RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
NEVAS, District Judge.
Stuart and Sons, Ltd. Partnership, et al. (collectively, "the Stuarts")
Pending before the court are the Stuarts' motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) [doc. # 57], which was converted by the court into a motion for summary judgment
For the following reasons, the Stuarts' motion for summary judgment is GRANTED and the Defendants' motion for summary judgment is DENIED.
The following facts are, at this point in the case, no longer in dispute.
At some point in the early 1950's, Stuart, Sr. came to possess the Paintings that are now the subject of this lawsuit.
Since at least 1962, Stuart, Sr. held himself out, and was publicly recognized as the owner of the Paintings in numerous publications, including books about Rockwell and gallery and museum catalogues.
In 1994, the Stuarts loaned the Paintings to the Norman Rockwell Museum in Stockbridge, Massachusetts ("the Museum"). The Museum has always identified the Paintings as the property of the Stuart family, both at the Museum and on its web site. For a number of years, including the time the Paintings were on loan to the Museum, a member of the SerVaas family was on the Museum's Board of Directors.
In the summer of 2001, the Stuarts were negotiating with Sotheby's, a New York auction house, to sell the Paintings. At that time, Sotheby's contacted Curtis for information about the Paintings for its sale catalogue. In response, the Defendants wrote to Sotheby's claiming to own the Paintings. Sotheby's then cancelled the
Summary judgment should be granted if the record demonstrates that there is' no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir.1994); Fed.R.Civ.P. 56(c). The burden of demonstrating the absence of any genuine issue of material fact rests on the moving party, see Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), and all ambiguities and inferences that may reasonably be drawn from the facts must be viewed in the light most favorable to the nonmoving party, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Whether a fact is material depends on the substantive law of the claim and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. A disputed issue is not created by a mere allegation in the pleadings, See Applegate v. Top Assoc., Inc., 425 F.2d 92, 96 (2d Cir.1970), or by surmise or conjecture, see Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980). Conclusory assertions also do not create a genuine factual issue. See Delaware & Hudson Ry. Co. v. Conrail, 902 F.2d 174, 178 (2d Cir.1990). Where affidavits are submitted on summary judgment they "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Santos v. Murdock, 243 F.3d 681, 683 (2d Cir.2001) (quoting Fed. R.Civ.P. 56(e)). Thus, "as to issues on which the non-moving party bears the burden of proof, the moving party may simply point out the absence of evidence to support the nonmoving party's case." Nora Beverages, Inc. v. Perrier Group of Am., Inc., 164 F.3d 736, 742 (2d Cir.1998).
"The movant's burden does not shift when cross-motions for summary judgment are before the court; rather, each motion must be judged on its own merits." Lillbask ex rel. Mauclaire v. Sergi, 117 F.Supp.2d 182, 186 (D.Conn.2000); see Schwabenbauer v. Board of Educ., 667 F.2d 305, 313-14 (2d Cir.1981). Indeed, "[c]ross motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified. . . ." Rains v. Cascade Industries, Inc., 402 F.2d 241, 245 (3d Cir.1978).
The Stuarts maintain that they are entitled to a declaration of ownership of the Paintings and that the Defendants' counterclaim for a declaration of ownership of the Paintings is actually a claim for conversion and, as such, is barred by the statute of limitations. In the alternative, the Stuarts maintain that the Defendants' counterclaim is barred by the doctrine of laches. The Defendants assert that they own the Paintings and that the statute of limitations did not begin to run on their claim until they made a demand for the return of the Paintings in 2001.
The Defendants label their counterclaim as one for a declaratory judgment that they are the rightful owners of the Paintings. Despite this label, the Defendants allege that "[t]he attempted consignment of the Paintings constituted conversion of the same." The Stuarts say that by labeling the claim as one for declaratory judgment the Defendants are attempting to circumvent the statute of limitations. They say that whatever label the Defendants put on their claims, the action they describe is one for conversion. The court agrees.
