NEW YORK—The Andy Warhol Foundation for the Visual Arts, the Andy Warhol Art Authentication Board, Vincent Fremont and Vincent Fremont Enterprises have filed suit against Philadelphia Indemnity Insurance Company (PIIC), in New York State Supreme Court, in an effort to recoup millions of dollars they incurred in legal costs in defending against an antitrust suit that was settled last November.
The plaintiffs claim they are entitled to full coverage for the $6.6 million total, under four policies issued by PIIC and effective in 2002 and 2003.
The antitrust lawsuit (referred to as the “Simon Action” in the complaint), was filed in 2007 against the plaintiffs in this 2011 action, by collector and documentary filmmaker Joe Simon-Whelan, alleging a “20-year scheme of fraud, collusion, and manipulation” to control the market of Warhol’s works. Simon-Whelan charged that the authentication board is “utilized to remove competing Warhol artwork from the marketplace by falsely declaring it to be inauthentic, thereby raising the value of the Foundation’s own holdings.”
Simon-Whelan had a red Warhol self-portrait, dated 1965, which was authenticated by Warhol estate officials shortly after the artist’s death in 1987. But the authentication board (formed in 1995) rejected it twice, in 2001 and 2003, saying it had not been executed by Warhol.
According to the current complaint against the insurer, “between July 13, 2007, when the Simon Action was first filed, and March of 2010, PIIC denied any coverage for the Simon Action under the [Directors and Officers] policies it issued to the Plaintiffs. During this time period, the only payment that PIIC made to Plaintiffs for defense costs incurred in the Simon Action was for $225,000.”
Last April the current plaintiffs filed a request for an arbitration with the insurer seeking a declaration of full coverage for the costs of defending against the Simon action. PIIC responded by filing a motion to stay the arbitration, and the two sides then agreed to a standstill agreement while the Simon Action was being litigated.
Attorneys for PIIC did not respond to a request for comment. But Nicholas Gravante, Jr., an attorney at Boies, Schiller & Flexner, who led the defense in the Simon Action and is also representing the various Warhol entities in the current proceeding, told ARTnewsletter: “The resources the Warhol Foundation will have to expend fighting PIIC, which it paid and trusted to protect it in this precise time of need, brings squarely into focus whether it still makes economic sense for art authentication boards to exist and provide their free public service. Aside from the wasted time, every dollar it spends litigating is diverted from the Foundation’s promotion of the arts, which is its one and only mission.”