                United States Court of Appeals
                           For the Eighth Circuit
                       ___________________________

                               No. 15-3936
                       ___________________________

  Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a
         foreign partnership; Hiland Operating, LLC, a foreign company

                     lllllllllllllllllllll Plaintiffs - Appellants

                                          v.

           National Union Fire Insurance Company of Pittsburgh, PA

                      lllllllllllllllllllll Defendant - Appellee
                                     ____________

                   Appeal from United States District Court
                  for the District of North Dakota - Bismarck
                                 ____________

                         Submitted: December 15, 2016
                            Filed: January 31, 2017
                                ____________

Before KELLY and MURPHY, Circuit Judges, and MONTGOMERY,1 District
Judge.
                          ____________

MURPHY, Circuit Judge.




     1
       The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota, sitting by designation.
       Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating,
LLC (collectively, Hiland) brought this insurance coverage action against National
Union Fire Insurance Company of Pittsburgh, PA (National Union). Hiland alleged
that National Union had a duty to defend and indemnify it in connection with a
lawsuit arising from an explosion at its natural gas processing facility. The district
court2 granted National Union summary judgment after concluding that an exclusion
to the insurance policy barred coverage. Hiland appeals, and we affirm.

                                          I.

       Hiland owns and operates a natural gas processing facility in Watford City,
North Dakota. The processing facility receives gas and hydrocarbon products and
processes them into byproducts for sale. Hiland entered into a master service contract
with Missouri Basin Well Service (Missouri Basin). That contract provided that
Missouri Basin would "from time to time, be requested by Hiland . . . to perform
certain work or furnish certain services to Hiland." The contract also required
Missouri Basin to obtain insurance policies which named it as the primary insured
and Hiland as an additional insured.

       Missouri Basin also procured a commercial general liability insurance policy
through National Union in April 2011, which was effective through April 2012. An
endorsement to the policy provided that any organization to which Missouri Basin is
obligated as a result of any contract or agreement would be included as an additional
insured under the policy. The policy required National Union to pay all "sums that
the insured becomes legally obligated to pay as damages because of 'bodily injury' or
'property damage'" which the policy covered. The policy also required National
Union "to defend the insured against any 'suit' seeking those damages."


      2
       The Honorable Daniel L. Hovland, United States District Judge for the District
of North Dakota.

                                         -2-
      The policy included an endorsement which excluded coverage for:

      (1) "Bodily Injury" or "property damage" arising out of the actual,
      alleged or threatened discharge, dispersal, seepage, migration, release or
      escape of pollutants:
            (a) At or from any premises, site or location which is or was at
            any time owned or occupied by . . . any insured. . . .
            (b) At or from any premises, site or location which is or was at
            any time used by or for any insured . . . for the handling, storage,
            disposal, processing or treatment of waste;
            (c) Which are or were at any time transported, handled, stored,
            treated, disposed of, or processed as waste by or for:
                    (i) Any insured . . . .
            (d) At or from any premises, site or location on which any insured
            or any contractors or subcontractors working directly or indirectly
            on any insured's behalf are performing operations . . . .

The endorsement defined "pollutants" as "any solid, liquid, gaseous or thermal irritant
or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste." The endorsement provided that subparagraphs (1)(a) and (1)(d) do not apply
if the pollution "commences during the term of the policy," the insured discovers the
pollution within seven days "after it commences," and the insured reports the
pollution to the insurer within twenty one business days following its discovery.

       In October 2011, Hiland requested that Missouri Basin remove water from its
hydrocarbon condensate tanks at its Watford City processing facility. Condensate is
one of the marketable byproducts derived from the facility's processing of gas and
hydrocarbon products. It is a flammable, volatile, and explosive product. Missouri
Basin asked B&B Heavy Haul, LLC (B&B), a subcontractor, to haul the water. After
B&B employee Lenny Chapman arrived at the facility he positioned his truck in front
of one of the condensate tanks. Before Chapman began removing the water, one of
the tanks overflowed. The condensate then caused an explosion which seriously
injured Chapman.

                                         -3-
        Chapman and his wife filed a lawsuit against Hiland, alleging negligence and
loss of consortium. The Chapmans later settled their claims against Hiland. National
Union refused to defend and indemnify Hiland as an additional insured under its
insurance policy with Missouri Basin. Hiland then filed this declaratory judgment
action against National Union, arguing it was an additional insured under the
insurance policy and that National Union had breached the policy by refusing to
defend or indemnify it. After the parties filed cross motions for summary judgment,
the district court granted National Union summary judgment. The court concluded
that although Hiland was an additional insured under the policy, the Chapmans' action
fell within the pollution exclusion. Hiland appeals.

