The judge advised that if the lawyers dont shorten their arguments, then jurors are simply going to decide this case based on “who they like the bestand I would be perfectly willing to put into a sealed envelope my views on how that is going to come out.”

The key issue in the trial, pitting WTC leaseholder Larry Silverstein against 13 of his insurers in Manhattan Federal Court, is which insurance form may have been used by the carriers in their coverage binders.

Insurers are arguing that they are bound to the Willis property form, which specifically defines “occurrence” and would limit Mr. Silversteins WTC claim to one event of $3.55 billion, rather than a Travelers property form, which offers no such definition and thus would be more beneficial to Mr. Silverstein's claimthat two separate airplanes crashing into two separate WTC towers constitute two occurrences for insurance purposes.

Final policy documents were not signed before the Sept. 11 terrorist attack.

Mr. Silversteins camp has acknowledged in this trial that many insurers received only the Willis property formalso called the “Wilprop” formfor the WTC underwriting submission before they issued binders prior to Sept. 11, 2001.

However, Mr. Silversteins attorneys contend that when Travelers had insisted on using its own form, which doesnt define occurrence, the Travelers document had become the operative form for the coverage before the attack.

During the trials first two weeks, attorneys from both sides examined and cross-examined some 10 witnessesstarting with Mr. Silversteins risk manager, Robert Strachan (see last weeks edition for a full report), then moving on to other executives, including officials from:

WTC retail-space leaseholder Westfield America

GMAC, which lent $563 million to Mr. Silverstein for his WTC lease

Insurance consulting firm Harbor Group, which had advised GMAC on WTC matters

Willis of New York, Mr. Silversteins broker on the WTC insurance

The trial is expected to last through March and possibly beyond that, with scores of new witnesses yet to be grilled, some of the participants involved in the case told National Underwriter.

However, based on some of the testimony so far, the jurorsseven men and five women, most of whom appear to be in their 40s or 50sperhaps can be forgiven for becoming bewildered by the technical issues in dispute. Some witnesses, for example, offered testimony that sometimes appeared to contradict other witnesses or even their own earlier remarks.

Take the case of Robert Strachan, Mr. Silversteins risk manager and the trials first witness. He testified during the trials first week that he had accepted the Travelers form as “the operative policy” back in July 2001.

He explained that faxing the Wilprop form the day after the terrorist attack to an attorney for the WTCs owner, the Port Authority of New York and New Jersey, as well as to a representative for GMAC, was his way of saying “we were working with” this formnot that it was the operative policy. “It was the only policy I had in my office” at that time, he said.

However, last week, Peter Lefkowitza key witness who served as principal manager from the consulting firm Harbor Group to advise GMAC on WTC insurance mattersoffered testimony that could undermine Mr. Strachans claim.

Mr. Lefkowitzone of the insurance representatives for GMAC who received the Wilprop form faxed from Mr. Strachan and who had spoken to Mr. Strachan on the phone on Sept. 12, 2001told jurors that he was the first person to suggest to Mr. Strachan that the terrorist attack might constitute two insured events.

Mr. Strachan also told Mr. Lefkowitz on the phone on Sept. 12, 2001, that he thought there was only one deductiblewith the implication that there was only one insured event in the WTC caseaccording to Mr. Lefkowitzs testimony.

Then, Mr. Lefkowitz noted: “I said to him, Did you ever think of the implications if it was two occurrences?”

“It was just, I think, a spontaneous reaction,” Mr. Lefkowitz said on the witness stand, adding that when he asked Mr. Strachan on the phone, the day after the attack, if he had thought of possible implications if there were two insured occurrences, Mr. Strachan had told him, “No, I never thought of that.”

Mr. Lefkowitz also said GMAC didn't have enough information to back up contentions that the WilProp form had been replaced as the governing policy document prior to the attack, adding that it was his understanding that no policy form had been “finalized.” As a result, he noted, GMAC didn't take a position in the WTC insurance debate. “I don't believe they were taking sides,” he said.

During the past two weeks, there was other conflicting testimony and also what some attorneys testily described as “selective amnesia” from some of the witnesses. Last week, one major witness in particular rankled attorneys representing the insurers and even tested Judge Mukaseys tolerance.

The witness, Beth Ann Herrmann, was director of insurance operations at GMAC at the time of the Sept. 11 attack. On that day, she was asked by GMAC's chairman to collect as much information as possible about the WTC coverage. She promptly began to attend meetings, take part in conference calls and listen to conversations involving managers from the Silverstein Properties and Willis, as well as people from Harbor Group and GMAC, over the following several days.

But despite taking extensive notes during that time, Ms. Herrmann answered most questions during the trial last week with the response: “I don't have an independent recollection” from those meetings. “I remember walking into the room, but I don't remember any of the conversation,” she said of one of the meetings she had attended.

Barry Ostrager, the lead attorney for Swiss Reinsurance Company, the largest player in the case, became irritated enough during his examination to ask Ms. Herrmann: “So your mind is a complete blank?” to which she replied: “As to words and content, yes.”

Judge Mukasey also stepped in, even asking Ms. Herrmann that, when she met with Mr. Silverstein's lawyers, if they had ever directed her about remembering certain information. When she told the judge that she was asked to be honest and answer “if the light bulb goes off,” the judge then remarked if Mr. Silverstein's lawyers would have preferred Ms. Herrmann to have “as few light bulbs as possible in this case.”

There was also positive testimony for Swiss Res Mr. Ostrager. On Feb. 18, Timothy Boydan assistant vice president of Willis who had worked on obtaining the WTC insurance coveragetestified that he told GMAC representatives on July 9, 2001, that the Wilprop form was the form that was to be used by Willis to go to the marketplace. He said his colleagues at Willis had told him that the Travelers Property form was “no good” and “a pain in the neck” compared to the Wilprop form they were sending out to insurers.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, February 20, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.