A federal judge dealt a blow to World Trade Center lease-holder Larry Silverstein yesterday, ruling in favor of a group of insurance companies that the Sept. 11 attack on the Twin Towers was one event, not two.
In a battle with his insurers, Silverstein claims the terror attack was two events – which would double the payout to nearly $7 billion.
Federal Judge John Martin decided in favor of three companies with a minor stake in the mammoth insurance deal – accounting for only $112 million of Silverstein’s $3.5 billion coverage.
The judge said contracts signed by Hartford Fire Insurance Co., Royal Indemnity Co., and St. Paul Fire and Marine Insurance Co. clearly define the terror attack as a single “occurrence.”
“The ordinary businessman would have no doubt that when two hijacked planes hit the Twin Towers in a 16-minute period, the total destruction of the World Trade Center resulted from one series of similar causes,” Martin wrote.
Martin did not rule on the larger dispute between Silverstein and 17 other insurers, led by Swiss Re. That case is scheduled for trial in November.
The head of Swiss Re’s U.S. affiliates hailed yesterday’s ruling.
“The Silverstein case is in shambles,” said Jacques E. Dubois, chairman of Swiss Re American Holding Corp. “Things are falling into place from the insurers’ standpoint.”
John Mechanic, a real-estate lawyer not involved in the case, said the ruling “is not good” for Silverstein – but added: “I don’t think it’s conclusive one way or the other.”
Silverstein declined comment, but a spokesman said the developer disagrees with the ruling and will appeal.
Martin also signaled in his ruling that he intends to focus the upcoming trial in the insurance dispute on the fine print of contracts and business deals – and away from the emotional impact of the trade center attack.
The judge said the case is not about “the public interest in the rebuilding of the World Trade Center” – but about the dry question of what contract language the different firms had agreed to.
While the case has frequently been described as a dispute over whether the tragedy can be defined as one or two occurrences, it largely boils down to a disagreement over which set of insurance documents were in effect on Sept. 11.
The judge said the three insurance companies involved in yesterday’s ruling had signed documents that clearly defined the Sept. 11 attack as a single occurrence.
Silverstein argues that his insurers had agreed to a different set of documents that do not define “occurrence” – and that state law backs up his double-payout argument.
