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Michael Ovitz Sues AIG|for $2.5M in Stolen Art

LOS ANGELES (CN) - Michael Ovitz sued AIG for $2.5 million, claiming the insurer refused to indemnify him for a Richard Prince painting that an art dealer stole from him.

Ovitz sued American International Group and its Chartis Property Casualty subsidiary on April 17 in Superior Court.

He claims that Perry Rubinstein and his gallery stole from him the Prince painting, "Untitled (de Kooning)," and a painting called "Nobody's Home," by an unidentified artist.

Rubinstein is not a defendant in this case. Ovitz claims the dealer stole the painting by promising to sell them on consignment and pay Ovitz for him, minus commissions.

"In fact, Rubinstein had orchestrated a criminal fraud, of which the supposed consignment of 'Untitled' was but a single component," Ovitz says in the complaint.

He claims that Rubinstein sold both paintings, and never paid him dime one. This constitutes theft, for which he was insured, Ovitz says.

He claims that the insurers offered to pay "up to $575,000" for "Nobody's Home," which Ovitz claims had a "scheduled insured value" of $1.6 million, and a market value of $2.4 million. Only after Ovitz paid "substantial" money to his attorneys did the insurers agree to pay $1.6 million for "Nobody's Home," Ovitz says, but they refuse to indemnify him for the theft of "Untitled."

Ovitz says the paintings were stolen in the same scheme of criminal fraud, and that the insurers owe him. He says they based their denial of coverage on an unpublished opinion from a California Court of Appeal, and that "even worse," that unpublished opinion was based on a Florida appellate court ruling "which the Florida Supreme Court repudiated even before the unpublished California Court of Appeal opinion was issued."

Ovitz seeks $2.5 million and punitive damages for breach of contract and breach of faith. He is represented by Eric George with Browne George & Ross.

(Due to an editing error, an earlier version of this story identified the plaintiff as Steve Ovitz.)

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