BILL ANALYSIS
AB 2765
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2765 (Judiciary Committee)
As Amended August 18, 2010
Majority vote
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|ASSEMBLY: |74-0 |(May 6, 2010) |SENATE: |34-0 |(August 25, |
| | | | | |2010) |
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Original Committee Reference: JUD.
SUMMARY : Clarifies application of the "discovery rule" for
purposes of recovering works of fine art, as defined, and
extends to six years the statute of limitations for recovery of
works from a museum, gallery, auctioneer, or dealer.
Specifically, this bill :
1)Extends the statute of limitations for specific recovery of a
stolen work of fine art, including works taken by fraud or
duress, as defined, from three to six years after actual
discovery if the action for recovery is brought against a
museum, gallery, auctioneer, or dealer. Specifies that this
extension of the statute of limitation will only apply to
works of fine art taken within 100 years prior to the
enactment of this statute.
2)Clarifies, in response to differing appellate court rulings
that the "discovery rule" for triggering the statute of
limitations for the recovery of fine art applies to property
taken by theft prior to 1983, when the discovery rule was
first codified, and further clarifies that "discovery" under
the discovery rule means "actual" rather than "constructive"
discovery.
3)Provides that "actual discovery" means that the claimant, or
his or her agent, has knowledge of the identity and
whereabouts of the work of fine art and sufficient information
to indicate that the claimant has a claim for a possessory
interest in the stolen work. Specifies that "actual
discovery" does not include "constructive knowledge" imputed
by law.
4)Provides that the statute of limitation as set forth in this
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bill applies notwithstanding the state's "borrowing" statute
that permits application of another state's statute of
limitation under prescribed circumstances.
5)Provides that the provisions of this bill shall apply to all
future and pending actions dismissed on statute of limitation
grounds if the judgment in that action is not yet final or if
the time for filing an appeal has not expired.
6)Provides that a defendant in an action to which the above
provisions apply may raise all equitable and legal defenses
and doctrines, including, without limitation, laches and
unclean hands.
7)Provides that the provisions of this bill will only apply to
actions commenced on or before December 31, 2017, effectively
creating a sunset as of that date.
8)States legislative findings and declarations on the state's
interest in determining rightful ownership of stolen art and
legislature's intent to clarify existing case law. Finds and
declares that museums and galleries have played, and continue
to play, an important role making collections available for
the benefit of the public and assisting rightful owners in
recovering works of stolen art.
The Senate amendments :
1)Limit the application of bill to works of "fine art," as
defined, taken within 100 years prior to the date of the
enactment of this statute.
2)Clarify that the provisions of this bill will apply to future
actions and to pending actions that were dismissed on statute
of limitation grounds if the judgment is not final and time
for filing an appeal has not expired.
3)Provide that in action subject to these provisions, the
defendant may raise and all equitable and legal defenses and
doctrines, including laches and unclean hands.
4)Clarify the definition of "actual discovery" and specify that
actual discovery means knowledge of the identity and
whereabouts of the work of fine art and facts sufficient to
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indicate that the claimant has a possessory interest in the
work.
5)Provide that the provisions of this bill will only apply to
works of fine art taken within 100 years prior to enactment.
6)Provide that the provisions of this bill will only apply to
actions commenced on or before December 31, 2017, effectively
creating a sunset as of that date.
7)Add legislative intent language relating to the public benefit
of museums and galleries and their voluntary efforts to assist
rightful owners in recovering works of stolen fine art.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate, albeit it without the
sunset, the 100-year reach-back limitation, and the express
authorization of all legal and equitable defenses.
FISCAL EFFECT : None
COMMENTS : This bill amends the statute of limitation (SOL) in
Code of Civil Procedure Section 338 (c) relating to the recovery
of stolen works of fine art. Specifically, the measure will
primarily do four things: 1) clarify that the "discovery" rule
adopted in 1983 applies to works stolen before that date,
thereby clarifying disparate opinions of the California Courts
of Appeal on this point; 2) clarify that the discovery rule
adopted by the legislature was one of "actual" and not
"constructive" discovery; 3) extend to six years the SOL for
actions for specific recovery of a stolen work of fine art that
is brought against a museum, gallery, auctioneer, or dealer;
and, 4) provide that in an action subject to the six-year
statute of limitation, a defendant may raise all legal and
equitable defenses, including laches and unclean hands. The
limitation periods established by this bill will only apply to
works of fine art that have been taken within the 100 years
prior to enactment. The provisions of this bill would apply to
all pending and future actions commenced on or before December
31, 2017, including any actions dismissed because of a prior
statute of limitation, if the judgment in that action is not yet
final or if the time for filing an appeal has not yet expired.
The bill would apply to works of art stolen through simple
theft, as well as works taken by fraud or duress.
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At one level, this bill seeks to clarify competing
interpretations of California's statute of limitations for the
specific recovery of personal property. At a deeper level,
however, it seeks to address a vexing problem faced by theft
victims who are attempting to recover works of fine art that may
have been stolen several years earlier, but where the victim
only learns the whereabouts of the work many years later. It is
in the very nature of stolen art that it can circulate in the
private marketplace for many years before appearing in the
collections of a museum or gallery. By that time the SOL has
often long run its course. Courts in California and elsewhere
have long recognized that, given the nature of stolen art, the
proper trigger for the SOL should be the discovery by the owner
of the whereabouts of the work, not the time of theft or even
the time of the first public display of the work subsequent to
the theft. By extending the SOL to six years in such cases, and
clarifying that the SOL does not start running until the
claimant actually discovers the whereabouts of the work of art
and other fact indicating a possessory interest, this bill seeks
to create a more reasonable and equitable SOL that will permit
more cases to be decided on the merits.
However, most cases of art theft involve two innocent victims:
the original owner who was the victim of the theft, and the good
faith purchaser (including museums and galleries that perform an
important public benefit) who does know that the work was
stolen. In order to give an equitable degree of certainty to the
innocent purchaser, this bill expressly provides that in actions
subject to the six-year SOL the defendant-possessor of the work
of art may raise all equitable and legal defenses, including
laches. Under the equitable doctrine of laches, a defendant can
retain possession by showing that the plaintiff unreasonably
delayed bringing an action for recovery and that this
unreasonable delay worked a detriment to the defendant. This
express authorization is necessary because of existing case law
holding that "equitable" remedies like laches are generally not
available in "legal" actions like replevin, unless of course a
statute provides otherwise.
Finally, it should be stressed that this bill does not create a
new cause of action. It merely modifies the statute of
limitation - as it applies to stolen works of fine art - for
already permissible actions to recover personal property that is
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wrongfully held by another. Moreover, as the author stresses,
nothing in this bill speaks to the merits of a plaintiff's claim
to be the rightful owner of the work of art. Rather, this bill
merely ensures that such claims will be decided on the merits,
after a full consideration of presented evidence, rather than
being dismissed on procedural grounds.
There is no known opposition to this bill, and it has received
no negative votes to this point. The California Association of
Museums, and a number of individual museums, raised concerns
about the bill, which the author agreed to consider and discuss
with representatives of the museum community. The most recent
amendments reflect the fruits of these discussions and have
apparently adequately addressed the concerns of the museum
community.
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN:
0006357