SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: IAS PART 3
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GABRIELE HAMMERSTEIN,

Plaintiff,
Index No. 114355/98

- against -

THE CONFERENCE ON JEWISH MATERIAL CLAIMS
AGAINST GERMANY, INC.,

Defendant.
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BARRY A. COZIER, J.:
In an August 6, 1999 decision and order entered August 19, 1999, this Court granted that part of the motion of defendant The Conference on Jewish Material Claims Against Germany, Inc. (the "Claims Conference") that sought an order dismissing the instant action on ground of forum non conveniens. CPLR 327. The Claims Conference had also moved, in the alternative, for summary judgment dismissing the Complaint in its entirety. CPLR 3212. Because the forum non conveniens prong of the motion was granted, this Court did not address the merits of that part of the motion that sought summary judgment.
Following the August 6, 1999 decision, plaintiff Gabriele Hammerstein ("Hammerstein") moved for reconsideration, reargument, and renewal, to reverse the order granting dismissal on the ground of forum non conveniens. Oral argument was held on her motion on December 7, 1999. On December 9, 1999, in accordance with the Court's decision on the record of December 7, 1999, this Court granted that branch of Hammerstein's motion that sought to reargue, and, upon reargument, the Court vacated its August 6, 1999 order and denied the Claims Conference's motion to dismiss on forum non conveniens grounds, pursuant to CPLR 327. This Court also restored to the motion calendar and marked submitted that branch of the Claims Conference's original motion that sought summary judgment dismissal of the Complaint. Thus, the summary judgment motion is now before this Court.

