The auction house sold the oil painting, "Portrait," by the French cubist Marie Laurencin, to Yoon Young Im for $235,000 at a New York City auction in May 1991, according to Im's suit in Manhattan federal court.
Yoon, a South Korean national, consigned the canvas for auction by Sotheby's in London in 2006. But the rival house refused to put it on the block after discovering it had been swiped from the collection of renowned Paris art dealer Paul Rosenberg, the suit says.
Rosenberg, who represented such artists as Pablo Picasso and Henri Matisse, fled Paris for America during World War II, losing about 100 artworks to the German occupiers.
Yoon's suit charges Christie's with negligence for failing to find out that "Portrait" was stolen property before selling it to her.
The suit seeks damages, including the original purchase price plus interest, as well as its present value, which isn't specified.
"Portrait," an abstract depiction of a dark-eyed woman wearing a necklace, was included on a list of missing paintings drawn up by Rosenberg's heirs in 1963 and circulated by the French government. "A reasonably prudent auction house" would have known that, the suit says.
Rosenberg's relatives have threatened to sue to get back the painting, which is being held by Sotheby's pending resolution of its rightful ownership.
"There is some pretty good documentation by the Rosenberg family," said Yoon's lawyer, Richard Altman.
Christie's did not return a call seeking comment.
This isn't the first time the auction house has found itself in hot water over artwork tainted by ties to the Third Reich.
In 2006, a Manhattan federal judge temporarily blocked Christie's from auctioning a 1903 Picasso over claims that a former owner, Berlin banker Paul von Mendelssohn-Bartholdy, had been forced by the Nazis to sell it on the cheap because he had Jewish relatives.
That painting, "Portrait of Angel Fernandez de Soto," was bought by a charity, the Sir Andrew Lloyd Webber Art Foundation, at Sotheby's for $29 million in 1995 and was expected to fetch up to $60 million.
Judge Jed Rakoff later reversed his ruling, but Christie's canceled the auction at the last minute when Mendelssohn-Bartholdy's great-nephew, Julius Schoeps, filed another suit in Manhattan state Supreme Court.
That case was tossed last year.http://www.nypost.com/seven/12262008/news/regionalnews/nazi_loot_bidder_ness_145946.htm