Laidlaw Environmental Services (TOC), Inc. v. Aetna Casualty & Surety Co

In Laidlaw Environmental Services (TOC), Inc. v. Aetna Casualty & Surety Co. (Ct.App. 1999) 338 S.C. 43 524 S.E.2d 847, Laidlaw contracted with Radco to construct a "baghouse" for Laidlaw's hazardous waste incineration system. Radco abandoned the project, and Laidlaw hired another contractor to finish the project. When placed into operation, the baghouse leaked. Laidlaw sued Radco, which was insured by Aetna. The Aetna policy specified that it did not apply to injury or damage included within the products-completed operation hazard clause. (Id., 524 S.E.2d at p. 848.) Aetna took the position that the claims against Radco fit within the products-completed operations hazard coverage, which Radco had not purchased. Therefore Aetna did not believe that there was any potential for coverage. (Id. at p. 849.) As part of a settlement, Radco assigned its rights against Aetna to Laidlaw, which later sued Aetna. Aetna was granted summary judgment in the trial court on the ground that products-completed operations coverage had been specifically rejected by Radco. (Laidlaw, supra, 524 S.E.2d at pp. 849-850.) On appeal, the court affirmed that Radco's abandonment of the work on the baghouse brought Laidlaw's claims within the scope of the products-completed operations clause. Significantly, the court pointed out that both parties agreed that Radco abandoned the work. (Id., at p. 850.) The court explained that "when an insured abandons work on a project the insured has effectively 'completed' its work for that project, even if the project remains unfinished, thus invoking products-completed operations coverage." (Ibid.) In Laidlaw Envtl. Servs. (TOC), Inc. v. Aetna Casualty & Sur. Co. (S.C.Ct.App. 1999) 524 S.E.2d 847, Laidlaw contracted with Radco to construct a "baghouse" for Laidlaw's hazardous waste incineration system. Radco abandoned the project, and Laidlaw hired another contractor to finish the project. When placed into operation, the baghouse leaked. Laidlaw sued Radco, which was insured by Aetna. The Aetna policy specified that it did not apply to injury or damage included within the products-completed operation hazard clause. (Id. at p. 848.) Aetna took the position that the claims against Radco fit within the products-completed operations hazard coverage, which Radco had not purchased. Therefore Aetna did not feel that there was any potential for coverage. (Id. at p. 849.) As part of a settlement, Radco assigned its rights against Aetna to Laidlaw, which later sued Aetna. Aetna was granted summary judgment in the trial court on the ground that products-completed operations coverage had been specifically rejected by Radco. (Laidlaw, supra, 524 S.E.2d at pp. 849-850.) On appeal, the court affirmed that Radco's abandonment of the work on the baghouse brought Laidlaw's claims within the scope of the products-completed operations clause. Significantly, the court pointed out that both parties agreed that Radco abandoned the work. (Id. at p. 850.) The court explained that "when an insured abandons work on a project the insured has effectively 'completed' its work for that project, even if the project remains unfinished, thus invoking products-completed operations coverage." (Ibid.)