                                         II.

       We review a district court's "grant of summary judgment de novo and consider
the facts in the light most favorable to the nonmoving party." Nichols v. Tri-Nat'l
Logistics, Inc., 809 F.3d 981, 985 (8th Cir. 2016). A district court's grant of
"[s]ummary judgment is only appropriate when 'there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as a matter of law.'" Id.
(quoting Pinson v. 45 Dev., LLC, 758 F.3d 948, 951–52 (8th Cir. 2014)). We review
de novo questions of contract interpretation. Anderson v. Hess Corp., 649 F.3d 891,
896 (8th Cir. 2011).

       It is undisputed that North Dakota law governs this action. In North Dakota,
an "insurer's obligation to defend its insured is ordinarily measured by the terms of
the insurance policy and the pleading of the claimant who sues the insured." Tibert
v. Nodak Mut. Ins. Co., 816 N.W.2d 31, 42 (N.D. 2012) (quoting Schultze v. Cont'l
Ins. Co., 619 N.W.2d 510, 513 (N.D. 2000)). If the allegations in the Chapmans'
complaint could have supported recovery upon a risk covered under National Union's
policy, National Union would have a duty to defend Hiland. Id. The duty to defend
is broader than the duty to indemnify. Id. at 43.

                                         -4-
                                         III.

      Hiland first argues that the pollution exclusion in the National Union insurance
policy is ambiguous. If language in an insurance contract is ambiguous, "any
ambiguity or any reasonable doubt as to its meaning should be construed strictly
against the insurer, and the doubt or ambiguity favorably to the insured." Universal
Underwriters Ins. Co. v. Johnson, 110 N.W.2d 224, 226 (N.D. 1961). A term is
ambiguous if "there is doubt or uncertainty as to its meaning and it is fairly
susceptible of two interpretations." Id. at 227 (quoting 44 C.J.S. Insurance § 297c,
at 1166–69).

       National Union argues that Hiland waived any argument that the pollution
exclusion was ambiguous because Hiland did not raise any such argument before the
district court. We will not ordinarily "consider arguments raised for the first time on
appeal." Cole v. Int'l Union, United Auto., Aerospace & Agric. Implement Workers
of Am., 533 F.3d 932, 936 (8th Cir. 2008) (quoting Wiser v. Wayne Farms, 411 F.3d
923, 926 (8th Cir. 2005)). A party therefore "cannot assert arguments that were not
presented to the district court in opposing summary judgment in an appeal contesting
an adverse grant of summary judgment." Id. "We may notice plain error despite a
failure to raise the issue below, but we generally do so only to prevent a miscarriage
of justice." Id. (internal quotation marks omitted).

       In its memorandum in support of summary judgment, National Union argued
that the pollution exclusion in its policy "is clear and unambiguous." Hiland chose
not to contest this point in its response in opposition to summary judgment. Hiland
instead argued that hydrocarbon condensate is not a pollutant under the unambiguous
terms of the policy.

    Hiland argues that the following sentence in its memorandum in opposition to
summary judgment preserved its ambiguity argument: "To find otherwise would

                                         -5-
require the Court to look beyond the policy's definition of 'pollutant' and to interpret
the ambiguous term to mean what National Union wants it to mean, and not what the
policy describes it as being." Read in context, however, this sentence merely
reiterates Hiland's argument that the definition of pollutant is unambiguous. Indeed,
the district court noted in its summary judgment order that "Hiland does not contend
the language of the pollution exclusion is ambiguous." Because Hiland did not
directly dispute the ambiguity issue, it is waived. See Cole, 533 F.3d at 936.

       We need not review this issue for plain error because a failure to review it will
not result in a miscarriage of justice. North Dakota has not addressed whether
pollution exclusions like the one in this case are ambiguous. Moreover, the "majority
of state and federal jurisdictions have held that absolute pollution exclusions are
unambiguous as a matter of law." Church Mut. Ins. Co. v. Clay Ctr. Christian
Church, 746 F.3d 375, 380 (8th Cir. 2014) (quoting Cincinnati Ins. Co. v. Becker
Warehouse, Inc., 635 N.W.2d 112, 118 (Neb. 2001)).

                                          IV.

