IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-60302

NATIONWIDE MUTUAL INSURANCE COMPANY,

 Plaintiff – Counter Defendant – Appellee

v.

GUM TREE PROPERTY MANAGEMENT, L.L.C.; THE SOUTHERN 

GROUP OF MISSISSIPPI, INCORPORATED; WILSON COLEMAN,

 Defendants – Counter Claimants – Third 

 Party Plaintiffs – Appellants

v.

THE NOWELL AGENCY, INCORPORATED; GREG BOST,

 Third Party Defendants – Appellees

Appeal from the United States District Court

for the Northern District of Mississippi

USDC No. 1:12-CV-181

Before REAVLEY, SMITH, and SOUTHWICK, Circuit Judges.

PER CURIAM:*

 Nationwide Mutual Insurance Company sought a declaratory judgment

that it had no duty to defend or indemnify insureds in a suit filed in Kentucky 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

January 14, 2015

Lyle W. Cayce

Clerk

 

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state court. The district court granted summary judgment in favor of 

Nationwide and the third-party defendants. The insureds now appeal. We 

AFFIRM. 

FACTUAL AND PROCEDURAL BACKGROUND

The claim that Nationwide had a duty to defend and indemnify arose 

from litigation brought in Kentucky state court by Lexington Relocation 

Services, LLC against three parties whom we will call the “Gum Tree 

Defendants”: Gum Tree Property Management, LLC; The Southern Group of 

Mississippi, Inc.; and Wilson Coleman. The plaintiff Lexington is a corporate 

housing company that provides relocation services in several states. These

defendants rent and manage real estate in the Tupelo, Mississippi area. 

Coleman is the president of both Gum Tree and The Southern Group. 

In the Kentucky litigation, Lexington claimed that one of its former 

employees, Misty McGuire, had violated her obligations to Lexington while

working for these defendants. Lexington had hired McGuire in 2003 as an 

account specialist. McGuire signed an employment agreement that prohibited 

her from using or disclosing confidential information; working for or assisting 

any entity that competed with Lexington within the business jurisdiction for 

one year; working within the Lexington area for one year; and directly or 

indirectly soliciting any of Lexington’s clients, customers, or employees. 

McGuire resigned from Lexington in July 2010. Lexington alleges that 

McGuire almost immediately went to work for the Gum Tree Defendants

performing substantially the same marketing and sales tasks that she had 

previously performed, in violation of her employment agreement. Lexington 

claims that the Gum Tree Defendants were aware of the restrictions on 

McGuire but solicited and received confidential information from McGuire and 

used it to solicit Lexington’s current and prospective customers, causing 

Lexington to suffer prejudice and incur damages. 

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Lexington brought claims for: (1) tortious interference with contractual 

relations, (2) tortious interference with actual and prospective business 

advantages, (3) civil conspiracy, (4) conversion, (5) breach of fiduciary duty, (6) 

breach of duty of loyalty, (7) aiding and abetting a fiduciary breach, (8) 

misappropriation of trade secrets, (9) fraud, (10) negligent misrepresentation, 

(11) unjust enrichment, (12) unfair competition, and (13) negligence per se. 

After Lexington filed suit, the Gum Tree Defendants demanded that 

Nationwide provide a defense and indemnify them from any judgment. The

Gum Tree Defendants had nine different general commercial liability and 

umbrella policies provided by Nationwide. Five policies were issued to The 

Southern Group and four were issued to Gum Tree. 

Coleman purchased the policies from Greg Bost, an agent with the 

Nowell Agency. The Gum Tree Defendants assert that Bost was their exclusive 

insurance agent, and that Coleman directly contacted Bost with coverage and 

claims questions. Coleman allegedly never reported a claim directly to 

Nationwide, as Bost was his liaison. 

The Gum Tree Defendants assert that sometime in July or August 2011, 

shortly after being served with the complaint, Coleman called Bost to tell him 

that the Gum Tree Defendants had been or were in the process of being sued. 

Bost recalls the conversation but disputes that Coleman informed him that the 

Gum Tree Defendants were being sued. According to Bost, Coleman was only 

“vaguely complaining about a problem.” 

On March 14, 2012, eight months after being served, Coleman e-mailed 

Bost to ask if Nationwide would provide coverage for the lawsuit. Bost 

responded the next day and requested a copy of the complaint. The attorney 

for the Gum Tree Defendants e-mailed the complaint to a Nationwide adjuster. 

The Gum Tree Defendants assert that in this e-mail their attorney informed 

Nationwide that they denied all allegations of intentional wrongdoing. 

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Nationwide sent Coleman a letter on May 1 informing him that it was still 

investigating the claim but, pending a final determination, denied a duty to 

defend or indemnify. 

