                             UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                             No. 12-2059


ROSS DEVELOPMENT CORPORATION,

                Plaintiff,

          and

FIREMAN’S FUND INSURANCE        COMPANY;   UNITED   STATES   FIRE
INSURANCE COMPANY,

                Defendants - Appellees,

          v.

PCS NITROGEN INCORPORATED,

                Defendant and 3rd-Party Plaintiff - Appellant.



                             No. 12-2454


ROSS DEVELOPMENT CORPORATION,

                 Plaintiff - Appellant,

          v.

FIREMAN’S FUND INSURANCE        COMPANY;   UNITED   STATES   FIRE
INSURANCE COMPANY,

                 Defendants - Appellees,

          and
PCS NITROGEN INCORPORATED,

                Defendant and 3rd-Party Plaintiff.


Appeals from the United States District Court for the District
of South Carolina, at Charleston.   Margaret B. Seymour, Senior
District Judge. (2:08-cv-03672-MBS)


Argued:   May 15, 2013                     Decided:   June 6, 2013


Before WILKINSON, MOTZ, and SHEDD, Circuit Judges.


Affirmed by unpublished per curiam opinion.


ARGUED:    Daniel S. McQueeney, Jr., PRATT-THOMAS WALKER, PA,
Charleston, South Carolina; Michael Howard Ginsberg, JONES DAY,
Pittsburgh, Pennsylvania, for Appellants.       Michael Anthony
Kotula, RIVKIN RADLER, LLP, Uniondale, New York; Jay Russell
Sever, PHELPS DUNBAR, New Orleans, Louisiana, for Appellees. ON
BRIEF: G. Trenholm Walker, PRATT-THOMAS WALKER, PA, Charleston,
South Carolina, for Ross Development Corporation. Amy K. Pohl,
JONES DAY, Pittsburg, Pennsylvania; Kirby D. Shealy, III, ELLIS,
LAWHORNE & SIMS, P.A., Columbia, South Carolina; Sandra
Kaczmarczyk, ALTON ASSOCIATES PLLC, Washington, D.C., for PCS
Nitrogen, Incorporated.      H. Michael Bowers, SMITH MOORE
LEATHERWOOD LLP, Charleston, South Carolina, for Fireman’s Fund
Insurance Company; Steven W. Ouzts, TURNER PADGET GRAHAM &
LANEY, P.A., Columbia, South Carolina, Jonathan B. Womack,
PHELPS DUNBAR LLP, New Orleans, Louisiana, for United States
Fire Insurance Company.


Unpublished opinions are not binding precedent in this circuit.




                                 2
PER CURIAM:

      Ross Development Corporation brought this action seeking a

declaratory judgment that its insurers had duties to defend and

indemnify     Ross,       its       shareholders,        and     former    directors      in

lawsuits     arising          out      of     the       cleanup      of    environmental

contamination from a site formerly owned by Ross.                           The district

court     granted       the       insurers’    motions         for   summary     judgment,

holding that they had no duty to defend or indemnify.                             Ross and

its   judgment      creditor        from     one   of   the    underlying       cases,   PCS

Nitrogen, Inc., appeal.              We affirm.



                                              I.

      This dispute concerns insurers’ asserted duties arising out

of the cleanup of environmental contamination from a site that

Ross had formerly owned.               See PCS Nitrogen Inc. v. Ashley II of

Charleston LLC, 714 F.3d 161 (4th Cir. 2013).                             The following

facts are undisputed.

      Beginning         in    1906,        Planters      Fertilizer       and    Phosphate

Company (now Ross) operated a phosphate fertilizer manufacturing

facility     at     a    forty-three-acre             site     in    Charleston,     South

Carolina.     Planters manufactured fertilizers by burning pyrite

ore as fuel and reacting sulfuric acid with phosphate rock.                              The

process     generated         a     pyrite    slag      byproduct      containing        high

concentrations of arsenic and lead.                       Over the years, Planters

                                               3
used this slag byproduct on the site as fill material and to

stabilize roads.          In 1963, a fire destroyed a large portion of

Planters’    acid    plant.          After   constructing       a   modernized      acid

plant and resuming fertilizer production, Planters sold the site

and its equipment in 1966.

      Years after selling the site, Ross bought the insurance

policies    at    issue    in    this    appeal.         Ross     purchased      primary

insurance     coverage       from      Fireman’s      Fund      Insurance        Company

(“FFIC”)    for   the     period      from   1973    through      1992,    and    excess

coverage from United States Fire Insurance Company (“USFIC”) for

the period from 1979 through 1984.                  As relevant to this appeal,

each policy provides basic coverage for liability for unexpected

and   unintentional       damages      to    third-party     property,        including

those damages arising out of past activities on Ross’s then-

owned, now-alienated properties, like the Charleston site.                           The

policies, however, can be divided into two groups based on the

extent to which they exclude from coverage liability arising out

of damages caused by pollution.

