## Facts

- Gerda Dorothea DeWeerth owned a Claude Monet painting, *Champs de Blé à Vétheuil*, inherited in 1922; it disappeared in Germany in 1945 after American soldiers had been quartered at a family castle.
- DeWeerth made efforts over time to locate the painting but did not recover it.
- In 1957, Edith Marks Baldinger bought the Monet in New York from Wildenstein & Co., Inc., allegedly in good faith, and kept it largely in her home.
- In 1982, DeWeerth learned Baldinger possessed the painting, demanded its return, and sued after Baldinger refused.
- After a bench trial, the district court (1987) ruled for DeWeerth and ordered return of the painting.
- The Second Circuit (1987) reversed, holding the claim time-barred because DeWeerth had not exercised “reasonable diligence” in searching, and judgment was entered for Baldinger.
- In 1991, the New York Court of Appeals in *Guggenheim v. Lubell* rejected a “reasonable diligence” requirement and reaffirmed New York’s demand-and-refusal accrual rule for claims against good-faith purchasers of stolen art.
- DeWeerth moved under Federal Rule of Civil Procedure 60(b) to vacate the judgment for Baldinger and reinstate judgment for DeWeerth in light of *Guggenheim*.

## Issues

1. Whether an intervening state high-court decision clarifying state law can justify Rule 60(b)(5) or Rule 60(b)(6) relief from a final federal judgment in a diversity case based on an Erie prediction later shown to be wrong.
2. Whether, under New York’s demand-and-refusal rule reaffirmed in *Guggenheim*, DeWeerth’s replevin/conversion claim was timely because it accrued upon her 1982 demand and Baldinger’s refusal.
3. Whether laches barred recovery even if the claim was timely under the statute of limitations.

## Decision

- The district court granted DeWeerth’s Rule 60(b) motion and vacated the judgment previously entered for Baldinger.
- The court reinstated judgment for DeWeerth requiring return of the Monet.
- The court treated *Guggenheim* as an intervening, authoritative exposition of New York law that contradicted the Second Circuit’s earlier diligence-based accrual approach.
- Applying demand-and-refusal, the court held DeWeerth’s claim accrued in 1982 and was not time-barred.
- The court rejected Baldinger’s laches defense on the record presented, finding insufficient prejudice from DeWeerth’s delay to defeat recovery.

## Legal Principles

- In diversity cases, federal courts must apply state substantive law as authoritatively stated by the state’s highest court; when a prior Erie prediction is later contradicted, that clarification can constitute an intervening change warranting post-judgment relief in appropriate circumstances.
- Rule 60(b)(5) permits relief when it is no longer equitable that a judgment have prospective application; Rule 60(b)(6) permits relief for other exceptional reasons justifying reopening a judgment.
- Under New York law for stolen art held by a good-faith purchaser, a claim for replevin or conversion generally accrues upon the owner’s demand for return and the possessor’s refusal, not upon theft or upon an owner’s lack of diligence in searching.
- Laches remains a distinct equitable defense in stolen-art cases, but the mere passage of time inherent in delayed discovery does not alone establish laches without a showing of prejudicial delay.

## Conclusion

The district court reopened the final judgment under Rule 60(b) after New York’s highest court reaffirmed demand-and-refusal accrual for stolen-art claims, concluding the prior federal limitations ruling rested on an incorrect Erie prediction and that neither the statute of limitations nor laches barred DeWeerth from recovering the painting.


DeWeerth v. Baldinger (In re DeWeerth), 804 F. Supp. 539 (S.D.N.Y. 1992)