Michael Ovitz Files Lawsuit Against AIG Over Artwork Loss Valued at $2.5M

Mark Von Holden/Getty Images for Kimberly Ovitz

The suit involves a piece of art by American painter and photographer Richard Prince.

Michael Ovitz has filed a lawsuit against insurance company American International Group (AIG) and Chartis Property Casualty Co. claiming bad faith breach of contract in allegedly failing to reimburse Ovitz for a loss of $2.5 million over a piece of art, Untitled, by contemporary American painter Richard Prince.

The suit, filed April 17 in Los Angeles County Superior Court, is part of a legal saga that dates back to 2013, when Ovitz sued Perry Rubenstein Gallery, alleging that the L.A. gallery improperly sold two pieces of Prince's work, Untitled and Nobody's Home, and failed to deliver proceeds promised to the former Walt Disney Company president from those sales. 

According to the new suit, the defendants agreed to pay the scheduled amount of $1.6 million to cover costs of Nobody's Home but have yet to pay out a claim for Untitled. The suit claims that the defendants "rested their denial of coverage on an unpublished opinion of the California Court of Appeals that relied on authority from an intermediate appellate court of the state of Florida. Neither has precedential value to this case, the suit alleges. 

"While Defendants ultimately acknowledged coverage and full insurance benefits for another loss under almost identical circumstances, Defendants steadfastly, unreasonably, and without probable cause, refused to provide coverage for the loss at issue herein," and thus represented bad faith, the suit states. 

AIG could not be reached at press time. Ovitz is listed as plaintiff along with his ex-wife, Judy Ovitz. (The CAA co-founder is currently engaged to Tamara Mellon.)

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