In Re September 11 Property Damage

481 F. Supp. 2d 253
CourtDistrict Court, S.D. New York
DecidedMarch 9, 2007
Docket21 MC 101, 04 Civ. 7272(AKH)
StatusPublished
Cited by8 cases

This text of 481 F. Supp. 2d 253 (In Re September 11 Property Damage) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re September 11 Property Damage, 481 F. Supp. 2d 253 (S.D.N.Y. 2007).

Opinion

481 F.Supp.2d 253 (2007)

In re SEPTEMBER 11 PROPERTY DAMAGE AND BUSINESS LOSS LITIGATION.
Aegis Insurance Services, Inc.; Liberty Insurance Underwriters, Inc.; National Union Insurance Company of Pittsburgh; Nuclear Electric Insurance Limited; Certain Underwriters at Lloyds, (Syndicates 1225 and 1511); a/s/o Consolidated Edison Company of New York, Inc., Plaintiffs,
v.
Seven World Trade Center Company L.P.; Silverstein Properties, Inc.; Citigroup, Inc.; Citigroup Global Markets Holdings, Inc.; Salomon Smith Barney Holdings, Inc.; Salomon, Inc.; Swanke Hayden Connell Architects; Ambassador Construction Co., Inc.; Consentini Associates, Inc.; Cantor Seinuk Group, P.C.; Flack & Kurtz, Inc; Skidmore Owings & Merrill, LLP; Office of Irwin G. Cantor, P.C.; Syska & Hennessy, Inc.; Amec Construction Management, Inc.; Centrifugal Associates, Inc.; Dic/Underhill, a Joint Venture; H.O. Penn Machinery Co., Inc.; Kaback Enterprises; Preferred Utilities Manufacturing Corp.; Electric Power Systems, Inc.; American Power Technologies, Inc.; G.C. Engineering & Associates, P.C.; Tishman Construction Corporation; Firecom Inc.; Grace Construction Products; Fiberlock Technologies, Inc.; Rosenwach Tank Co., Inc.; All Fire Systems, Inc.; Emery Roth & Son, P.C.; Abco Peerless Sprinkler Corporation; Amr Corporation; American Airlines, Inc.; UAL Corporation; United Airlines, Inc.; Colgan Air, Inc.; U.S. Airways Group, Inc.; *254 US Airways, Inc.; Huntleigh USA Corporation; ICTS International V; Globe Aviation Services Corporation; Burns International Security Services Corporation; Pinkerton's Inc.; Securitas AB; and Boeing Co., Defendants.
Seven World Trade Company, L.P. and Silverstein Properties, Inc., Third-Party Plaintiffs,
v.
Swanke Hayden Connell Architects; Ambassador Construction Co., Inc.; Consentini Associates, Inc.; Cantor Seinuk Group, P.C.; Flack & Kurtz, Inc; Skidmore Owings & Merrill, LLP; Office of Irwin G. Cantor, P.C.; Syska & Hennessy, Inc.; Amec Construction Management, Inc.; and Centrifugal Associates, Inc., Third-Party Defendants.

Nos. 21 MC 101, 04 Civ. 7272(AKH).

United States District Court, S.D. New York.

March 9, 2007.

*255 OPINION AND ORDER GRANTING THIRD-PARTY DEFENDANTS' MOTIONS TO DISMISS

HELLERSTEIN, District Judge.

I discuss in this decision the legal sufficiency of a third-party action filed by Seven World Trade Company, L.P. and Silverstein Properties, Inc. (together, "Silverstein"). *256 Silverstein was the owner of the leasehold to, and the developer of, a 47-story office tower that was destroyed by fire and debris following the terrorist-related aircraft crashes of September 11, 2001. As a result of the events of that day, Silverstein became both a plaintiff and a defendant, suing to recover damages for loss he suffered, and defending against suits alleging that his negligence caused the losses that others suffered. I discuss here Silverstein's third-party action, by which he seeks indemnification and contribution to the extent he is held liable in lawsuits against him.