Nationwide formally denied coverage on July 12 and 17, 2012. It then 

brought this suit in the United States District Court for the Northern District 

of Mississippi. It sought a declaration that it had no duty to defend or 

indemnify. The Gum Tree Defendants counterclaimed and also filed a thirdparty complaint against Bost and the Nowell Agency, alleging breach of 

fiduciary duty, breach of implied covenant of good faith and fair dealing, and 

negligence. All of the parties filed motions for summary judgment. 

The district court issued two separate opinions granting summary 

judgment for Nationwide, Bost, and the Nowell Agency. In the first opinion, 

the district court agreed with Nationwide that it had no duty to defend or 

indemnify in the Kentucky litigation. Based on this holding, the court issued 

a second opinion in favor of Bost and the Nowell Agency. The Gum Tree 

Defendants appeal both decisions.

DISCUSSION

This court reviews a district court’s grant of summary judgment de novo, 

applying the same standards as the district court. Catlin Syndicate Ltd. v. 

Imperial Palace of Miss., Inc., 600 F.3d 511, 513 (5th Cir. 2010). Summary 

judgment is proper “if the movant shows 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). “Under Mississippi law, construction of an insurance 

policy presents a question of law, which we review de novo.” State Farm Mut. 

Auto. Ins. Co. v. LogistiCare Solutions, LLC, 751 F.3d 684, 688 (5th Cir. 2014)

(citation omitted).

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I. True Facts Exception

Under Mississippi law, “an insurance company’s duty to defend its 

insureds derives neither from common law nor statute, but rather from the 

provisions of its policy . . . .” Baker Donelson Bearman & Caldwell, P.C. v. 

Muirhead, 920 So. 2d 440, 450 (Miss. 2006). In most instances, an insurer’s

“duty to defend is neither greater nor broader than the duty to comply with its 

other contractual obligations.” Id. 

Whether an insurer has a duty to defend is primarily determined by 

comparing the policy language with the allegations in the underlying 

complaint or declaration. Delta Pride Catfish, Inc. v. Home Ins. Co., 697 So. 2d 

400, 403 (Miss. 1997) (citation omitted). “An insurance company's duty to 

defend its insured is triggered when it becomes aware that a complaint has 

been filed which contains reasonable, plausible allegations of conduct covered 

by the policy.” Baker Donelson, 920 So. 2d at 451.1

There is a narrow exception to this general rule. Even if the allegations 

in the underlying complaint do not trigger coverage, an insurer still has a duty 

to defend if the insurer learns of facts — not mere assertions — that support 

the existence of coverage:

[W]here, through independent investigation, an insurer becomes 

aware that the true facts, if established, present a claim against 

the insured which potentially would be covered under the policy, 

the insurer must provide a defense until it appears that the facts 

upon which liability is predicated fall outside the policy's coverage.

1 Some states, such as Texas, refer to this as the “eight-corners rule,” because what is 

within the four corners of the policy is compared with the assertions within the four corners 

of the complaint. See, e.g., GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 

305, 308 (Tex. 2006). Mississippi case law does not recognize that term, though some of this 

court’s opinions have affixed the label to the similar analysis under Mississippi insurance 

law. See, e.g., QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 443 (5th Cir. 2009).

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Auto. Ins. Co. of Hartford v. Lipscomb, 75 So. 3d 557, 559 (Miss. 2011) (citing 

Mavar Shrimp & Oyster Co., Ltd. v. U.S. Fid. & Guar. Co., 187 So. 2d 871, 875 

(Miss. 1966)). 

We just described the exception as “narrow” because the Mississippi 

courts have applied the exception only when the insured becomes aware that 

the “true facts” of the events leading to the claim support at least a duty to 

defend. For example, in one of the more recent cases, the insurance company 

investigated the claim and discovered — contrary to the complaint — that its 

insured, who was covered only under a home-owner’s policy, admitted that the 

structure subject to the claim was actually rental property. See Lipscomb, 75 

So. 3d at 560–61. Because the person seeking coverage admitted to his insurer

facts proving there was no coverage, there was no duty to defend. Id.

In an earlier case, we discussed the Mississippi doctrine in a manner 

relevant to the case before us now. Am. States Ins. Co. v. Natchez Steam 

Laundry, 131 F.3d 551, 553 (5th Cir. 1998). There, the insured argued that its 

insurer had notice of true facts that triggered the duty to defend. Id. The 

complaint alleged that the insured had acted intentionally at its laundry when 

it engaged in bawdy behavior toward the plaintiff; the conduct constituted 

sexual harassment and created a hostile work environment. Id. at 552. Based 

on the assertions, the insurer determined there was no coverage because of an 

intentional-act exclusion in the policy. Id. at 552–53. The insured, though, 

argued that by informing the insurer that it denied acting intentionally, it 

created a “true fact” sufficient to trigger the duty to defend. Id. at 553. This 

court disagreed. We held that a denial “is not a ‘fact,’ but only an assertion.” 

