JUNE 26, 2013 Warhol Foundation Reaches Settlement with Philadelphia Indemnity Insurance Company
The Andy Warhol Foundation for the Visual Arts is pleased to announce that it has concluded a settlement with its insurer, Philadelphia Indemnity Insurance Company, that fully resolves the Foundation’s claims against the insurer for refusing to pay the Foundation’s legal costs incurred in defending itself against an antitrust case brought by Joe Simon and a “copy-cat” suit by Susan Shaer. Both suits alleged an absurd scheme to manipulate the prices for Andy Warhol’s artwork; yet despite their lawyers’ aggressive and often harassing pursuit of document, deposition and expert discovery proceedings, Simon and Shaer were forced to dismiss their claims in late 2010 with prejudice and with no payments or other recompense to them, admitting in open court that they had no basis for the claims at the time they were filed and that despite having persuaded the court to force the Foundation to engage in wasteful discovery they had found no basis for the claims.
The Foundation’s insurer nevertheless refused to reimburse the Foundation for its legal costs incurred in defending these bogus suits, alleging that the Foundation’s insurance policies did not cover claims of this nature. The Foundation therefore was forced to sue its insurance company to recover on the policies. In 2012 the court issued a critical court ruling in favor of the Foundation, finding that in fact the Foundation’s insurance policies do cover such costs. Accordingly, little remained of the case; and the parties settled it on very favorable terms for the Foundation, without the need for trial.
We note that The New York Review of Books falsely reported in its June 20, 2013 issue that the Foundation and its insurer are actively preparing the case for trial. The New York Review of Books published that report without ever having contacted the Foundation to verify its facts and thus failed to exercise ordinary journalistic care; had it done so, that false report could easily have been avoided.
Notwithstanding, the Foundation is pleased to announce this settlement, with the insurer having paid back to the Foundation the lion’s share of our legal costs. These funds have now been restored to the Foundation’s endowment, where they will be used to provide much-needed grant support, all in fulfillment of the Foundation’s charitable mission to advance the visual arts.