Two insurance companies have requested a court ruling to deny a claim exceeding $19.7 million by the owners of several allegedly forged Jean-Michel Basquiat paintings, which were seized during an FBI operation at the Orlando Museum of Art in 2022. The insurers argue that the owners must have suspected that the artworks were counterfeit and thus possess no real value.
Liberty Mutual Insurance Company and Great American Insurance Company are pursuing a declaratory judgment in Orlando, Florida, asserting that their policy does not extend coverage to counterfeit items.
“The defendants are not entitled to any compensation for this ‘loss’ because no actual loss has occurred,” the insurance companies contended in court documents submitted last year. “The paintings remain undamaged and intact.”
The owners have refuted the insurance companies’ claims, stating that they acted in good faith. They argue that the authenticity of the paintings should not influence the policy payout since the insurers did not conduct an authenticity check when the works were included under the insurance policy.
The paintings were loaned to the Orlando Museum of Art and displayed until they were confiscated by federal agents during the raid. In accordance with their display agreement, the museum added the owners to its fine arts insurance policy as additional insured parties. The owners subsequently filed a claim with the insurance providers, who responded by emphasizing that the policy did not cover the paintings due to their alleged lack of authenticity.
Michael Barzman, a former Los Angeles auctioneer, admitted guilt in 2023 to federal charges relating to making false statements to the FBI. He acknowledged that he and an accomplice fabricated the fake artworks and misleadingly attributed them to Basquiat.
Basquiat, a notable figure in the 1980s neo-Expressionism movement, gained fame in New York City before passing away from a drug overdose in 1988 at the age of 27. The Orlando Museum of Art was the first institution to showcase the more than twenty artworks that were reportedly discovered in an old storage unit, decades after Basquiat’s death.
Immediately following the reported unearthing of the paintings in 2012, doubts about their genuineness surfaced. Although the art was claimed to be created in 1982, experts noted discrepancies, such as one piece utilizing a FedEx font not introduced until 1994, years after Basquiat’s death, as pointed out in the federal warrant pertaining to the museum’s raid.
In addition, Thad Mumford, the television writer who owned the storage locker where the artwork was allegedly found, informed investigators that he had never owned any pieces by Basquiat and that the artworks were not present in the unit during his last visit. Mumford passed away in 2018.
Initially, the insurance companies filed their lawsuit in state court in Orlando. However, the owners have requested for the case to be moved to federal court, given that the involved parties reside in different states.
In a separate matter, the museum has taken legal action against its former executive director for fraud and breach of contract, asserting that the institution’s reputation suffered greatly as a result. The former executive director, Aaron De Groft, has countered with a suit of his own, claiming wrongful termination and defamation.
The insurance providers have requested in court that their lawsuit be reverted to state court, claiming that the proceedings involving the museum and its former director are ongoing in that jurisdiction. They believe that the outcome of the case with De Groft will clarify the questions surrounding the authenticity of the artworks and determine the damages owed if the pieces are confirmed as counterfeits.
