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XL Specialty Ins. Co., as Subrogee of Chowaiki & Co., Fine Art Ltd. v. Christie's Fine Art Storage Services, Inc.

137 A.D.3d 563 (2016)

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XL Specialty Ins. Co., as Subrogee of Chowaiki & Co., Fine Art Ltd. v. Christie’s Fine Art Storage Services, Inc.

New York Supreme Court, Appellate Division

137 A.D.3d 563 (2016)

Facts

Chowaiki & Co., Fine Art Ltd. (Chowaiki), a private art gallery, entered an agreement with Christie’s Fine Art Storage Services, Inc. (Christie’s) (defendant) to store some of its fine-art pieces for one year. The storage agreement gave Chowaiki an option to (1) have Christie’s accept liability for loss or damage to the goods limited by the lower of $100,000 or the market value of goods or (2) sign a loss or damage waiver, which included an insurance requirement and a waiver of subrogation. Chowaiki opted for the loss/damage waiver. Chowaiki’s artwork was stored on the first floor of Christie’s and was damaged during Hurricane Sandy by floodwater. Christie’s flooded in a storm prior to Hurricane Sandy, with little damage to any artwork because first-floor pieces were elevated. Christie’s emailed Chowaiki prior to the storm’s landfall that precautions would be taken to protect the artwork; however, Chowaiki’s artwork was damaged. XL Specialty Insurance Co., as subrogee of Chowaiki & Co., Fine Art Ltd. (XL) (plaintiff), paid for damages to the artwork and sued Christie’s for subrogation. A motion court found that the storage agreement created a bailor/bailee relationship between Chowaiki and Christie’s and that the waiver of subrogation contained in the loss/damage waiver was enforceable, barring this action. XL appealed.

Rule of Law

Issue

Holding and Reasoning

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