The opinion of the court was delivered by: Mukasey, District Judge.
Plaintiff in this action, Richard S. Keoseian, and defendant
Hedda Schoonderbeek von Kaulbach, both claim to own a painting by
the late German Expressionist Max Beckmann portraying his wife,
Mathilde Beckmann, who was known as Quappi. The painting,
"Portrait of Quappi," was devised by Quappi Beckmann to von
Kaulbach, her sister, who is now in her nineties and lives in
Germany. Keoseian asserts that von Kaulbach agreed in 1987 to
give him the painting and that she confirmed that agreement in a
written assignment; von Kaulbach argues that the purported
assignment was incomplete under controlling
law and was procured by fraud and overreaching. Now before the
court are motions by von Kaulbach for summary judgment and by
Keoseian to dismiss von Kaulbach's ninth affirmative defense,
based on the invalidity of the assignment under German law.
Apparently because of von Kaulbach's advanced age and frailty,
she has not submitted an affidavit in support of her position,
but relies instead on Keoseian's own testimony and his conduct
contemporaneous with the events at issue. As explained below, it
is clear based on controlling German law applied to Keoseian's
own testimony and contemporaneous conduct that the assignment was
incomplete. Therefore, von Kaulbach's motion is granted and
Keoseian's is denied.
Keoseian's complaint seeks a declaratory judgment that von
Kaulbach's assignment of the portrait is valid and enforceable.
Defendants, in addition to von Kaulbach, are Frederic C. Houston
and Perry Rathbone, the executors of Quappi Beckmann's estate,
now in probate in the Surrogate's Court of New York County, and
two potential claimants to the painting: Dr. Peter Beckmann, the
son of the late artist by a marriage prior to the one with Quappi
and now himself deceased, and Dr. Beckmann's daughter, Mayen
Wuerdig. The facts, so far as they are relevant to this motion,
are as follows: Quappi died in 1986. Under a 1975 will, Quappi
had left the bulk of her estate to her sister, von Kaulbach, who
was her only surviving relative. However, in 1982, apparently
under the malign influence of two sisters who moved in with her,
Quappi rewrote her will and left the bulk of her property to
them, with von Kaulbach to receive only $5,000. Although the
legal form of the legacy was modified, the 1982 will remained
substantially in effect when Quappi died in 1986.
Plaintiff Richard Keoseian was a neighbor of Quappi's in New
York after Max Beckmann died. He had met von Kaulbach in earlier
years when von Kaulbach, who lives in Germany, was well enough to
visit her sister in New York. When Quappi died von Kaulbach
wished to contest the 1982 will, but she lived in Germany on a
small pension and knew no lawyers in the United States other than
Houston, who had served as Quappi's lawyer from 1950 to 1986.
Houston, then recently retired, was unwilling to ask his firm to
become involved. Von Kaulbach therefore authorized Keoseian, who
called to offer assistance, to find her a lawyer who would act on
a contingent fee basis and advance disbursements. Keoseian and
the two executors named in the 1975 will, Houston and Rathbone,
approached Edward J. Ross of Breed, Abbott & Morgan, to represent
von Kaulbach. Keoseian and Houston negotiated and, with Rathbone,
signed a retainer agreement with Ross, which Keoseian and Houston
brought to Germany for von Kaulbach's signature. At the same
time, von Kaulbach signed a "Foundation Trust" agreement brought
over from New York by Keoseian and Houston, under which von
Kaulbach promised to establish a trust with 75% of the net
proceeds of her legacies from Quappi, creating the Max Beckmann
Foundation, with Keoseian, Houston and Rathbone as the
Foundation's directors and with Keoseian as its Executive
Director. It is clear that Keoseian performed these services with
no expectation of compensation other than the compensation he
would receive as the Director of the Max Beckmann Foundation. The
Foundation Trust agreement is the subject of separate but related
litigation before me. Hedda Schoonderbeek von Kaulbach v.
Richard Keoseian, 89 Civ. 4456 (MBM).
Ross commenced litigation and, eventually, the sisters settled,
with the result that the 1982 will was invalidated and the 1975
will was admitted to probate in New York, with Houston and
Rathbone as executors. According to Keoseian, out of gratitude
for his efforts on her behalf, von Kaulbach promised to give him
a painting of herself, painted by her father, who was also an
artist, and the "Portrait of Quappi" by Beckmann. This promise
allegedly was made first in June 1987, in a telephone
conversation between Keoseian and von Kaulbach, and later renewed
in a telephone conversation in which Houston also participated.
