2016 07 07 rusic order granting summary judgment

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UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV-15-02796-RGK (Ex) Date July 6, 2016

Title G&G Productions, LLC v. Rita Rusic

Present: TheHonorable

R. GARY KLAUSNER, UNITED.STATES DISTRICT JUDGE

Sharon L. Williams Not Reported N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Not Present Not Present

Proceedings: (IN CHAMBERS) Order Re: Plaintiff’s Motion for Summary Judgment(DE 70) and Defendant’s Motion for Summary Judgment (DE 75)

I. INTRODUCTION

On April 16, 2015, G&G Productions, LLC filed suit against Rita Rusic. On September 9, 2015,Plaintiff filed a First Amended Complaint (“FAC”) alleging: (1) Conversion and Civil Theft, (2)Replevin, (3) Unjust Enrichment, and (4) Claim for Declaratory Judgment that Plaintiff is the owner of apainting at issue in the case.

On November 12, 2015, the Court denied Defendant’s motion to dismiss the case on the basis offorum non conveniens. Presently before the Court are the parties’ cross-motions for summary judgment.For the following reasons, the Court GRANTS Rusic’s Motion for Summary Judgment and DENIESG&G’s motion for Summary Judgment.

II. FACTUAL BACKGROUND

This case centers on the acquisition, ownership, and disappearance of an oil painting titled, Wineof Babylon (“the Painting”), created by Jean-Michel Basquiat in 1984. Basquiat, not a party to thisaction, emerged as a leading figure in the widely recognized neo-expressionism art movement. Neo-expressionism, which developed in the late 1970s, sought to portray common, recognizable objects in arough and violently emotional manner.

At the heart of this case is the marriage of Vittorio Cecchi Gori, a renowned Italian filmdirector,1 and Defendant Rita Rusic, a former fashion model and beauty-pageant winner. Gori and Rusicmarried in 1983 and lived together at a residence in Rome, Italy (“Rome Residence”). Neither party

1 Gori is perhaps most well known for his film Life is Beautiful, which received an Academy Award forBest Foreign Language Film in 1997. CV-90 (06/04) CIVIL MINUTES - GENERAL of 7

Case 2:15-cv-02796-RGK-E Document 108 Filed 07/06/16 Page 1 of 7 Page ID #:3249

disputes that on June 5, 1998, Gori purchased the Painting for $330,000.00 from the Tony ShafraziGallery in New York. Both parties further agree that shortly after Rusic and Gori separated in 1999, thePainting disappeared from the Rome Residence. With the exception of these two points of consensus,the parties offer competing narratives as to the ownership and present whereabouts of the Painting.

A. Ownership of the Painting

G&G Productions, LLC (“G&G”), a California-based production company and Plaintiff in the instant action, contends that it owns the Painting through a series of assignments dating back to Gori’sinitial purchase. According to G&G, the Painting is Gori’s separate property because, pursuant to amarriage pact, he and Rusic agreed to maintain separate matrimonial assets. (Gori Decl. Ex. 1, ECF No.71.)2 On February 22, 2010, Gori assigned all of his rights in the Painting to Giovanni Nappi, hislongtime attorney. (Gori Decl. Ex. 9, ECF No. 71.) On April 1, 2015, Nappi assigned all of hisownership rights in the Painting to G&G in exchange for 50% ownership of the LLC. (Nappi Decl. Ex.4, ECF No. 72.)

Rusic presents a different version of events. She maintains that the Painting was an anniversarygift from Gori. (Rusic Decl. ¶2, ECF No. 79.) As evidence, Rusic submits two letters from the TonyShafrazi Gallery, inquiring about an outstanding balance on the Painting. (Rusic Decl. Exs. 1-2, ECFNo. 79.) According to Rusic, the fact that both letters were directed and addressed solely to her indicatesthat the gallery, as well as Gori, considered the Painting to be an anniversary gift. In further support ofher claim that the Painting was a gift, Rusic asserts that Gori routinely allowed her to choose gifts, onoccasions like Christmas and the couple’s anniversary, which he would later pay for. (Rusic Decl. ¶2,ECF No. 79.) As an example, Rusic points to an Italian Court Order finding her not liable for thepurchase price of a diamond necklace because the item was deemed to be a Christmas gift from Gori.(Serra Decl. Ex. 1, ECF No. 93.)

B. Disappearance of the Painting

Neither party disputes that Rusic filed for separation on May 7, 1999, and shortly thereafter, thePainting disappeared. Each party offers its own theory as to the disappearance.

