The federal jury that has been deliberating the complex issue of how much Silverstein Properties, the master leaseholder of the World Trade Center, should recover from its insurers has reached a partial verdict.
On Thursday the jurors told the court that they had found in favor of nine of the 13 insurers, including Lloyd’s, Travelers and Chubb’s Federal Insurance Co. They found in favor of Silverstein’s position as regards three other carriers, Royal Indemnity, Zurich American and Twin City Fire Insurance.
But the jury has not yet reached a decision on which form – the WilProp “one event” form or the Travelers “two possible events” – as concerns Swiss Re, the original plaintiff in the action, and the insurer with the largest amount at stake, around $877 million.
Judge Michael Mukasey accepted the jury’s findings on the other insurers and asked them to continue their deliberations as concerns Swiss Re. They are obviously having a difficult time determining the course of events from the conflicting testimony of the parties involved. Swiss Re has maintained that it had always relied exclusively on the WilProp form, but Silverstein has produced evidence that underwriters at Swiss Re were sent the Travelers form, and that it was intended to replace the WilProp form. Swiss Re denies this was the case, and one of its underwriters testified that although he had received the Travelers form he had not read it, as he had never seen it before. Judge Mukasey has ruled that Swiss Re could nevertheless be bound by the form’s contents, but only if the jury finds that the company knew what they were.
The insurers who were able to prove that they relied on the WilProp binder form will pay approximately $1 billion in WTC claims. Silverstein had sought to obtain recoveries for both towers, arguing that their destruction constituted two events, which would have doubled the amounts to be paid.
A second trial will now be held, with or without Swiss Re, depending on the jury’s findings, to determine if the Travelers’ form actually supports Silverstein’s “double recovery” theory. If so, a third trial is scheduled to determine the actual amounts to be paid.
According to news reports from the AP and Reuters, the jury had actually reached a decision on all of the insurers, except Swiss Re, by Tuesday. They are scheduled to resume deliberations Monday on that question. One juror has been excused from further deliberations in the case due to undisclosed personal problems.
Neither Swiss Re’s attorneys nor Silverstein’s chose to comment on the partial verdict. If the “two event” theory ultimately prevails, Silverstein could receive as much as $5.5 billion in recoveries.
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