properties to be insured and a ten year loss summary.
On July 9th, Tucker provided Springett-King with a copy of the
WilProp form marked "DRAFT," as well as a risk assessment
report. The form did not identify a particular company as the
lead underwriter in the space allotted for such identification.
Tucker did not identify the lead underwriter to Springett-King.
On July 11th, Springett-King informed Tucker by phone of St.
Paul's quote for its participation in the WTC program. Tucker's
notes of the discussion read: "St. Paul p/o 250 × 250 @1500/mil
$375,000." On July 18th, Tucker sent Springett-King an e-mail
stating: "Bind effective 7/19/01 to 7/19/02 $30,000,000 p/o
$250,000,000 xs $250,000,000 All Risk Including Flood and
Earthquake at $425,000 100% or $51,000 for your 12% share. Please
confirm coverage bound with an assigned policy number by return
e-mail. We need policy numbers for the closing tomorrow."
Springett-King replied by e-mail, stating: "The policy number is
144SP0922. I will send formal binder shortly." St. Paul never
issued a binder. Springett-King testified, during her
deposition, that by sending the policy number she was
On July 23, 2001, Michelle Smith, a Senior Technical Assistant
at Stewart Smith, sent Springett-King a copy of the Confirmation
of Insurance. Smith's letter asked Springett-King to review the
Confirmation and advise it if it did not agree with her records.
The letter also read: "We look forward to receiving the policy
[from St. Paul] in due course."
The Confirmation stated that Stewart Smith had "procured
insurance subject to all terms and conditions herein stated,
from the Insurer listed below." It identified the policy as
"Manuscript Form to be agreed." The Confirmation did not
identify any lead underwriter and did not state that St. Paul
would be required to follow the form of another insurer.
Although the Confirmation set forth the terms and conditions of
St. Paul's coverage, it was bereft of key terms, including the
fact that 1 World Trade Center LLC, 2 World Trade Center LLC, 4
World Trade Center LLC and 5 World Trade Center LLC were among
On August 1, 2001, Oscar Aguilar of St. Paul sent Tucker an
invoice which was thereafter paid. An internal St. Paul document
shows that as of this date, St. Paul had written $30 million in
coverage on the Silverstein program. The "Policy Form and
Conditions" section of the internal document was blank.
There is no evidence that St. Paul was informed of Travelers
participation in the World Trade Center insurance program at any
time prior to September 11th.
On September 11, 2001, Springett-King called Kevin Nash,
Senior Vice President of her division, and informed him that St.
Paul had participated in the WTC insurance program. She also
told Charles Loud, the St. Paul claims adjuster on the WTC
insurance program, that St. Paul had participated in that
program. On September 14th, St. Paul submitted a notice of loss
to its reinsurer, stating that it would be required to pay the
entire position of $30 million on the WTC insurance policy and
thus would be entitled to $24 million from the reinsurer.
On September 17th, Tucker sent an e-mail to Springett-King
stating that "the lead as far as the policy form is concerned is
Travelers" and that he "should have the excess form and a copy
of the primary for you shortly." Springett-King forwarded the
e-mail to Loud. In an entry for this date, Loud's computer
journal reads: "received E-Mail [from Carol] and Travelers is
the lead and will issue a policy this week from what she
understands." The journal
also indicates that Springett-King told Loud that day that
"Travelers is going to issue the policy . . ."
On September 18th, Loud sent a "Property Large Loss Report" to
St. Paul's home office which read: "Coverage — Forms and Issues:
We have yet to receive a copy of the policy. The form is going
to be issued from Travelers Insurance Company . . ."
On October 3rd, Springett-King e-mailed Tom Cesare of Stewart
Smith, saying "We do not have a copy of endorsement 1. Please
fax a copy. Thanks." Stewart Smith sent a complete copy of the
Travelers policy, to which a St. Paul employee affixed a note
saying "final form 10/4/2001." To this, Springett-King added,
"All Endorsements Included."
If the Court was empowered to impose "its own conception of
what the parties should or might have undertaken, rather than
confining itself to the implementation of a bargain to which
they have mutually committed themselves," Martin v.
