77 N.Y.2d 311 (1991)
In replevin actions for stolen art, the statute of limitations begins to run when the owner demands the return of the chattel and the possessor refuses, without imposing a duty of reasonable diligence on the owner to locate the stolen property.
Summary
The Solomon R. Guggenheim Foundation sued Rachel Lubell to recover a stolen Chagall gouache. Lubell argued the statute of limitations barred the claim because the museum failed to diligently search for the painting after its theft in the late 1960s. The New York Court of Appeals held that the statute of limitations begins to run upon demand and refusal, rejecting a reasonable diligence requirement for owners of stolen art. The court reasoned that imposing such a duty would be impractical and would encourage illicit trafficking in stolen art, while noting that the defendant could still assert a laches defense at trial.
Facts
The Guggenheim Museum owned a Chagall gouache, donated in 1937. The gouache was last seen at the museum on April 2, 1965. Sometime in the late 1960s, the museum discovered it was missing but didn’t know it was stolen until a 1969-1970 inventory. The museum did not report the theft to authorities, believing publicity would hinder recovery. In 1974, the museum “deaccessioned” the gouache. In 1967, Mrs. Lubell and her husband bought the painting from a gallery for $17,000. The painting was traced back to Mrs. Lubell in 1985. The museum demanded its return in January 1986, and she refused.
Procedural History
The Guggenheim sued Lubell in 1987 to recover the painting. The trial court granted summary judgment to Lubell, finding the claim time-barred due to the museum’s lack of diligence. The Appellate Division reversed, dismissing the statute of limitations defense and denying Lubell’s summary judgment motion. The Court of Appeals granted leave to appeal.
Issue(s)
Whether a museum’s failure to take reasonable steps to locate a stolen painting affects the statute of limitations defense in a replevin action against a good-faith purchaser.
Holding
No, because in New York, a cause of action for replevin against a good-faith purchaser of stolen property accrues when the true owner demands the return of the chattel and the possessor refuses, and there is no requirement that the owner exercise reasonable diligence in locating the stolen property for the statute of limitations to apply.
Court’s Reasoning
The Court of Appeals upheld the demand and refusal rule, stating that it “affords the most protection to the true owners of stolen property.” The court rejected the imposition of a reasonable diligence requirement, noting that while New York case law recognizes that a true owner cannot unreasonably delay making demand once they discover the location of their property, imposing a duty of diligence before the true owner has reason to know where its missing chattel is to be found would be imprudent. The court highlighted the difficulty in defining “reasonable diligence” due to the varied circumstances of art theft. The Court was also influenced by New York’s status as a preeminent cultural center, reasoning that placing the burden of locating stolen art on the true owner would encourage illicit trafficking. The court noted prior legislative attempts to institute a discovery rule, which were ultimately vetoed by the governor due to concerns of turning New York into a haven for cultural property stolen abroad. However, the court clarified that the museum’s conduct would be considered in the context of Lubell’s laches defense. The court stated, “Despite our conclusion that the imposition of a reasonable diligence requirement on the museum would be inappropriate for purposes of the Statute of Limitations, our holding today should not be seen as either sanctioning the museum’s conduct or suggesting that the museum’s conduct is no longer an issue in this case.”