Frigon v. Pacific Indemnity Co.
United States District Court for the Northern District of Illinois
2007 WL 756384 (2007)

- Written by Margot Parmenter, JD
Facts
Henry Frigon (plaintiff) was an art collector who purchased numerous paintings from a Chicago gallery. Frigon insured his paintings with a policy written by Pacific Indemnity Company (defendant). The policy covered all risk of physical loss of the paintings, unless specifically excluded. Between 1997 and 2002, Frigon consigned 11 of his paintings back to the gallery for resale. Each of the consignments was accompanied by a consignment agreement that included an intentional-act provision, which excluded losses that resulted from foreseeable consequences of Frigon’s intentional acts. Unfortunately, the gallery was insufficiently capitalized. By December 2002, Frigon’s consigned paintings had been sold to bona fide purchasers without his knowledge for less than the minimum sale price, and the gallery had kept the money rather than delivering it to him. Frigon was never told anything about the sales until January 2003, when the gallerist informed him that one of his paintings had sold and that he should expect 12 payments. When payments ceased prematurely, Frigon demanded the return of his paintings. In April 2003, the gallery admitted to selling the paintings and spending the proceeds. In May 2003, Frigon reported the stolen paintings to Pacific Indemnity as a loss under his policy. Pacific Indemnity refused coverage. Frigon sued. In warring motions for summary judgment, Frigon sought to establish coverage. Pacific Indemnity argued that Frigon had not established a covered loss because Frigon had sold the paintings on consignment and was thus deprived not of the paintings but of their sale price. Pacific Indemnity argued alternatively that Frigon’s loss was excluded by the policy’s intentional-act provision.
Rule of Law
Issue
Holding and Reasoning (Gettleman, J.)
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