Howard University v. Borders

Background

Howard University sued Larry Borders and Virginia Borders over ownership of Centralia Madonna, a 1947 drawing by Charles White. Howard asserted claims for a declaration that it owned the drawing, quiet title, and replevin under New York common law. Replevin is a claim seeking return of specific personal property. The Borders’ remaining counterclaim sought a declaration that they had the proper right, title, and interest in the drawing.

Howard possessed the drawing beginning in 1947. The evidence showed that it was on Howard’s campus in January 1973, and Howard had records of one loan but no record of selling or transferring the drawing to the Borders’ friend, J.D. Kibler, or to another person. The Borders said Kibler gave them the drawing as a gift in the early 1970s. The drawing remained in the Borders’ Durham, North Carolina home for more than forty-five years. In 2020, they consigned it to Sotheby’s for a planned New York auction. Sotheby’s withdrew the drawing after Howard claimed it and demanded its return. The drawing remained with Sotheby’s in New York.

Choice of law and timeliness

The court found conflicts among New York, North Carolina, and Washington, D.C. law concerning the statute of limitations and the burden of proving whether the drawing was stolen or lawfully transferred. Applying New York’s interests-based choice-of-law analysis, the court held that New York law governed. New York had the stronger interest because the drawing had been brought there for a contemplated sale, and New York has an interest in preserving the integrity of its art market and preventing the state from becoming a marketplace for stolen goods.

Under New York’s demand-and-refusal rule, a claim to recover stolen property from a good-faith possessor begins when the true owner demands its return and the possessor refuses. Howard demanded the drawing on June 1, 2020, and the Borders refused. The court therefore held that Howard’s claims were timely and granted summary judgment to Howard on that issue.

Title and burden of proof

The court held that Howard made the required threshold showing of an arguable ownership claim. Howard had possessed the drawing for decades, its records showed the drawing on campus in 1973, and it had no record of a voluntary sale or transfer. Under New York law, that showing shifted the burden to the current possessors—the Borders—to prove that the drawing was not stolen or unlawfully taken from Howard and instead had been transferred, sold, or loaned voluntarily.

The court held that the Borders did not meet that burden. They relied principally on a 1976 inventory labeling the drawing “Loan (?)” and a Sotheby’s email reporting speculation that the Barnett-Aden Gallery might have sold the drawing to a South Carolina collection. The court concluded that this evidence suggested possible avenues of inquiry but did not provide evidence from which a jury could find that the Borders actually obtained good title. The court therefore granted Howard summary judgment on its title-related claims.

Laches

Laches is a defense based on unreasonable delay that prejudiced the opposing party. The court denied summary judgment on the Borders’ laches defense. Evidence that Howard knew or should have known by 1976 that the drawing was missing could support a finding of unreasonable delay. Evidence that Howard listed the drawing in later inventories could support the opposite conclusion, but it did not resolve the factual dispute.

The court also held that the Borders had presented enough evidence of possible prejudice to create a jury question. Relevant witnesses, including Kibler, had died, and the passage of time could have caused faded memories and loss of documents. The court therefore left both unreasonable delay and prejudice for the factfinder.

Remaining counterclaim and affirmative defenses

Because the court denied Howard’s motion as to laches, it also denied Howard’s motion for summary judgment on the Borders’ remaining counterclaim seeking a declaration of their ownership rights.

The court dismissed the Borders’ first affirmative defense, which asserted that Howard failed to state a claim, because that defense would merely relitigate the legal sufficiency of claims already decided. The court resolved the second affirmative defense, based on the statute of limitations, in Howard’s favor because New York’s demand-and-refusal rule made the claims timely. The court denied summary judgment on the third affirmative defense, laches.

The court granted summary judgment as to the fourth affirmative defense, entrustment, because the Borders conceded they lacked evidence to establish it. It also granted summary judgment as to the fifth affirmative defense, which invoked equitable estoppel, unclean hands, culpable conduct, and waiver, and as to the sixth and seventh defenses concerning whether the drawing was stolen, whether Howard had title, and whether Howard voluntarily transferred title. The court stated that the Borders had not identified evidence creating a genuine factual dispute on those issues.

As to the eighth affirmative defense, concerning negligence in securing or monitoring the drawing and entrusting it to a faithless agent, the court stated that negligence in failing to prevent or detect intentional conduct is not a defense to an intentional tort and that the record contained no evidence supporting entrustment to a faithless agent. The opinion does not separately state an express disposition for that defense. The court granted summary judgment as to the ninth affirmative defense, based on an alleged violation of a District of Columbia lawyer-conduct rule, because the Borders identified no evidence of a violation. The tenth affirmative defense, failure to mitigate damages, was deemed abandoned because Howard sought only equitable relief and the Borders did not respond to Howard’s argument.

Disposition

The court’s conclusion states: “The motion for summary judgment is GRANTED IN PART and DENIED IN PART.” The Clerk was directed to close the motion docket entry. The opinion does not state that the entire case was dismissed or that any ruling was with prejudice or without prejudice.