According to G&G, Gori vacated the Rome Residence soon after Rusic filed for separation, butRusic continued to live there with the couple’s two children. G&G claims that the Painting disappearedin Gori’s absence, and the only reasonable inference to draw is that Rusic stole it because she hadunfettered access to the artwork. In subsequent years, Gori made several attempts to recover the Paintingby sending demand letters to Rusic. (Gori Decl. ¶7, ECF No. 71.) Two such letters are attached, bearingthe dates May 16, 2000, and February 24, 2009. (Gori Decl. Exs. 7-8, ECF No. 71.) Gori also testifiedthat he repeatedly asked Rusic for the Painting, to which she replied “that she had the Wine of Babylonwhere she lived and didn’t want to change the furniture, paintings, and other furnishings.” (Gori Decl.¶7, ECF No. 71.)

In retort, Rusic testifies that she did not take the Painting and that she never made any statementto Gori that she had possession of the Painting. (Rusic Decl. ¶3, ECF No. 93.) Instead, Rusic claims, the

2 G&G submits a marriage certificate written entirely in Italian. While G&G does not provide an Englishtranslation, it submits a declaration by Giovanni Nappi, Gori’s longtime attorney, who testified that themarriage certificate indicates the couple’s intent to maintain separate property throughout the marriage.(Nappi Decl. ¶4, ECF No. 72.) Additionally, G&G provides a declaration from Gori in which hetestified that he and Rusic “agreed to keep [their matrimonial] assets as separate property under Italianlaw.” (Gori Decl. ¶3, ECF No. 71.) CV-90 (06/04) CIVIL MINUTES - GENERAL of 7


Painting disappeared when Gori hired movers to transport numerous items of personal property awayfrom the Rome Residence. (Rusic Decl. ¶5, ECF No. 79.) Rusic further claims that on June 9, 1999,during the period when she supposedly stole the Painting, Gori struck her in the head during a fight,causing a concussion and requiring an emergency room visit. (Rusic Decl. ¶6, ECF No. 93.) As a resultof the injury, Rusic claims she was bedridden for a week and could not possibly have pilfered thePainting.

C. Current Whereabouts of the Painting

G&G contends that the Painting is currently still in the possession of Rusic and her ex-boyfriend, Canio Mazzaro, an Italian businessman. After a relationship spanning approximately four years,Mazzaro sued Rusic in April 2011, alleging that she breached a profit-sharing agreement. (Blakely Decl.Ex. 2, ECF No. 89.) G&G posits that Rusic gave Mazzaro the Painting as part of a settlement agreementto resolve the 2011 lawsuit. In support of this theory, G&G introduces the deposition of a woman namedPaola Ruffolo who testified that she was invited to a dinner party at Mazzaro’s home in Milan, Italy inNovember 2011; while there she saw the Painting in his living room. (Ruffolo Depo. 7:13-17, ECF No.89.) Ruffolo further testified that Mazzaro told her he had acquired the Painting through a settlementwith Rusic. (Ruffolo Depo. 10:1-7, ECF No. 89.) G&G learned this information after Nappi and Ruffolomet to discuss the Painting in 2014.

In rebuttal, Rusic submits a declaration from Mazzaro in which he testified that he has never meta woman by the name of Paola Ruffolo and that all of the representations in Ruffolo’s deposition arefalse. (Mazzaro Decl. ¶¶2-3, ECF No. 84.) Mazzaro also stated that he “never had possession of ‘TheWine of Babylon’ by Jean-Michel Basquiat.” (Mazzaro Decl. ¶4, ECF No. 84.) In fact, Mazzaro statedthat he never lived at the apartment in Milan where Ruffolo claimed to have attended the dinner party in2011. Rather, the residence in question was inhabited by Mazzaro’s parents as evidenced by utility billsand a certificate of residence bearing his parents’ names. (Mazzaro Decl. Exs. 1-2, ECF No. 84.)

III. JUDICIAL STANDARD

Pursuant to Federal Rule of Civil Procedure 56(a), a court may grant summary judgment onlywhere “there is no genuine issue as to any material fact and . . . the movant is entitled to judgment as amatter of law.” Fed. R. Civ. P. 56(a). Upon such a showing, the court may grant summary judgment onall or part of the claim. See id.

To prevail on a summary judgment motion, the moving party must show that there are no triableissues of material fact as to matters upon which it has the burden of proof at trial. Celotex Corp. v.Catrett, 477 U.S. 317, 325 (1986). On issues where the moving party does not have the burden of proofat trial, the moving party needs to show only that there is an absence of evidence to support thenon-moving party’s case. See id.

