The Honorable Edw ard R. Korman, of the United Sta tes Dis trict Court for the Ea stern * Distr ict of New York, sitting by designa tion.

1 10- 257- cv G r o sz v . M u se u m o f M o d e r n A r t, e t a l.
UN ITED STA

TES CO URT OF AP P EALS F OR TH E S ECO N D CI RCU IT 

## SUMMA RY ORDER

Ru li ng s b y su m m ar

y o r de r do no t have pr ece de nt ial eff ect . Cit at io n to a sum m ar y o r de r file d on or af ter J anuary 1 , 2007, is perm itted and is governed by F ederal Rule of Appellate P rocedur e 32.1 and this court ’s Loca l Rule 32.1.1

. When citing a summary or der in a d ocumentfiled with this cour t, a part

y must cit e either t he Feder al Appendix or anelectronic d atabase (with t he notati on “summ ary ord er”). A part y citing a sum mary or der must serve a copy of it on any party not r epresented by cou nsel. At a stated term of the United States Court of Appeals for the Second Circuit, he ld at the Daniel Pa trick Moynihan United Sta tes Courthous e, 500 Pea rl Street, in the City of New Y ork, on the 16 day of Dec ember, two thousand and ten.

th

PR E SE NT: J OS É A. C AB R ANES , B A R R I NGT ON D. P AR KER ,

Circuit Jud ges , E DWA R D R. K O RMAN , *

District Judge

.

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Plainti ffs-Appella nts,

v
. T HE M USEU M O F M ODE R N A RT , H ER MA NN -N EI S S E WI T H C O GN AC , P AI NT I NG B Y G RO SZ , S ELF

P ORT R AI T WI T H M ODEL , P AI NT I NG B Y G RO SZ , REP UB L I C A N A UT OMA T ONS , P AI NT I NG B Y G RO SZ ,

Defenda nts-App ellees

, A MER I C A N J EWI S H C O N G RE SS , C O M M I S S I O N FOR A RT RECO VERY , F I LI PP A M A R UL L O A NZ A L ONE , Y EHU DA B AU ER , M I CHAEL J. B AZ YL ER , B ER NA R D D O V B ELI AK , M I CHAEL B ER ENB AU M , D O NALD2

S. B U R R IS , J UDY C HI C A GO A ND D ONA L D W O O DM AN , TALBE RT D’ A LEM BERTE , M A R I ON F. D ES M UKH , H EDY E P ST E IN , H ECTOR F EL I C I A NO , I R V I NG G REEN BERG , G R AC E C OHEN G ROS S M AN , M

ARCI A S AC H S L I T T EL , H UBE RT G. L O CKE , C AR R I E M ENKEL -M EA DOW , A RT HUR R. M I L L ER , C AROL RI T T NER , J OHN K. R O TH , L UCI L L E A. R O U SS IN , W I L L I A M L. S HULM AN , S T EP HEN D. S M I TH , F R I T Z W EI NS C HE NK ,

Ami ci Cur iae

.

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FOR P LA INTIFFS-AP PELLA NTS: D A V I D R OWL A ND (P atr ici a Her tl in g, o n th e bri ef ) , Ro wlan d & Pe tr of

f, New Yor k, N Y; Raym on d D owd , D un ni ngt onB ar th ol ow & Mill er LLP, New

Yor k, N Y.

FOR DEF ENDANTS-APP ELL EES: C H AR LE S S. S I MS (M argar et A. D ale, J ennif

er L. J on es , on the brief

), Pros kauer R ose LLP , New Yor k, N Y.

F OR AMICI C URI AE: E dw a rd Mc Glyn n G a ffn ey , Jr. , V a lp a raiso University School of Law, V alpa raiso, IN; J ennif er Kr ede r , L aw O ff

ice o f J ennif

er Kr ede r , F lo r enc e, K

Y.

Appea l from a judgment of the United States Distr ict Court for the Southern Dis trict of New Yor k ( ColleenM cM aho n, Judge ).

UPON CONSIDERAT ION WHEREOF, IT IS HEREBY ORDERED, ADJU DG ED , AN D D ECR EED tha t th e j ud gm en t of the Di stri ctC ou rt i s AF F IRME D

. Plaintiffs Martin and Lilian Grosz (“plaintiffs ” or “Gros z heirs”) are the lega l heirs to the
es tat e of th e lat e pai nt er

Geo rge G r os z ( “G r os z”) . T hr ee o f G r os z’s wor ks of ar t, Hermann -Neisse wi th Co gn ac , Self-Portr ait with Model

, and Repu bli

can Aut o mato ns are currently in the possess ion of the M us eumof

M od er n Ar t i n N ew Yo r k ( “M oM A”) . P lai nt

if fs fileds ui t ag ain s t M oM

A onApr il 1 0, 2009 in the Southern District of N ew Y ork, alleg ing cla ims for , among other things, conversion,
r epl evi n, dec lar ato ry ju dgm ent , an d co ns truct ive trus t w

ith r es pec t t o the w or ks of ar t. OnJ un e 4, 200 9, d ef end ant s mo vedun der

Fe der al Rule o f Ci

vil Pr oce du r e 12 (b)( 6) to di s mi s s th e Com pl ain t as time-barred. In its Decision and Order Granting Defendant’s Motion to Dis miss the Compla int, Gr o sz v. M useu m o f M o der n Ar t, et al. , No. 09-CIV-3706, 201 0 WL 88003 (S.D.N.Y . Jan. 6, 2010), the Distr ict Court granted MoMA’s motion. T he District Court dis miss ed the ca se as barred by the th r ee- year s tatut e of limit ati on s fo r

con ver s io n an d r epl evi n u nd er New Yor k la w, N .Y. C.P .L .R. § 214(3). Plaintiffs appeal the judgme nt of the Dis trict Court, claiming tha t the three-year statute of limitations had not passed at the point at which suit wa s br ought or, in the alternative, that the statute of limitations in this case should have bee n subject to equitable tolli ng. We assume the parties’ familiarity with the fac ts and procedural histor y of this action.3 I.