        Hiland next argues that the district court erred by concluding that condensate
is a pollutant. National Union's insurance policy excluded from coverage bodily
injuries or property damage "arising out of the . . . discharge, dispersal, seepage,
migration, release or escape of pollutants." The policy defined pollutants as "any
solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste." The policy did not define irritant or
contaminant, however. North Dakota applies "the plain, ordinary meaning" to an
undefined term in an insurance policy so long as the term is not subject to strict
technical usage. Hanneman v. Cont'l W. Ins. Co., 575 N.W.2d 445, 450–51 (N.D.
1998). Neither party argues that the definition of pollutant is subject to strict
technical usage.



                                          -6-
        North Dakota courts consider dictionaries to be "good source[s] to determine
the plain, ordinary definition of an undefined term." Hanneman, 575 N.W.2d at 451.
An irritant is defined as "something that irritates," that is, that "produce[s] irritation."
Webster's Third New International Dictionary 1197 (2002); see also The American
Heritage Dictionary of the English Language 928 (5th ed. 2011) ("Causing irritation,
especially physical irritation."). A contaminant is "something that contaminates," that
is, that "soil[s], stains[s], corrupt[s], or infect[s] by contact or association." Webster's
Third New International Dictionary, supra, at 490; see also The American Heritage
Dictionary of the English Language, supra, at 396 (defining a contaminant as "[o]ne
that contaminates," that is, that makes "impure or unclean by contact or mixture").

       According to Chapman's complaint, condensate is a saleable byproduct that
results from the processing of gas and hydrocarbon products. The complaint
described condensate as "flammable, volatile, and explosive." Condensate is
therefore a contaminant because flammable, volatile, and explosive liquid and gas has
the ability to soil, stain, corrupt, or infect the environment. This conclusion is in
accord with the "bulk of the case authority . . . [which] holds that oil, gasoline, and
other petroleum products are toxic by nature and therefore they constitute a
contaminant when released into the environment." Aetna Cas. & Sur. Co. v. Dow
Chem. Co., 933 F. Supp. 675, 683 (E.D. Mich. 1996) (collecting cases); see also
Owners Ins. Co. v. Farmer, 173 F. Supp. 2d 1330, 1332–34 (N.D. Ga. 2001)
(concluding that diesel fuel is a "pollutant"); Breese v. Hadson Petroleum (USA),
Inc., 955 F. Supp. 648, 650–51 & n.7 (M.D. La. 1996) (concluding that diesel fuel is
a "liquid contaminant"); Guilford Indus., Inc. v. Liberty Mut. Ins. Co., 688 F. Supp.
792, 793–96 (D. Me. 1988) (concluding that fuel oil is a "pollutant").

      The conclusion that condensate is a pollutant is further supported by Noble
Energy, Inc. v. Bituminous Cas. Co., 529 F.3d 642 (5th Cir. 2008). In that case Noble
Energy contracted with a water hauler "to collect and dispose of Basic Sediment and
Water ('BS&W') from Noble's storage tanks" at an oilfield recycling facility. Id. at

                                            -7-
644. The water hauler was covered by an insurance policy that contained a pollution
exclusion that is identical in all relevant parts to the exclusion here. See id. at 646.
While an employee of the water hauler was unloading the BS&W from a truck,
condensate vapors dispersed and caused the truck's engine to explode. Id. at 644.
The court concluded that condensate "indisputably [met] the policy's definition of
'pollutant'" and the explosion "indisputably arose out of the discharge, dispersal,
release, or escape of the BS&W and its vapors." Id. at 647. We find Noble Energy,
Inc. persuasive and indistinguishable from the current action.

       Hiland nevertheless argues that even if condensate has the inherent properties
of a contaminant, it does not fall within the policy's definition of a contaminant
because the condensate caused harm in a manner other than by contamination. In
United Fire & Casualty Co. v. Titan Contractors Service, Inc., 751 F.3d 880, 886 (8th
Cir. 2014), we concluded that a "pollution exclusion will not necessarily apply where
the substance causing injury has the potential to irritate but has . . . caused harm in a
manner other than by irritating." As an example, we noted that if a bottle of Drano
qualified as a "pollutant" a pollution exclusion would not necessarily "bar coverage
for bodily injuries suffered by one who slips and falls on the spilled contents of [the]
bottle of Drano." Id. (quoting Pipefitters Welfare Educ. Fund v. Westchester Fire Ins.
Co., 976 F.2d 1037, 1043 (7th Cir. 1992)).