The facts in this action, as set forth in the since-vacated August 6, 1999 decision, will be stated once again. Hammerstein is a New York State resident. She is the daughter and last surviving child of Dr. Erich Rosenhain and Dr. Gertrude Rosenhain-Hammerstein, who died in 1959 and 1983, respectively. Prior to World War II, Hammerstein's parents owned an in- patient sanatorium known as the Schlosspark Sanatorium (the "Sanatorium"), as well as an out- patient clinic referred to as "Kassenklinik." The Kassenklinik was located at Koenigstrasse 91, in Schwerin, Germany. The Sanatorium, also in Schwerin, was located at Weinbergstrasse 1/1a, on a property consisting of a mansion and a coach house amid a large park-like setting (the "Property"). A wing of the Property was Hammerstein's childhood home and residence. Hammerstein and her parents and siblings fled Nazi Germany in 1935 and 1936, leaving behind the family's home, properties, and successful business enterprises. According to the Complaint, the Gestapo "acquired" the properties, in 1938, in a forced sale. At the end of World War II, Schwerin became part of East Germany.
In the instant action, Hammerstein "seeks damages, an accounting and a constructive trust as a result of, among other things, defendant's unjust enrichment, fraud and conversion of (and attempts to convert) plaintiff's family's real property and other assets located in Germany, as well as defendant's breach of fiduciary duty to plaintiff." Complaint, ¶ 1. According to the Complaint, the Claims Conference "interfered with and deprived plaintiff (and is continuing to deprive plaintiff) of her rights to property and assets as the lawful heir and owner of property wrongfully taken by the Nazis during their Holocaust against the Jews." Id.
The Claims Conference was created in 1952 as a not-for-profit New York corporation with branches in Frankfurt, Germany, and Tel Aviv, Israel. The Claims Conference states that it functions, under specific statutory criteria, as a representative of the collective body of Holocaust victims who lost their property to Nazi confiscation during World War II. From the time of its creation until 1990, the Claims Conference's activities were limited to properties located in what was then West Germany. In 1990, in anticipation of German reunification after the fall of Communism, East Germany enacted the German Restitution Law, under which victims or heirs of victims of the Holocaust, whose properties were confiscated by the Nazis, were entitled to restitution, provided they filed a claim for the properties by December 31, 1992.
In an effort to maximize recovery on behalf of Holocaust victims worldwide, the Claims Conference made a global claim in December 1992 for properties contained in certain German archives. Such efforts were made pursuant to the German Restitution Law, which provides that (1) all properties belonging to heirless victims of the Holocaust, and (2) any unclaimed property as of December 31, 1992, would automatically inure to the Claims Conference, provided that it had made a claim to the property before December 31, 1992.
The instant action involves claims relating to the Property, as well as to the "Betriebsvermoegen," (the total value of all items connected with a business, including medical equipment, furniture, paintings, rugs, etc.) of both the Kassenklinik and the Sanatorium.
Claims Regarding the Property:
Prior to the December 31, 1992 deadline, Hammerstein and her sister, who has since passed away, processed paperwork to obtain restitution of the Property. In 1992, the local German authorities issued Hammerstein and her sister a restitution notification as to the Property. Thereafter, a German court granted them a restitution order. In mid-1994, the Claims Conference filed an Objection to the Property's return to Hammerstein and her sister. Hammerstein asserts that the Objection was spurious, and an attempt to deprive her and her sister of their rightful inheritance.
According to the Complaint, the Claims Conference's Objection prevented Hammerstein from renting, occupying, or disposing of the Property. Plaintiff attributes the sharp reduction in the proposed purchase price for the Property, from approximately $4 million in 1994, to $1 million in 1996 and thereafter, to the deterioration and extensive vandalization of the property over which she had no control after defendant asserted its Objection. Hammerstein states that the Objection also caused her to lose the opportunity to accept any of the higher-priced offers for the Property, and that she incurred extensive legal expenses to prove her entitlement to the Property. Moreover, Hammerstein asserts that the Claims Conference knew, or acted in reckless disregard of the fact, that its Objection was both false and untimely.
