Commercial Division Blog

Posted: November 21, 2013 / Categories Commercial, Statute of Limitations/Laches

Laches Defense from Events of WWII Fails for Lack of Prejudice

On November 14, 2013, the Court of Appeals issued a decision in In re: Flamenbaum, Docket No. 178, holding that a laches defense based on events going back to WWII failed because of the failure to show prejudice.

In a probate proceeding, a German museum sought to recover a 3,000 year-old gold tablet from the estate of Riven Flamenbaum.  German archeologists discovered the tablet in Iraq before WWI and gave it to the museum.  During WWII, the tablet disappeared. It resurfaced in 2003, when it was discovered among Flamenbaum's possessions. The museum filed a notice of appearance and claim with the Surrogate's Court. After a trial, the Surrogate held that the museum's claim was barred by laches. The Appellate Division, Second Department reversed, holding that, inter alia, the estate had not shown prejudice. The Court of Appeals affirmed, writing:

We agree with the Appellate Division that the Estate failed to establish the affirmative defense of laches, which requires a showing that the museum failed to exercise diligence to locate the tablet and that such failure prejudiced the Estate. While the Museum could have taken steps to locate the tablet, such as reporting it to the authorities or listing it on a stolen art registry, the Museum explained that it did not do so for many other missing items, as it would have been difficult to report each individual object that was missing after the war. . . . As we previously observed to place a burden of locating stolen art work on the true owner and to foreclose the rights of that owner to recover its property if the burden is not met would . . . encourage illicit trafficking in stolen art.

While the Estate argued that it had suffered prejudice due to the museum's inaction, there is evidence that least one family member (the decedent's son) was aware that the tablet belonged to the museum.

Practitioners often invoke laches, but forget the essential element of prejudice. The Flamenbaum decision provides a stark reminder of the effect of the failure (or inability) to show prejudice.