FLM, LLC, and Daimler Chrysler Corp., n/k/a Chrysler LLC v. The Cincinnati Insurance Company
2012 Ind. App. LEXIS 411
Ind. Ct. App.2012Background
- FLM owns land at 8515 East Washington Street, Indianapolis, and leases to IRI which stores, mixes, and removes sand under environmental obligations.
- Chrysler supplied foundry sand to IRI for disposal, with IRI depositing sand on FLM’s property starting May 1999.
- IDEM classified the sand as Type III and directed cleanup; IDEM NOV issued May 17, 2004 against IRI, FLM, and Chrysler.
- CSX complained that sand migrated onto its adjacent property, clogging drainage and disrupting railway operations.
- FLM seeks insurance coverage under IRI’s Cincinnati CGL and Umbrella policies for environmental claims; Cincinnati contends no coverage exists, and brings declaratory claims while Chrysler is joined.
- The trial court granted summary judgment for Cincinnati on coverage for IDEM/City claims; FLM and Chrysler appeal asserting coverage under personal injury and/or property damage provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IRI’s abandonment of sand constitutes a covered occurrence. | FLM argues abandonment is a wrongful entry/invasion under personal injury. | Cincinnati contends language limits coverage to actions by owner/lessor. | Ambiguous; construed against Cincinnati in favor of coverage. |
| Whether the phrase 'by or on behalf of its owner, landlord, or lessor' limits coverage to acts by FLM. | FLM contends ambiguity supports broader coverage for IRI’s abandonment. | Cincinnati argues phrase limits coverage to actions by owner/lessor. | Ambiguity exists; construed against Cincinnati; coverage supported. |
| Whether contractual indemnity exclusions bar coverage for IDEM/City claims. | ILI argues exclusion does not apply since IRI was also on NOV and liable anyway. | Cincinnati relies on contractual exclusion to bar coverage. | Exclusion does not apply; ILR liable without the contract; reversed. |
| Whether property damage provisions provide coverage via 'occurrence' ambiguity. | Harvey-like interpretation allows coverage for unintended consequences of IRI’s action. | Policy requires an accident; ambiguity remains and favors insurer. | Coverage exists under property damage provisions; remand for judgment in FLM’s favor. |
Key Cases Cited
- Summit Indus. v. Travelers Indem. Co., 715 N.E.2d 926 (Ind. Ct. App. 1999) (environmental damages potentially covered under personal injury provisions; ambiguity)
- Allstate Ins. Co. v. Dana Corp., 759 N.E.2d 1049 (Ind. 2001) (ambiguity suffices to construe against insurer; coverage not automatic)
- Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279 (Ind. 2006) (occurrence includes unintended consequences of intentional acts; ambiguity favors coverage)
- Terre Haute First Nat. Bank v. Pac. Employers Ins. Co., 634 N.E.2d 1336 (Ind. Ct. App. 1993) (accident/occurrence interpretation guidance in insurance)
- New Castle County v. National Union Fire Ins. Co., 174 F.3d 338 (3d Cir. 1999) (persuasive by analogy on ambiguity of identical policy language)