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After three weeks of deliberation, the jury in the second World Trade Center insurance trial ruled Monday that the Sept. 11, 2001, terror attacks constituted two occurrences under the unfinished binders used by the nine remaining insurers. The verdict means that real estate developer Larry Silverstein, the trade center leaseholder, and the Port Authority of New York and New Jersey, owner of the site, will collect up to $2.2 billion from the insurers. They would have been paid half that amount had the jury viewed the attack as just one occurrence. The verdict before Southern District of New York Judge Michael Mukasey is a major victory for Silverstein and his lawyers at Wachtell, Lipton, Rosen & Katz after losing their first case against a larger group of insurers. Silverstein entered into a 99-year-lease with the Port Authority in July 2001. The attacks that destroyed the Twin Towers and most of the World Trade Center occurred before he completed insurance policies with two dozen insurers. The parties had not made final the terms of their insurance binders, leaving in doubt how the attack would be interpreted: as one event or two. In the first round of litigation, a jury also sitting before Judge Mukasey held that the attack constituted one “occurrence” for insurance purposes. The WilProp form, a standard contract used in the industry, governed the 10 insurers involved in the first verdict. Three additional carriers won summary judgment motions and two settled with Silverstein. Three carriers involved in the first trial but not covered by the WilProp form, and six others that sat out the first trial, combined to form the nine in the second case. They were Travelers Indemnity Co., Industrial Risk Insurers, Royal Indemnity Co., Allianz Insurance Co., Tokio Marine and Fire Insurance Co., Twin City Fire Insurance Co., Tig Insurance Co., Westfield WTC LLC and Zurich American Insurance Co. Throughout the long deliberations, the jury asked to see testimony from witnesses on both sides who had negotiated the terms of the insurance policies or interpreted them after the attacks. The focus of the testimony centered on what the parties intended the unfinished contracts to mean as of Sept. 10, 2001. Early on, Bernard Nussbaum of Wachtell Lipton explained the difference between the two cases. The first dealt with what form applied, he said. Under the WilProp form, the attack was seen as one occurrence. The only question in the first trial, which was tried by Nussbaum’s colleague, Herbert Wachtell, was which insurers fell under the form. In the second case, the parties asked the jury to determine what the language actually meant as applied to the facts of Sept. 11. Lawyers for both sides provided drafts of negotiations and witnesses to build their case. ONE ATTACK ARGUED Representing Travelers Indemnity Co., Harvey Kurzweil of Dewey Ballantine tried to show jurors that despite the use of two planes to attack the Twin Towers, the event constituted one coordinated attack. Likewise, Michael Barr of Sonnenschein Nath & Rosenthal in his representation of Royal Indemnity Co., argued that although the WilProp form did not apply, its terms were consistent with the terms used in the forms governing the remaining nine insurers. The jury of nine women and two men disagreed. In their deliberations, jurors focused on the testimony of Frank Teterus, an executive at Industrial Risk Insurers. Teterus had testified that the terms defining what was an occurrence used in the WilProp form and Industrial Risk’s form “could be interpreted differently.”

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