## Facts

- The United States brought an in rem civil forfeiture action against *Portrait of Wally*, an Egon Schiele painting.
- Lea Bondi Jaray, an Austrian Jewish art dealer, acquired the painting in the 1920s for her personal collection.
- After the 1938 Anschluss and Nazi “Aryanization,” dealer Friedrich Welz took over Bondi’s gallery; the United States and Bondi’s estate contended Welz stole the painting from Bondi.
- After World War II, U.S. forces seized Welz’s property, including the painting, and transferred it to Austrian authorities, which later delivered a group of Schiele works (including the painting) to the Rieger heirs.
- The Rieger heirs sold the painting to the Österreichische Galerie Belvedere; collector Rudolf Leopold later acquired it from the Belvedere and then transferred it to the Leopold Museum.
- Bondi, after fleeing Austria, asserted that she owned the painting and asked Leopold to help recover it; he acquired it without informing her.
- In 1997–1998, the Leopold Museum loaned the painting to the Museum of Modern Art in New York; after Bondi’s heirs asserted a claim, the U.S. government seized the painting in New York.
- The forfeiture theory alleged the painting was imported in violation of the National Stolen Property Act (18 U.S.C. § 2314) and was forfeitable under related federal customs/forfeiture statutes.

## Issues

1. Whether the United States was entitled to summary judgment that the painting was “stolen, converted, or taken by fraud” and imported into the United States with the claimant’s knowledge it was stolen, supporting forfeiture.
2. Whether the Leopold Museum was entitled to summary judgment striking the seizure warrant and requiring release of the painting by showing no genuine dispute that it lacked the required knowledge at importation.
3. Whether the painting’s postwar Austrian restitution history and related defenses resolved the forfeiture and title questions as a matter of law at the summary judgment stage.

## Decision

- The court denied the Leopold Museum’s motion for summary judgment and denied the United States’ and Bondi estate’s cross-motion for summary judgment.
- The court held there was a triable issue of fact as to whether Dr. Rudolf Leopold, and thus the Museum, knew the painting was stolen when it was imported into the United States.
- Because the knowledge element was disputed and material, neither side was entitled to judgment as a matter of law; the case was to proceed toward trial on the disputed factual issues.

## Legal Principles

- Summary judgment is improper where the record permits competing reasonable inferences on a material element, including a party’s knowledge or state of mind.
- Under the government’s theory, forfeiture required proof that the artwork was “stolen, converted, or taken by fraud” and that it was transported or imported into the United States with knowledge of that status.
- Provenance evidence, dealings between parties, and circumstantial indicators of awareness of wrongful taking can create a genuine dispute on knowledge sufficient to defeat summary judgment.
- Foreign restitution events and transactions may inform the factual record but do not automatically resolve, as a matter of law, whether property was stolen or whether an importer acted with the requisite knowledge under U.S. forfeiture statutes.

## Conclusion

The court refused to resolve forfeiture and possessory entitlement on summary judgment because the evidence created a genuine dispute about whether the Leopold Museum’s principal knew the painting was stolen when it was brought into the United States, making trial necessary on that central factual question.


United States v. Portrait of Wally, 663 F. Supp. 2d 232 (S.D.N.Y. 2009)