'Oriental Woman Seated on the Floor' or 'Odalisque'

In this story:

• Nazis stole painting in 1940
• 'The museum didn't do its homework'
• Painting removed from display

NEW YORK (CNN) -- The heirs of one of France's most prominent art dealers have filed suit against the Seattle Art Museum for the return of a stolen Henri Matisse painting that recently hung on the museum's walls.

The family of Paul Rosenberg, led by his daughter-in-law, Elaine Rosenberg of New York, and his daughter, Micheline Nanette Sinclair of Paris, filed the suit Friday in U.S. District Court in Seattle.

The suit seeks the return of the colorful "Oriental Woman Seated On The Floor," also known as "Odalisque," painted by Henri Matisse in 1927. The painting is estimated to be worth $3 million to $5 million.

The colorful painting of a woman seated in an exotically decorated room belonged to the Rosenberg family before World War II. It was donated to the museum in 1990 by Seattle collector Prentice Bloedel.

It is the first lawsuit by private individuals against an American museum over art looted by the Nazis during World War II, according to the Commission for Art Recovery.

Rosenberg

From the 1920s until the start of World War II, the Paul Rosenberg gallery in Paris was the exclusive representative of Matisse and Picasso and other notable artists.

Rosenberg's collection was high on the Nazi wish list when Hitler's armies systematically plundered the prized art collections of Europe. Rosenberg hid hundreds of paintings in country houses and bank vaults before he fled France.

"Odalisque" was among a cache of valuable works removed from a Paris bank vault in 1940.

After the war, the stolen painting was sold on the Paris art market and later purchased by a Paris art gallery, according to research done by the Rosenberg family.

Eventually, the Matisse was sold to the Knoedler & Co., an art gallery in New York City. Bloedel, a founder of the MacMillan Timber Co., bought the Matisse legitimately from Knoedler & Co. in 1954. Bloedel donated the painting to the Seattle museum in 1990.

But Bloedel's granddaughter discovered a possible problem when a black and white picture of the "missing" painting was published last year in "The Lost Museum" by Hector Feliciano.

That book chronicles the victimization of art collectors, especially Jewish ones like the Rosenbergs, during World War II.

"I think it was without conscience that the museum received a painting in 1990 but didn't worry about the provenance," Elaine Rosenberg said, referring to the work's ownership history.

"The museum didn't do its homework," she said.

The museum has since hired experts to research the Rosenberg's ownership claim. Under property law that applies to art, even someone who purchased an art work in good faith must return the work, without compensation, to the rightful owner.

"Because of the complexity in researching the provenance of European paintings lost in Europe during the period between 1940-1954, they have not completed their research," according to a written statement faxed to CNN from the Seattle law firm, David Wright Tremaine, which represents the museum.

"The museum regrets that all of the interested parties were not able to reach a settlement without having to resort to litigation," the statement said.

A spokesman for David Wright Tremaine would not comment when asked if the museum would countersue the Knoedler gallery.

However, the statement said the lawsuit would determine the "rights and obligations" of all parties," including the obligations of Knoedler Gallery" in one forum.

The Rosenbergs had hoped to settle their claim out of court.

"My objection is it costs us money to get back something that's ours," Rosenberg said.

The painting has been removed from display at the Seattle Museum.