Robert Owen Lehman Found., Inc. v. Israelitische Kultusgemeinde Wien

197 A.D.3d 865

152 N.Y.S.3d 749

ROBERT OWEN LEHMAN FOUNDATION, INC., Plaintiff-Respondent,

v. ISRAELITISCHE KULTUSGEMEINDE WIEN, et al., Defendants,andRobert Rieger Trust, Defendant-Appellant. (Appeal No. 1.)

225

CA 20-00723

Supreme Court, Appellate Division, Fourth Department, New York.

Entered: August 26, 2021

DUNNINGTON BARTHOLOW & MILLER, NEW YORK CITY (RAYMOND J. DOWD OF COUNSEL), FOR DEFENDANT-APPELLANT.

NIXON PEABODY LLP, ROCHESTER (ZACHARY C. OSINSKI OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

PRESENT: SMITH, J.P., NEMOYER, CURRAN, BANNISTER, AND DEJOSEPH, JJ.

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum: In 1917, Austrian artist Egon Schiele made a portrait of his wife Edith. In 1964, that artwork was bought by art collector Robert Lehman, Sr. from an exhibition at an art gallery in London, England and, later that year, Lehman, Sr. gifted the artwork to his son, Robert Owen Robin Lehman (Robin). In 2016, Robin gifted the artwork to plaintiff, his eponymous foundation. After plaintiff consigned the artwork to Christie's for auction, two groups asserted competing claims of ownership of the artwork, alleging that the artwork left the possession of its rightful owner during the Holocaust. Defendant Israelitische Kultusgemeinde Wien (IKG) represents defendant Susan Zirkl Memorial Foundation Trust, which claims ownership of the artwork as an heir of Karl Maylander. Defendant Robert Rieger Trust (Rieger) and defendant Michael Bar claim ownership as heirs of Heinrich Rieger. Plaintiff then commenced this action seeking, inter alia, a declaration that it is the rightful owner of the artwork. In appeal No. 1, Rieger appeals from an order that denied its motion for a change of venue or, in the alternative, to dismiss plaintiff's amended complaint against it pursuant to CPLR 3211. Rieger and defendant Jacob Barak, the trustee of Rieger, then moved for leave to renew or reargue the motion denied in the order in appeal No. 1 and, in the alternative, to dismiss plaintiff's amended complaint against Rieger and Barak pursuant to CPLR 3211. Bar subsequently joined the motion of Rieger and Barak and, in appeal No. 2, Rieger, Barak and Bar (collectively, defendants) appeal from an order denying that motion. Insofar as the order in appeal No. 2 denied that part of defendants’ motion seeking leave to reargue, it is not appealable and we therefore dismiss the appeal to that extent (see Stradtman v. Cavaretta [appeal No. 2], 179 A.D.3d 1468, 1469, 118 N.Y.S.3d 828 [4th Dept. 2020] ).

Rieger contends in appeal No. 1 that Supreme Court erred in denying its motion insofar as Rieger sought to dismiss the amended complaint against it. Specifically, Rieger contends that plaintiff does not have standing to seek a declaration that it is the rightful owner of the artwork because plaintiff's tax returns do not list the artwork as an asset or state that it received the artwork in a gift transaction and thus, under the doctrine of tax estoppel, plaintiff cannot assert in this litigation that it owns the artwork. We reject that contention. "Where, as here, a defendant makes a pre-answer motion to dismiss based on lack of standing, ‘the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing, rather than on the plaintiff to affirmatively establish its standing in order for the motion to be denied’ " ( Matter of Violet Realty, Inc. v. County of Erie , 158 A.D.3d 1316, 1317, 72 N.Y.S.3d 267 [4th Dept. 2018], lv denied 32 N.Y.3d 904, 2018 WL 4355109 [2018] ). "Under the doctrine of tax estoppel, [a] party to litigation may not take a position contrary to a position taken in [a] ... tax return" ( Rizzo v. National Vacuum Corp. , 186 A.D.3d 1094, 1095, 130 N.Y.S.3d 167 [4th Dept. 2020] [internal quotation marks omitted]; see Mahoney-Buntzman v. Buntzman , 12 N.Y.3d 415, 422, 881 N.Y.S.2d 369, 909 N.E.2d 62 [2009] ). " ‘[T]ax estoppel’ is applied where a party's subsequently-adopted litigation position flatly contradicts express assertions previously made in tax filings ..., but the omission of an asset leaves all questions in regard to it open" ( Angiolillo v. Christie's, Inc. , 185 A.D.3d 442, 443, 127 N.Y.S.3d 105 [1st Dept. 2020] ; see Matter of Elmezzi , 124 A.D.3d 886, 887, 3 N.Y.S.3d 62 [2d Dept. 2015] ). Here, tax estoppel does not prevent plaintiff from contending that it owns the artwork because plaintiff did not affirmatively assert in its tax return that it did not own the artwork; it simply did not list the artwork in a schedule of gifts that it received in 2016 (see Angiolillo , 185 A.D.3d at 443, 127 N.Y.S.3d 105 ; Matter of Courant , 142 A.D.3d 614, 616, 36 N.Y.S.3d 237 [2d Dept. 2016], lv dismissed 29 N.Y.3d 929, 50 N.Y.S.3d 32, 72 N.E.3d 567 [2017] ).

Contrary to Rieger's further contention in appeal No. 1, the court did not abuse its discretion in denying its motion insofar as it sought a change in venue. "The decision whether to grant a change of venue is committed to the sound discretion of the trial court, and will not be disturbed absent a clear abuse of discretion ... Three grounds are available for a change of venue: (1) ‘the county designated for that purpose is not a proper county’; (2) ‘there is reason to believe that an impartial trial cannot be had in the proper county’; or (3) ‘the convenience of material witnesses and the ends of justice will be promoted by the change’ ( CPLR 510 )" ( Harvard Steel Sales, LLC v. Bain , 188 A.D.3d 79, 81, 132 N.Y.S.3d 222 [4th Dept. 2020] ). " ‘To effect a change of venue pursuant to CPLR 510 (1), a defendant must show both that the plaintiff's choice of venue is improper and that its choice of venue is proper’ " ( Matter of Zelazny Family Enters., LLC v. Town of Shelby , 180 A.D.3d 45, 47, 116 N.Y.S.3d 127 [4th Dept. 2019] ). Rieger failed to make such a showing inasmuch as plaintiff's choice of venue, i.e., Monroe County, is proper because plaintiff is "deemed a resident of" that County (see CPLR 503 [c] ). Furthermore, contrary to Rieger's contention, CPLR 508 does not require that venue be placed in the county where the chattel is located (see Tower Broadcasting, LLC v. Equinox Broadcasting Corp. , 160 A.D.3d 1435, 1437, 76 N.Y.S.3d 335 [4th Dept. 2018] ). Rieger abandoned any reliance on CPLR 510 (3) as a ground for change in venue inasmuch as it failed to raise that contention in defendants’ main brief (see Ciesinski v. Town of Aurora , 202 A.D.2d 984, 984, 609 N.Y.S.2d 745 [4th Dept. 1994] ). In any event, Rieger failed to meet its burden of demonstrating that the convenience of material witnesses would be better served by a change in venue (see Rowland v. Slayton , 169 A.D.3d 1474, 1475, 91 N.Y.S.3d 833 [4th Dept. 2019] ).

We reject Rieger's contention...