The background is recounted in two earlier decisions Aegis Ins. Serv. v. Port Auth., 468 F.Supp.2d 508 (S.D.N.Y.2006) ("Aegis"); and Indus. Risk Ins. v. Port Auth. of N.Y. & N.J., 387 F.Supp.2d 299 (S.D.N.Y.2005) ("IRI"). In short summary, Silverstein purchased a long term leasehold interest in the land and air space of Seven World Trade Center ("7WTC") in 1980. Beneath and next to his property, Consolidated Edison Company of New York, Inc. ("ConEdison"), pursuant to agreements made with the Port Authority in 1968, built and maintained a power substation serving the entire World Trade Center complex then proposed to be developed. When, in 1987 and 1988, Silverstein developed and leased the 47-story office tower that became Building Seven, ConEdison serviced that building as well.

In 1988, Silverstein leased portions of floors one through five, and floors 28 through 47 of 7WTC to Salomon Inc., a predecessor of defendant Citigroup Inc. and Citigroup Global Market Holdings Inc. (together, "Citigroup"). In 1998, Silverstein leased portions of the basement and the seventh floor, and the 23rd floor to New York City's Office of Emergency Management ("OEM"). Both leases authorized the respective tenants to design and build emergency generator and fuel supply systems, to enable them to have independent sources of energy. Salomon negotiated for that right in which, allegedly, "intensified the fires that engulfed building number seven and made them impossible to extinguish." IRI, 387 F.Supp.2d at 302.

The collapse of 7WTC caused substantial loss to Silverstein. Industrial Risk Insurers ("IRI") paid his claim, became subrogated to his rights, and sued Citigroup, among others, for causing the loss, alleging that Citigroup was negligent for maintaining large stocks of diesel fuel in 7WTC. I granted Citigroup's motion to dismiss, holding that, pursuant to the lease agreement between Silverstein and Citigroup, Silverstein had assumed the risks posed by Citigroup's backup generator system and related fuel tanks, barring IRI's suit. See id. at 308-10.

The collapse of 7WTC also destroyed the ConEdison substation and valuable transformers and other equipment that had been housed in the substation. Aegis Insurance Services, Inc. and other insurers paid the loss, became subrogated to ConEdison's rights, and filed suit against the Port Authority (the owner of the property), Silverstein (the owner and manager of the leasehold), and those who designed, built, maintained, and used the large stocks of diesel fuel and the emergency generator system that allegedly caused the fires to become uncontrollable—Citigroup, the City, and the contractors, engineers and architects who designed and built the system for Citigroup and the City. I held in Aegis, supra, (a) that the City of New York was entitled to immunity under the New York State Defense Emergency Act ("SDEA"), N.Y. Unconsol. Law § 9101 et seq. (McKinney 2006), that no triable issues were presented and summary judgment could be granted, and I dismissed the claims against it; (b) that the case was *257 not ripe for decision with respect to the claims against the Port Authority, and I denied the Port Authority's motion to dismiss the complaint against it; (c) that a legally sufficient claim had been stated against Citigroup, and I denied its motion to dismiss the complaint against it (with one exception not here relevant); (d) that a legally sufficient claim had been stated against Silverstein, and I denied his motion to dismiss the complaint against him; and (e) that the architects and contractors who were engaged by the City and Citigroup to design and build their respective backup generator systems did not owe a duty of care to ConEdison, and I granted their motions to dismiss the complaint against them.

Following my holding in Aegis that ConEdison's subrogated insurer had stated a legally sufficient claim against Silverstein, Silverstein amended his answer to assert third-party claims for indemnification and contribution against parties that had been dismissed in the lawsuit. Silverstein alleged that the several design and construction defendants — Swanke Hayden Connell Architects; Ambassador Construction Co.; Consentini Associates, Inc.; and the Cantor-Seinuk Group, which were engaged by the City (collectively, the "OEM Design and Construction Defendants"), and AMEC Construction Management, Inc., f/k/a Morse/Diesel International, Inc. ("AMEC"); Centrifugal Associates, Inc.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
481 F. Supp. 2d 253, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-september-11-property-damage-nysd-2007.