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Swiss Heir Loses Claim to Picasso Settlement

WASHINGTON - A Swiss man cannot share in the settlement the Museum of Modern Art has paid to his relatives over the provenance of two Picassos, a federal judge ruled.

MoMA and the Solomon R. Guggenheim Foundation reached the settlement in 2009 to settle claims around Picasso's "Boy Leading a Horse" and "Le Moulin de la Galette."

Both paintings had previously been part of the collection of Paul Robert Ernst von Mendelssohn-Bartholdy, a member of the illustrious family that includes the composer Felix Mendelssohn, and his philosopher grandfather.

Though Mendelssohn-Bartholdy's heirs said the family sold them under Nazi duress in 1933, MoMA said Paul Mendelssohn gave the paintings to his second wife in 1927, and that she freely put them into the stream of commerce.

The Washington law firm Byrne, Goldenberg & Hamilton began work in 2004 to identify the heirs with a right to the paintings.

Since Paul Mendelssohn had no children and left his estate to his second wife, the property remaining in her estate went to his four surviving married sisters or their descendants.

Thomas Wach sued the firm in 2011, claiming that he is a direct descendent of one of the sisters, Katharina Wach, and therefore a rightful heir to the paintings.

In spite of his rightful interest, Byrne Goldenberg allegedly refused include the Switzerland-based Thomas Wach in the MoMA settlement.

But Byrne Goldenberg said that that two other beneficiaries of the settlement, Mikhail von Redlich of Stockholm, Sweden, and Michel Snaije of Paris, France, claimed the rights to the same portion of the settlement as Katharina Wach's heirs.

The firm said Thomas Wach should have joined von Redlich and Snaije as co-defendants to his action. And yet joining these alleged relatives would also "destroy the diversity jurisdiction upon which this proceeding is based" because federal statute prohibits having aliens on opposite sides of a lawsuit. Like the plaintiff, Redlich and Snaije are not U.S. citizens.

U.S. District Judge Colleen Kollar-Kottelly dismiss Wach's action Thursday. "Defendant correctly argues, and plaintiff does not contest, that joinder of an alien as a defendant in this action would destroy the diversity jurisdiction upon which this proceeding is based," she wrote.

While Wach contends that Snaije's claim does not compete with his own, he "does not dispute that Redlich asserts a claim to the same settlement funds," according to the ruling.

Allowing the suit to proceed without joining Redlich would threaten his interest in the settlement and expose the firm to "the risk - if not the certainty - of a subsequent claim by Redlich to the same funds at issue here and thus to the possibility of multiple inconsistent liabilities," Kollar-Kottelly added.

As such, the court "cannot, 'in equity and good conscience,' permit the instant action to proceed without Redlich," she added.

Because "joinder of Redlich would necessarily divest this action of the diversity jurisdiction on which it is based, plaintiff's complaint must be dismissed."

Thomas Wach still has alternative judicial remedies available to resolve this controversy, according to the ruling.

All persons who assert an interest in the Wach settlement funds can adjudicate their claims in Germany and in the Superior Court of the District of Columbia, the judge said.

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