We r evi ew the dis mi s s al o f acom pl ain t p ur s uan t t o F ede r al Rule o f Ci vil Pr oce du r e 12 (b)( 6) de novo , co ns trui ng the c om pl ain t l ib er ally andaccep ti ng all f actual all egat io ns inth e co mp lai nt

as true. See Cham bers v. T

ime W arner, Inc. , 282 F.3d 147, 15 2 (2d Cir. 2002).

Un der New Yor k St ate La

w, “ [a] n i nn oce nt

pu r chas er

of s to lengoo ds bec om es a wr ongdo er only af te r r ef us in g the o wne r ’s dem andfo r th eir r eturn. ” Kunstsamm lungen Zu W eimar v. Elicofon , 67 8 F. 2d115 0, 1 161 (2 d Ci r . 19 82) . T hi s “de man d- and -r ef us al” rul e dat es back

to 196 6, whenth e New York Supreme Court beca me the first court in the country to address the statute of limitations is sue fo r in no cen t p ur chas er s of

chat te l inar t d eali ngs
. See Me nzel v. List , 49 Misc. 2d 300 (N.Y. Sup. C t. 1966). In Menzel

, a ca se involving a good faith purchase of a pai nting by Marc Cha gall, the court hel d that a cau s e of

act io n f or con ver s io n o r r epl evi n acc r ues “agai ns t a p er s onwho lawf ully co mes by a c hattel . . . not upon the stealing or the taking, but upon the defenda nt’s r efusal to convey the chat te l u po n d ema nd .” Id

. at 3 04.

T he G r os z he ir s do no t af fi r mat ive ly as s er t that

M oM A was a badfaith p ur chas er
. Acco r di ngl

y, a j ud gm ent

dec lar in g the p lai nt

if fs ’ cl aim s as ti me- barr ed r es ts onwhe th er s ui t w as br ought withi n thr ee yea r s of

r ef us al b y M oM

A. All p ar ti es agr ee that

r ef us al b y M oM

A has tak en place , they only

disagree on whe n. As the Distr ict Court expla ined in its thoughtful and comprehensive opinion, the rec ord indicates that refusal took place, a t the latest, in a letter from the Di re ct or o f MoMA t o th e G rosz he irs’ a ge nt o n Ju ly 20 , 2 00 5, a nd tha t th e a ge nt o f th e G rosz he irs’ confirmed his unders tanding that refusal had take n place in at lea st t wo subsequent letters to M oM A. B ecau s e pl ain ti ff

s di d n ot file s ui t u nt

il A pr il 1 0, 2 010 , m or e thanth r ee yea r s af te r r ef us al took place , the Distr

ict Court correctly dismiss ed the ac tion as falling outside the statute of li mi ta ti on s.
II.

Plaintiffs clai m, in the alternative , that MoMA s hould be equita bly estopped from us ing the statute of limitations as a defense bec ause plaintiffs relied upon continuing neg otiations with MoM A incho os in g no t t o f

ile s ui t. Un der

New Yor k la w, “ [t ]h e do ctr in e of equ it abl e es to pp el ap pl

ies where it would be unjust to allow a defenda nt to ass ert a statute of limitations defense”—specifica lly, “w here plaintiff was induce d by fraud, misrepr esentations or deception to
r ef r ainfr omfiling a t

im ely a ct io n, ” Zumpano

v. Quinn , 6 N .Y. 3d666 , 67 3- 74 ( N. Y. 2 006 ) (

in te r nal quotation marks and citation omitted). “[T]he plaintiff must demons trate reasonable relia nce on the def end ant ’s mi s r epr es ent ati on s .” Id

. T he m er e exi s te nce of

s et tl eme nt

neg ot iat io ns is in s uf

fi cien t t o j us ti fy

an es to pp el cl aim

. See Cran esville B lock Co., Inc. v. Niagara Mohawk Power Corp , 57 2 N .Y. S.2 d 4 95, 296 -9 7 ( N. Y. Ap p. Di

v. 3 d Dep ’t 199 1) . I nd eed , wh er e “ther e was nev er any s et tl eme nt

agr eem ent [;] co nt

in ueddi ff icult ies in trying to settle the matter[;] no f raud or mis representation by defendants[; and] no ag reement or promis e by de fendants upon which pla intiffs relied in faili ng to commence their lawsuit within the
r equ ir eme nt per io d, ” equi tab le es to pp el d oes no t ap ply. Ma rvel v. Capi tal Dis t. T ran sp. Aut h. , 49 4 N.Y.S.2d 2 15 (N.Y. App. Div. 3d Dep’t 1985).4

T he r eco r d i ndicat es no fr audor mi s r epr es ent ati ononth e par t o f M oM A, n or do es it in di cat e evi den ce o f r eas on abl e r eli ance by p lai nt if fs onany alle gedmi s r epr es ent ati on s by M oM A. We the refore hold that the District Court correctly denied pla intiff’s equitable tolling cla im.

CONCLUSI ON

We hav e co ns id er ed all o f p lai nt if fs ’ cl aim s onapp eal an d f

in d themto be w

itho ut mer it

. Ac co rdi ng

ly , t he ju dg me nt o f th e D ist ric t C ou rt i s AF F IRME D

.

FOR THE C OU R

T: Ca therine O’Haga n Wolfe, C lerk of Court