The Claims Conference maintains that it acted in good faith, and withdrew the Objection in 1995, upon receiving proof that Hammerstein was entitled, through inheritance rights, to restitution of the Property. Hammerstein alleges that the Claims Conference did not withdraw its Objection until 1996, upon notification of Hammerstein's intention to initiate a lawsuit regarding its activities related to the Property.
Each party submits an affidavit by a German attorney. These two German attorneys dispute several matters of German law, including the effect of the Objection on Hammerstein's rights to and control over the Property.
Claims Regarding the Business Assets:
In 1996, Hammerstein learned that, in addition to filing a claim for restitution of the Property, she also could have filed a claim for the value of her parents' business assets, or Betriebsvermoegen, at the Sanatorium and the Kassenklinik. However, because plaintiff did not learn that such a claim was available to her until after the December 31, 1992 deadline passed, she did not file a timely claim for the value of the business assets.
The Sanatorium was included in the German archives to which the Claims Conference had made a global claim prior to the deadline. Thus, in 1998, the Claims Conference filed a claim with the German authorities, seeking restitution for the value of the business assets of the Sanatorium. The Claims Conference asserts that it first learned of the Sanatorium in 1998. According to the Claims Conference, as a matter of German law, Hammerstein had no claim to the value of the Sanatorium because she had not filed a claim prior to the December 31, 1992 deadline.
Hammerstein alleges, upon information and belief, that the Claims Conference was aware, prior to the December 31, 1992 deadline, that she had filed a claim for the Property but had not filed a claim with respect to the business assets of the Sanatorium. She asserts that the Claims Conference breached its fiduciary duty to her by, inter alia, neither notifying her that she could file such a claim, nor informing her of the applicable deadline. Hammerstein further asserts that the Claims Conference failed to inform her, until years later when she pressed for the information, that it had filed its own claims for the value of her parents' business assets.
Hammerstein further asserts that in 1998, after much persistence on her part, the Frankfurt office of the Claims Conference finally informed her that it had filed two claims, which were still pending, for the value of her parents' business assets. Hammerstein asserts that the Claims Conference also informed her that any potential payments by the Claims Conference to her for her parents' business assets would be at the discretion of the Claims Conference.
According to Stefan Minden ("Minden"), the German attorney who has represented the Claims Conference in Germany regarding Hammerstein's claims to the Property and the business assets of the Sanatorium, the German Restitution Law imposed no obligation on the Claims Conference to seek out survivors, to aid them in making timely restitution claims, or to investigate claims on behalf of individuals. He asserts that, pursuant to the statute, the Claims Conference was named the "Successor Organization for all unclaimed individual Jewish property (and for the property of dissolved Jewish communities and organizations) situated in the former East Germany, with a mandate to use the proceeds from these properties for the benefit of Holocaust survivors." Minden Affidavit, January 8, 1999, ¶ 6.
Hammerstein asserts that the Claims Conference has refused to account for, or to provide, information as to whether it has filed or received payment on other claims with respect to properties belonging to Hammerstein or to any other members of her family.
The instant Complaint contains 12 causes of action: (1) breach of fiduciary duty; (2) conversion; (3) unjust enrichment; (4) fraud, misrepresentation and concealment; (5) interference with agreement; (6) accounting; (7) constructive trust; (8) interference with prospective contractual relations; (9) interference with property rights; (10) prima facie tort; (11) slander of title; and (12) tortious/negligent misrepresentations.

