Nebraska, Currently.
In 2013 I hired an artist to do some art for a children's book. No written contract was ever done or made up. Over the past few years he asked if he could do extra work on the book and began searching for a publisher. I told him if he finds a publisher that I dont care about the money I could make for the book so he backed out and took the art he did and is searching for a publisher to get the art out there. The art is the characters I paid him to design and draw for me. I own the copy write on the book. But I copy writed the book without the art. Can he use the art work i paid him to design for me?
Could you please clarify a few things for me?
You worked with the artist to create the book, so the artwork was designed specifically for the book. Did you ever combine the artwork with the text into a single work, or were these always separate works? How exactly did the artist "take" the artwork?
If you purchased the artwork from the artist in 2013, you own the work the artist created. The artist could not take these pieces of art from you legally. But without a written and signed transfer agreement between the artist and you, you do not own the
copyrights in the artwork so you are not free to do with the artwork what you want. You would own the single works only.
Without ownership of the copyrights in the artwork, you do not hold any of a copyright holders exclusive rights - the right to copy or reproduce the work, the right to distribute the work, the right to create derivatives of the work, the right to display (or perform) the work.
It appears from what you have said that you retain all rights in your text and the artist retains all rights in the artwork and that you will be unable to use the artwork for your book without the artist's permission and the artist will be unable to use your text without your permission. This is assuming no book was ever created combining the text with the artwork.
At this point and with my current understanding, I see that you can demand that the artwork that was taken is returned to you. The artist created it for you and you paid for it. You can also try to work out a partnership agreement with the artist to combine art with text to form a joint work, where you could both retain separate ownership in the copyrighted works you created but share in any revenue generated from the joint work. This seems to be what you both intended to do back in 2013.
You can also find an IP attorney in your area for a personal review of the arrangement you had with the artist. The attorney can perhaps, after the review, draft a letter to the artist informing the artist of the existing rights each of you have in your works and the current right you have to keep the artwork you purchased. The attorney might also be able to negotiate for you a new agreement between you and the artist.