Silverstein Case goes to Jury

Discussion in 'Politics & Religion' started by aphexcoil, Apr 20, 2004.

  1. Silverstein World Trade Center Insurance Case Goes to Jury
    April 19 (Bloomberg) --


    World Trade Center leaseholder Larry Silverstein's claim that his insurers owe him almost twice their policy limits, or as much as $6.8 billion, based on a switch in insurance forms, went to a jury in U.S. court in New York after a judge spent 41 minutes instructing them on applicable law.

    Silverstein's insurers, led by Swiss Reinsurance Co., filed suit one month after the Sept. 11 terrorist attacks, saying they owed him no more than $3.55 billion, the amount of insurance he bought in July 2001 when he leased the complex for 99 years from the Port Authority of New York and New Jersey. The developer said he may be owed twice that, based on a change in policy forms that may recognize the attacks by two hijacked jets as two losses.

    In his charge to the six-man, five-woman jury, U.S. District Court Judge Michael Mukasey told them their job is to determine whether the form insurers say was in place -- a Willis Group Holdings Ltd. document known as Wilprop 2000 -- governed each insurer's agreement to provide coverage on Sept. 11, without sympathy or prejudice toward Silverstein or the insurers.

    The trial is the first of three possible proceedings that will determine how much Silverstein will get to rebuild commercial office space at the trade center site, including the proposed 1,776-foot Freedom Tower. New York Governor George Pataki has championed the rebuilding of Ground Zero as critical to lower Manhattan's economic recovery.

    The first proceeding involves 13 of the 22 members of Silverstein's insurance pool, including Swiss Re, Lloyds of London -- which provided 19 percent of the coverage -- Chubb Corp. and Employers Insurance of Wausau. All 13 claim to have offered insurance based on the Wilprop form, which was circulated by the developer's insurance broker, Willis Group, the month before he signed the lease.

    `Occurrence' Definition

    The Wilprop form contains a definition of the word ``occurrence'' that would limit Silverstein to no more than a $3.55 billion total-loss payment. Silverstein and Willis say that they switched each insurer to another form, written by Travelers Indemnity Co., which has no such definition, and may entitle Silverstein to double payouts on the basis that two jets hitting each of the twin towers constitutes two different occurrences.

    According to the case presented by Silverstein's attorney, Herbert Wachtell, Swiss Re received the Travelers form in an e- mail three days before its representative signed a revised placing slip. Barry Ostrager, the attorney for Zurich-based Swiss Re -- the world's second-largest reinsurer and holder of 22 percent of Silverstein's coverage, the largest share -- said the e-mail wasn't explicit enough to constitute a change in operative forms.

    Except for one insurer, Allianz AG, which isn't in this phase of the case, none of the insurers had final insurance contracts on Sept. 11.

    Waived Right?

    Wachtell said Lloyd of London's member insurers all waived their right to specify a policy form, and the others were told in conversations with their underwriters that Willis had switched the form to Travelers. Lawyers for the insurers, including Lloyds's David Boies, said Willis never documented the switch and never sent them the Travelers form before the attack took place.

    The 10-week trial is to be followed by a second phase involving Travelers, Allianz, two other insurers who didn't accept the Wilprop form, and any insurer that loses the first phase, to determine whether the trade center attack was one occurrence or two. The third phase would set damages.

    The case is SR International Business Insurance Co. Ltd. v. World Trade Center Properties LLC et al, 01-CIV-9291.

    Insurers, Coverage Amounts

    The plaintiff insurers in the first phase of the trial, their base of operations and the amount of their policies on a single occurrence are:

    Swiss Reinsurance Co. of Zurich, Switzerland, $778.1 million.

    Lloyds of London Syndicates, U.K., $662.8 million.

    Federal Insurance Co., a unit of Chubb Corp., U.S., $254.3 million.

    Royal Specialty Underwriting Inc., U.S., $178 million.

    Swiss Reinsurance UK, U.K., $83.3 million.

    Employers Insurance of Wausau, U.S., $64.9 million.

    Zurich America Co., U.S., $45.7 million.