To defeat a summary judgment motion, the non-moving party may not merely rely on itspleadings or on conclusory statements. Id. at 324. Nor may the non-moving party merely attack ordiscredit the moving party’s evidence. See Nat’l Union Fire Ins. Co. v. Argonaut Ins. Co., 701 F.2d 95,97 (9th Cir. 1983). The non-moving party must affirmatively present specific admissible evidencesufficient to create a genuine issue of material fact for trial. Celotex, 477 U.S. at 324.

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IV. DISCUSSION

G&G seeks summary judgment on the following claims: (1) conversion, (2) replevin, (3) unjust enrichment, and (4) a declaration that G&G is the owner of the Painting. Rusic asserts the statute oflimitations as a defense. Because the Court finds that G&G’s lawsuit is barred by the statute oflimitations, it does not reach the merits of G&G’s claims.

A. Statute of Limitations

Rusic argues that this lawsuit is time barred by Italy’s ten-year statute of limitations, which began to run in 2000 when Gori discovered the theft. G&G retorts that the applicable statute oflimitations is California’s three-year period for stolen artwork, which did not commence until Nappidiscovered the Painting’s whereabouts in 2014. This Court must first determine whether the borrowingstatute applies. If so, the next question is whether the Italian statute of limitations precludes this action

1. California’s Borrowing Statute

“Because this is a diversity case, forum state law determines which [] statute of limitationsgoverns.” Flowers v. Carville, 310 F.3d 1118, 1123 (9th Cir. 2002). “California’s choice-of-law analysisis a two-part inquiry. First, the [c]ourt determines whether it is required to apply the law of the foreignjurisdiction under California’s borrowing statute. Second, if [the borrowing statute] does not mandatethe application of foreign law, the [c]ourt considers whether to apply California law or foreign lawunder the governmental interest test.” Rodriguez v. Mahony, No. CV 10-02902, 2012 WL 1057428, at*5 (C.D. Cal. Mar. 26, 2012).

The Court need not engage in the governmental-interest test because California’s borrowingstatute clearly governs the instant action. The borrowing statute provides,

When a cause of action has arisen in another State, or in aforeign country, and by the laws thereof an action thereoncannot there be maintained against a person by reason of thelapse of time, an action thereon shall not be maintainedagainst him in this State, except in favor of one who has beena citizen of this State, and who has held the cause of actionfrom the time it accrued.

Cal. Civ. Proc. Code § 361 (emphasis added). The borrowing statute “creates a general rule that when acause of action has arisen in another jurisdiction but cannot be maintained against a particular defendantin that jurisdiction because of the lapse of time, the action cannot be maintained against that defendantin a California court.” McCann v. Foster Wheeler LLC, 225 P.3d 516, 525 (Cal. 2010).

“[T]he applicability of California’s borrowing statute turns on the time plaintiffs’ claimsaccrued.” Deirmenjian v. Deutsche Bank, A.G., No. CV 06-00774, 2006 WL 4749756, at *34 (C.D. Cal.Sept. 25, 2006). “To determine where the cause of action accrued, a court must look to ‘the time when,and the place where, the act is unlawfully committed or omitted.’” Dalkilic v. Titan Corp., 516 F. Supp.2d 1177, 1184 (S.D. Cal. 2007). “Under California law, a cause of action generally accrues at themoment that the party who owns it is entitled to file and prosecute an action.” Deirmenjian v. DeutscheBank, A.G., No. CV 06-00774, 2010 WL 3034060, at *14 (C.D. Cal. July 30, 2010).

The Court finds that California’s borrowing statute governs the instant action and requiresadoption of the applicable Italian statute of limitations. Neither party disputes that the Painting



disappeared from the Rome Residence at some point after Rusic and Gori separated in May 1999.Moreover, G&G’s own evidence shows that its predecessor in interest, Gori, discovered the theft asearly as May 16, 2000, because on that date he sent a letter to Rusic demanding the return of thePainting. Overall, the evidence establishes that G&G’s cause of action arose in Italy in 2000,3 meaningthat the borrowing statute applies and triggers the Italian statute of limitations for conversion.