Schumacher, 52 N.Y.2d at 109, 436 N.Y.S.2d at 249,
417 N.E.2d 541, St. Paul's motion for summary judgment would be
denied.*fn4 Apparently Springett-King did not even review the
WilProp form before issuing St. Paul's binder. However, a party
who accepts a written offer of a contract without reading it can
not be heard to claim that it is not bound by the terms of that
As Judge Carter of this Court observed recently in Hangzhou
Silk Import & Export Corp. v. P.C.B. Intern. Industries, Inc.,
No. 00 Civ 6344, 2002 WL 2031591, at *6 (S.D.N.Y. Sept. 5,
[A party to a contract] will not now be heard to
attempt to avoid the contract by claiming ignorance
of its provisions. Ignorance of the terms and
conditions of a contract is no defense for a party
that has already executed the contract. "A party who
signs a document without any valid excuse for having
failed to read it is `conclusively bound' by its
terms." Sofio v. Hughes, 162 A.D.2d 518,
556 N.Y.S.2d 717, 718-19 (2nd Dep't 1990) (quoting
Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1,
537 N.Y.S.2d 787, 792, 534 N.E.2d 824 (1988)).
Here Willis submitted an offer to purchase insurance from St.
Paul, which included a draft of the WilProp form. That offer was
accepted when Springett-King sent Willis the St. Paul policy
number confirming coverage. As of the point at which the binder
became final, no form other than the WilProp form had been
before the parties.
There can be no question that, if the Silverstein Parties were
asserting that St. Paul bound itself to the WilProp form, St.
Paul would have no defense. Since "[m]utuality is the essence of
a contract," Hauck Food Products Corp. v. E.A. Stevenson &
Co., 203 A.D. 308, 312, 197 N.Y.S. 34, 37 (3rd Dep't 1922)
(Hinman, J., concurring), both the Silverstein Parties and St.
Paul must be bound to the same terms. "Unless both parties to a
contract are bound, so that either can sue the other for a
breach, neither is bound." Oscar Schlegel Mfg. Co. v. Peter
Cooper's Glue Factory, 231 N.Y. 459, 462, 132 N.E. 148 (1921);
Riccardi v. Silver Linen Supply Co., Inc., 45 A.D.2d 191, 193,
356 N.Y.S.2d 872, 875 (1st Dep't 1974), aff'd 36 N.Y.2d 945,
373 N.Y.S.2d 551, 335 N.E.2d 856 (1975); Supreme Lodge K.P. v.
177 U.S. 260, 269, 20 S.Ct. 611, 615, 44 L.Ed. 762 (1900) ("[I]f
the insured is to be now bound as having thus contracted, there
must be mutuality in the contract."). The WilProp form was the
only mutually binding form that was before the parties at the
time the binder became effective.
The Silverstein Parties argue that since the confirmation of
binder sent to St. Paul identified the policy as "Manuscript
Form to be agreed," St. Paul agreed to accept whatever form was
ultimately agreed upon. However, such a reading would have made
the binder an unenforceable agreement to agree. R.G. Group,
Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir. 1984)
("Under New York law, if parties do not intend to be bound by an
agreement until it is in writing and signed, then there is no
contract until that event occurs.").
As noted above, a binder is not an agreement to agree to terms
in the future. A binder is "a short method of issuing a
temporary policy for the convenience of all parties, to
continue until the execution of the formal one." Lipman v.
Niagara Fire Ins. Co., 121 N.Y. 454, 458, 24 N.E. 699 (1890).
As of September 11, 2001, no formal contract of insurance had
been executed or even completely agreed upon, and St. Paul had
not even been told of Travelers' participation in the World
Trade Center insurance program.
Thus, the terms of the insurance agreement between St. Paul
and the Silverstein Parties on September 11th can only be
derived from the form that was before the parties at the time
the binder was issued. This was the WilProp form. It is of no
consequence that this form now favors St. Paul, which did not
read it, over the Silverstein Parties, who proposed it as a
draft. Each of these parties is bound to the definition of
"occurrence" that is set forth therein.
II. THE WILPROP DEFINITION OF "OCCURRENCE"
The WilProp form contained the following definition of the
"Occurrence" shall mean all losses or damages that
are attributable directly or indirectly to one cause
or to one series of similar causes. All such losses
will be added together and the total amount of such
losses will be treated as one occurrence irrespective
of the period of time or area over which such losses
The insurers argue that where one of the Twin Towers was
struck by a hijacked airplane at 8:46 a.m. on September 11th,
and 16 minutes later, the second tower was hit by a second
hijacked plane, there can be no reasonable dispute that the
Silverstein Parties' losses were the result of "one series of
similar causes." The Silverstein Parties limit their response to
this argument to a footnote in which they quote a professor's
argument that this language could be construed so that two
planes hitting the two towers in a sixteen minute period would
not constitute one series of similar causes.