Id. A contrary conclusion would allow an insured to “trigger the duty to defend 

merely by denying the allegations in the complaint.” Id. 

The Gum Tree Defendants suggest that Nationwide’s duty to defend was 

triggered after it presented the insurer with various pleadings and evidence. 

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Their answer denied any intentional conduct. Coleman, president of the other 

two Gum Tree Defendants, also presented a sworn affidavit that denied any 

intentional conduct. The Gum Tree Defendants claim that these documents 

establish the falsity of the underlying allegations. The district court 

determined that these items do not contain any true facts and are simply 

denials of the allegations in the complaint. 

The general rule for determining whether the duty to defend has been 

triggered relies on what the plaintiff alleges, regardless of what the defendant 

denies, and compares the allegations to the policy language. Perhaps more 

often than not in duty-to-defend cases, it is the plaintiff’s claim that creates 

coverage. Here, though, as in Natchez Steam Laundry, the plaintiff’s claim 

presents a case excluded from the coverage provided by the relevant policies. 

We do not interpret the “true facts” rule to require an insurance company, 

when the claim is outside coverage, to consider the denials in an answer when 

deciding whether to defend or to review affidavits from the insured that 

support the denials. Such a rule would transform the narrow exception into a 

broad one. Mississippi case law does not support such a broad reading. Under 

our diversity jurisdiction, we will not extend this state-law doctrine to a place 

the state courts have not gone.

We agree with the district court that a determination of coverage in this 

case is limited to the underlying complaint.

II. Personal Injury

The Gum Tree Defendants claim that they are entitled to coverage 

because the underlying complaint contains allegations of a “personal injury.”

Each of the Nationwide policies extends coverage to a “personal injury” or a 

“personal and advertising injury.” 

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The commercial general liability policies issued to The Southern Group 

define “[p]ersonal and advertising injury” to include “[o]ral or written 

publication, in any manner, of material that slanders or libels a person or 

organization or disparages a person’s or organization’s goods, products or 

services” or “oral or written publication, in any manner, of material that 

violates a person’s right of privacy.” The commercial general liability policies 

issued to the Gum Tree Defendants and one of the umbrella policies issued to 

The Southern Group contain nearly identical definitions of “personal and

advertising injury.” 

The remaining two umbrella policies contain slightly different language. 

These policies define “personal injury” as an “injury, other than advertising 

injury, arising out of one or more of the following offenses committed during 

the policy period in the conduct of your business: . . . (2) The publication or 

utterance of libel or slander or of other defamatory or disparaging material, or 

[a] publication or utterance in violation of an individual’s right of privacy.” 

The district court held that the allegations in the complaint do not fit 

within either of the definitions of personal injury, either as disparagement or

invasion of privacy. We will analyze each definition.

A. Disparagement 

The Gum Tree Defendants argue that the complaint alleges facts that fit 

within the “disparagement” category of “personal injury.” They concede that 

the complaint does not contain explicit allegations of disparagement. Instead, 

they argue that allegations in the complaint describe conduct that is the 

equivalent of disparagement. For example, they argue in their appellate brief 

that Lexington’s allegation that the Gum Tree Defendants “induced, persuaded 

or otherwise caused third parties not to enter into or continue their” 

relationship with Lexington, a claim the complaint labels as “tortious 

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interference,” means that the Gum Tree Defendants must have disparaged 

Lexington in order to induce or persuade. They also argue that the complaint’s 

allegation that defendants and third parties conspired to deprive Lexington of 

business opportunities constitutes an allegation that they conspired to 

disparage Lexington. Further, the damages claimed by Lexington are 

allegedly of the kind that would result from disparagement. 

The district court found that there were “no allegations that the Gum 

Tree Defendants ‘disparaged’ Lexington Relocation while allegedly soliciting 

its current and prospective customers.” The court explained that, because the 

policies do not define “disparage,” the court may rely on the plain, ordinary, 

and popular understanding of the term. The court noted that, according to 

Merriam-Webster’s Dictionary, disparage means “‘to describe (someone or 

something) as unimportant, weak, bad, etc.; to lower in rank or reputation.” 

Using this definition, the court reasoned that the complaint does not allege 

that the Gum Tree Defendants used the trade secrets or confidential 

information to disparage Lexington in any way. 

The Gum Tree Defendants contend that the district court erred in failing 

to consider several court opinions it cited. All except one of the opinions are 

from state courts. None of those are courts in the relevant states of Kentucky 

or Mississippi. Those opinions are inconsistent with this court’s precedent, as 

discussed below, and the district court’s failure to apply them was not error. 