To prevent a party from making a mockery of the statute of limitations through creative labeling in cases where, as here, legal and equitable claims co-exist, the court will focus on the substance of the claim as opposed to its form, and an equitable remedy will be withheld if an applicable statute of limitations bars the concurrent legal remedy. See Gilbert v. City of Cambridge, 932 F.2d 51, 57 (1st Cir.1991); see also Town of Orangetown v. Gorsuch, 718 F.2d 29, 42 (2d Cir.1983) (noting that if a claim for declaratory relief can be resolved through another form of action that has a specific limitations period, the specific period will govern). Accordingly, although the Defendants' counterclaim is labeled as one seeking declaratory relief, in substance it is a claim for conversion and will be construed as such.
II. Statute of Limitations
Because jurisdiction in this case is based on diversity of citizenship, the court must apply the forum state's substantive law, including its choice of law rules. See AroChem, Int'l, Inc. v. Buirkle, 968 F.2d 266, 269-70 (2d Cir.1992). Under Connecticut's choice of law rules, if the underlying claim existed at common law, the statute of limitations is considered procedural. See Slekis v. Nat'l R.R. Passenger Corp., 56 F.Supp.2d 202, 204 (D.Conn. 1999). The underlying claim here is conversion, a claim that existed at common law, see D'Occhio v. Connecticut Real Estate Comm'n, 189 Conn. 162, 182, 455 A.2d 833 (1983), and thus Connecticut's threeyear common-law tort statute of limitations, Conn. Gen.Stat. § 52-577, applies.
Connecticut's general tort statute of limitations is an occurrence, as opposed to an accrual, statute that runs from "the date of the act or omission complained of." Fichera v. Mine Hill Corp., 207 Conn. 204, 212, 541 A.2d 472 (1988). As the Connecticut Supreme Court concluded, "the history of that legislative choice of language [in § 52-577] precludes any construction thereof delaying the start of the limitations period until the cause of action has accrued or the injury has occurred." Id. (citing Prokolkin v. General Motors Corp., 170 Conn. 289, 294-97, 365 A.2d 1180 (1976)). Hence, Connecticut's three-year statute of limitations applies to the conversion claim at issue here.
Conversion occurs when one, without authorization, assumes and exer cises a right of ownership of property belonging to another to the exclusion of the owner's rights. See Aetna Life & Cas. Co. v. Union Trust Co., 230 Conn. 779, 646 A.2d 799 (1994); Luciano v. Stop & Shop Cos., 15 Conn.App. 407, 544 A.2d 1238 (1988); Epstein v. Automatic Enterp., 6 Conn.App. 484, 488, 506 A.2d 158 (1986). In a conversion action, "[t]he essence of the wrong is that the property rights of the [original owner] have been dealt with in a manner adverse to him, inconsistent with his right of dominion, and to his harm." Coleman v. Francis, 102 Conn. 612, 615, 129 A. 718 (1925); see also Restatement (Second) of Torts § 222A. There
In the first class of conversion the possession is wrongful from the outset. See Epstein, 6 Conn.App. at 488, 506 A.2d 158. Proof of the wrongful taking establishes the conversion; thus there is no need for a demand and a refusal for return of the property to establish the tort. See id. The statute of limitations for this type of conversion begins to run on the date the property was wrongfully taken. See Sterniak v. Mullins, No. CV020516931S, 2003 WL 22480570, at *2 (Conn.Super.Ct., Sept.18, 2003) (citing Heffernan v. Marine Midland Bank, NA, 283 A.D.2d 337, 727 N.Y.S.2d 60, 62 (N.Y.A.D.2001)).
