Court Opinion

ID: 9487484
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:17:38.857618+00
Date Added: 2024-06-11T17:52:17.759212
License: Public Domain

OWEN, District Judge.
I respectfully dissent.
The majority recognizes that in dismissing Mrs. DeWeerth’s action on New York statute of limitations grounds, the prior “DeWeerth panel’s prediction was wrong.” It was wrong in adding to New York’s well-established demand and refusal rule a due diligence requirement, which the panel then found had not been met.1 Nevertheless, the majority leaves the dismissal standing, asserting first, that the prior panel was confronted with “an unsettled issue of state law,” and second, that *1277the doctrine of finality of judgments outweighs “any injustice DeWeerth believes she has suffered by litigating her case in the federal as opposed to the state forum.”
I am unable to accept either of these conclusions. As to the majority’s view that the pre-DeWeerth New York law was “unsettled”, no prior New York statute of limitations ruling had any suggestion of a pre-demand due diligence requirement, or that the issue was ever raised, or even could have been considered.2 The New York Court of Appeals in Gillet v. Roberts, 57 N.Y. 28 in 1874, stated at 34:
The rule is a reasonable and just one, that an innocent purchaser of personal property from a wrongdoer shall first be informed of the defect in his title, and have an opportunity to deliver the property to the true owner, before he shall be made liable as a tort feasor for a wrongful conversion.
This was followed by such cases as Cohen v. M. Keizer, Inc., 246 App.Div. 277, 285 N.Y.S. 488 (1st Dep’t. 1936), 285 N.Y.S. 488 at 489:
However, [defendant’s] possession having been lawful and not tortious in the first instance, a demand upon him and his refusal to surrender possession before the commencement of the suit was necessary.
Thereafter, Menzel v. List, 22 A.D.2d 647, 253 N.Y.S.2d 43, 44 (1st Dep’t. 1964), on remand, 49 Misc.2d 300, 267 N.Y.S.2d 804 (Sup.Ct.N.Y.Co.1966), modified on other grounds, 28 A.D.2d 516, 279 N.Y.S.2d 608 (1st Dep’t. 1967), modification rev’d, 24 N.Y.2d 91, 298 N.Y.S.2d 979, 246 N.E.2d 742 (1969), again held that “a demand by the rightful owner is a substantive, rather than a procedural, prerequisite to the bringing of an action for conversion by the owner[,]” and therefore, “the statute of limitations did not begin to run until demand and refusal.” Id. 22 A.D.2d at 647, 253 N.Y.S.2d at 44.3
This well-established New York law, as I view it, was further confirmed prior to our 1987 DeWeerth opinion by the fact that in 1986 a bill passed the New York legislature proposing to institute a “discovery rule” providing that as to certain not-for-profit institutions, the statute of limitations would run from the time those institutions gave notice, as specified in the bill, that they were in possession of a particular object. The bill was vetoed by Governor Cuomo. The majority recognizes the fact, as do I, that the fate of this bill is wholly consistent with the complete absence in any gre-Guggenheim authorities of any such requirement. As Guggenheim itself observes, 79 N.Y.2d at 319, 567 N.Y.S.2d 623, 569 N.E.2d 426.
The history of this bill and the concerns expressed by the Governor in vetoing it, when considered together with the abundant case law spelling out the demand and refusal rule, convince us that that rule remains the law in New York and that there is no reason to obscure its straightforward protection of true owners by creating a duty of reasonable diligence.
Thereafter, the first DeWeerth opinion having issued in 1987 with certiorari denied in June 1988, the New York Court of Appeals in February 1991, some two and one-half years later in Guggenheim Foundation v. Lubell, 77 N.Y.2d 311, 567 N.Y.S.2d 623, 569 N.E.2d 426, specifically focused on this question and reaffirmed New York Law, stating at 77 N.Y.2d at 317-18, 567 N.Y.S.2d 623, 569 N.E.2d 426:
New York case law has long protected the right of the owner whose property has been stolen to recover that property, even if it is in the possession of a good-faith purchaser for value (see, Saltus & Saltus v. Everett, 20 Wend 267, 282). There is a three-year Statute of Limitations for recovery of a chattel (CPLR 214[3]). The *1278rule in this State is that a cause of action for replevin against the good-faith purchaser of a stolen chattel accrues when the true owner makes demand for return of the chattel and the person in possession of the chattel refuses to return it. (see, e.g., Goodwin v. Wertheimer, 99 N.Y. 149, 153; [1 N.E. 404] Cohen v. Keizer, Inc., 246 App.Div. 277) [285 N.Y.S. 488]). Until demand is made and refused, possession of the stolen property by the good-faith purchaser for value is not considered wrongful (see, e.g., Gillet v. Roberts, 57 N.Y. 28, 30-31; Menzel v. List, 49 Misc.2d 300, 304-05, [267 N.Y.S.2d 804], mod as to damages 28 A.D.2d 516, [279 N.Y.S.2d 608], rev’d as to modification 24 N.Y.2d 91, 298 N.Y.S.2d 979, 246 N.E.2d 742).
Having thus pronounced, Guggenheim went on to state, 77 N.Y.2d at 318, 567 N.Y.S.2d 623, 569 N.E .2d 426:
We have reexamined the relevant New York case law and we conclude that the Second Circuit [in DeWeerth] should not have imposed a duty of reasonable diligence on the owners of the stolen art work for purposes of the Statute of Limitations.[4]
Accordingly, in my view, this case is a most compelling one for relief under Fed. R.Civ.P. 60(b)(6) which provides in pertinent part as follows:
On motion and upon such terms as are just, the court may reheve a party ... from a final judgment ... for ... (6) any other reason justifying relief from the operation of the judgment.
Subpart (6) of the said Rule, as stated by our Court in Matarese v. LeFevre, 801 F.2d 98 (2d Cir.1986) at 106:
“confers broad discretion on the trial court to grant relief when ‘appropriate to accomplish justice,’” International Controls Corp. v. Vesco, 556 F.2d 665, 668 n. 2 (2d Cir.1977) (quoting Klapprott v. United States, 335 U.S. 601, 615, 69 S.Ct. 384, 390, 93 L.Ed. 266 (plurality opinion of Black, J.), modified on other grounds, 336 U.S. 942, 69 S.Ct. 384, 93 L.Ed. 266 (1949)), cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 758 (1978); it constitutes a “grand reservoir of equitable power to do justice in a particular ease,” Radack v. Norwegian America Line Agency, Inc., 318 F.2d 538, 542 (2d Cir.1963) (quoting 7 Moore’s Federal Practice, ¶ 60.27[2] at 60-295). It is “properly invoked where there are extraordinary circumstances, Ackermann v. United States, 340 U.S. 193, 199, 71 S.Ct. 209, 212, 95 L.Ed. 207 (1950); see United States v. Cirami, 563 F.2d [26, 32 (2d Cir.1977) ]; or where the judgment may work an extreme and undue hardship, see United States v. Karahalias, 205 F.2d 331, 333 (2d Cir.1953); In re Emergency Bearcon Corp., 666 F.2d 754, 759 (2d Cir.1981), and “should be liberally construed when substantial justice will thus be served.” Radack v. Norwegian America Line Agency, Inc., 318 F.2d at 542; see also Dunlop v. Pan American World Airways, Inc., 672 F.2d 1044, 1051 (2d Cir.1982); United States v. Cirami, 563 F.2d at 32.
The clear applicability of Rule 60(b)(6) to this case was well-stated by Judge Broderick below, 804 F.Supp. at 547:
The range of fundamental policy and constitutional considerations which have informed the Erie[5] doctrine are fully evident in the present case. Failure to act on the present Rule 60 motion would deny Mrs. DeWeerth the right to recover her property solely because she initially brought this action in federal rather than state court. Had Mrs. DeWeerth brought suit in state court, her claim would have been deemed timely commenced under the applicable statute of limitations.
Such inconsistency is exactly the type of result that Erie was enacted to avoid. As Justice Frankfurter noted, “[t]he nub of the policy that underlies Erie R. Co. v. Tompkins is that for the same transaction the accident of a suit by a non-resident litigant in a federal court instead of in a State Court a block away should not lead to a substantially different result.” Guar*1279anty Trust Company of New York v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 1470, 89 L.Ed. 2079 (1945).
I am, of course, unhesitatingly one with the majority as to the “integrity of the [prior] DeWeerth decision [and] ... the fairness of the process that was accorded DeWeerth.” However, given the majority’s acknowledgement “that the [prior] DeWeerth panel’s prediction was wrong[,]” I cannot accept the result here that Mrs. DeWeerth, who sought our federal diversity jurisdiction, must now suffer the consequences not only of the said soon-corrected prediction, but also today’s determination by the majority that for us to grant her Rule 60(b)(6) relief would have the Court embark on “simply an improvident course that would encourage countless attacks on federal judgments long since closed.”6 Little more than two and one-half years elapsed from the denial of certiorari in the first DeWeerth appeal, and Guggenheim’s authoritative pronouncement.7 Rule 60 exists as a remedy in an extraordinary case to accomplish justice, see Matarese v. LeFevre, supra. This I see as such a case. Should not the impact of Guggenheim rather be shouldered by us, notwithstanding the integrity of our error? While the doctrine of finality of judgments does address an important interest, it should not deter us from using Rule 60 today to do justice because we may have to deal hereafter with the Rule’s invocation in unworthy cases.
Accordingly, contrary to the majority, I see no abuse of discretion by the District Court and would affirm on the scholarly and thorough opinion of Judge Broderick below.

