi persecution had not been the cause of the loss.
As alleged in the present action, the art collection had not in fact been destroyed; according to the plaintiff, Ms. Weidler and her family kept the collection and later began to sell individual pieces. The first instance occurred in 1973, when the wife of the deceased Mr. Westheim (Ms. Westheim-Frenk) learned that Ms. Weidler had sold a painting from her husband’s collection to a New York gallery. Ms. Westheim-Frenk brought suit the same year (the “1973 Action”) against Ms. Weidler and others seeking damages, possession of all items from Mr. Westheim’s collection, and an accounting of Ms. Weidler’s actions regarding the collection. The case settled before discovery, and Ms. Westheim-Frenk executed a standardized form release (the “Release”) of all claims that she (or her heirs) “ever had, now have, or … shall or may have for, upon or by any reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of the release.” In exchange for the release, Ms. Westheim-Frenk received $7,500.20, equivalent to $40,000 in today’s dollars. The action was dismissed with prejudice by stipulation.
The present action started in 2013, with the plaintiff (Ms. Westheim-Frenk’s daughter) alleging that the defendants—the executor of Ms. Weidler’s will (Yris Rabenou Solomon), the Yris Rabenou Corporation, Darius and Teimor Solomon (sons of Ms. Solomon and the sole heirs of Ms. Weidler)—possessed and/or sold five pieces of art from Mr. Westheim’s collection (the “Five Pieces”), and sought a declaration of her rightful ownership, as well as claims of replevin, accounting, and damages. The majority of her claims survived a motion to dismiss in a ruling affirmed by the First Department. In affirming the trial court’s decision, the First Department noted the plaintiff’s allegation that the Release was not intended to cover the current action and also that it was fraudulently induced so dismissal before discovery would be premature.
Following discovery, the defendants moved for summary judgment contesting the plaintiff’s ownership of the Five Pieces and her ability to maintain the suit in light of the Release.
Judge Masley rejected the defendants’ argument that they had good title to the Five Pieces pursuant to the Uniform Commercial Code’s Doctrine of Entrustment. The court noted that the defendants did not dispute that Ms. Weidler had, between 1977 and 1983, transferred four of the Five Pieces to one of the defendants, Yris Rabenou Solomon (the executor of Ms. Weidler’s will), and that Ms. Solomon helped sell the fifth piece in 1998. Instead, the defendants argued that the Doctrine of Entrustment applied. According to the defendants, Mr. Westheim entrusted the Five Pieces to Ms. Weidler, an art dealer who had the authority to transfer them with good title when acting in the ordinary course of her business. Judge Masley noted that claiming status as a buyer in the ordinary course is an affirmative defense, but the defendants did not plead it. The court also noted that because Mr. Wesheim left his collection behind in Germany to flee Nazi persecution, this is not the type of entrustment contemplated by the U.C.C., and any later transfers by Ms. Weidler were suspect. Judge Masley also excluded an expert opinion submitted by the defendants stating that Mr. Westheim intended Ms. Weidler to sell the collection because the opinion was unsigned and undated by the expert, in violation of Commercial Division Rule 13. Judge Masley also found the opinion to be conclusory.
Nonetheless, Judge Masley granted summary judgment to the defendants on the ground that the Release barred the plaintiff’s claims. Judge Masley stated that since the Release was a standardized form, the court “must be flexible in its application of the parole evidence rule” when considering the plaintiff’s arguments. The plaintiff attempted to avoid the plain language of the release by arguing that a later transaction between Ms. Weidler and Ms. Westheim-Frenk showed that the Release only related to the single painting at the center of the 1973 Action. According to the plaintiff, in 1976, Ms. Weidler attempted to sell another painting from Mr. Westheim’s collection. At that time, the art dealer handling the transaction split the amount of the sale between Ms. Weidler and Ms. Westheim-Frenk. The plaintiff contended that the splitting of the sale amount would not make sense if the Release had waived all of Ms. Westheim-Frenk’s claims to other artwork from Mr. Westheim’s collection. The plaintiff also pointed to the low amount of the settlement as inappropriate for a release that covered other works of art. Judge Masley rejected these arguments, concluding that the plaintiff’s evidence of conduct and intent was inconclusive and could not overcome the clear language of the Release.
Finally, Judge Masley found that the plaintiff did not provide any specific evidence to support her allegation that that Ms. Weidler used fraud to obtain the Release. Judge Masley also rejected the plaintiff’s fraud allegation because to set aside a release on the basis of fraud, the fraud must be separate from the subject of the release. Judge Masley held that the plaintiff did not identify any representations made by Ms. Weidler to Ms. Westheim-Frenk at the time the Release was signed, and the Release was not conditioned on the truth of any information provided regarding the existence of other works of art. Nor was Ms. Weidler’s acceptance of only half the proceeds from the 1976 sale sufficient to constitute a waiver of the Release—nothing regarding that sale unmistakably manifested intent to waive the Release.
In the face of the unambiguous Release, the Court had no choice but to grant summary judgment and dismiss the case.