      The   first    group      of   policies    --      FFIC’s     primary    coverage

policies issued for the period from 1973 through 1987 and all of

USFIC’s     excess      coverage      policies      --    include      a   “qualified

pollution exclusion.”           This provision excludes from coverage, in

pertinent part, liability “arising out of the discharge . . . of

. . . waste materials or . . . pollutants into the land.”                            The

                                             4
exclusion      is    “qualified”     because       it    does      not      apply    if   the

“discharge . . . is sudden and accidental.”

      The second group of policies -- those issued by FFIC for

the   period      from    1987   through        1990    --    include       an     “absolute

pollution    exclusion.”         This   provision            excludes       from    coverage

liability      for    property     damage       “arising       out    of     the    actual,

alleged or threatened discharge, dispersal, release or escape of

pollutants,” including waste, with a defined connection to the

insured.       This      exclusion   does       not     contain      an     exception     for

“sudden     and      accidental”     discharges,             but     does     except      all

liability for third-property damage arising out of an otherwise-

excluded pollutant discharge if that discharge is “caused by

heat, smoke or fumes from a hostile fire.” 1

      In the 2000s, Ashley II of Charleston, the current owner of

a large portion of the site, began to remediate environmental

contamination at the site.              The district court summarized the

site’s present conditions as follows:

      There are four conditions at the Site that the
      remediation seeks to correct:   arsenic contamination,
      lead   contamination,    low  pH,   and   carcinogenic
      polyaromatic    hydrocarbon  (“cPAH”)   contamination.
      Arsenic and lead contamination are found across the
      entire Site.   There are two “hot spots” for cPAHs on
      the Site. . . .   The source of the cPAH contamination
      was a fire that destroyed a major portion of the acid
      plant in 1963.    The cost of remediation is directly

      1
       Although FFIC continued insuring Ross beyond 1990, those
policies are not at issue in this appeal.


                                            5
       related to the volume of contaminated soil on the
       Site.   The predominant factors contributing to the
       costs of the clean-up are the amount of hazardous
       materials and the spread of these hazardous materials
       throughout the Site. . . .    Ross, formerly known as
       Planters, is the only known Site owner that burned
       pyrite ore and generated pyrite slag. Pyrite slag is
       the source of the vast majority of the arsenic and
       much of the lead contamination at the Site.

Ross Dev. Corp. v. Fireman’s Fund Ins. Co., No. 2:08-3672-MBS, -

- F. Supp. 2d --, 2012 WL 5897245, at *2 (D.S.C. Nov. 15, 2012)

(internal citations omitted).               No party disputes that Planters’

use of pyrite slag provides the source of most of the arsenic

and lead contamination at the site.                       The parties do debate,

however, how quickly arsenic and lead from the slag leached into

surrounding soils and when this contamination migrated to and

damaged surrounding third-party properties.

       In September 2005, Ashley filed an action against PCS (a

successor-in-interest to a former owner of the site) seeking a

declaratory judgment that PCS was jointly and severally liable

for response costs incurred in remediating contamination at the

site     under        the     Comprehensive              Environmental     Response,

Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601–

9675    (2006).         In     January          2007,     PCS    filed   third-party

contribution claims against other parties with past and present

connections      to   the    site,    including         Ross.    PCS’s   third-party

complaint     alleged       that     Ross   was         liable   under   CERCLA   for

“environmental impacts . . . associated with [Ross’] phosphate

                                            6
fertilizer          manufacturing        facilities           at    the     Charleston         site

includ[ing]           elevated        levels     of     metals        .     .    .   in        soil,

groundwater, and sediment.”



                                               II.

        In July 2007, Ross requested a defense of the CERCLA action

from FFIC and USFIC.                  In November 2007, FFIC agreed to defend

Ross in the CERCLA action, but reserved the right to withdraw

that    defense.          USFIC       did    not      reply    to     Ross’s      request       for

defense.

        In     June     2008,     FFIC       notified       Ross      that      it   would       be

withdrawing its defense under its view that the site was not an

“insured premises” under the policies because Ross did not own

it during any of the policy periods at issue.                              However, FFIC did

not formally withdraw its defense at that time.                                 On October 13,

2008, Ross informed FFIC by e-mail of new information that “one

of   the      sources    of     contaminants          [was]    the    fire      in   1963      that

burned down . . . parts of the [acid] plant.”                                   Ross concluded

that “[t]his fire would certainly come within the exception to

the [pollution] exclusion.”                    FFIC formally withdrew its defense

of Ross in the CERCLA action the next day.