The second class of conversion occurs when the possession is originally rightful, but becomes wrongful as a result of: (1) a wrongful detention; (2) a wrongful use of the property; or (3) the exercise of an unauthorized dominion over the property. See Epstein, 6 Conn.App. at 488, 506 A.2d 158. With regard to the first instance, where the original possession is authorized, but becomes wrongful when the property is detained without authorization, a conversion does not occur until the possessor refuses to return the property on demand. See id. "Demand is only required in the `detention' scenario because by definition, a rightful possession cannot become a `detention' until a possessor fails to comply with a request to quit possession made by the rightful owner." Luciani, 15 Conn.App. at 410, 544 A.2d 1238. In this type of conversion, the statute of limitations begins to run when the demand is refused. See id.
In the other two instances in the second class of conversion, either the wrongful use or the unauthorized dominion constitute the conversion and no demand for the return of the property is necessary. Thus, the statute of limitations in either case begins to run when a party, publicly or outwardly, exhibits wrongful use or unauthorized dominion over the property. See id.; see also SongByrd, Inc. v. Grossman, 206 F.3d 172, 183 (2d Cir.2000) (stating that when a rightful possessor of property uses it as his own, the "character" of possession changes and a conversion occurs). Whether the rightful owner had actual knowledge of the conversion is of no consequence for purposes of the statute of limitations. See Cablevision of Connecticut v. Sollitto, 109 F.Supp.2d 84, 85 (D.Conn.2000); see also Fichera v. Mine Hill Corp., 207 Conn. 204, 212-13, 541 A.2d 472 (1988) ("The three year limitation period of § 52-577 begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury.).
Here, the Defendants initially asserted that they had always owned the Paintings and that Stuart, Sr.'s possession of the Paintings was wrongful from the outset. The Defendants now, however, agree with the Stuarts that Stuart, Sr.'s possession of the Paintings was originally rightful. According to the Defendants, Stuart, Sr. originally and continuously possessed the Paintings as a bailee, but his possession, or "bailment," became wrongful, and the statute of limitations only began to run, when the Stuarts refused their demand to return the Paintings in 2001. In contrast, the Stuarts argue that Stuart, Sr.'s original rightful possession would have become wrongful, and thus an act of conversion occurred, at the very latest, in 1986, when Stuart, Sr.'s attorney, in response to SerVaas's letter inquiring into the whereabouts of "Saying Grace" and other Rockwell
As noted, the Defendants first asserted that Stuart, Sr. either wrongfully (1) accepted the Paintings as gifts from Rockwell (who they claim did not own them or have the right to give them away) and in so doing breached .his fiduciary duty as an employee of Curtis and the Post; or (2) took the paintings without authorization or permission when he left the Post in the 1960s and thereafter exercised a right of ownership of them to the exclusion of Curtis. Both of these allegations bring their claim within the first class of conversion, and as such the statute of limitations began to run at the time Stuart, Sr. wrongfully took the Paintings. Thus, if Stuart, Sr. wrongfully-accepted the Paintings from Rockwell, the statute of limitations would have begun to run immediately—i.e., no later than 1953. If Stuart, Sr. wrongfully took the Paintings when he left the Post in the early 1960s, the statute of limitations would have begun to run at that time. In either scenario, there was no need for Curtis or the Post to make a demand on Stuart, Sr. to return the Paintings in order for the three-year statute of limitations to begin to run. Thus, based on the Defendants' initial argument, their conversion claim was time-barred, at the latest, by the mid-1960s.
Now, according to the Defendants' allegations in their answer to the Stuarts' second amended complaint
The flaw in the Defendants' argument is that no demand was required to constitute a conversion under the undisputed facts of this case. As these undisputed facts establish, Stuart, Sr., and/or his family, repeatedly, and for the better part of the four decades in. which they possessed the Paintings, publicly asserted
There is no factual support for the Defendants' assertion that the conversion did not occur until 2001, when they filed the counterclaim that ostensibly constituted a demand for the return of the Paintings. Indeed, this claim is against the weight of the evidence, even when construed in the Defendants' favor. The most persuasive evidence in this regard is the 1986 letter from Stuart, Sr.'s attorney to Beurt SerVaas, in which Stuart, Sr.'s attorney asserted not just that Stuart, Sr. had mere possession, but that he owned "Saying Grace" and other original Rockwell artwork.
