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Deutsche Bank’s claims that New York City was responsible for the destruction or damage of its offices near the World Trade Center out of negligence because city-owned diesel gas tanks exploded following the Sept. 11 terror attacks have been dismissed by a federal judge for inadequate pleading. Southern District Judge Alvin K. Hellerstein also dismissed claims based on the City’s handling of the “Frozen Zone” erected around the site during the evacuation and cleanup. The judge did give the bank leave to replead claims of negligence per se, and private and public nuisance against the city, but left the impression those claims would be difficult to sustain. In the companion federal and state cases of Taunus Corp. v. The City of New York, 02 Civ. 9762 and 03 Civ. 0314, Deutsche Bank and its corporate affiliates and subsidiaries — suing under the name of a holding company, Taunus Corp. — were seeking damages of over $500 million for the partial destruction of 130 Liberty St. and the damage to 4 Albany St., both buildings owned by the bank, and for the collapse of 4 World Trade Center, where the bank leased over 300,000 square feet of space. While the bank initially sought to blame its losses on the City’s inspection and general oversight of the Twin Towers, it later sought to add as a cause the explosion of the diesel tanks, which were stored at 7 World Trade Center for use in an emergency by then-Mayor Rudolph Giuliani and public safety personnel. That second cause, Hellerstein said, must be rejected because a deficient notice of claim had been filed with the City and the time had long-passed to allow for a late notice of claim. “We thought that their case was without merit from the very beginning and even under the notice pleading standards of the federal courts, the count was dismissible,” said Assistant Corporation Counsel Jesse Levine. “We are pleased to see the judge felt the same way.” Judge Hellerstein first dismissed the federal case, 02 Civ. 9762, as duplicative of the state action that had been removed to federal court. He then turned to the issue of the notice of claim, filed by the bank against the City under New York General Municipal Law � 50-e, for negligence with respect to the Twin Towers and the subsequent attempt to add the diesel tank theory. The notice, filed on Dec. 7, 2001, “did not include the plaintiffs’ claims with respect to the storage of diesel tanks by the defendant in 7 World Trade Center,” the judge said. “The City contends that these additional claims must be dismissed, and I so hold.” The bank argued that the diesel tank issue was eventually raised at a hearing, and that, in any event, it should be allowed to file a late notice of claim. They cited as precedent Industrial Risk Insurers v. City of New York, (NY. Sup. Ct. Mar. 19, 2003) where a leaseholder was given leave to file late notice based on the placement of the tanks in 7 World Trade Center. Judge Hellerstein was not persuaded. “In Industrial Risk Insurers, however, the plaintiff filed late notice of claim within the period allowed for suit and thus could invoke Sec. 50-e(5),” he said. “Here, the omission cannot be corrected by filing a late notice of claim under Sec. 50-e(5), because more than one year and ninety days have passed since the time the plaintiffs’ claims arose on Sept. 11, 2001, and the statutory bar applies.” The plaintiffs were “asserting a new theory of liability” that “cannot be corrected,” he said. As for the argument that the city essentially was on notice because the tanks were raised at the hearing, Hellerstein said they “cannot overcome the original deficiency where the theory of liability departs from one expressed in the original Notice of Claim.” SPECIAL DUTY On the City’s alleged negligence for operation of the Frozen Zone after the attacks, the judge said it could not be held negligent for performing a governmental function absent some “special relationship” between the City and the bank, and the bank had only made “conclusory allegations” about such a relationship. Similarly, the bank was not in a position to charge the City with negligent inspection and control of the Twin Towers because the bank did not alleged the City had a special duty of care. The claims of negligence per se, public nuisance and private nuisance, were dismissed by the judge as “inadequately pleaded.” Should the bank decide to replead those claims, he said, it would have to show violations of statutory law for negligence per se, a “special relationship” on the private nuisance claim and a “particularized injury suffered by the plaintiffs beyond that suffered by the public,” on the public nuisance claim. Henry Bergman and Philippe Zimmerman of Moses & Singer represented Taunus Corp.

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