{ "id": 8525451, "name": "LINDLEY CHEMICAL, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY", "name_abbreviation": "Lindley Chemical, Inc. v. Hartford Accident & Indemnity Co.", "decision_date": "1984-11-20", "docket_number": "No. 8420SC60", "first_page": "400", "last_page": "404", "citations": [ { "type": "official", "cite": "71 N.C. App. 400" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "312 S.E. 2d 882", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1984, "opinion_index": 0 }, { "cite": "310 N.C. 476", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2403430, 2394663, 2394152, 2404109, 2398648 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/310/0476-01", "/nc/310/0476-05", "/nc/310/0476-04", "/nc/310/0476-02", "/nc/310/0476-03" ] }, { "cite": "306 S.E. 2d 502", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "504" } ], "opinion_index": 0 }, { "cite": "63 N.C. App. 694", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526095 ], "year": 1983, "pin_cites": [ { "page": "696" } ], "opinion_index": 0, "case_paths": [ "/nc-app/63/0694-01" ] } ], "analysis": { "cardinality": 500, "char_count": 9645, "ocr_confidence": 0.821, "pagerank": { "raw": 7.12319690207718e-08, "percentile": 0.42774849035600143 }, "sha256": "809152ac1ed44a8d2b83fa388b886c94eac7c111cdb627abc074f7ea40c53e96", "simhash": "1:21637e527d6b22fe", "word_count": 1506 }, "last_updated": "2023-07-14T17:51:06.115640+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Webb and Eagles concur." ], "parties": [ "LINDLEY CHEMICAL, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY" ], "opinions": [ { "text": "BRASWELL, Judge.\nLindley Chemical, Inc., sold a roller cleaner chemical to Tow Dyeing and Finishing Company. While Richard Allen Poplin, an employee of Tow Dyeing and Finishing Company, was using the chemical, it caught fire and Poplin was severely burned. Poplin sued Lindley Chemical, now the plaintiff before us, for the injuries he sustained and obtained a favorable judgment. The defendant-insurance company refused to defend the Poplin lawsuit and refused to pay the judgment, contending the insurance policy specifically excluded coverage. The plaintiff sued the defendant, seeking to force it to pay the Poplin judgment. The trial court, however, granted the defendant\u2019s motion to dismiss on the grounds that the plaintiff had failed to state a claim upon which relief could be granted. The plaintiff has appealed this ruling.\nTo better understand whether the policy does or does not cover the Poplin incident, we recite the following facts. On 1 November 1979, the defendant issued to the plaintiff a policy of insurance denominated as a \u201ccasualty insurance policy\u201d which provides \u201cManufacturers\u2019 and Contractors\u2019 Liability Insurance Coverage ... for premises and for the named insured\u2019s operations in progress.\u201d The policy contains coverage for bodily injury liability and for property damage liability. Coverage A, the bodily injury liability section of the policy, states that \u201c[t]he company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay damages because of . . . bodily injury ... to which this insurance applies, caused by an occurrence, and the company shall have the . . . duty to defend any suit against the insured seeking damages on account of such bodily injury. . . .\u201d However, the policy also expressly provides that \u201c[t]his insurance does not apply: . . . (p) to bodily injury ... included within the completed operations hazard or the products hazard. In the definition section of the policy, \u201c \u2018products hazard' includes bodily injury and property damage arising out of the named insured\u2019s products or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs away from premises owned by or rented to the named insured and after physical possession of such products has been relinquished to others.\u201d\nPrior to 18 July 1980, the plaintiff sold and delivered an Acetone solvent, \u201cLintex Cleaner AC,\u201d to Tow Dyeing for the purpose of cleaning the rollers on a \u201cTri-Pad\u201d Machine used in drying dyed cloth. On 18 July 1980, Richard Allen Poplin, a Tow Dyeing employee, climbed on top of the Tri-Pad and poured the solvent onto the rollers. The solvent ignited and the fire burned Poplin severely on his face, arms, and legs. The trial court in Poplin\u2019s lawsuit against the plaintiff found and concluded that the plaintiff, \u201cknowing that the product was hazardous and dangerous, had negligently failed to warn [Poplin\u2019s] employer ... or prospective users and specifically [Poplin] as to the dangerous, extremely flammable and other hazardous properties and propensities of the fluid substance\u201d it sold and delivered. The trial court also concluded that the plaintiff had been negligent by \u201cobliterating, painting over and concealing\u201d the adequate warning label appearing on the solvent\u2019s drum when received by the plaintiff from its own supplier. The plaintiff was required to compensate Poplin in the amount of $750,000.00.\nThe defendant-insurance company, maintaining that the plaintiffs policy did not provide coverage for this incident, twice refused to defend the suit brought by Poplin and refused to pay the $750,000.00 judgment.\nThe scope of our review from the order granting the defendant\u2019s Rule 12(b)(6) motion is whether \u201c \u2018it appears to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim.\u2019 (Citations omitted.)\u201d Brown v. Miller, 63 N.C. App. 694, 696, 306 S.E. 2d 502, 504 (1983), disc. rev. denied, 310 N.C. 476, 312 S.E. 2d 882 (1984). The theory of recovery behind the plaintiffs claim is that their liability to Poplin was based on their \u201cfailure to warn\u201d him and Tow Dyeing about the dangers associated with Acetone. The plaintiff contends that since risks created due to their \u201cfailure to warn\u201d were not specifically excluded in the policy, then the defendant is liable under the policy. We disagree and hold that because there is no set of facts which the plaintiff could prove that would entitle it to a recovery, the defendant\u2019s Rule 12(b)(6) motion was properly granted.