[Amazing how all those insurance companies have been litigating for years on whether 2 airplanes count as 1 or 2 insurance incidents, but never on whether demolition explosives count as insurance incidents at all... And whatever happened to the concept of a qualifying period ?!]
http://biz.yahoo.com/law/061019/7b2c5609d7386ddc0340c6b8ca5d4f67.html?.v=1 2nd Circuit Upholds Verdicts in Multibillion-Dollar World Trade Center Insurance Dispute Thursday October 19, 2:54 am ET Mark Hamblett, New York Law Journal Law.com World Trade Center leaseholder Larry Silverstein's attempt to win at least $2 billion more from insurers on the theory that the two airplane attacks on Sept. 11, 2001, were two separate occurrences was rebuffed Wednesday. The 2nd U.S. Circuit Court of Appeals upheld a Southern District of New York jury verdict that the bulk of insurance policies covering the Trade Center treated the terror attacks as a single occurrence. However, the court also upheld a victory awarded Silverstein by the jury in the second phase of trial, agreeing that temporary insurance policies in effect when terrorists leveled the buildings required treatment of the attack as two occurrences. That ruling meant that nine insurance companies will have to pay double the roughly $1 billion in coverage under their policies. Judges John M. Walker Jr., Jose Cabranes and Rosemary Pooler decided the appeals in SR International Business Insurance Co. v. World Trade Center Properties, lead docket 04-4500-cv. Walker wrote the opinion of the panel. The ruling is likely the final resolution of a massive insurance dispute that began shortly after the terror attacks. Silverstein originally sought more than $7 billion. He has been awarded about $4.5 billion. Silverstein had agreed on a 99-year lease for the World Trade Center buildings in the spring of 2001, and spent the summer negotiating a multilayer insurance program that provided for $3.54 billion in coverage on a "per occurrence" basis. But for all but one of the insurers, final insurance contracts had not been signed when the hijackers steered two planes into the North and South towers at 8:48 and 9:03 on the morning of Sept. 11. The litigation began when one insurance company filed suit seeking a declaratory judgment in the Southern District on its obligations under the still-to-be-completed insurance policies. Silverstein filed counterclaims seeking to double the $3.54 billion to over $7 billion, setting up one of the largest, and certainly the most emotional, insurance fights in history. Southern District Judge John Martin held that three insurers were governed by the so-called "WilProp" form -- the form Silverstein's insurance broker used during negotiations. The form treated the destruction by two planes as one occurrence. Judge Martin also denied summary judgment to Silverstein on his claim that the undefined term "occurrence" in the policy of Travelers Indemnity Co., one of the companies with the most at stake in the litigation, meant that, as a matter of law, the attacks were two occurrences. The 2nd Circuit affirmed Judge Martin. Due to Martin's retirement from the bench, the case was reassigned to Chief Judge Michael Mukasey, who proceeded to hold a two-phase trial. NO EVIDENTIARY ERRORS In the first phase, a jury found that nine of 12 participating insurers and 20 Lloyd's of London syndicates were bound by the WilProp form -- leaving Silverstein with only a single-occurrence recovery. But three insurers were found not to be governed by the form and they were joined in the second phase of the trial by six insurers who conceded the same. The jury in the second phase found that all nine insurers were subject to payments on a two-occurrence basis. Wednesday, the circuit rejected Silverstein's arguments on phase one, and did the same for the losing insurers arguments in phase two. Both sides had argued that they should have prevailed as a matter of law and the issues never should have reached a jury. The circuit also disagreed with both sides' claims that the verdicts were marred by evidentiary errors and flawed jury instructions. "Not surprisingly, however, neither side admits that any errors contributed to the judgments in their favor," Walker wrote. "As a result, we are led to believe that the same type of error that would require us to set aside one set of judgments are unfounded when it comes to the other set of judgments -- and vice versa." On Silverstein's claim that the issue never should have reached a jury, Judge Walker said, "The Silverstein parties ignore unfavorable evidence and rely on inferences that the jury was not required to make." Of the nine insurers who lost the second phase of the trial, eight appealed. One settled with Silverstein. The circuit rejected their claims that expert testimony as to custom and usage in the insurance industry should not have been allowed and that evidence of custom and usage in the industry was insufficient to send the matter to the jury. "We conclude that the Silverstein Parties brought forth evidence sufficient to establish an industry custom that insurers utilize a narrow definition of 'occurrence' in their industry forms," Judge Walker said. Similarly, the circuit found Silverstein had produced enough evidence of intent by the negotiating parties to show that the two plane attacks amounted to two occurrences. Barry Ostrager of Simpson Thacher & Bartlett represented SR International Business Insurance in the first phase of the trial and acted as lead counsel in the litigation because the company had a lead role in the coverage, more than 25 percent. A Silverstein victory would have doubled the approximately $975 million SR was obligated to pay. "Judge Musakey did a masterful job handling two hotly contested trials -- these were emotionally charged trials that took place just blocks from the World Trade Center," Ostrager said. Ostrager said he did not believe there were any constitutional issues that would give rise to an appeal to the U.S. Supreme Court. "Honestly I don't think there is any enormous surprise here -- I don't think the Silverstein parties are going to be shocked that the jury verdict on behalf of Swiss Re was affirmed," he said. Silverstein said in a statement Wednesday that he was "gratified" that the circuit upheld the jury's finding that the attacks "were two events for the purposes of determining how much the insurers have to pay." He continued, "Over the past five years, the World Trade Center insurers have engaged in an all-out campaign to shirk their legal and moral obligation to honor their policies and help finance the rebuilding of the World Trade Center. All the money owed by the insurers is needed and has been committed to the rebuilding ... The court has spoken yet again, and the time has come for all of the insurers to finally pay what they owe." Silverstein was represented by Herbert M. Wachtell of Wachtell, Lipton, Rosen & Katz. ________________________________________________________ "Let's pull it." --Larry Silverstein on WTC 7, on camera ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SpamWall: Mail to this addy is deleted unread unless it contains the keyword "igve". _______________________________________________ Futurework mailing list Futurework@fes.uwaterloo.ca http://fes.uwaterloo.ca/mailman/listinfo/futurework
