NEW YORK—New York-New Jersey Port Authority can collect insurance only for damage done to one World Trade Center building and the PATH train station, not for the entire complex that was destroyed on Sept. 11, 2001, a U.S. District Court judge ruled on Monday.
The decision turned on whether the Port Authority's insurance policies excluded the rest of the World Trade Center complex because the agency had leased it to developer Larry Silverstein who bought his own insurance.
The U.S. judge for the Southern District of New York upheld the section of the land-owning agency's policy called "Exclusion f," saying it "applies in the present case and removes the Silverstein Property from coverage under the Port Authority Insurance program."
A Port Authority spokesman had no immediate comment on the latest twist in the many battles over insurance spawned by the destruction of the twin towers that anchored Manhattan's financial center.
The amount of insurance money that the bi-state agency will get is a critical issue, partly because reconstruction costs keep climbing and several projects, including the memorial, have already been scaled back.
The Port Authority recently finished the excavation work needed, allowing Silverstein to begin building three skyscrapers.
The Manhattan-based judge also rejected the agency's claim that she should not rule until Silverstein had fulfilled his obligation to rebuild the complex.
"Not only does the Port Authority fail to support this argument with citation to any case law, but this position is, in fact, contradicted by the controlling decisions on this issue," she wrote.
Robert Skinner, a lawyer for Ropes & Gray in Boston who represented Lloyds of London, said that the Port Authority still wants as much as $3 billion for the damage done to Building Number 6 and the train system.
However, the lawyer noted the insurers believe the bi-state agency suffered less than $1.5 billion of damages to Building Number 6 and the train station.
Further, the Port Authority's $3 billion claim is partly based on its argument that the attacks were two separate events, Skinner said. Silverstein fought his insurers in court to get the attacks termed two occurrences.
If the Manhattan judge follows the precedents set by other courts who ruled on Silverstein's claims, she will decide that this question is settled by how the different insurers wrote their policies, according to Skinner.
The other insurers included in the decision were: GlobalRisks UK Ltd, Copenhagen Reinsurance Co Ltd, Great Lakes Reinsurance
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