       According to the Chapmans' complaint, the condensate caused Chapman's
injuries due to its contamination of the environment. Condensate is a contaminant
because it is flammable, volatile, and explosive. After Hiland permitted the
condensate tanks to overflow, condensate escaped into the environment. The
complaint alleged that overflow of the condensate tanks "caused ignition, fire, and an
explosion" which seriously injured Chapman. Because condensate is a contaminant
due to its flammable, volatile, and explosive properties and because Chapman's




                                          -8-
injuries were the result of an explosion, the nature of the harm here is directly related
to the nature of the contaminant.3

        Hiland also attempts to rely on Hocker Oil Co. v. Barker-Phillips-Jackson,
Inc., 997 S.W.2d 510 (Mo. Ct. App. 1999). In Hocker Oil, a company that owned
gasoline service stations sought coverage from its insurer after a drain plug on one
of its gasoline storage tanks failed, thereby releasing gasoline into the ground. Id. at
512. The insurer denied coverage under a pollution exclusion identical to the
exclusion in the present action. Id. at 512–13. After concluding that the exclusion
was ambiguous, the court determined there that gasoline was not a pollutant because
the insured's primary business was to sell gasoline. Id. at 518. Hiland argues
similarly that condensate is not a pollutant because it is in the business of selling
condensate. As we have recently noted, however, Hocker Oil is not persuasive
because it "has been almost uniformly rejected by appellate courts in other
jurisdictions, and has not since been cited or referred to favorably by the Supreme
Court of Missouri." Doe Run Res. Corp. v. Lexington Ins. Co., 719 F.3d 868, 875
(8th Cir. 2013).

      The district court therefore did not err by concluding that National Union did
not have a duty to defend or indemnify Hiland because the allegations in the
Chapmans' complaint fell within the policy's pollution exclusion.4



      3
       Notably, the Chapmans' complaint does not allege that "the substance causing
injury"—the condensate—"caused harm in a manner other than by"
contaminating—that is, by exploding due to its flammable, volatile, and explosive
nature. See United Fire, 751 F.3d at 886. Nor does the Chapmans' complaint allege
Chapman's injuries were caused by an intervening or superseding cause.
      4
        Because we conclude that condensate is a contaminant, we need not determine
whether the district court properly concluded that it qualifies as waste under the
policy.

                                          -9-
                                          V.

       The district court concluded that National Union was not required to defend or
indemnify Hiland because subdivisions (1)(a) and (1)(d) of the pollution exclusion
applied. Subdivisions (1)(a) and (1)(d) do not however apply if the pollution
commenced during the term of the policy, the insured discovers the pollution within
seven days after it commences, and the insured reports the discharge of pollution to
the insurer in writing within twenty one days of discovering it. The district court
concluded that this exception to the exclusion did not apply because Hiland failed to
offer evidence that it reported the pollution to National Union within twenty one days
of discovering it.

       Hiland argues that the district court improperly placed on Hiland the burden
at the summary judgment stage to offer affirmative evidence that it reported the
pollution within twenty one days. Hiland contends that even if it was required to
prove at trial that it reported the pollution to National Union within twenty one days,
National Union had the burden at summary judgment to assert the inapplicability of
this exception, thus shifting the burden to Hiland to show affirmatively that it
reported the pollution in a timely manner.

       Under Rule 56, the party moving for summary judgment must show "that there
is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(a). The nonmoving party may resist a
properly supported motion for summary judgment by "asserting affirmative defenses
which it has the burden to prove" and supporting those defenses with specific facts.
Midwest Oilseeds, Inc. v. Limagrain Genetics Corp., 387 F.3d 705, 714 (8th Cir.
2004).

      In North Dakota the "insurer has the burden to prove the applicability of a
policy exclusion." Lovas v. St. Paul Ins. Cos., 240 N.W.2d 53, 62 (N.D. 1976)

                                         -10-
(quoting Long v. Glidden Mut. Ins. Ass'n, 215 N.W.2d 271, 274 (Iowa 1974)). The
insured, however, carries the burden to prove the applicability of "an exception to the
exclusion in order to benefit from coverage." Nationwide Mut. Ins. Cos. v.
Lagodinski, 683 N.W.2d 903, 907 (N.D. 2004). As noted above, National Union met
its summary judgment burden by proving the applicability of the pollution exclusion.
The district court then properly placed the burden of proving the applicability of an
exception to this exclusion on Hiland. Because Hiland did not offer specific facts
showing that it reported the pollution to National Union within twenty one days, the
district court did not err by concluding that the exception to the exclusion did not
apply.

                                         VI.

      For these reasons, we affirm the judgment of the district court.
                      ______________________________




                                         -11-
