Overview
The Steptoe litigation team successfully defended AIG from $410 million dollars in claims for coverage for five paintings—including works from well-known artists Andy Warhol and Cy Twombly—that were evacuated from billionaire Ronald Perelman’s mansion in the Hamptons during a fire seven years ago. As a result, the team was recognized as a runner-up in The AmLaw Litigation Daily Litigator of the Week Runners-Up and Shout-Outs.
After a three-week trial and years of litigation, Justice Joel Cohen of the New York County Commercial Division found that five well-known artworks by Warhol, Ruscha, and Twombly, encased in custom Plexiglas frames, were evacuated from billionaire Ronald Perelman's Hamptons mansion as a fire raged above in the attic, suffered no damage from the fire. He thus dismissed Perelman’s claim for $410 million plus interest in its entirety in a case involving an unusual insurance policy that allowed surrender for the full insured value—itself three or four times higher than the market value—upon any physical damage, no matter how minor or reparable. Complementing the "truly spectacular advocacy," Justice Cohen ruled that Perelman had failed to prove that the fire or evacuation efforts caused any changes to these five artworks.
At trial, a true collaboration of Steptoe, spearheaded by Charles Michael, plus co-counsel for the other insurers in the case—O'Melveny & Myers, led by Jonathan Rosenberg, and Clyde & Co., under Owen Carragher—methodically demolished Plaintiffs' scientific theories and pointed out the suspicious circumstances of the claim, which had been submitted almost two years after the fire when Perelman suffered enormous financial reversals. Charles Michael, cross-examining Plaintiffs' star witness, conservation scientist Dr. Jennifer Mass, showed how she had reversed her theories multiple times and conducted no experiments or modeling to test her theory that humidity from the conditions on the night of the fire would have sped damaging chemical reactions within the paintings. Examining Perelman, he established that, amid a billion-dollar asset sale to meet margin calls, another painting in the same room during the fire had been sold for $30 million with no disclosed fire damage. Jonathan Rosenberg similarly discredited Plaintiffs' fire expert, showing his failure to test how fast outside humidity would enter the painting frames. Owen Carragher, meanwhile, obtained an admission from the MacAndrews & Forbes executive responsible for handling the claim that no objective evidence of damage existed in March 2020 when the claim was made.
The Steptoe team representing AIG included partners Charles Michael and John O'Connor, senior counsel Roger Warin, of counsel Joseph Sanderson, associates Julie Wilson Lascano and Prakriti Luthra and paralegals Ruby Donaghu and Riley John, as well as former associates Joe McClure and Morgan Lucas and former paralegal Madeleine Danes.
Read more at Law.com and The New York Times (Subscription Required)