       On May 27, 2011, after a bench trial, the district court

found        Ross     liable     to    PCS      for    forty-five          percent        of    the

environmental          response       costs     at    the     site,       see   Ashley     II     of

                                                7
Charleston,      LLC     v.    PCS    Nitrogen,        Inc.,      791    F.   Supp.   2d   431

(D.S.C. 2011), and we affirmed, see PCS Nitrogen Inc., 714 F.3d

161.

       In the meantime, PCS had brought two additional actions to

recover money it believed Ross would owe from the underlying

CERCLA case.       First, in September 2008, PCS filed a shareholder

action    in     state    court       seeking         contribution        from   thirty-two

former    Ross    shareholders         who   received            distribution    of   assets

during Ross’s winding up of its affairs between 1997 and 2006.

Second,    in    December       2009,      PCS       filed   a    fraudulent     conveyance

action in federal court against six individuals that acted as

Ross’s directors between 1992 and 2006.                           Ross sought FFIC’s and

USFIC’s defense of its former shareholders and directors, but

the insurers denied this request.

       Before the district court in this case was Ross’s twice-

amended action seeking a declaration that the FFIC and USFIC

insurance policies provided coverage for liabilities from the

underlying CERCLA action, as well as the related shareholder and

fraudulent conveyance suits.                     Ross also sought a declaration

that FFIC and USFIC had breached their duties to defend Ross,

its    shareholders,          and    its   directors         in    the   three   underlying

suits.    In August 2011, after becoming Ross’s judgment creditor

in the underlying CERCLA action, PCS filed cross-claims against

FFIC and USFIC, also seeking to establish coverage under the

                                                 8
policies for liabilities arising out of the three underlying

actions.

       The     district          court     granted       summary         judgment    to     the

insurers,      holding          that   the      absolute      and    qualified      pollution

exclusion provisions excluded any coverage for liability arising

out    of    the    underlying         CERCLA        action     and,     by   relation,     the

shareholder and fraudulent conveyance suits.                             The court further

held    that    the    complaints          in    the    underlying        actions    did   not

trigger the insurers’ duties to defend Ross.                              Ross, and PCS as

its judgment creditor, (“Appellants”) timely appeal.



                                                III.

       We review a grant of summary judgment de novo.                               Henry v.

Purnell, 652 F.3d 524, 531 (4th Cir. 2011) (en banc).                                “Summary

judgment      is    appropriate          only    if    taking    the     evidence    and    all

reasonable         inferences          drawn     therefrom          in   the     light     most

favorable to the nonmoving party, no material facts are disputed

and the moving party is entitled to judgment as a matter of

law.”       Id. (internal quotation marks omitted).

       Under       South    Carolina       law,       “[c]ourts      interpret      insurance

policy      language       in    accordance       with     its      plain,     ordinary,    and

popular meaning, except with technical language or where the

context requires another meaning.”                      M & M Corp. of S.C. v. Auto-

Owners Ins. Co., 701 S.E.2d 33, 35 (S.C. 2010).                                “Policies are

                                                 9
construed in favor of coverage, and exclusions in an insurance

policy are construed against the insurer.”             Id.    However, an

insured party bears the burden of proving an exception to an

exclusion.     Helena Chem. Co. v. Allianz Underwriters Ins. Co.,

594 S.E.2d 455, 460 n.5 (S.C. 2004).

       An insurer owes its insured two inter-related duties -- the

duty   to   indemnify   (i.e.,   provide   coverage)   and   the   duty   to

defend.      While an insurer’s duty to indemnify its insured is

determined by applying the facts of an underlying judgment to

the policy language, an insurer’s duty to defend generally is

determined by the underlying complaint.          City of Hartsville v.

S.C. Mun. Ins. & Risk Fin. Fund, 677 S.E.2d 574, 578 (S.C.

2009).       Thus,   “[i]f   the   underlying    complaint     creates    a

possibility of coverage under an insurance policy, the insurer

is obligated to defend.”     Id.

       After carefully considering the record, the briefs, and the

applicable law, and having the benefit of oral argument from the

parties, we affirm the judgment in favor of the insurers for the

reasons well-stated by the district court.         Given the clear and

detailed analysis of the district court, we need only address

certain principles that Appellants appear to misunderstand.

       First, it is clear that the underlying CERCLA action (and,

by relation, the shareholder and fraudulent conveyance actions)

initially triggered the policies at issue by imposing liability

                                    10
on   Ross   for     environmental           damages      to    third-party     property,

namely groundwater and tidal marshlands around its former site.

See Helena Chem. Co., 594 S.E.2d at 457 (holding “environmental

cleanup costs” constitute “property damages”).                           However, it is

equally     clear       that     the    qualified         or      absolute     pollution

exclusions in each policy exclude this liability from coverage.

