Dismissing provenance: the use of procedural defenses to bar claims in nazi-looted art and securitized mortgage litigation
| Autor | Christian J. Bromley |
| Cargo | Associate, Bryan Cave LLP; J.D., Emory University School of Law, 2015; B.A., Art History, Rollins College, 2012. Mr. Bromley is a member of Bryan Cave's Commercial Litigation client services group and routinely handles complex litigation involving federal lending regulations. He also served as the Managing Broker for a boutique residential real... |
| Páginas | 218-234 |
DISMISSING PROVENANCE: THE USE OF PROCEDURAL DEFENSES
TO BAR CLAIMS IN NAZI-LOOTED ART AND SECURITIZED
MORTGAGE LITIGATION
CHRISTIAN J. BROMLEY*
I. Introduction ......................................................................................................................... 218
II. Federal Responses .............................................................................................................. 220
A. The Second World War ....................................................................................... 220
B. The Great Recession ............................................................................................ 224
III. Title Dispute Litigation .................................................................................................... 226
A. Nazi-Looted Art ..................................................................................................... 226
B. Securitized Mortgage Foreclosures .................................................................. 227
IV. Technical Defenses ............................................................................................................. 230
A. Statute of Limitations and Laches ..................................................................... 230
1. Statute of Limitations .................................................................................................... 230
2. Laches Doctrine ................................................................................................................ 231
B. Standing ................................................................................................................... 232
V. Conclusion ........................................................................................................................... 234
I. INTRODUCTION
To buy, or not to buy. The seasoned collector earmarks pages in the
gallery’s upcoming sale catalogue while the naïve first-time homebuyer favorites
listings on their Realtor.com® app. Seemingly worlds apart, these two buyers face
an important legal challenge: the possibility that the property they buy, the
coveted Old-Master canvas or somewhat neglected Arts and Crafts bungalow,
has disputed provenance and a troubling kink in the chain of title.
Art and real estate constitute significant personal and cultural assets that
are often deeply important to their individual owners and society at large.
Nonetheless, art with questionable provenance and real estate with uncertain
transfers of title present strikingly analogous challenges for current owners and
title holders—whether museums and individuals with this art in their
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* Christian J. Bromley, Associate, Bryan Cave LLP; J.D., Emory University School of Law, 2015;
B.A., Art History, R ollins College, 2012. Mr. Bromley is a member of Bryan Cave's Com mercial
Litigation client services group and routinely handles complex litigation involving federal lending
regulations. H e also served as the Managin g Broker for a boutique residential real estate
brokerage. He extends many thanks to Lisa Moore for her art law expertise.
No. 2
Dismissing Provenance
219
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collections, or financial institutions and good-faith purchasers acquiring the title
to real estate at foreclosure sales.
The provenance of fine art ushers a unique set of legal concerns when that
art was once among the 650,000 works looted by the Nazis during the Second
World War.1 With multiple transfers between individual owners and interested
financial institutions since the turn of the twenty-first century, the seven million
properties foreclosed in the wake of the subprime mortgage collapse have
similarly unsettled provenance.2 Just as art represents a comparatively minor
casualty of the Holocaust, the legal ramifications of the Great Recession may have
initially appeared rather inconsequential to American real property regimes,
which have been well established and fairly unwavering since the dawn of the
American Republic.3 To the contrary, art- and real estate-related litigation jointly
display title disputes in response to these respective eras that stand to have
drastic and lasting effects on two of America’s most significant property
markets.4
Outside equitable arguments for the restitution of art and the reversal of
potentially improper real estate foreclosures, technical defenses represent the
legal fulcrum of title dispute litigation for art and real estate alike. Museums,
collectors, and other purchasers or recipients of Nazi-looted art may bar their
adversaries’ ownership claims by asserting that the statute of limitations has run
or that those claims were unreasonably delayed under the doctrine of laches.
Financial institutions and other foreclosure sale purchasers may similarly bar the
ownership claims of their adversaries regardless of merit by asserting that those
claimants lack standing to challenge the foreclosure of a securitized mortgage.
As a point of clarification, this Article neither seeks to nor equates the
actions committed by the Nazis during the Second World War with the lending
practices of twenty-first century America. This Article draws a parallel between
the potential legal challenges and litigation facing American lending institutions,
title insurance companies, and real property owners in the coming years with the
decades of similar litigation amongst either museums or private collectors and the
heirs to Nazi-looted art. This Article proceeds in three parts. Part I examines the
historical context of the legal issues discussed herein by exploring the broad
federal responses to both the Second World War and the Great Recession. Part II
examines the title disputes over Nazi-looted art and securitized mortgage
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1 Alex Shoumatoff,
The Devil and the Art Dealer
, VANITY FAIR NEWS (April 2014),
http://www.vanityfair.com/news/2014/04/degenerate-art-cornelius-gurlitt-munich-apartment
(last visited Apr. 5, 2015).
2
National Foreclosure Report
, CORELOGIC (2015), http://www.corelogic.com/about-
us/researchtrends/national-foreclosure-report.aspx# (last visited Apr. 5, 2015).
3
See
Dale A. Whitman & Drew Milner,
What We Have Learned From the Mortgage Crisis About
Transferring Mortgage Loans
, 49 REAL PROP. TR. & EST. L.J. 1, 3 (2014).
4
See infra
Parts II & III.
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