A federal judge has dismissed a high-profile lawsuit over insurance payouts for five artworks destroyed in a fire, including three paintings by Claude Monet collectively worth over $45 million, following new revelations over the contested policy. The news was first reported by local Michigan news site Mlive.
The dispute pitted Julie and Matthew Halbower, and the trust that owns their art collection, against a syndicate of insurers operating under Hiscox, an underwriter for Lloyds of London. Matthew is the founder and CEO of Florida-based Pentwater Capital Management, a hedge fund that manages some $10 billion and is known for making millions by betting against the Federal Trade Commission’s antitrust efforts.
ARTnews has contacted the legal representatives of Hiscox and the Halbowers for comment.
The Halbowers initially filed suit in August 2022, two months after a fire destroyed their Michigan home. The initial court documents state that the blaze resulted in the loss of five works of “fine art insured under a Fine Art Policy issued by Howden Insurance Brokers Limited,” and underwritten by Hiscox. The policy had liability limit, or the maximum amount an insurance company will pay for a claim, of $100 million.
The Halbowers claimed that the insurer failed to reimburse the trust for the total value of three artworks that were lost in the fire, as well as two additional works the collectors alleged were covered by the policy. The initial court documents concealed the identity of the paintings, rather referring to them by the pseudonyms “Cliff,” “Path,” “Castle,” “Prairie,” and “River.”
An investigation by Mlive matched a 2021 inventory of paintings included by the collectors’ insurance policy to those reportedly lost to the fire, establishing the titles of two of the three works in question: Monet’s Falaise at Varengeiville (1882), appraised at $14 million and paid out for $15 million, and Francis Picabia’s Ruine de Passy-Les Tours effet de soleil (1906), which was appraised at $325,000 and paid out for $333,000.
The two works the Halbowers said they had made claims on but had not received reimbursement also include Prairie, ciel nuageux, an 1890 painting by Monet with a fair market value at the time of the filing of $14.5 million.
“River” has been speculated as a painting by Hermann Herzog, an artist associated with the Hudson River School, given his mention in emails cited by the court filings, as well as potential witnesses including the owner of a Florida art gallery who “may have knowledge regarding the August 12, 2022, appraisal of the Herzog painting.” Court materials also supports its identity as Monet’s La Seine press du Vetheuil (1878), which had a fair market value of $13 million, per an email exchange between the collectors and a third party involved in listing assets for the policy.
The two-year litigation only ended with the discovery of a 2021 email from Tonja Van Roy, an insurance agent, that revealed how Van Roy had retroactively added Prairie, ciel nuageux to the Halbowers’ insurance policy. The policy was “doctored by Ms. Van Roy during the submission of the claim to Hiscox to appear as if it had been sent,” Judge Jonker wrote in his opinion in January. Hiscox did not cover the painting, an asset worth more than $14 million, because they weren’t asked to.
The Halbowers filed an amended complaint when the revelation came to light; however, the case now hinged on “a fundamentally new coverage theory that the language of the Lloyd’s policy cannot possibly support,” Jonker wrote.
Roy plead guilty in an unrelated case to one federal count of wire fraud in January after a Department of Insurance investigation found that she had stolen over than $3.7 million from AFCO Credit Corporation.
Julie Halbower sued Van Roy and her former employers, Pegasus Insurance Services, Hanasab and High Street, the company that acquired Hanasab, last fall over her omission of Prairie, ciel nuageux. Halbower alleged that Roy’s failure to request a new appraisal in 2022 negatively impacted the value of the artworks. The lawsuit was settled out of court in December.
