23 Million Dollar Lawsuit Still Hanging Above Christie's Art Storage after Hurricane Sandy Damage
The story about Christie’s art storage that was damaged during the Hurricane Sandy four years ago, continues, since four New York courts (both appellate lower courts) still keep all cases against the Christie’s Fine Art Storage Services (CFASS) alive. But, what’s the story behind all these cases? In 2012, the Hurricane Sandy hit the coast of the Northeastern United States, including New York City, which caused flooding of large sections of Lower Manhattan and Brooklyn. Among many other objects, Christie’s Fine Art Storage in Brooklyn was flooded as well, causing severe damage to many artworks. The insurance companies have been trying for three years now to recover the money they lost when they paid the damage.
Christie’s Art Storage Lawsuits Saga
In 2013, first of two lawsuits hit Christie’s by the insurance company Axa. They accused the auction house company for “gross negligence” during and after the Hurricane Sandy. The insurance company argued that Christie’s Fine Art Storage Services should have taken required steps before, during and after the storm, in order to protect the artworks. Also in 2013, the insurance company StarNet sued Christie’s art storage claiming that 500 pieces of art that remained on the facility’s ground floor remained unprotected during and after the storm. After three years, there are four existing cases before different New York courts, that eventually could lead Christie’s to pay $23 Million to the insurance companies. There were two court decisions (in February and in March) keeping all the lawsuits against Christie’s alive. StarNet Insurance is seeking more than $10m for damage to art by Leroy Neiman, owned by the artist’s foundation, estate and corporation. Axa Art Insurance is seeking $1.5m for damage to the collection owned by the Jacqueline Piatigorsky Revocable Trust, while XL Insurance is seeking $700,000. Finally, in the fourth lawsuit against Christie’s Fine Art Storage Service, the dealer Boyd Sullivan is seeking more than $11m for damage to his art.
Who is Responsible?
We wrote a lot about the art storage business – recently, we’ve published an article about the art-storage business booming in Delaware, US; and about the scandal surrounding Geneva Freeport (a group of free storage facilities in the city) after the leak of the Panama papers. All of these stories show how risky art-storage business can be. In the case of the Christie’s Fine Art Storage Services (CFASS) and Hurricane Sandy, who is actually responsible? Of course, everything depends on the storage contracts. In the case of the CFASS, there is one important provision in the contract with the XL Insurance – it stipulated that CFASS would not be liable for any damage. Similar examples can be found in other storage contracts as well. However, the insurance companies argue that the CFASS was warned about the danger of the Hurricane Sandy; that the company knew that the Christie’s art storages are located in the area that was about to be directly hit; and finally, the company did not prevent the damage. That is why all four lawsuits against Christie’s are still active, while the auction company might pay around $23 Million in the near future.
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Featured Image: The location of the Christie’s art storages (via independen.co.uk). All Images used for illustrative purposes only.