    Great Lakes Reinsurance PLC of London, U.K., $35 million.

    Wurttembergische Versicherung AG, U.K., $16 million.

    QBE International Insurance Ltd., U.K., $12.5 million.

    Lexington Insurance Co., U.S., $5 million.

    Copenhagen Reinsurance Co., U.K., $4 million.

    Twin City Fire Insurance Co., U.S., a unit of Hartford Financial Services Group Inc., $2.5 million.

    Houston Casualty Co., U.K., $2.4 million.
     
  2. This is really a fascinating case. One occurrence or two? If I'm on the jury I think I would have to say two. If Tower One toppled into Tower Two, then it's clearly one occurrence. Two separate hijacked jets, even if part of a coordinated plan, seem to me to constitute two occurrences.
     
  3. your walking down an alley with $500 in your pocket, not worried cause you got muggers insurance $500/occurrence.

    2 guys jump out of the shadows - one guy beats the shit out of you and takes $250 - the next the beats you and takes your other $250. your insurance should pay out $1000?
     
  4. That's it , you solved the case. Call the judge and clear things up for him.

    Boys, we have genuis in our midst!
     
  5. thats right bitch, case closed
     
  6. What's really a fascinating,
    This was the first time since the Towers were built in the 70's that the property's control was passed to A Private Entity just few months before 9/11..... :D:D:D
     
  7. Is there a legal definition of "occurrence" written within the documents themselves? In the regular world, words like that can retain a rather loose definition. For something to "occur" means that it happens -- some cause brings out an effect.

    However, the legal definition of "occurrence" as it is defined and written in the insurance documents might have a more precise meaning.

    If I were sitting on the jury, I would be inclined to call the entire "event" (both buildings getting destroyed) as one occurrence. My reasoning for this is that one group orchestrated one attack which consisted of multiple strikes -- however, the entire event as it stands by itself would, in my mind, be a single occurrence of terrorism.

    However, that would be my initial inclination and I'm sure I could be easily swayed the other way if I knew more about the law / definition. I'd have to read the documents themselves.
     
  8. In either case, Mr Silverstein will make out HUGE:

    Owes 563 million (borrowed money) will collect either 3.5 BILLION or 7 BILLION!!!!! :cool:

    And the transaction was completed 7 weeks before the WTC attacks

    GMAC loan dispute ends
    It expects to collect payment on World Trade Center
    November 22, 2003

    General Motors Corp.'s giant mortgage-lending arm says it will get back $563 million it lent to the owner of the World Trade Center weeks before the Sept. 11, 2001, terrorist attacks.

    Two months after suing to get its money back, General Motors Acceptance Corp. said Friday it had reached an agreement with World Trade Center Properties LLC, which leased the towers owned by the Port Authority of New York and New Jersey.

    The conditional settlement ends a two-year dispute between the companies and allows site reconstruction to proceed without lengthy delays. GMAC lent $563 million to the part-owner of the World Trade Center seven weeks before the terrorist attacks destroyed New York's twin towers.
    http://www.freep.com/money/autonews/gmac22_20031122.htm


    The next question would be, was this an act of war (one occurrence as GWB stated in his first speech):confused: or will go under accident (two incidents)?:confused: 3.5 billion windfall at stake, it can buy lots of lawyering, jury selection and "appropriate" media coverage:D :D :D :D

    Ya got to love it
     
  9. No because your loss was 250 each incident and that is what the insurance will reimburse you for. Casualty insurance works differently than life insurance. But you can only die once, so there is not a problem of repeat claims.
     
  10. Probably "occurrence" is a defined term in the policies but that definition may not be precise enough to cover this dispute. The dictionary definition includes the terms "event" and "incident". So the question becomes, was the crucial "event" the collision with the building or the entire conspiracy? I lean towards the "two event" conclusion because there were two separate planes that were operated independently of each other, although admittedly according to a common plan.

    I see it as a very close question. Let's say the buildings were destroyed during wartime in a multiple plane bombing attack. Then it seems to me there was one event, ie a bombardment. Certainly would make a great law school exam question.
     
    #10     Apr 20, 2004