Lawsuit Against Christie’s Over Piatigorsky Collection Highlights the Ongoing Struggle to Recover and Reform Practices After Sandy Devastation

August 26, 2013

Christie’s Fine Art Storage Services (CFASS), wholly owned subsidiary of Christie’s auction house, has been hit with a damning lawsuit in New York State‘s Supreme Court. CFASS is being sued for $1.5 million on claims of gross negligence, negligent misrepresentation, and breach of contract arising from damage sustained by the Gregor and Jacqueline Piatigorsky art collection (the “Collection”) housed at a CFASS storage facility during Superstorm Sandy.

The late Gregor Piatigorsky, world-renowned cellist, and his wife Jacqueline, tennis and chess champion—a power couple that met in the 1930s—amassed an impressive art collection, including many valuable Impressionist and Expressionist era works that were housed at CFASS during the storm. Though the complaint does not specify which works were damaged, a longtime Piatigorsky aide said that the Collection included a 1904 Degas entitled “Monsieur and Madame Louis Rouart.” Other damaged pieces could include paintings by Chaim Soutine. AXA Art Insurance, one of the world’s foremost purveyors of art insurance, filed the complaint against CFASS on Thursday, August 15, as subrogee of the Jacqueline Piatigorsky Revocable Trust. As a subrogee, AXA acts for the injured parties to recoup its own losses sustained from paying out insurance claims.

 The complaint paints a condemning picture, alleging that the Collection was left “languishing… on the ground floor of the warehouse” and that CFASS took “virtually no steps to protect it.” According to the complaint, the Piatigorsky Collection arrived at the warehouse at 100 Imlay Street in Red Hook on October 18, 2012, about a week before Sandy hit. The complaint also states that CFASS fired its warehouse manager around the same time, leaving the facility in the hands of an inexperience crew during one of the worst natural disasters ever to hit New York. By the time the storm began, the works were still “unprocessed by Christie’s staff, fully exposed on the floor.” The complaint goes on to state that “despite dire warnings about the impact of Sandy…Christie’s took virtually no steps to protect art, failing to even elevate the Collection and other art from the ground floor to higher floors of the warehouse.” As a result, the Collection was “exposed to water, high humidity, significant temperature fluctuations, and particulate matter.”

The complaint goes on to accuse CFASS of “intentionally misrepresent[ing] the precautions taken” and of failing to take proper steps after the storm hit. Christie’s storage also allegedly failed to inform clients of damage right away, which allegedly delayed restoration. Attached to the complaint, an email sent on November 1, 2012 to CFASS clients stated “staff has inspected our facility today and I can confirm that your property is safe and has experienced no damage.” 

Christie’s spokesperson declined to comment except to say that CFASS had yet to be served with court papers.

There have been grumblings against CFASS’ handling of Sandy for months. In April, The Art Newspaper published an article detailing how CFASS was losing several angry clients over damage sustained to their artworks during the storm. At the time, Christie’s explained that CFASS has measures in place for extreme weather that were implemented and that the backup generators worked, but “there was damage on the ground floor because the surge was not expected.” Although the article also suggested that a class action lawsuit against CFASS was in the works, the dispute with AXA is the first lawsuit filed against CFASS for its handling of the Sandy response and losses.

Though this case represents a big blow to CFASS’ public image, the dispute highlights two broad facts: that New York is still grappling with Sandy’s unprecedented devastation (for which no one was truly prepared) and that insurance companies, AXA included, are reconsidering their prior practices.

CFASS was certainly not the only storage facility to sustain damage, as most of the city’s fine art storage facilities are located in cheap, industrial areas close to the waterfront. For example, SurroundArt, a 160,000-square-foot storage facility in the Brooklyn Navy Yard, also sustained damage and losses estimated at $40 million. Additionally, LeConte Moore of insurance brokerage DeWitt Stern stated that 60% of the art that got wet is “turning out to be a total loss,” because even after policies and restoration costs are paid out, the value of the artwork is still decreased.  The total insured losses from Sandy are estimated at around $35 billion, and approximately $200 million to $300 million consisted of losses to art. In the wake of the damage sustained by galleries, storage facilities, personal homes, and conservators’ workshops across the city, major insurance companies are limiting the scope of policies, attempting to influence art storage practices. For example, Blouin Art News quoted AXA’s president and CEO, Christiane Fescher, suggesting that insurers are adjusting their underwriting practices in consideration of a redrawn flood map for New York. Fescher calculated AXA’s Sandy claims between $36-38 million and revealed that AXA will no longer insure art that is kept in basements in Chelsea. It is likely that more lawsuits are in store, as the insurance industry attempts to determine who bears Sandy damages, grapple with its current payouts, and protect against future losses.

The truth of the allegations and possible extent of CFASS’ negligence will be revealed as the legal proceedings unfold. But, as the devastation caused by Sandy is fully surveyed and quantified, one of the greatest hubs of the art world will continue to recover from the unparalleled disaster and to rethink the best ways it can protect and preserve its artworks.

For previous Center for Art Law coverage of Sandy damage, see: The NYC Art World Surveys Damage And Makes Predictions Following the Devastation Caused By Hurricane Sandy

Sources: The Art Newspaper, New York Daily News, The Independent.