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Accepting all facts alleged in the Amended Complaint as true as required
by Rule 12(b)(6), Fed. R. Civ. P., I find that plaintiffs have set forth sufficient facts to
defeat the Port Authority's motion to dismiss for absence of proximate cause.
C. Discussion of the Lease Agreement between the Port Authority and Con Ed
The Port Authority next argues that, under established New York law, the
lease agreement between the Port Authority and Con Ed, expressly naming the Port
Authority as insured, bars plaintiffs from asserting claims for reimbursement against the
Port Authority. Determining what liability the Port Authority may have for damage
sustained by Con Ed, however, is dependent upon an analysis of the lease agreement in
its entirety and cannot depend upon an analysis of an isolated provision.
1. The Lease Agreement
In 1968, Con Ed and the Port Authority entered into an agreement for Con
Ed to build a power substation beneath the space that would become 7WTC. (See
Agreement of Lease between the Port Authority and Con Ed, dated May 29, 1968 (the
"Con Ed Lease"), Bekker Dec. Ex. D, Jacob Dec. Ex. G.) In addition to specifically
addressing the construction of the substation and the terms of Con Ed's Lease, the
agreement also addressed the future construction of a commercial tower above the
substation. Several provisions of the Con Ed Lease are relevant to my analysis of the
pending motions to dismiss by the Port Authority and Citigroup, and these are addressed
in detail below.
In anticipation of the future construction of a commercial tower, the Con
Ed Lease defined the rights and obligations of the Port Authority and Con Ed with
respect to such construction by specifically providing for the remedies available to Con
