* The Honorable John Gleeson, United States District

Judge for the Eastern District of New York, sitting by

designation.

1

11-4042-cv

Bakalar v. Vavra

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED

ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE

PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A

DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST

SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals

2 for the Second Circuit, held at the Daniel Patrick Moynihan

3 United States Courthouse, 500 Pearl Street, in the City of

New York, on the 11th 4 day of October, two thousand twelve.

5

6 PRESENT: DENNIS JACOBS,

7 Chief Judge,

8 ROBERT D. SACK,

9 Circuit Judge,

10 JOHN GLEESON,

District Judge.* 11

12

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14 DAVID BAKALAR, 

15 Plaintiff-Counter-Defendant16 Third-Party-Defendant17 Appellee,

18

19 -v.- 11-4042-cv

20

21 MILOS VAVRA, LEON FISCHER, 

22 Defendants-Counter23 Claimants-Appellants.

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2

1

2 FOR APPELLANT: Raymond J. Dowd, Luke McGrath,

3 Thomas V. Marino, Dunnington,

4 Bartholow & Miller LLP, New

5 York, NY.

6

7 FOR APPELLEES: William L. Charron, Pryor

8 Cashman LLP, New York, NY.

9

10 Appeal from a judgment of the United States District

11 Court for the Southern District of New York (Pauley III,

12 J.).

13

14 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

15 AND DECREED that the judgment of the district court be

16 AFFIRMED. 

17

18 This is an ownership dispute concerning a 1917 drawing

19 by Egon Schiele (the “Drawing”), between David Bakalar, who

20 seeks a declaration that he owns it by purchase from a

21 dealer, and Milos Vavra and Leon Fischer, who are heirs of

22 Austrian cabaret performer, Fritz Grunbaum, who owned it

23 before he was murdered by the Nazis in 1941. The United

24 States District Court for the Southern District of New York

25 (Pauley III, J.) awarded judgment to Bakalar on the basis of

26 laches. Bakalar v. Vavra, 819 F. Supp.2d 293, 307 (S.D.N.Y.

27 2011). “Following a bench trial, we set aside findings of

28 fact only when they are clearly erroneous . . . . However,

29 we review de novo the district court's conclusions of law

30 and its resolution of mixed questions of law and fact.” 

31 Phansalkar v. Andersen Weinroth & Co., L.P., 344 F.3d 184,

32 199 (2d Cir. 2003) (citations omitted). We assume the

33 parties’ familiarity with the underlying facts, the

34 procedural history, and the issues presented for review. 

35

36 [1] In a title action under New York law, a good faith

37 purchaser of an artwork has the burden of proving that the

38 work was not stolen. Bakalar v. Vavra, 619 F.3d 136, 147

39 (2d Cir. 2010) (citing Solomon R. Guggenheim Found. v.

40 Lubell, 77 N.Y.2d 311, 321 (1991)). Here, the district

41 court found that the Drawing was not looted by the Nazis. 

42 Bakalar, 819 F. Supp. 2d at 298-99. Vavra and Fischer argue

43 that the district court’s finding is clearly erroneous and

44 that the Nazis stole the Drawing. However, Bakalar traced
3

1 the provenance back to Mathilde Lukacs, Grunbaum’s sister2 in-law, who sold it to a gallery in 1956. Vavra and

3 Fischer’s hypothesis--that the Nazis stole the Drawing from

4 Grunbaum only to subsequently return or sell it to his

5 Jewish sister-in-law--does not come close to showing that

6 the district court’s finding was clearly erroneous. 

7

8 After finding that the Drawing was not stolen by the

9 Nazis, the district court extended its Lubell analysis by

10 requiring Bakalar to show that Lukacs acquired proper title

11 in the Drawing, and found that he could not. Bakalar, 819

12 F. Supp. 2d at 299-302. We do not decide whether Bakalar

13 discharged his burden under Lubell by tracing the provenance

14 back to Lukacs, who was a close relative of Grunbaum (she

15 was sister to Mrs. Grunbaum, who survived Grunbaum before

16 herself being murdered by the Nazis). The point was not

17 pressed by Bakalar, and we affirm instead on the district

18 court’s ruling that the claim against Bakalar is defeated by

19 laches. 

20

21 This Court previously recognized that Bakalar could

22 assert a laches defense under New York law. See Bakalar,

23 619 F.3d at 147. In order to prevail on laches, Bakalar had

24 to show that “(1) [Vavra and Fischer] were aware of their

25 claim [to the Drawing], (2) they inexcusably delayed in

26 taking action, and (3) Bakalar was prejudiced as a result.” 