\nFrom the record, it is apparent that the plaintiff purchased what is commonly referred to as \u201cpremises-operations\u201d coverage. This type of insurance covers \u201c[a]n injury or a loss [which] may result while an activity is in progress, and prior to the completion thereof, either as a result of an act of negligence or an omission.\u201d 7A J. Appleman, Insurance Law and Practice, Sec. 4508 (1979). The applicable section of the policy is entitled \u201cCoverage for Premises and for the Named Insured\u2019s Operations in Progress.\u201d The plaintiff did not purchase \u201cproducts liability\u201d coverage which insures against potential injuries caused by products possessing inherent hazards.\nAt the outset, it is well to recognize that products liability is a coverage that takes over where premises-operations leaves off by means of the various applicable exclusions. Obviously, if the insured carries premises-operations coverage as well as products and completed operations coverage there would be little litigation. Thus the cases that deal with this problem usually involve the situation where the policyholder failed to purchase products and completed operations coverage and a loss occurred that the insurer claims is excluded under the premises-operations portion of the policy.\nId. By its language, the policy excludes coverage for bodily injury arising out of the plaintiffs products if the bodily injury occurred away from the plaintiffs premises and after the physical possession of the products had been relinquished to others. There is no dispute between the parties that Poplin was injured by the product while working on his own employer\u2019s premises and while the product was in his employer\u2019s possession.\nAs in the present case, once a product has been completed and distributed in the market, \u201cpremises-operations\u201d coverage is not the appropriate coverage and the individual or entity now needs \u201cproducts liability\u201d coverage. Although the coverages are complementary, they do not overlap and protect against two separate hazards. Id. Thus, we find unpersuasive the plaintiffs argument that the \u201cfailure to warn\u201d about a product\u2019s dangers is a risk contemplated by this policy and not specifically excluded. Such a risk could have properly been insured against had the plaintiff purchased \u201cproducts liability\u201d insurance instead of or as well as \u201cpremises-operations\u201d insurance. Since the insurance it did purchase does not extend coverage to off-premises injuries, the plaintiff cannot recover under this \u201cpremises-operations\u201d policy.\nLikewise, we see no merit in the plaintiffs contention that because it painted over and concealed the existing warning on the drum containing the flammable solvent while it was on its premises and in its possession that the injury falls outside the exclusionary language. The policy speaks with regard to \u201cbodily injuries\u201d which occur while the product is on its premises. It does not contemplate bodily injuries occurring off the premises even though the negligent act may have been committed on the premises.\nAlso, the major cases cited by the plaintiff in its brief in support of the proposition that the products hazard exclusion does not apply when the negligence surrounding the product consisted of a failure to warn are distinguishable. In each of those cases, the insured had purchased \u201ccomprehensive general liability\u201d insurance to protect against the risks associated with the products after they were sold. These insureds, unlike the plaintiff, had not merely purchased insurance to protect against injuries occurring on their premises or injuries associated with the insureds\u2019 operations in progress.\nBecause the plaintiffs claim is specifically excluded by the terms of his insurance policy and because it appears to a certainty that the plaintiff is entitled to no relief under any set of facts, we hold the defendant\u2019s Rule 12(b)(6) motion was properly granted.\nAffirmed.\nJudges Webb and Eagles concur.", "type": "majority", "author": "BRASWELL, Judge." } ], "attorneys": [ "John M. Bahner, Jr., for plaintiff appellant.", "Golding, Crews, Meekins, Gordon & Gray by James P. Crews and David N. Allen for defendant appellee." ], "corrections": "", "head_matter": "LINDLEY CHEMICAL, INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY\nNo. 8420SC60\n(Filed 20 November 1984)\nInsurance 8 149\u2014 liability insurance \u2014 premises-operations coverage distinguished from products liability coverage\nIn an action to compel defendant insurance company to pay a judgment arising from a third party\u2019s use of plaintiffs product, defendant\u2019s motion for a Rule 12(b)(6) dismissal was properly granted where plaintiff had purchased \u201cpremises-operations\u201d coverage rather than products liability coverage, so that injuries occurring while an activity was in progress were covered, but not injuries occurring away from plaintiffs premises and after physical possession of the products had been relinquished, even if plaintiff had performed a negligent act on its premises.\nAppeal by plaintiff from Barefoot, Judge. Judgment entered 5 October 1983 in Superior Court, STANLY County. Heard in the Court of Appeals on 19 October 1984.\nJohn M. Bahner, Jr., for plaintiff appellant.\nGolding, Crews, Meekins, Gordon & Gray by James P. Crews and David N. Allen for defendant appellee." }, "file_name": "0400-01", "first_page_order": 434, "last_page_order": 438 }