"This is a suit about keeping promises," plaintiff attorney Michael Keating of Foley Hoag told the jury in SWINC v. Lloyd's Underwriters.
The plaintiff, SWINC, represented the bankruptcy estate of Stone & Webster, a large projects engineering company that had declared bankruptcy. The defendants were insurers that had issued a professional liability policy to Stone & Webster.
Stone & Webster had won a contract from the Maine Yankee to decommission the Maine Yankee nuclear power plant and transform it into a greenfield. However, before the work was completed, Maine Yankee terminated Stone & Webster's contract.
SWINC claimed that Stone & Webster had failed to comply with its schedule, failed to obtain required permits, and was unable to complete the job on time. The contract specifically provided for termination based on these performance defects, which, the plaintiff said, did in fact occur, and "is precisely the conduct that a professional liability policy is intended to cover."
The defendants claimed that Stone & Webster's contract was not terminated because of poor performance, but instead was terminated because of Stone & Webster's insolvency, and therefore the loss resulting from the termination was not covered by the professional liability policy. Further, according to the defendants, Stone & Webster had misled the insurers as to its financial condition when the policy was issued, which was material because "a contractor that is hurting financially does a bad job."