This is so because Ross’s liability for third-party property

damages in the CERCLA action “arises out of” its “discharge” --

use as fill material -- of “waste” or a “waste material” -- the

pyrite slag byproduct -- on the site.                         Thus, the only question

as to the insurers’ duties to indemnify is whether any exception

to the pollution exclusions apply.

     Appellants         first     argue      that       1972-87     policies     provide

coverage     notwithstanding           the     qualified         pollution     exclusion

because the pollution damages to third-party property were both

“sudden”     --    meaning       unexpected        --    and     “accidental.”        See

Greenville Cnty. v. Ins. Reserve Fund, 443 S.E.2d 552, 553 (S.C.

1994) (interpreting “sudden” within the “sudden and accidental”

exception    to     mean    “unexpected”).              This    argument     rests   on   a

fundamentally       flawed       reading     of    the    “sudden    and     accidental”

exception.        The exception’s plain language requires that the

discharge,        not      the    pollution         damages,        be     “sudden    and

accidental.”        See,     e.g.,     JA    159   (“[T]his       exclusion    does   not



                                             11
apply     if     such     discharge      . . .     is     sudden        and     accidental.”

(emphasis added)).

     The       contrary       interpretation       offered        by    Appellants         would

render     the      qualified         pollution    exclusion           clause       completely

superfluous.            See    Liberty    Mut.    Ins.     Co.    v.    Triangle         Indus.,

Inc., 957 F.2d 1153, 1157 (4th Cir. 1992).                         This is so because

the policies at issue provide coverage only for “an accident

. . . which results in . . . property damage neither expected

nor intended from the viewpoint of the insured.”                                   Appellants’

interpretation of the qualified pollution exclusion as excluding

“from th[is] basic coverage all releases of pollution except

those    which      cause      [unexpected       and]    unintended          damages      simply

restates       th[is]         basic    coverage     and      writes          the     pollution

exclusion completely out of the contract.”                             Id.      Accordingly,

because no party disputes the fact that Ross intentionally used

pyrite slag as fill material (i.e., discharged waste) on the

site, the “sudden and accidental” exception to the qualified

pollution exclusion does not apply.                     Accord id. at 1158.

     Appellants’ argument that damages caused by the 1963 acid

plant fire are excepted from the policies’ pollution exclusions

similarly fails.              Appellants are correct that if the 1963 fire

resulted       in    third-party        property        damages    during          the    policy

periods    at       issue     here,    Ross’s     resulting       liability          would   be

covered    both       under      those    policies        with    qualified          pollution

                                             12
exclusions (because the fire was “unexpected” and “accidental)

and   under    those      policies     with       absolute    pollution        exclusions

(because the fire was “hostile”).                  However, Appellants failed to

proffer any evidence that the exceptions actually apply here.

See Helena Chem. Co., 594 S.E.2d at 460 n.5.                            In particular,

they failed to point to any evidence that the 1963 acid plant

fire actually caused any third-party property damage, much less

damage      during      the   policy    periods       at     issue      in   this     case.

Accordingly, the district court did not err in holding that no

policy before it affords coverage for Ross’s underlying CERCLA

liability,      or      the   potential       liabilities         of    Ross’s       former

shareholders and directors in the two related actions.

      For    similar      reasons,     the    district       court     did   not    err    in

holding that the insurers did not have a duty to defend Ross,

its shareholders, or its directors in the underlying actions.

The complaints in the underlying CERCLA action clearly alleged

third-party property damages arising out of the discharge of

pollutants         or    waste   materials,          triggering         each       policy’s

respective qualified or absolute pollution exclusion.                              Further,

the   complaints        raised   no    possibility         that   the    discharge        was

“sudden      and     accidental,”      or,        indeed,     anything       other     than

intentional or part of Ross’s ordinary course of business.                                 As

South Carolina courts have made clear, “an insurer has no duty

to defend an insured where the damage was caused for a reason

                                             13
unambiguously excluded under the policy.”     USAA Prop. & Cas.

Ins. Co. v. Clegg, 661 S.E.2d 791, 797 (S.C. 2008). 2   Thus, the

district court did not err in holding that neither insurer had a

duty to defend Ross in the underlying CERCLA action, or Ross’s

former shareholders and directors in the two related cases.



                               IV.

     For these reasons, and for the reasons stated more fully by

the district court, the judgment of the district court is



                                                        AFFIRMED.




     2
       Nor did Ross’s notice to FFIC that that 1963 acid plant
fire was a source of contamination at the site trigger its duty
to defend.   The notice provided no factual indication that the
fire caused any third-party property damages during the relevant
policy periods.


                               14