G&G argues that the borrowing statute is displaced by California’s conversion statute (Cal. Civ.Proc. Code § 338). Section 338(c) contains three subsections governing the following: (1) actions torecover personal property, (2) actions to recover an article of artistic significance against a privateindividual, and (3) actions to recover a work of fine art against a museum, gallery, auctioneer, or dealer.Because G&G seeks to recover stolen artwork against a private individual, its claim falls withinsubsection (2), which sets forth a three-year limitations period and states that a claim does not accrue“until the aggrieved party discovers the whereabouts of the artwork.” Cal. Civ. Proc. Code § 338(c)(2).G&G urges this Court to disregard the borrowing statute and adopt the limitations period and discoveryrule set forth in § 338(c)(2). The Court disagrees for two reasons.

First, the express language of § 338(c) only exempts from the borrowing statute actions broughtagainst a museum, gallery, auctioneer, or dealer (subsection (3)) not actions brought against a privateindividual (subsection (2)). Cal. Civ. Proc. Code § 338(c)(4) (“[California’s borrowing statute] shall notapply to an action brought pursuant to paragraph (3).”). The California legislature exempted claimsagainst museums, galleries, auctioneers, and dealers from the borrowing statute but remained silent as toclaims against private parties. Pursuant to the axiom, expressio unius est exclusio alterius, thelegislature’s silence as to claims against private parties coupled with its express carve-out for claimsagainst art institutions indicates that a claim alleging stolen artwork against a private individual is notexempt from California’s borrowing statute. Longview Fibre Co. v. Rasmussen, 980 F.2d 1307, 1312-13(9th Cir. 1992) (“[T]he expressio unius, or inclusio unius, principle is that ‘[w]hen a statute limits athing to be done in a particular mode, it includes a negative of any other mode.’”). Thus, G&G’s claim,brought against Rusic as a private individual, is not exempt from the borrowing statute.

Second, and even more fatally, the discovery rule in § 338 is of no help to G&G here. Accordingto G&G, the claim against Rusic did not accrue until 2014, when Nappi discovered that the Painting wasallegedly housed at Mazzaro’s Milan residence. Therefore, G&G maintains the limitations period didnot commence until 2014. In making this argument, G&G conveniently overlooks the fact that itspredecessor in interest, Gori, was aware of Rusic’s alleged theft in May 2000 as evidenced by thedemand letter he sent seeking the return of the Painting. While Gori may not have been aware of thePainting’s exact whereabouts back in 2000, “the discovery rule, whenever it applies, incorporates theprinciple of constructive notice.” Orkin v. Taylor, 487 F.3d 734, 741 (9th Cir. 2007). In other words, the“cause of action began to accrue when [Gori] discovered or reasonably could have discovered [his]claim to the [Painting], and [its] whereabouts.” Von Saher v. Norton Simon Museum of Art at Pasadena,592 F.3d 954, 969 (9th Cir. 2010). Based on the demand letter, it is clear that Gori was on notice of hisclaim for conversion against Rusic as early as May 2000. Accordingly, the discovery rule does not resultin a later accrual date.

Having determined that California’s borrowing statute applies and that G&G’s claim accrued in2000, the next question is whether the Italian statute of limitation bars the present lawsuit.

3 G&G took title to the Panting subject to any running statute of limitations. Hooker v. E. Riverside Irr.Dist., 38 Cal. App. 615, 622 (Ct. App. 1918) (“[I]t could scarcely be held that the holder of a right ofaction could suspend the running of the statute by splitting his right of action and transferring a portionthereof to another. Except in the case of certain statutory exceptions, a statute of limitations runs againstthe right of action, not against the holder thereof.”).CV-90 (06/04) CIVIL MINUTES - GENERAL of 7


2. Italian Statute of Limitations

“Matters of foreign law may be determined by the court, which may consider any relevantmaterial or source, including testimony.” Reebok Int’l Ltd. v. McLaughlin, 49 F.3d 1387, 1392 n.4 (9thCir. 1995) (citing Fed. R. Civ. P. 44.1). “The application, content and meaning of foreign law may bedetermined by reliance on any relevant material including English translations of foreign statutes orlaws, materials from treatises, scholarly works discussing the law and declarations from persons familiarwith the relevant law.” Integra Lifesciences I, Ltd. v. Merck KgaA, No. 96-CV-1307, 2000 WL35717873, at *1 (S.D. Cal. Jan. 27, 2000).

Rusic offers the testimony of Carlo Arnulfo, an attorney licensed to practice law in Italy who hasover fifteen years of experience. (Arnulfo Decl. ¶1, ECF No. 75.) She also submits English versions ofrelevant Italian statutes and cases, translated by Stefano Abbasciano who is admitted to both the ItalianBar and the California Bar. (Abbasciano Decl. ¶1, ECF No. 76.)

