Recently, “Legal Files” wrote about the end — or perhaps temporary cessation — of the litigation involving Barney Hallingby’s 1957 Ferrari 250 GT (October 2018, p. 50).
The Ferrari was once the property of Andreas Gerber and Bernhard Friedli. They claimed that it was stolen in Spain in 1991. Friedli litigated the matter in Spain and lost, with the Spanish court deciding it was a civil business dispute and not a theft.
Fast forward to this year, and Hallingby was victorious in his Connecticut state court action regarding the ownership of the car. Undaunted, Gerber seems to have embarked on a campaign to tell the world that he still owns “his” Ferrari.
The other side
The article drew a quick response from a Barbara Kahn, telling us that we needed to hear Gerber’s side of the story. Our invitation in response resulted in an email contact from Oliver Weber, Gerber’s Swiss attorney. After some cat-and-mouse negotiations regarding which parts of the “story” would be reported, all with a desire to be sure that only “accurate” renditions of the facts were published, we eventually received a large volume of information “documenting” that the Ferrari had truly been stolen, but not so much on the actual legal issues.
A thief is not an owner
“Legal Files” has often stated that a thief does not acquire title and cannot pass good title to a third-party purchaser. But that rule is not absolute.
For example, if the rightful owner takes too long to assert his rights to recover possession of the car, he may never be able to do so. In such a case, the thief never had good title to the car, but since the rightful owner is legally incapable of recovering the car, the current possessor essentially becomes the legal owner of the car.
Another important distinction is that the loss of a car in a botched business deal is not necessarily a theft. A theft is a criminal taking of the car. A failed business deal — say, where the purchaser is given the car but never pays for it — is not a theft. In such a case, the buyer becomes the owner and the seller is left with only a legal claim for damages.
Was the Ferrari stolen?
Weber points to several things as “proof” that the Ferrari was stolen:
- Interpol listed the car as stolen — and continues to do so.
- Swiss authorities have recognized it as stolen.
- The Connecticut State Police report concludes that it was stolen.
However, with all due respect, none of those matters prove anything of the sort.
Interpol and the Swiss authorities list the Ferrari as stolen because they received theft reports from Gerber. Based upon his version of the facts, they concluded that it appeared that the car was stolen, and listed it as such. However, that is not a final determination of anything.
Although Weber insists that the police determinations should be taken as proof, the very lengthy (31 pages) Connecticut police report actually establishes nothing.
Although the officer who wrote the report appears to have been convinced, its conclusion is simply that “probable cause” exists. That is a far cry from a legal determination of anything.
We all know that being arrested or charged does not make you guilty — that is for a court to decide afterward. Further, the police report would not even be admissible as evidence in any subsequent litigation, as it is technically all hearsay and opinion.
Connecticut did not bring criminal charges against Hallingby, concluding that this needed to be sorted out in a civil action. Weber claims they simply lacked the resources to prosecute. That may or may not be the case, but either way, we still lack any sort of final determination here.
The Spanish judgments
Friedli brought legal action in Spain to recover the Ferrari and lost.
The Spanish court ruled that there was no criminal theft, but rather it was a botched business deal. No appeal was taken, and no one has brought any legal challenge to the validity of those judgments. Why is Gerber not bound by those judgments?
Weber makes inconsistent statements about the nature of the relationship between Gerber and Friedli. At one point, he stated they are equal co-owners. At another point, he described them as partners — and produced a partnership agreement.
If they were co-owners and not partners, Friedli would have lost his interest in the Ferrari, but Gerber might still be able to claim 50% ownership. If they were partners, then Friedli’s legal actions would have been taken on behalf of the partnership, and Gerber would be bound by the result. That is, he would be under U.S. law and likely the law of most European countries.
Corrupt Spanish courts
Weber attacks the Spanish judgments on the basis that it has been well documented that the Spanish courts were highly corrupt during the 1990s and controlled by the Spanish mafia. He produces a number of news articles about it, and points to two of the judges having been convicted of corruption crimes.
But does that mean that every decision rendered by the Spanish courts during that time is void?
Law typically distinguishes between things that are void and those that are voidable. A voidable judgment stands until it is successfully challenged and voided. The person challenging it is usually required to do so within a certain time, and would lose the ability to challenge it when that time passes.
The length of time allowed would likely be determined under Spanish law, although another country might allow a challenge at another time if the judgment is sought to be enforced in the other country. Gerber has gone almost 30 years without any attempt to challenge the Spanish judgments in any country, so there are serious questions whether he can still do that.
The Connecticut litigation
The Connecticut state court declared that Hallingby, not Gerber, is the rightful owner of the Ferrari. Weber dismissed this out of hand, claiming that the Connecticut court had no jurisdiction over Gerber and the judgment is therefore ineffective.
Weber stated that it is well settled under the Den Hague Convention and international law that a person can appear in a court in order to challenge its jurisdiction without subjecting himself to the court’s supervision.
Hallingby’s attorney, Lawrence Treece, generally agrees with that, but he claims that Gerber went beyond a jurisdictional challenge and partially defended the case, which voluntarily created jurisdiction. Weber seems to have missed that point, and he insisted that the jurisdictional challenge was all that occurred.
Interestingly, Weber was not there when it happened. He did initially appear on behalf of Gerber, but his submissions were rejected because he is not licensed to practice law in the United States — let alone Connecticut. Afterwards, Gerber appeared on his own behalf with his own filings, apparently copying Weber’s.
My impression is that Weber does not recognize that what may be permissible in European courts is not necessarily where the line will be drawn in Connecticut — which is where it counts.
The Swiss litigation
Gerber has filed suit against Hallingby in Switzerland, seeking to establish ownership of the Ferrari. He can’t make Hallingby appear there, and Hallingby won’t.
Weber tried to goad Hallingby into doing that, asking why he won’t go there and sort things out if he really wants to reach the truth. Of course, one could say the exact same thing about Gerber — he was even present in Connecticut court, so why didn’t he resolve everything there?
Weber claimed that there is some sort of stalemate — the Spanish and Connecticut judgments are invalid, and neither party is going to go to the other’s turf to settle the issues once and for all.
He claimed that Gerber wants to litigate the theft issues, but it seems he only wants to do that on his home court, Switzerland, his most hospitable jurisdiction. However, that court has the weakest connection to the Ferrari. The Ferrari disappeared in Spain, and it is currently located in Connecticut. Both those jurisdictions have better connections to the case than Switzerland, which is simply Gerber’s home.
In addition, presenting legally admissible evidence to establish that a theft occurred almost 30 years ago could be a difficult endeavor. A lot of time has passed, necessary witnesses may now be unavailable, and those witnesses that are available may have foggy memories.
When asked what Gerber plans to do to recover the Ferrari, Weber stated that he will simply wait for the Ferrari to leave the U.S. and then try to seize it.
In the meantime, he is going to “inform the Ferrari community” all about the “real facts,” in an apparent guerrilla war effort to deter potential buyers of the Ferrari.
So this seems to be the ongoing situation. Gerber and Weber will do their best to try the case in the court of public opinion.
Hallingby owns the car under U.S. law, and he can pass good title if it stays in the U.S. If the Ferrari leaves the U.S., ownership could depend on whether Weber or Treece has the better legal analysis. ♦
JOHN DRANEAS is an attorney in Oregon. His comments are general in nature and are not intended to substitute for consultation with an attorney. He can be reached through www.draneaslaw.com.