32
Citigroup has "the burden of demonstrating that [it] has an enforceable
right" as such an intended beneficiary of the Port Authority's contract with Con Ed.
Airco Alloys Division, Airco Inc. v. Niagara Mohawk Power Corp.,430 N.Y.S.2d 179,
186 (4th Dep't 1980). In order for Citigroup to show its status as an intended beneficiary,
it "must establish: `(1) the existence of a valid and binding contract between the other
parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is
sufficiently immediate rather than incidental, to indicate the assumption by the
contracting parties of a duty to compensate him if the benefit is lost.'" State of Cal.
Public Employees' Ret. Sys. V. Shearman & Sterling (CALPERS), 741 N.E.2d 101, 104
(N.Y. 2000) (quoting Burns Jackson Miller Summit & Spitzer v. Lindner, 451 N.E.2d
459 (N.Y. 1983)).
Citigroup argues that the Con Ed Lease was intended for its benefit and
that Con Ed is therefore limited to pursuing the remedies provided for in the Con Ed
Lease. As a substantial tenant of the tower above Con Ed's substation, that may be so.
The freedom of design and construction obtain by the Port Authority and acknowledged
by Con Ed--to construct a tower of "whatsoever design, size and purpose as the Port
Authority may from time to time and at any time during the letting determine" (Con Ed
Lease § 8(b))--almost necessarily had to benefit the tenants moving into a building so
constructed. Thus it would seem that a fair reading of the lease, particularly sections 8
and 16, suggests that it was intended to benefit the Port Authority, and by necessary
implication, those who might in the future acquire rights from the Port Authority with
respect to building Seven.
However, Citigroup has not yet filed an answer with its affirmative
