A federal judge has dismissed a lawsuit over insurance payments for five artworks destroyed in a 2022 house fire in west Michigan, among them three paintings by the French impressionist Claude Monet collectively worth more than $45 million.
The case had proceeded on the basis of a lie told by an insurance agent working for the artworks’ owners, according to an opinion handed down in January by U.S. District Judge Robert Jonker.
After the lie came to light, he wrote, their arguments could no longer pass muster.
Fire
The case began with a blaze.
A lakefront mansion in Pentwater Township caught fire on the night of June 2, 2022. It burned for more than 20 minutes before anyone called the fire department and for another half hour while firefighters searched for the source of the smoke.
By the time they found it, the fire had “a huge head start,” Pentwater Fire Chief Jonathan Hughart said.
It burned to the ground. The five artworks burned with it.
The house was owned by Julie Halbower and the Samonica Pentwater Trust. Julie Halbower’s husband, Matthew Halbower, is founder of the hedge fund Pentwater Capital Management.
Earlier that year, he had taken out an insurance policy on the couple’s art collection that would cover more than $93 million in losses.
In the wake of the fire, the insurer, Hiscox Syndicate 33 of Lloyd’s of London, paid out more than $31 million for three paintings that were part of the initial policy. It did not pay for two others.
Julie Halbower sued on behalf of the Halbower legacy trust alleging that the company had not only improperly failed to pay for those paintings but had paid less than the policy promised for the other three.
“La Route de Vetheuil,” an 1880 painting by the French impressionist Claude Monet, was destroyed in a 2022 house fire in Pentwater Township.
Monet
The initial court filings took pains to conceal the identity of the artworks in question, referring to them only by the pseudonyms “Cliff,” “Path,” “Castle,” “Prairie” and “River.”
But documents filed later in the case name one definitively, give strong clues as to the identities of three others and hints about the fifth.
The only painting identified clearly in court records is “Prairie, ciel nuageux,” which Monet painted in the summer of 1890. It showed a flower-filled field underneath a bright but cloudy sky, with woods and haystacks in the distance.
It is mentioned by name in an email from Tonja Van Roy, formerly the president of Pegasus Insurance Services, which was included in court filings.
Matching a 2021 inventory of paintings covered by the Halbowers’ insurance policy with the pseudonyms, a list of paintings that survived the fire and the amounts of the insurance payments for three of the destroyed paintings gives clues as to their identity.
“Path” is most likely Monet’s “La Route de Vetheuil,” a painting of the road leading into the village along the Seine where the artist lived in 1880. Matthew Halbower referred to it in an email included in court records as “Monet Path” and lists its value as $14 million. Hiscox would pay the Halbowers $16 million for the painting after it burned.
“Cliff” is probably Monet’s “Falaise a Varengeville,” an 1882 work depicting the jagged cliffs along the Normandy coast. Halbower refers to it as “Monet Cliff” in his email and lists its value as $14 million. Hiscox paid out $15 million after it was destroyed.
“Castle” is probably “Ruines de Passy-les-Tours, effet de soleil” by the French avant-garde painter Francis Picabia. Halbower listed its value at $325,000. Hiscox paid $333,315 in response to the insurance claim.
None of those paintings appears on a list of artworks that survived the fire.
Court records say “River” did not appear on the 2021 inventory, but subsequent filings do contain one possible clue.
On a list of potential witnesses in the case, Julie Halbower included the CEO and manager of a Naples, Florida, art gallery who “may have knowledge regarding the August 12, 2022, appraisal of the Herzog painting.”
In the wake of the fire, the Halbowers still owned at least one painting by Hermann Herzog, a landscape artist associated with the Hudson River School, according to emails included in court filings.
It’s possible that “River” was another one. Herzog did paint a lot of rivers.
“Falaise a Varengeville,” an 1882 painting by Claude Monet, was destroyed in a 2022 house fire in Pentwater Township.
Discovery
Nearly two years into litigation, both sides made a discovery that changed the terms of the dispute.
A November 2021 email from Van Roy, the insurance agent, showing that she had added “Prairie, ciel nuageux” to the insurance policy “was, in fact doctored by Ms. Van Roy during the submission of the claim to Hiscox to appear as if it had been sent,” according Jonker’s opinion.
Hiscox didn’t cover the painting, which had been assessed at more than $14 million, because they’d never been told about it.
Both sides agreed that Hiscox had never been told about “River.” The judge didn’t buy the argument that the policy required them to cover it anyhow.
Halbower filed an amended complaint, but the arguments they were left with rested on “a fundamentally new coverage theory that the language of the Lloyd’s policy cannot possibly support,” the judge wrote.
Attorneys representing Hiscox and Julie Halbower did not immediately respond to requests for comment.
Van Roy did not respond to a text message sent to her cell phone.
She pleaded guilty to one federal count of wire fraud in January after a California Department of Insurance investigation in an unrelated case determined that she had stolen more than $3.7 million from AFCO Credit Corporation via falsified loan applications.
Hanasab Insurance Services, a company that Van Roy worked for in the months before the fire, and High Street Insurance Partners, a company that later acquired Hanasab, did not respond to messages seeking comment.
A second suit
The Halbowers likely didn’t go uncompensated, however.
Julie Halbower sued Van Roy, Pegasus, Hanasab and High Street in Oceana County last fall, over Van Roy’s failure to tell Hiscox about “Prairie, ciel nuageux” and alleging that she had also failed to request a copy of a new appraisal done in 2022 that showed the artworks had increased in value.
Had she had done so, the suit said, Hiscox would have been obligated to reimburse the Halbowers based on the new higher assessments.
That lawsuit was settled out of court in December. The terms of the settlement were not disclosed.