Although von Kaulbach had possession of the painting by her
father, she had only the right to receive the Beckmann painting
under Quappi's will; the painting itself was part of Quappi's
estate. According to Keoseian, von Kaulbach asked Houston to
prepare any documents necessary to effect the gift.
Houston prepared a document in English entitled "Transfer of a
Specific Legacy" ("the assignment contract") and instructed
Keoseian to have it translated into German. Keoseian went to
Germany and presented both the document and the German
translation to von Kaulbach, who, outside his presence, signed
the German version. The document states that Keoseian's services
to von Kaulbach and Quappi were rendered "in the name of
friendship" and that von Kaulbach was giving, conveying and
transferring to Keoseian the "Portrait of Quappi." According to
Keoseian, von Kaulbach intended and arranged to have the German
version notarized, but first met with Dr. Peter Beckmann, who,
according to Keoseian, caused her to change her mind about the
notarization and apparently also about the gift itself. Keoseian
returned to New York with the less valuable painting of von
Kaulbach by her father, and the signed but not notarized German
version of the contract assigning the Portrait of Quappi by Max
Keoseian believed that even though von Kaulbach signed it, the
assignment contract would not bind her and transfer the painting
until it was notarized and the notarization was confirmed by a
court in Germany. Upon his return, he wrote von Kaulbach a letter
dated August 28, 1987 in which he attempted to persuade her to
change her mind and have the agreement notarized. He stated in
the letter that "[Peter Beckmann's] influence caused you to break
your promise, not honor your commitment to me and betray my trust
in you" and "the completion of your promise to me . . . was to
have become official by a local Bürgermeister witnessing your
signature with his stamps and seals and then the German Lower
court in Garmisch-Pa., authorizing with his stamps and seals the
Bürgermeister's signature. . . . Even though you promised this
`Gift' and signed the German translation of the Assignment Letter
which the United States Courts would recognize as an official
document, it was not an official document until the proper German
authorities put their stamps and seals on it." (Zirin Aff., Exh.
4, pp. 5, 10-11) The letter suggests that von Kaulbach decided
not to have the agreement notarized because Dr. Beckmann told her
both that she or the estate had substantial financial obligations
still to be paid, and that an appraiser had valued the "Portrait
of Quappi" as one of Quappi's most valuable assets.
The parties dispute whether von Kaulbach also reasonably
believed that the assignment would not become effective until it
was notarized, based on statements made to her by Keoseian.
The first issue on this summary judgment motion is whether
German law or New York law applies. Von Kaulbach's Ninth
Affirmative Defense is that the document is void under German
law. Keoseian cross-moves for summary judgment striking this
defense, arguing that New York law applies. Because New York is
the forum state, New York's choice of law rules govern. Bader v.
Purdom, 841 F.2d 38, 39 (2d Cir. 1988). The traditional choice
of law rule for assessing the validity of a contract would apply
the law of the jurisdiction where the contract is made. Recovery
Consultants, Inc. v. Shih-Hsieh, 141 A.D.2d 272, 534 N.Y.S.2d 374,
375 (1st Dep't 1988); Intercontinental Planning, Ltd. v.
Daystrom, Inc., 24 N.Y.2d 372, 248 N.E.2d 576, 300 N.Y.S.2d 817
(1969); Russell v. Societe Anonyme des Etablissements Aeroxon,
268 N.Y. 173, 181, 197 N.E. 185 (1935). Under this rule, the law
of Germany would clearly govern. Although drafted in New York,
the assignment contract was signed in Germany and the parties
intended that it would be fully performed there.
However, the traditional black letter approach to choice of law
has been replaced
by interest analysis, which "`gives to the place `having the most
interest in the problem' paramount control over the legal issues
arising out of a particular factual context, thus allowing the
forum to apply the policy of the jurisdiction `most intimately
concerned with the outcome of [the] particular litigation.'"
