Cohen v. The Republic of the Philippines

146 F.R.D. 90 (S.D.N.Y. 1993)

What's Going On?

Motion by alleged owner of four paintings to intervene in an interpleader action brought to determine the rightful owner of the four paintings.

Who's Who?

Plaintiffs     :

Marc Cohen – [head of an auction company]
Marc Cohen & Co. – [auction company].

Defendant :

Klaus Braemer – agent of Imelda Marcos.
The Republic of the Philippines – government.

Facts:

In late 1991 or early 1992, Plaintiff Marc Cohen, [the head of an auction company], received four paintings on consignment from Defendant Klaus Braemer, who was the agent of Imelda Marcos, wife of the former President of the Philippines. Defendant Braemer was responsible for running Marcos's New York home. The total value of the paintings, which hung in Marcos's New York home, was nearly $5 million. Defendant Braemer demanded the return of the paintings in March of 1992, but Cohen refused because he was uncertain who actually owned the paintings. Consequently, Plaintiffs Marc Cohen and Marc Cohen & Co, [an auction company], brought an interpleader action against Defendants Braemer and The Republic of the Philippines. Defendant Braemer claims that he has a direct interest in the paintings, which served as collateral for two loans that Defendant Braemer either made or guaranteed for Marcos. Defendant The Philippines claims that the paintings were either acquired with Philippine government funds for the benefit of Defendant The Philippines, or that they were acquired with funds which Marcos's husband illegally obtained while he was President of the Philippines. Five months after the initial complaint was filed, Marcos now moves to intervene in this action, denying the claims of the Defendants and asserting that the paintings were acquired with her money, and remain her property.

Issue:

May a party with an alleged interest in property that is the subject matter of an action intervene in that action to assert the alleged interest?

Decision:

Yes. Under FRCP 24, any party may intervene if (1) the applicant makes a timely application for intervention; (2) the applicant claims an interest relating to the property or transaction which is the subject of the action; (3) the disposition of the action may impair the applicant's ability to protect that interest; and (4) the applicant's interest is not adequately represented by existing parties. Marcos's application for intervention was timely because all parties knew of her potential intervention from the beginning of the action, the five month delay was not unreasonable given the politically sensitive international implications of the action, and no party was unduly prejudiced by the delay. Marcos has alleged a sufficient interest to support her motion to intervene. She claims that the paintings were acquired with her funds and hung in her apartment. Although Defendant The Philippines has shown that Marcos's residence was held in a trust for the Philippines, it has not shown that the contents of the residence belonged to Defendant The Philippines. Because Marcos claims a superior interest than that of Defendant The Philippines in the paintings, and disputes Defendant Braemer's alleged security interest in the paintings, the parties do not adequately represent Marcos's interest. Marcos's alleged interest is also contrary to those of Defendants, and the disposition of the case could possibly prejudice her interest. Marcos therefore fulfills the requirements of Rule 24(a)(2), and her motion to intervene is granted.

Basic Rule:

Under FRCP 24, any party may intervene if (1) the applicant makes a timely application for intervention; (2) the applicant claims an interest relating to the property or transaction which is the subject of the action; (3) the disposition of the action may impair the applicant's ability to protect that interest; and (4) the applicant's interest is not adequately represented by existing parties.

Terms:

Interpleader :

An action to determine ownership of property which a disinterested third party holds when there is doubt as to who owns the property.

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