CatoCooper13
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At issue: Whether firms must pay for one loss or two
Friday, September 26, 2003 Posted: 2332 GMT ( 7:32 AM HKT)
NEW YORK (CNN) -- A federal appeals court ruled Friday that a jury should decide if the crashes of two hijacked airliners into the twin towers of the World Trade Center constituted two separate attacks or occurrences, which might entitle the leaseholder to collect insurance twice.
The real estate developer, Larry Silverstein, contends that the crashes of two airliners nearly 20 minutes apart into the two 110-story towers, which collapsed independently of each other, should be considered separate events.
The insurers contend that the attack was a single occurrence.
At stake are billions of dollars that could be used to rebuild on the 16-acre trade center site. According to The Associated Press, Silverstein Properties estimates its attack-related losses at $8.2 billion, including $5.7 billion for the twin towers and related property.
Silverstein, which took over the trade center's lease only six weeks before September 11, 2001, had negotiated a total, maximum coverage of $3.55 billion per catastrophic occurrence with 24 insurance companies.
The ruling by the 2nd U.S. Circuit Court of Appeals centers on a dispute between 22 insurance companies and Silverstein. The two other insurers -- ACE Bermuda and XL Insurance -- have settled with Silverstein, agreeing to pay a total of $400 million.
At the heart of the dispute is the definition of "occurrence" -- defined differently in two industry forms used by the insurers -- and which form the firms intended to use.
Three other insurers were found liable for a single occurrence in a ruling by a trial judge last year, which was upheld by the appeals court.
Thus, Hartford Fire Insurance, Royal Indemnity Co., and St. Paul Fire and Marine Insurance owe a total of $112 million.
For Hartford, Royal, and St. Paul, the policy form defined a single occurrence as "all losses or damages that are attributable directly or indirectly to one cause or a series of similar causes ... irrespective of the period of time or area which such losses occur."
Form labeled 'ambiguous'
However, the court said that a jury should determine whether the attacks were two separate events under a different policy of Travelers Insurance.
The three-judge panel labeled Travelers' form "ambiguous" and said it "did not define the term 'occurrence.' " Silverstein contends that the Travelers Insurance policy form applies for the other 19 firms being sued.
"The question of how many occurrences the events of September 11th constituted is a question properly left to the fact-finder," the judges said. "To be sure, a jury could find two occurrences in this case ... or it could find that the terrorist attack, although manifested in two separate airplane crashes, was a single, continuous, planned event causing a continuum of damage that resulted in the total destruction of the WTC, and thus was a single occurrence."
Barry Ostrager, a lawyer for Swiss Re, which is responsible for about 25 percent of the trade center's insurance coverage, said in a telephone interview that the appeals court ruling was a "serious setback for the Silverstein claim, because the court has rejected his theory of the case."
Ostrager called Silverstein's two-occurrence theory a "fanciful claim."
Howard Rubenstein, a spokesman for Silverstein, said in a written statement that the appeals court decision applied only to the three firms responsible for only 3 percent of the total coverage.
"The terms governing the coverage of each insurer has to be determined on a case-by-case basis," Rubenstein said.
"We are fully confident that a jury hearing all of the evidence will reject the insurers' attempts to avoid paying for the cost of rebuilding the World Trade Center," he said.
Silverstein, who leased the trade center from the site owner, the Port Authority of New York and New Jersey, has legal rights to rebuild and plans to develop the 2 million-square-foot, 1,776-foot-tall skyscraper designed by Daniel Libeskind, the master site plan architect, and his own architect, David Childs.
Silverstein also hopes to develop four other office buildings on the site during the next decade.
He is building a 52-story office building on the spot adjacent to ground zero where World Trade Center 7 was destroyed.
Can you believe the nerve of the Insurance company and the leaseholder of the 2 WTC be fighting over this? :roll: What do you all think?
Friday, September 26, 2003 Posted: 2332 GMT ( 7:32 AM HKT)
NEW YORK (CNN) -- A federal appeals court ruled Friday that a jury should decide if the crashes of two hijacked airliners into the twin towers of the World Trade Center constituted two separate attacks or occurrences, which might entitle the leaseholder to collect insurance twice.
The real estate developer, Larry Silverstein, contends that the crashes of two airliners nearly 20 minutes apart into the two 110-story towers, which collapsed independently of each other, should be considered separate events.
The insurers contend that the attack was a single occurrence.
At stake are billions of dollars that could be used to rebuild on the 16-acre trade center site. According to The Associated Press, Silverstein Properties estimates its attack-related losses at $8.2 billion, including $5.7 billion for the twin towers and related property.
Silverstein, which took over the trade center's lease only six weeks before September 11, 2001, had negotiated a total, maximum coverage of $3.55 billion per catastrophic occurrence with 24 insurance companies.
The ruling by the 2nd U.S. Circuit Court of Appeals centers on a dispute between 22 insurance companies and Silverstein. The two other insurers -- ACE Bermuda and XL Insurance -- have settled with Silverstein, agreeing to pay a total of $400 million.
At the heart of the dispute is the definition of "occurrence" -- defined differently in two industry forms used by the insurers -- and which form the firms intended to use.
Three other insurers were found liable for a single occurrence in a ruling by a trial judge last year, which was upheld by the appeals court.
Thus, Hartford Fire Insurance, Royal Indemnity Co., and St. Paul Fire and Marine Insurance owe a total of $112 million.
For Hartford, Royal, and St. Paul, the policy form defined a single occurrence as "all losses or damages that are attributable directly or indirectly to one cause or a series of similar causes ... irrespective of the period of time or area which such losses occur."
Form labeled 'ambiguous'
However, the court said that a jury should determine whether the attacks were two separate events under a different policy of Travelers Insurance.
The three-judge panel labeled Travelers' form "ambiguous" and said it "did not define the term 'occurrence.' " Silverstein contends that the Travelers Insurance policy form applies for the other 19 firms being sued.
"The question of how many occurrences the events of September 11th constituted is a question properly left to the fact-finder," the judges said. "To be sure, a jury could find two occurrences in this case ... or it could find that the terrorist attack, although manifested in two separate airplane crashes, was a single, continuous, planned event causing a continuum of damage that resulted in the total destruction of the WTC, and thus was a single occurrence."
Barry Ostrager, a lawyer for Swiss Re, which is responsible for about 25 percent of the trade center's insurance coverage, said in a telephone interview that the appeals court ruling was a "serious setback for the Silverstein claim, because the court has rejected his theory of the case."
Ostrager called Silverstein's two-occurrence theory a "fanciful claim."
Howard Rubenstein, a spokesman for Silverstein, said in a written statement that the appeals court decision applied only to the three firms responsible for only 3 percent of the total coverage.
"The terms governing the coverage of each insurer has to be determined on a case-by-case basis," Rubenstein said.
"We are fully confident that a jury hearing all of the evidence will reject the insurers' attempts to avoid paying for the cost of rebuilding the World Trade Center," he said.
Silverstein, who leased the trade center from the site owner, the Port Authority of New York and New Jersey, has legal rights to rebuild and plans to develop the 2 million-square-foot, 1,776-foot-tall skyscraper designed by Daniel Libeskind, the master site plan architect, and his own architect, David Childs.
Silverstein also hopes to develop four other office buildings on the site during the next decade.
He is building a 52-story office building on the spot adjacent to ground zero where World Trade Center 7 was destroyed.
Can you believe the nerve of the Insurance company and the leaseholder of the 2 WTC be fighting over this? :roll: What do you all think?