“Notice-Defeats-Laches” – Clark v. Hemphill Artworks, LLC and the Second Circuit’s Clarification of Laches at the Pleading Stage in Art-Conversion Suits

1. Introduction

Clark v. Hemphill Artworks, LLC, No. 24-2078-cv (2d Cir. Aug. 19, 2025), originates from a decades-long struggle over the ownership of Alma Thomas’s 1973 painting “Dogwood Blossom Along Skyline Drive.” Plaintiff Gwendolyn Clark, who purchased the work with her husband Wallace in 1976, lost physical possession when Wallace removed it from their marital home before the couple separated. After Wallace’s death, the painting resurfaced in 2019 in the hands of art-dealer George Hemphill and the Mnuchin Gallery. Clark sued in 2022, asserting New York common-law claims—including conversion—seeking return of the artwork or damages.

The Southern District of New York dismissed all claims, principally on the equitable ground of laches, reasoning that Clark’s 26-year delay (from 1982 to 2008) fatally prejudiced the current possessors. On appeal, the Second Circuit affirmed dismissal of every claim except conversion, holding that—at the Rule 12(b)(6) stage—allegations that the defendants knew of Clark’s adverse ownership claim before taking or selling the painting defeat a laches defense as a matter of law. The Court therefore vacated the judgment as to conversion and remanded.

2. Summary of the Judgment

The Court of Appeals reviewed de novo the district court’s Rule 12(b)(6) dismissal on laches grounds.
Laches requires both (i) unreasonable delay by the plaintiff and (ii) prejudice to the defendant.
Even assuming an unreasonable delay, the Court found the prejudice element inadequately alleged because the complaint plausibly asserted that:
- a Hemphill employee was expressly told in 2016 that Clark was searching for the painting, and
- the Mnuchin Gallery contacted Clark’s daughter in early 2019 and learned the same.
Such notice nullifies any claim of unfair surprise or evidentiary prejudice on a motion to dismiss.
The Court affirmed dismissal of replevin, fraud, unjust enrichment, and any good-faith conversion theory, but vacated dismissal of Clark’s bad-faith conversion claim.

3. Analysis

3.1 Precedents Cited and Their Influence

Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406 (2d Cir. 2008) – Recognised that laches may be resolved on a Rule 12(b)(6) motion when apparent on the face of the complaint.
Zuckerman v. Metropolitan Museum of Art, 928 F.3d 186 (2d Cir. 2019) – Clarified that laches bars claims only when both unreasonable delay and evident prejudice are pled. Provided an analytical template for art-recovery cases.
Peters v. Sotheby’s Inc., 34 A.D.3d 29 (1st Dep’t 2006) – Quoted in Zuckerman for the “apparent on the complaint” standard.
Kverel v. Silverman, 172 A.D.3d 1345 (2d Dep’t 2019) – Treated “lack of knowledge or notice” by the possessor as an independent element of laches; the Second Circuit borrowed this framing.
In re Flamenbaum, 22 N.Y.3d 962 (2013) – New York Court of Appeals emphasised that an owner’s knowledge by descendants defeated prejudice.
Cohen v. Krantz, 227 A.D.2d 581 (2d Dep’t 1996) – Held laches inapplicable where defendants were on notice of plaintiff’s rights.
Weiss v. Mayflower Doughnut Corp., 1 N.Y.2d 310 (1956) – Classical two-prong statement of laches (delay and prejudice).

These authorities converge on one key insight: prejudice is generally incompatible with advance notice of a competing claim. The Second Circuit synthesised them to produce the “notice-defeats-laches” rule applicable at the pleading stage.

3.2 The Court’s Legal Reasoning

Pleading Standard – At Rule 12(b)(6) the Court must accept well-pled facts as true and draw inferences for the plaintiff. The complaint asserted explicit communications to both Hemphill and Mnuchin that Clark claimed ownership.
Prejudice Element – The district court’s prejudice finding rested primarily on the unavailability of Wallace Clark as a witness. The appellate panel held that such prejudice is legally insufficient when the possessor had contemporaneous notice of the adverse claim; notice provides an incentive to preserve evidence and undermines any surprise argument.
Interaction of State and Federal Rules – Laches is governed by state substantive law (here, New York) but applied through the federal procedural lens. The Second Circuit harmonised New York’s multi-department approach with federal pleading rules by treating notice as dispositive at the motion-to-dismiss stage.
Scope Limitation – The Court confined its holding to the conversion claim premised on bad-faith possession, leaving other claims undisturbed.

3.3 Potential Impact

Art-Market Due Diligence – Galleries and intermediaries now face stronger incentives to investigate and document any notice of competing title. Possessors alerted to a possible adverse claim may no longer rely on laches to obtain an early dismissal.
Pleading Strategy – Plaintiffs in conversion or replevin actions should expressly plead the possessor’s knowledge; doing so can immunise the claim from a laches-based Rule 12(b)(6) challenge.
Doctrinal Consistency – Although the order is non-precedential, it signals the Circuit’s alignment with certain Appellate Division departments that treat “lack of notice” as essential to laches. Future panels (or district courts) may convert this reasoning into a published, binding opinion.
Temporal Scope of Delay – The decision implicitly recognises that personal circumstances (e.g., domestic abuse) may explain, but not necessarily excuse, delay; however, the presence of possessor notice can eclipse those factual nuances on the prejudice prong.

4. Complex Concepts Simplified

Laches: An equitable defense that bars a claim when a plaintiff unreasonably delays in bringing suit and that delay prejudices the defendant.
Conversion: Wrongful exercise of dominion over personal property belonging to another. In art cases, it often means possessing or selling a work without valid title.
Bad-Faith vs. Good-Faith Conversion: Bad-faith: The possessor knew (or was reckless in ignoring) that someone else owned the property. Good-faith: The possessor honestly believed title was valid; under New York law, a demand-and-refusal is required before suit.
In-rem Defendant: An action directed against the property itself rather than (or in addition to) its owner—for example, naming the painting as “Defendant-in-rem.”
Rule 12(b)(6) Motion: A request to dismiss a complaint for “failure to state a claim” before any discovery, reviewing only the pleadings.
Summary Order: A non-precedential disposition used by the Second Circuit for cases that do not warrant a published opinion; still persuasive.

5. Conclusion

Clark v. Hemphill Artworks, LLC reinforces a pragmatic but powerful proposition in New York conversion law: a possessor’s prior notice of an adverse ownership claim neutralises the prejudice element of laches at the pleading stage. While confined to a summary order and the art-market context, the ruling arms plaintiffs with a clear roadmap for drafting complaints and alerts galleries that rudimentary knowledge of competing title claims can deprive them of an early laches exit. Going forward, courts within the Second Circuit are likely to scrutinise the prejudice prong with heightened sensitivity to notice, thereby narrowing laches’ availability in disputes over cultural property or other unique chattels whose provenance is contested.