. The prior panel stated as follows, 836 F.2d at 109-10:
In light of New York’s policy of favoring the good faith purchaser and discouraging stale claims and the approach to actions to recover property in other jurisdictions, we hold that under New York law, an owner’s obligation to make a demand without unreasonable delay includes an obligation to use due diligence to locate stolen property.

. This would appear so, because the cause of action does not even come into existence under New York law until a demand is made and there is a refusal. See, New York authorities, infra. New York law does, of course, give consideration to the question of reasonable diligence in the context of a laches defense. Guggenheim Foundation v. Lubell, 77 N.Y.2d 311 at 321, 567 N.Y.S.2d 623, 569 N.E.2d 426 (1991).

. In Kunstsammlungen Zu Weimar v. Elicofon, 536 F.Supp. 829, 848-49, (E.D.N.Y.1981), the District Court for the Eastern District of New York in 1981 thoroughly reviewed the New York authorities and confirmed the foregoing.

. The majority here acknowledges that "... no earlier New York case had addressed this issue[.]”

. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

. The majority expressly reaches this view stating that the district court abused its discretion where it weighed "any injustice DeWeerth believes she has suffered by litigating her case in the federal as opposed to the state forum” more heavily than "the important interest in the finality of the judgment in this case[.]”

. The majority acknowledges that under some circumstances the mere passage of some time would not bar appropriate correction.