Court Ruling Paves Way for $2.5 Million Claim Over Damaged Richard Avedon Triptych
The dispute raises issues over what constitutes a "formal appraisal."
A New York State Supreme Court Judge denied AXA Art Insurance Corporation’s motion to dismiss a $2.5 million lawsuit brought against it by the Richard Avedon Foundation over a damaged triptych. The long-running dispute has been closely watched because of the difficult issues it has raised about accurately appraising works and assessing value, particularly where damage and conservation are concerned. (See: The Trial of (Avedon’s) The Chicago Seven, or What’s Wrong with This Picture?)
Tellingly, at the end of her 30-page “non-final disposition,” Judge Joan B. Lobis said: “It is clear that both parties have fought hard in this matter. Both parties rely on the same letters in support of their arguments. These letters demonstrate only that the parties grew increasingly adversarial. In the court papers, each side frequently accuses the other of misconduct, deception, and frivolity, among other things.”
As artnet News reported last March, the case dates back to December 2011, when a panel of the Avedon triptcych The Chicago Seven, September 25, 1969, was lain on a table at an art storage facility for retouching, in advance of a planned 2012 exhibition at Gagosian Gallery. Water from a leaky pipe dripped on it.
AXA Values the Work
According to the recent ruling, AXA hired Edward Yee of Penelope Dixon & Associates to value the work “both prior to and after its damage.” The Yee report valued the work in its pre-damage condition at $1.99 million (on the date it sustained the damage). After the conservation work was complete, Mr. Yee revisited the work and judged that it had suffered a $398,000 loss in value from the damage. However, AXA maintains that Yee’s report was neither a formal appraisal as defined by the Uniform Standards of Professional Appraisal Practice (the gold standard for the industry), nor a guarantee of what the work would bring if offered for sale.
The foundation, for its part, brought in an appraiser who issued a lengthy report concluding that while the work was worth $2.5 million in its pre-damaged condition, as a result of the water damage, the work was worth only $50,000—essentially no commercial value.
After the reports were issued, the foundation disputed Yee’s conclusion and pointed to a clause in the contract that stated if the parties disagreed to the value of the property, or the amount of loss, based on the conclusions of their appraisers, they would submit their differing opinions to an umpire. But AXA stands behind its assertion that the Yee report does not constitute a formal appraisal, therefore the talk of selecting an umpire was “premature,” as per the ruling.
AXA has also said that the foundation’s appraiser, Sarah Morthland, was “motivated [by a] desire to assist the foundation.” If the work was declared a total loss, AXA maintained, the contract would require the foundation to surrender it, and that Ms. Morthland professed it to have some minimal value to enable the foundation to keep it while still recovering almost the entirety of the work’s pre-damage value.
A Court Victory?
“Avedon won nothing in the Court’s recent decision,” said AXA attorney John Cahill who pointed out that the foundation asked the Court to give it an immediate summary judgment (to decide in its favor) for $2.5 million based on the Morthland appraisal, which he said claims that the damage “to a relatively small portion of a large triptych” rendered the whole artwork without any value.” The court denied Avedon’s request and the case is proceeding. (A story that appeared on artnet News on February 19, inaccurately stated that the Avedon Foundation had won the suit against AXA and that the case had come to a close).
AXA claims it has always been willing to pay Avedon the full amount that Avedon is actually entitled to under the policy and that it continues to work with the attorneys for the foundation to bring the matter to a conclusion.
The Avedon Foundation sees things differently. In a statement sent to artnet News on February 13, along with news of Judge Lobis’s order, the Avedon Foundation said, “In our opinion, AXA has simply hoped to run our tiny not-for-profit arts organization into the ground by dragging its heels on paying a legitimate claim for over three years. We can’t imagine another insurance company treating us this way.”
Follow artnet News on Facebook:
Want to stay ahead of the art world? Subscribe to our newsletter to get the breaking news, eye-opening interviews, and incisive critical takes that drive the conversation forward.