Insurance company disputes Pebble Beach art heist claim

Mercury News: Insurance company disputes Pebble Beach art heist claim


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Insurance company disputes Pebble Beach art heist claim
By LARRY PARSONS - Monterey County Herald


Posted: 07/09/2011 07:47:37 AM PDT
Updated: 07/09/2011 07:47:37 AM PDT


MONTEREY -- The saga of the great Pebble Beach art heist marches on -- in court.

The owner of a reputed world-class collection of art reported stolen in a September 2009 burglary of a rented Sunridge Road home is suing the company that issued his renter's insurance policy.

The suit filed in Monterey County Superior Court by Ralph Kennaugh accuses Farmers Insurance Group of breach of contract and breach of good faith. It accuses the insurer of wrongfully accusing Kennaugh's associate, Angelo Amadio, of complicity in the theft and failing to conduct a thorough investigation.

The insurance company rejected the claim based on "concealment or fraud," according to court papers.

The suit, which seeks $500,000 the policy limit, general damages for emotional distress and $1.5 million in punitive damages, accuses the insurance company of making unreasonable demands for information, documents and testimony to simply harass the plaintiff.

Kennaugh, a retired Harvard Medical School physician, and Amadio caused a sensation after they reported the loss of millions of dollars of artwork including works by Jackson Pollock, Van Gogh, Miro and Rembrandt. A website devoted to the case claims the theft ranked as the second-largest art heist in U.S. history.

They sued the Monterey County Sheriff's Office in September, accusing the agency of defaming them through statements about the case by a former spokesman. A Superior Court Judge dismissed the suit in December, a ruling Amadio said would be appealed.

The suit filed June 30 on Kennaugh's behalf contained an exchange of three letters between a Farmers Insurance zone manager and Kennaugh's attorney, Christopher Cayce. The letters show a deep gulf between the parties about lost artwork.

An April 22 letter from Farmers Insurance denying Kennaugh's claim details nine areas where the insurance company said there were "misrepresentations and concealment of material facts."

Some of the specifics cited by the insurance company include: a lack of appraisal documentation, third-party witnesses who cast doubt about the existence of the Jackson Pollock painting at all, fabricated letters about a security system, and misrepresentations about how the artwork was transported from Boston to Pebble Beach.

"It is our belief that the misrepresentations and concealment were intentionally committed by the insured and Angelo Amadio in order to obtain insurance benefits in excess to which they would otherwise be entitled," said insurance company manager Bruce Litton in the letter.

Cayce responded in a May 12 letter in which he asserted there was no evidence of concealment or fraud by Kennaugh. Farmers Insurance's claim denial "is solely based on its inadequate investigation of the loss of the Pollock artwork," Cayce said.

Kennaugh's attorney said the insurance company failed to interview witnesses who knew about the stolen art and had all the documents pertinent to the claim.

"To put it bluntly you have more work to do before you just out of hand deny Dr. Kennaugh's claim," Cayce wrote.

In a June 10 letter, Litton responded to the assertion the insurance company hadn't done a thorough job. "Nothing could be further from the truth," he said.

He said sworn statements were taken from more than 20 people, thousands of pages of documents were reviewed and "countless hours performing art research have been spent."

"Seemingly with each attempt to validate the artwork, more questions than answers were obtained," Litton said.

The insurance company had trouble with Amadio's account that he installed a climate control system in a rental truck to transport the artwork across country to Pebble Beach.

"The technical description of the climate appears impossible," Litton said. Moreover, he said, Amadio's co-driver "denies any climate control."

A case management conference is scheduled for Nov. 4.