Intercontinental Planning, Ltd., 24 N.Y.2d at 382,
248 N.E.2d 576, 300 N.Y.S.2d 817 (quoting Auten v. Auten, 308 N.Y. 155,
161, 124 N.E.2d 99 (1954)). A similar analysis has been adopted
for cases involving tort and breach of contract claims: "`the law
of the jurisdiction having the greatest interest in the
litigation will be applied.'" Schultz v. Boy Scouts of America,
Inc., 65 N.Y.2d 189, 197, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985)
(citation omitted); J. Zeevi & Sons, Ltd. v. Grindlays Bank
(Uganda), Ltd., 37 N.Y.2d 220, 333 N.E.2d 168, 371 N.Y.S.2d 892,
898 (citation omitted), cert. denied, 423 U.S. 866, 96 S.Ct.
126, 46 L.Ed.2d 95 (1975). Under the circumstances of this case,
the interests of Germany, where the assignment contract was
entered into and where von Kaulbach resides, appear, for the
reasons set forth at pages 1258-59 below, to outweigh the
interests of New York, where the estate which includes the
painting is in probate and where plaintiff resides. Accordingly,
I find that under either the traditional black letter approach or
the newer interest analysis, a New York court would apply German
rather than New York law in determining the validity of the
contract signed by von Kaulbach.
It is clear from the assignment contract that if the assignment
was completed, it assigned to Keoseian as a gift von Kaulbach's
claim to a specific devise under her sister's will — the
"Portrait of Quappi." The assignment contract, which Houston
drafted for Keoseian, states that von Kaulbach did "hereby GIVE,
TRANSFER AND ASSIGN to the said RICHARD S. KEOSEIAN . . . that
certain legacy known and entitled as: Painting by Max Beckmann,
Portrait of Quappi . . . directed to given [sic] to me by
Clause 17th of the will of my said sister." (Seltzer Aff., Exh.
D) The "Portrait of Quappi" is at present part of the Estate of
Mathilde Beckmann which is currently being probated in New York.
The parties do not dispute that the "Portrait of Quappi" is
specifically devised to von Kaulbach under Quappi's will.*fn1
Under New York law, an assignment of a legacy is effective
absent notarization or acknowledgment except where otherwise
required by statute. The only requirements for a valid assignment
in New York are that the property to be assigned be clearly
identified, that there be a clear demonstration of the assignor's
intent to assign a present right in the property, and that the
assignor thereafter have no control over the property. Miller v.
Wells Fargo Bank International Corp., 540 F.2d 548, 557 (2d Cir.
1976); In re Moskowitz, 14 B.R. 677 (S.D.N.Y. 1981). For
purposes of this motion, which is limited to the question of
whether German law governs, and, if so, whether von Kaulbach is
entitled to summary judgment, I will assume that under New York
law, the contract signed by von Kaulbach satisfies the legal
requirements for a valid assignment.
Both parties have submitted affidavits of German law experts.
Von Kaulbach submitted the affidavit of Dr. Thomas Schuerrle of
the Munich law firm of Noerr, Stiefenhofer & Lutz, a member of
the Munich bar since 1985, practicing principally in the fields
of international, European Economic Community and antitrust law.
Keoseian submitted the affidavit of Dr. Ernest C. Stiefel, a
member of the German bar since 1932, and now an adjunct professor
at New York Law School, where he teaches comparative law. Because
did not fully address the issues raised in this complex dispute,
a third expert on German law was summoned by the court to answer
four specific questions. The parties do not dispute the third
expert's analysis of German law, although they do dispute his
application of the law to the facts. However, the analysis of the
facts in this opinion is my own, not the expert's.
According to the court-appointed German law expert for this
case, Professor George A. Bermann of Columbia Law School, German
law regards the assignment contract here as both an offer or
promise of a gift and an offer of assignment. Although an
assignment contract in general does not require notarization in
order to be effective under German law, if the underlying
obligation the assignor owes the assignee, which the assignment
is to satisfy — here, a gratuitous promise of a gift — requires
notarization — as it does under German law — then the assignment
contract would also in effect require notarization, simply
because under German law, if the underlying obligation is void,
the assignor has the right to get back from the assignee whatever
was assigned. Alternatively, the assignor has the right to refuse
performance. (Bermann Opinion on German Law, pp. 10-11)
Bürgerliches Gesetzbuch ("BGB") § 518, which governs the
requirements for a promise of a gift under German law, provides
§ 518. [Form of promise of gift]
(1) For the validity of a contract whereby an act
of performance is promised gratuitously, notarial
authentication of ...