Even if the court had not construed the Defendants' counterclaim as a conversion claim and determined that it was timebarred, the court would be compelled to reach the same conclusion under the equitable doctrine of laches. This is so despite the Defendants' claim that the Stuarts have failed to allege that they have been prejudiced by any delay and that they have "unclean hands" which precludes their assertion of this equitable defense.
Under Connecticut law, a party seeking equitable relief is barred by laches if it has engaged in unreasonable delay and if the delay has prejudiced the party against whom such relief is sought. Papcun v. Papcun, 181 Conn. 618, 620, 436 A.2d 282 (1980). A party's delay is unreasonable if the party "discovers or by the exercise of reasonable diligence cold have discovered the wrong of which he complains." I 291 Why? Ass'n v. Burns, 372 F.Supp. 223, 239 (D.Conn.1974). Normally, the determination of whether a party is guilty of laches is a question for the trier of fact, but this is not the case where "the subordinate facts found make such a conclusion inevitable as a matter of law." See Papcun, 181 Conn. at 621, 436 A.2d 282; see also Kunstsammlungen Zu Weimar v. Elicofon, 536 F.Supp. 829, 849-52 (E.D.N.Y.1981) (holding that summary judgment is proper on the issue of laches when there is no genuine dispute as to the facts supporting the elements). Here, based on the evidence before the court, there is no genuine issue of material fact as to the Defendants' prejudicial and unreasonable delay that supports the Stuarts' defense of laches.
A party's delay in bringing a claim results in prejudice to the opposing party if "it would be inequitable, in light of a change in [a party's] position, to allow [the] claim to proceed or because the delay makes it difficult to garner evidence to vindicate his or her rights." Robins Island Pres. Fund v. Southold Dev. Corp., 959 F.2d 409, 423 (2d Cir.1992).
Just as in Patriarchate, the passage of time has rendered the Stuarts' claim that Rockwell owned the original artwork (as opposed to the copyrights to the images that he sold to the Post) and gave the Paintings to Stuart, Sr. in the early 1950s much more difficult, if not impossible, to prove. Neither the Stuarts nor the Defendants have any documentary evidence that establish such original ownership rights. The two most important witnesses, Stuart, Sr. and Rockwell, have been deceased for many years.
Further, the Defendants' delay in pursuing their claim of ownership is not only prejudicial, it is also unreasonable. In contrast to the majority of cases involving stolen or missing artwork, the undisputed facts here show that the Defendants have known for many years, at the very latest since Stuart, Sr.'s attorney wrote to SerVaas in 1986, that Stuart, Sr. possessed and was asserting ownership of "Saying Grace" and other original Rockwell artwork.
While the Defendants did not delay asserting their claim of ownership for two hundred years as in Robins Island, or even seventy years as in Patriarchate, the passage of time in this case has caused the same type of prejudice to the Stuarts as the delay caused in those cases. Further, even though the Defendants have had actual knowledge of the facts supporting their claim for approximately fifteen years before this action was commenced, they failed to do anything to regain possession or establish their ownership of the Paintings during that time. The undisputed facts establish that the Defendants' delay in pursuing their claim of ownership of the Paintings is unreasonable and because that delay caused undue prejudice to the Stuarts, the doctrine of laches applies and bars the Defendants' claim for declaratory relief.
For the foregoing reasons, the Defendants' motion for summary judgment [doc. # 53] is DENIED. The Stuarts' motion for summary judgment [doe. # 57] is GRANTED. Because all of the claims asserted by the Stuarts have not been resolved by this ruling, judgment cannot enter in their favor. Accordingly, if the Stuarts intend to pursue their claim of tortious interference with business expectancies, they must so inform the court and opposing counsel of that intention within thirty days of the issuance of this ruling or the claim will be deemed abandoned and final judgment will enter.