27 Bakalar, 819 F. Supp. 2d at 303 (citing Ikelionwu v. United

28 States, 150 F.3d 233, 237 (2d Cir. 1998)). The district

29 court found that Vavra and Fischer’s “ancestors were aware

30 of--or should have been aware of--their potential intestate

31 rights to Grunbaum property,” and that the ancestors “were

32 not diligent in pursuing their claims to the Drawing.” Id.

33 at 305-06.

34

35 Vavra and Fischer contend that the district court

36 committed two errors of law bearing on the laches defense. 

37 First, they argue that the court erroneously “imputed

38 knowledge of ‘potential intestate rights’ to [Vavra and

39 Fischer] based upon previous actions or inactions of other

40 family members.” But it was obviously necessary for the

41 court to do just that; the alternative was to reset the

42 clock for each successive generation. See Bakalar, 819 F.

43 Supp. 2d at 303 ("This inquiry focuses not only on efforts

44 by the party to the action, but also on efforts by the
4

1 party's family.") (internal quotation omitted). Second,

2 Vavra and Fischer argue that their families had no legal

3 duty of diligence until they knew of the actual location of

4 the Drawing. They rely on language in Lubell declining to

5 “impose the additional duty of diligence before the true

6 owner has reason to know where its missing chattel is to be

7 found.” 77 N.Y.2d at 320. However, though “[l]ack of

8 diligence in locating the property” is not a consideration

9 for a statute of limitations analysis, it is absolutely

10 relevant “with respect to a laches defense.” SongByrd, Inc.

11 v. Estate of Grossman, 206 F.3d 172, 182 (2d Cir. 2000)

12 (citing Lubell, 77 N.Y.2d at 321). 

13

14 Vavra and Fischer’s factual arguments are no more

15 persuasive. Their theories about what their ancestors knew

16 (or didn’t know) are speculative, and we do not have a

17 “‘definite and firm conviction that a mistake has been

18 committed.’” Mobil Shipping & Transp. Co. v. Wonsild Liquid

19 Carriers Ltd., 190 F.3d 64, 67-68 (2d Cir. 1999) (quoting

20 Anderson v. Bessemer City, 470 U.S. 564, 574 (1985)). 

21

22 Next, Vavra and Fischer contest whether Bakalar was

23 prejudiced by their ancestors’ delay in pursuing the

24 Drawing. There can be no serious dispute that the deaths of

25 family members--Lukacs and others of her generation, and the

26 next--have deprived Bakalar of key witnesses. See Sanchez

27 v. Trustees of the Univ. of Pa., 2005 WL 94847, *3 (S.D.N.Y.

28 Jan. 18, 2004) (noting that the death of potential witnesses

29 is prejudicial) (citing Solomon R. Guggenheim Found. V.

30 Lubell, 153 A.D.2d 143, 149 (1st Dep’t 1990)). And while a

31 “defendant's vigilance is as much in issue as [a]

32 plaintiff's diligence,” Lubell, 153 A.D.2d at 152, Vavra and

33 Fischer’s speculation has not established clear error in the

34 district court’s finding that Bakalar, a good faith

35 purchaser, was prejudiced by the delay. See Bakalar, 819 F.

36 Supp. 2d at 306-07.

37

38 In sum, there is no clear error in the findings that

39 Vavra and Fischer’s ancestors knew or should have known of a

40 potential claim to the Drawing, that they took no action in

41 pursuing it, and that Bakalar was prejudiced in this

42 litigation as a result of that delay. It was therefore

43 sound to recognize Bakalar’s title on the basis of his

44 laches defense.
5

1 [2] Citing little authority, Vavra and Fischer argue

2 that the district court should have permitted them to

3 supplement the record with additional expert testimony on

4 remand. They misconstrue this Court’s remand instruction

5 that the district court could reopen discovery to mean that

6 it was required to do so. See Bakalar, 619 F.3d at 147

7 (“[W]e vacate the judgment of the district court and remand

8 the case for further proceedings, including, if necessary, a

9 new trial.”) (emphasis added). See also Int’l Star Class

10 Yacht Racing Ass’n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d

11 66, 73 (2d Cir. 1998) (“The decision whether to hear

12 additional evidence on remand is within the sound discretion

13 of the trial court judge.”). The district court granted a

14 six month extension for expert discovery before trial, but

15 Vavra and Fischer failed to meet the revised deadline. See

16 Bakalar v. Vavra, 851 F. Supp. 2d 489, at 491-92 (S.D.N.Y.

17 2011). The district court did not abuse its discretion in

18 abiding by its discovery calendar, especially in light of

19 its generous extension. 

20

21 Finding no merit in Vavra and Fischer’s remaining

22 arguments, we hereby AFFIRM the judgment of the district

23 court.

24

25

26 FOR THE COURT:

27 CATHERINE O’HAGAN WOLFE, CLERK

28