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By Steve Gorman
(Reuters) - A New York judge on Thursday awarded title of two Nazi-looted drawings by noted Austrian painter Egon Schiele to a Holocaust victim's heirs in what art experts viewed as a key test case of a U.S. law designed to ease the recovery of such stolen works.
Under the ruling, both works - "Woman in a Black Pinafore" and "Woman Hiding her Face" - are to be turned over to descendants of Franz Friedrich "Fritz" Grunbaum, an Austrian-Jewish entertainer and impresario who perished in the Dachau concentration camp in 1941.
Grunbaum, a vocal critic of the Nazis, once owned some 450 artworks, including more than 80 by Schiele, an Expressionist protege of Gustav Klimt and a major figurative painter of the early 20th century in his own right.
Grunbaum's art collection was seized by the Nazi regime after he was arrested in 1938 and sent to Dachau, according to a synopsis of the case contained in Thursday's summary judgment.
The two Schiele works in question turned up decades later, in a booth operated by a London-based dealer, Richard Nagy, at a 2015 art and design show in New York City, and the heirs filed suit seeking to recover the drawings.
Nagy's lawyers asserted he had acquired legitimate title to the two drawings, stemming from a 1956 sale of some 50 Schiele works by Grunbaum's sister-in-law to a gallery in Switzerland, and that the heirs' rights to bring their claim had long since expired.
In his 17-page decision, however, Justice Charles Ramos of the state Supreme Court in Manhattan sided against Nagy, citing the Holocaust Expropriated Art Recovery (HEAR) Act.
That law, enacted by Congress in 2016, extended the federal statute of limitations for seeking restitution of Nazi-confiscated art to six years from the time of "actual discovery" of its identity and whereabouts.
Nagy's lawyers argued the HEAR Act did not apply, a position the judge called "absurd," saying the statute was "intended to apply to cases precisely like this one."
The judge said there was no dispute the artworks at stake formerly belonged to Grunbaum and were forcibly taken by the Nazis during World War Two, a fact that put the onus on Nagy to establish a superior claim. Ramos said no such evidence was presented.
The judge also held that New York law "protects the rightful owner's property where that property had been stolen, even if the property is in the possession of a good faith purchaser."
Raymond Dowd, lawyer for the Grunbaum heirs - named in the case as Timothy Reif, David Frankel and Milos Vavra - hailed the decision as a landmark in bringing justice to Holocaust victims.
The ruling, he said, "brought us a step closer to recovering all of the culture that was stolen during the largest mass theft in history, which until now, has been overshadowed by history's largest mass murder."
(Reporting and writing by Steve Gorman in Los Angeles; Editing by Michael Perry)