Tuesday, July 15, 2014

The Stolen Renoir: How The Flea Market Purchaser Might Have Won With Art Title Insurance

In a January 2014 opinion, Judge Brinkema of the U.S. District Court for the Eastern District of Virginia ordered the possessor of a Pierre-Auguste Renoir painting dated 1879 and titled “Paysage Bords de Seine” to return the painting to the Baltimore Museum of Art. United States v. Baltimore Museum of Art, Case No. 1:13cv347 (Jan. 14, 2014).

In that case, Marcia Fuqua, the possessor of the painting, claimed to have purchased the painting at a flea market for $7 dollars. She argued that she had a superior claim to ownership of the painting since she was a bona fide purchaser for value. The Museum claimed that the painting was stolen and that under Virginia law Ms. Fuqua could not possibly be a bona fide purchaser of stolen property. This is due to the fact that in Virginia, one cannot rightly possess property that is stolen. Id.

Under Virginia common law, there is “a rebuttable presumption … that those in possession of the property are rightly in possession”. Id. at 7. Therefore, the Museum carried the burden to prove that the Renoir was actually stolen. The Museum did so by presenting a City of Baltimore police report from 1951, together with handwritten and typed notations in its catalog, minutes from a board meeting addressing the theft, and proof that the Museum received payment from the company insuring the painting (Saidie A. May had loaned the painting indefinitely to the Museum if the Museum agreed to insure it). Judge Brimkema accepted the evidence as conclusive of ownership and returned the Renoir to the museum. Of course, it did not help Ms. Fuqua’s case when her brother and others testified that the painting had been located in the family home for many years and could not have been purchased by Ms. Fuqua at a flea market.

Regardless of the fact that the painting was stolen, Ms. Fuqua probably could have protected her interest in the painting, valued between $70,000 and $100,000, by insuring the painting. In the case of Castle Cars, Inc. v. United States Fire Insurance Company, the Virginia Supreme Court upheld the insurance claim of a used car dealership after one of its vehicles was stolen, despite the fact that the vehicle had previously been stolen. 221 Va. 793 (1981). The Court ruled that although the car dealership did not legally own the stolen vehicle, it did have an insurable interest in the vehicle.

Purchasing title insurance on a work of fine art can protect the possessor against claims of bad title. In the case of the stolen Renoir, title insurance might have reimbursed Ms. Fuqua for her losses (up to the value of the painting) and for her attorney fees. Of course, if Ms. Fuqua made any misrepresentations to the insurance company, she would face larger legal problems. In addition, since every insurance policy is different, the provisions relating to stolen property should be carefully reviewed in each case.