$ 23 Million Claims Filed Against Christie’s Warehouses For Careless Storage Of Art

NEW YORK. Christie’s auction house may have to pay up to $ 23 million for damaged artwork affected by the Brooklyn flood in 2012. The decision was made by the New York Court of Appeals in March, and even earlier, in February, by the lower court. In total, four cases are pending before the courts against Christie’s Fine Art Storage Services (CFASS). The organization is accused of gross negligence and inability to ensure the safety of art. The plaintiffs are supported by insurance companies in which damaged art objects were insured.

The claim from StarNet Insurance is more than 10 million US dollars for damaged paintings by Leroy Neiman, Axa Art Insurance wants 1.5 million US dollars for damage caused to the private collection, XL Insurance expects 700 thousand US dollars for reimbursement to Chowaiki & Co. Gallery In the fourth lawsuit, the plaintiff is dealer Boyd Sullivan, who claims to be $ 11 million for damage to his art collection.

The central question that the courts have yet to answer is whether CFASS can relieve itself of liability or limit its liability to a certain amount. In separate decisions in three cases involving insurance companies, the lower court initially ruled in favor of CFASS based on the terms of the storage agreement. XL Insurance appealed against this decision. The lower court in its decision relied on two provisions of this contract. The first stipulated that CFASS would not be liable for any damage. The court noted that this provision is invalid because it would allow CFASS to avoid any liability, including for its own negligence, which is not allowed under the laws of the State of New York. The CFASS warehouse was located in a flood zone and XL Insurance claimed that the company received an early warning about the approach of the hurricane and the possibility of flooding, and only because of gross negligence did not take basic precautions, such as moving work from the first floor. The Court of Appeal decided that the ruling of the lower court on this provision was correct.

When the insurer pays the customer’s claims, he has the right to demand compensation from anyone responsible for the damage. But the CFASS contract also contained a second provision stipulating that XL Insurance waived the right to claim compensation. The lower court initially upheld this provision and ruled that XL Insurance could not sue CFASS, but the appellate court subsequently invalidated this part of the contract as well, as this is just another attempt by CFASS to circumvent New York State law and relieve yourself of responsibility. This decision allowed the resumption of claims by other victims, who were initially denied. A feature of the fourth lawsuit was that Boyd Sullivan’s contract with CFASS contains a clause on limiting liability to 300 thousand US dollars. The lower court recognized this provision as invalid, since although warehouses are allowed to limit their liability, it should provide for a limit for each storage unit or unit of weight, and not just the total amount. According to Christie’s lawyer, it is too early to put an end to the proceedings, as CFASS will appeal against these decisions.

Anna Sidorova © Gallerix.ru