Those causes of action related to the Claims Conference's alleged interference with Hammerstein's rights to the Property by filing an Objection in mid-1994 must be dismissed on Statute of Limitations grounds. The eleventh cause of action, sounding in slander of title, is governed by a one-year Statute of Limitations, pursuant to CPLR 215(3). Hanbidge v. Hunt, 183 A.D.2d 700 (2d Dept. 1992). Such a cause of action accrues from the time a prospective sale is lost because of a cloud on a plaintiff's title. Hammerstein alleges that she lost prospective sales of the Property between the time the Claims Conference filed its Objection in mid-1994 until 1996, when Hammerstein says it removed its Objection. Thus, the first lost sale must have occurred more than one year before this action was commenced in 1998, and, therefore, the cause of action is dismissed.
To the extent that other causes of action in the Complaint state a cognizable claim regarding interference with Hammerstein's rights to the Property, they must be dismissed on statute of limitations grounds. Pursuant to CPLR 214(4), the statue of limitations for claims of injury to property is three years. Because the Claims Conference filed its Objection in mid-1994, the three year period expired before this action was commenced in 1998.
In her breach of fiduciary duty claim, Hammerstein states that neither she, her family, nor any other Holocaust victims chose the Claims Conference as their representative. Instead, the Complaint alleges that the Claims Conference holds a position of trust by virtue of its self-appointed role as the representative of Holocaust victims, and, as such, that it owed a fiduciary duty to Holocaust victims and their heirs, including Hammerstein. However, the Claims Conference argues that there never was a relationship, let alone a fiduciary relationship, between Hammerstein and the Claims Conference.
This Court finds that there is an issue of fact as to whether the Claims Conference had a fiduciary duty to Hammerstein. While it is undisputed that the German government would not recognize any claims to property filed after December 31, 1992, there is an issue of fact as to the mandate of the Claims Conference and the scope of it rights and responsibilities after December 31, 1992, in terms of properties included in the global claim it had filed. Presumably the Claims Conference's mandate and directives are set forth in statutes, a Certificate of Incorporation, a Statement of Purpose and/or other such documents. To the extent that any such documents are not public record, Hammerstein is entitled to discovery thereto.
Hammerstein's third cause of action sounds in unjust enrichment. "A cause of action for unjust enrichment arises when one party possesses money or obtains a benefit that in equity and good conscience they should not have obtained or possessed because it rightfully belongs to another." Mente v. Wenzel, 178 A.D.2d 705, 706 (3d Dept 1991) (citation omitted). The issue of whether the Claims Conference owed Hammerstein a fiduciary duty affects this claim, and thus summary judgment dismissal of the third cause of action is not warranted.
Having determined that there is an issue of fact as to whether the Claims Conference had a fiduciary duty to Hammerstein, and whether the Claims Conference was unjustly enriched, this Court finds that the seventh cause of action, sounding in constructive trust should similarly survive the instant summary judgment motion. The Court of Appeals has stated that the four requirements for a constructive trust are: "(1) a confidential or fiduciary relation, (2) a promise, (3) a transfer in reliance thereon and (4) unjust enrichment." Sharp v. Kosmalski, 40 N.Y.2d 119, 121 (1976) (citations omitted). The Court further held that "[m]ost frequently, it is the existence of a confidential relationship which triggers the equitable considerations leading to the imposition of a constructive trust." Id.
However, "the power of equity to employ a constructive trust to reach a just result is not strictly limited by the conditions set forth in Sharp v. Kosmalski. Rather, the remedy is available to prevent unjust enrichment in a wide range of circumstances." Palazzo v. Palazzo, 121 A.D.2d 261, 264 (1st Dept. 1986) (citations omitted). Thus, the question of fact as to whether the Claims Conference owed Hammerstein a fiduciary duty creates an issue of fact as to the constructive trust claim as well.
In the sixth cause of action, for an accounting, Hammerstein asserts that she is entitled to know about all other properties her family once owned in Germany that the Claims Conference may have included in its claims, including its global claim. Again, the issue of whether the Claims Conference owed Hammerstein a fiduciary duty will determine whether she is entitled to such an accounting and, therefore, the claim is not subject to dismissal.
The second cause of action sounds in conversion. "The tort of conversion is established when one who owns and has a right to possession of personal property proves that the property is in the unauthorized possession of another who has acted to exclude the rights of the owner." Republic of Haiti v. Duvalier, 211 A.D.2d 379, 384 (1st Dept. 1995) (citations omitted). The tort of conversion must involve identifiable tangible property, and does not apply to real property. Garelick v. Carmel, 141 A.D.2d 501, 502 (2d Dept. 1988) (citation omitted). The second cause of action should be dismissed. Hammerstein failed to file a claim for the business assets prior to December 31, 1992. Therefore, those assets were never in her possession, and they could not have been converted from her possession to the Claims Conference's possession.
The fourth cause of action sounds in fraud, misrepresentation and concealment, and the twelfth cause of action alleges tortious/negligent misrepresentation. Part of the claim addresses what Hammerstein contends were false statements the Claims Conference made in filing its Objection in 1994. The allegations do not support these causes of action because Hammerstein asserts that the Claims Conference misrepresented the facts to officials in Schwerin through the filing of the Objection and otherwise. The claims fail because there is no allegation that Hammerstein herself reasonably relied upon statements or non-statements of the defendant. Megaris Furs, Inc. v. Gimbel Bros., Inc., 172 A.D.2d 209, 213 (1st Dept. 1991).
The causes of action alleging interference with an agreement, interference with prospective contractual relations, and prima facie tort are also dismissed. To support such causes of action, there must be a showing that malice was the sole motive for the defendant's action. See, Burns, Jackson, Miller, Summit & Spitzer v. Lindner, 59 N.Y.2d 314, 333 (1983) (citations omitted); M.J. & K. Co., Inc. v. Matthew Bender and Co., Inc., 220 A.D.2d 488, 490 (2d Dept. 1995) (citations omitted). In this action, the Claims Conference's filing of an Objection in 1994 was clearly motivated, at least in part, by its own economic interest, which is sufficient to support a defense of economic justification. See, Foster v. Churchill, 87 N.Y.2d 744, 750 (1996); WMW Mach. Co., Inc. v. Koerber AG, 240 A.D.2d 400 (2d Dept. 1997); Felsen v. Sol Cafe Mfg. Corp., 24 N.Y.2d 682 (1969). Therefore, these three causes of action must be dismissed.
In summary, the causes of action that survive the instant motion are those alleging a breach of fiduciary duty, and the three causes of action related thereto, sounding in unjust enrichment and constructive trust, and seeking an accounting.
Accordingly, it is
ORDERED that defendant's motion for summary judgment is granted in part, to the extent of dismissing the second, fourth, fifth, eighth, ninth, tenth, eleventh and twelfth causes of action, and it is further

ORDERED that defendant's motion for summary dismissing the first, third, sixth

and seventh causes of action is denied, and said causes of action are severed and continued; and it is further
ORDERED that the parties are directed to appear before the Court on June 29, 2000 at 9:30 a.m. in Part 3 (Room 218) for a preliminary conference to expedite discovery.
This constitutes the decision and order of the Court.

DATED: June 16, 2000

ENTER:


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J.S.C.