According to Arnulfo, Article 2946 of the Italian civil code creates a general, ten-year statute oflimitations for any cause of action where a shorter period is not specified by other statutes. (ArnulfoDecl. ¶2, ECF No. 75.) Attached to Arnulfo’s declaration is an English translation, which states:

Civil Code Article 2946. Ordinary Statute of Limitation.

With the exception of cases in which the Law has establishedotherwise, legal rights are extinguished after a 10-yearlimitation period under the ordinary law.

(Arnulfo Decl. Ex. 2, ECF No. 75.) Arnulfo explains that no other statute provides a shorter limitationsperiod for conversion or replevin actions; therefore, G&G’s claim seeking the return of the Painting isgoverned by the ten-year general limitations period. (Arnulfo Decl. ¶3, ECF No. 75.)

Arnulfo also describes when the limitations period commences under Italian law. An attachedEnglish translation of Italian Civil Code Article 2935 provides, “The statute of limitations runs from theday on which the right can be exercised.” (Arnulfo Decl. Ex. 7, ECF No. 75.) According to Italian caselaw, the limitations period will not be tolled for “the plaintiff’s ignorance of the event from which theright arises or the delay in acknowledging it due to lack of communication by the other party.” (ArnulfoDecl. Ex. 8, ECF No. 75.)

In the instant action, the claim against Rusic alleging conversion of the Painting accrued as earlyas May or July 2000. The evidence bears this conclusion out. On May 16, 2000, Gori sent Rusic ademand letter asking her to return the Painting. (Gori Decl. Ex. 7, ECF No. 71.) On July 10, 2000,Gori’s attorney filed a brief with an Italian court in connection with divorce proceedings where hepetitioned for the return of the Painting. (Arnulfo Decl. Ex. 3, ECF No. 75.) Thus, Gori clearly knew ofhis claim and was entitled to sue either in May or July 2000. At that point the ten-year statute oflimitations commenced, meaning that Gori was required to file the claim before July 10, 2010 at thelatest. Therefore, the instant lawsuit is barred by the Italian statute of limitations, as it was filed on April16, 2015.

G&G concedes that the correct limitations period under Italian law is ten years; it argues,however, that the limitations period was tolled by several intervening events. According to Nappi, whopurports to be an expert in Italian civil law, the ten-year limitations period was suspended at various



points as a result of court filings and demand letters initiated by Gori and his successors in interest.4

(Nappi Decl. ¶¶ 2-3, ECF No. 92.) G&G argues that the limitations period began to run when the mostrecent of these tolling events concluded in February 2014, meaning that the period extends until 2024,and the instant action is timely filed.

The Court rejects G&G’s argument for several reasons. For starters, Nappi’s conclusion as to thetolling effect of Italian court proceedings and demand letters is entirely unsupported—he neither cites toa single Italian statute nor mentions any case law. Moreover, contrary to Nappi’s declaration, G&G’sown attorney stated during a deposition that Nappi was not qualified as an expert in Italian law. (NappiDepo. 75:2-13, ECF No. 75.) Finally, Nappi argues for the tolling doctrine to apply without actuallyspecifying how long the limitations period was suspended. Thus, even if this Court were to accept thetolling argument (it does not), Nappi has failed to clearly articulate the duration of any tolling, renderingit impossible to determine whether G&G’s claim was timely filed.

Accordingly, the Court concludes that G&G’s conversion claim is barred by the ten-year Italianstatute of limitations. Because the replevin claim and unjust enrichment claim are derivative of theconversion claim, they too are barred by the statute of limitations. Finally, G&G’s request for adeclaration of the Painting’s ownership against Rusic is moot because G&G has maintained in itspleadings and at the summary judgment stage that Mazzaro, not Rusic, now owns the Painting pursuantto the alleged settlement agreement in 2011.

VI. CONCLUSION

For the foregoing reasons, the Court GRANTS Rusic’s Motion for Summary Judgment andDENIES G&G’s Motion for Summary Judgment.

IT IS SO ORDERED.

:

Initials of Preparer

4 Specifically, G&G contends that the following court proceedings and demand letters tolled thelimitations period:

Petition for Legal Separation (1999)First Demand Letter (May 16, 2000)Appeal to Criminal Court (July 10, 2000)Appeal before Rome Court of Appeals (2007)Appeal before Supreme Court (2006)Second Demand Letter (February 24, 2009)Third Demand Letter (March 16, 2010)Civil Complaint (March 20, 2010)Criminal Trial (February 28, 2014) CV-90 (06/04) CIVIL MINUTES - GENERAL of 7


2016 07 07 rusic order granting summary judgment

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