The Indiana Court of Appeals found the "personal injury" provisions to be ambiguous when asked whether the migration of sand constituted a "wrongful entry" or "invasion of the right of private occupancy" under the policy. FLM, LLC v. The Cincinnati Ins. Co., 2012 Ind. Ct. App. LEXIS 411 (Ind. Ct. App. Aug. 28, 2012).

   FLM leased property to IRI, which used the property for the storage, mixing, and removal of sand, gravel and similar materials. Under the lease, IRI was required to comply with all federal, state and local environmental, health, or safety statutes, rules, regulations or ordinances.

   IRI eventually stopped paying rent to FLM and abandoned over 100,000 tons of sand on FLM's Property. The Indiana Department of Environmental Management cited IRI and FLM and ordered that the sand be removed. FLM sought indemnity under the lease from IRI.

   IRI was insured by Cincinnati under a CGL policy and an umbrella policy. FLM filed a complaint against Cincinnati seeking a declaration that IRI had coverage under the liability policies. The trial court granted summary judgment to Cincinnati, finding there was no duty to defend or indemnify IRI.

   Under the policies, Cincinnati promised to pay "sums that the insured becomes legally obligated to pay as damages because of 'personal injury.'" Personal injury was defined as "injury other than 'bodily injury' arising out of one or more of the following:. . . The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a . . . premises that a person occupies by or on behalf of its owner, landlord, or lessor . . . ." Therefore, the policies required that "personal injury" arise from an enumerated "offense," which could be either a "wrongful entry" or an "invasion of the right of private occupancy."

      FLM's allegations involved sand initially brought onto property owned by FLM legitimately under the lease, but later abandoned by IRI when it could no longer pay its rent. The sand interfered with FLM's right to use and enjoy its property. Therefore, the language used in the policies could be reasonably construed to cover the abandonment.

   Cincinnati contended that if the abandoned sand constituted a wrongful entry or invasion of the right of private occupancy, the policies' personal injury coverage was limited to IRI's liability for: "the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of . . . a premises that a person occupies by or on behalf of its owner, landlord, or lessor." The underlined language limited the coverage to only a wrongful entry or invasion of the right of private occupancy that is by or on behalf of its owner, landlord, or lessor. Therefore, even if the abandonment of the sand constituted a wrongful entry or invasion of the property, it was not committed by or on the behalf of the property's owner, landlord, or lessor, here FLM, but by IRI.

   FLM argued that without the word "committed," it was unclear whether the last clause "by or on behalf of its owner, landlord, or lessor" applied. If Cincinnati meant to only cover wrongful entry or invasion committed by or on behalf of the property's owner, landlord, or lessor, then it should have drafted its policy more clearly.

   Both versions were reasonable interpretations. Therefore the provision was found ambiguous and was construed in favor of the insured.