In the most relevant precedent from this court, the insured argued that 

it was entitled to coverage because the underlying complaint alleged 

disparagement. Lamar Adver. Co. v. Cont’l Cas. Co., 396 F.3d 654, 663 (5th 

Cir. 2005). The insured relied on language in the complaint alleging that it

intentionally induced customers to terminate their contracts with the plaintiff; 

other language alleged that the insured improperly solicited and hired the 

plaintiff’s employees. Id. The insured urged this court to construe the 

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pleadings liberally to find allegations of disparagement. Id. at 664. 

Interpreting Louisiana law, we rejected this claim. Id. We noted that because 

Louisiana is a fact-pleading jurisdiction, in order for coverage to exist, the 

complaint would need to allege the elements of a disparagement claim. Id. 

The complaint failed to satisfy this requirement, and we therefore concluded 

that the insured was not entitled to coverage. Id. at 665.

Here, the relevant language in the complaint is nearly identical to that 

in Lamar. Consequently, the complaint is similarly devoid of any allegations 

of disparagement. The Gum Tree Defendants have attempted to distinguish 

this case by noting that Louisiana is a fact-pleading jurisdiction. This does not 

affect our analysis. Regardless of whether fact or notice pleading is the 

standard, Lexington has not alleged that the Gum Tree Defendants disparaged 

its business, under either dictionary definition of disparagement presented by 

the parties. The Gum Tree Defendants suggest that the complaint alleges that 

by soliciting Lexington’s customers, they necessarily harmed Lexington’s 

reputation. What the complaint asserted is that the Gum Tree Defendants 

induced customers to leave Lexington. It never claimed that the inducement 

resulted from disparagement, as opposed to other strategies such as price cuts, 

personal service, or any other aspects of the services offered by the inducer.

To allege a personal injury under the language of the policy, the 

complaint must allege that the Gum Tree Defendants published material that 

disparaged a person or organization. The complaint did not do so. 

B. Invasion of Privacy 

The district court also held that there were no allegations in the 

complaint that Lexington was injured by oral or written publication of material 

that violated its right of privacy. Although the policies contain slightly 

different language, they generally provide coverage for personal injuries 

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resulting from “oral or written publication, in any manner, of material that 

violates a person’s right of privacy.” Other policies provide coverage for oral or 

written publication of material that violates an “individual’s” right of privacy. 

The Gum Tree Defendants claim that the underlying complaint alleges 

that they infringed upon Lexington’s right of privacy by acquiring its 

confidential information without permission. The district court rejected this 

argument on the grounds that the right of privacy does not extend to entities 

like Lexington. The court noted that although the policy does not define 

“person,” the phrase “persons or organizations” is used in other provisions, and 

the policies differentiate between an individual and a business. Thus, the 

provisions providing coverage for offenses that violate a person’s right of 

privacy cannot apply in this case because Lexington is a business, not a person. 

The Gum Tree Defendants argue that because “person” is not defined in 

the policies, there is, at the very least, some ambiguity as to this question, 

which requires the provision to be construed in favor of the insured under 

Mississippi law. The Gum Tree Defendants have not cited any law suggesting 

that the right to privacy applies to an entity like Lexington. Further, 

Nationwide has correctly noted that Kentucky does not provide a cause of 

action for invasion of a business’s right to privacy. Finally, it is suggestive that 

the policies omit the word “organizations” in the provisions addressing 

invasion of privacy, while including it in other provisions. 

The district court correctly concluded that the allegations do not amount 

to an invasion of privacy. 

III. Advertising Injury

The Gum Tree Defendants further assert that the district court erred in 

holding that they failed to establish that an advertising injury was alleged in 

the complaint. The district court reasoned that the Gum Tree Defendants’ 

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argument failed for four reasons: (1) the alleged offenses were not committed 

in the course of advertising, (2) the allegations do not constitute an “offense”

under the policies, (3) coverage is precluded by the “Knowing Violation of 

Rights of Another” and “Breach of Contract” exclusions, and (4) there is no 

causal connection between the alleged conduct and injury. An analysis of each 

of these reasons is unnecessary. We agree with the district court that the lack 

of a causal connection between any “advertising” and the alleged “advertising 

injury” is alone enough to preclude coverage. 

Mississippi law requires a causal connection between any advertising 

and an alleged advertising injury. Delta Pride, 697 So. 2d at 404. The 

Mississippi Supreme Court concluded that this “majority rule . . . best 

articulates the insured’s objectively reasonable expectations about the scope of 

coverage” and “is partly a matter of interpretation and partly a matter of 

common sense.” Id. The court went on to explain, “Virtually every business 

that sells a product or service advertises . . . . If no causal relationship were 

required between advertising activities and advertising injuries, then 

advertising injury coverage, alone, would encompass most claims related to the

insured’s business.” Id. at 404–05 (internal quotation marks omitted). 

This court, in interpreting the same requirement under Louisiana law,

has noted that there is an insufficient causal connection if the same claim could 

have been asserted regardless of any advertising. Delta Computer Corp. v. 

Frank, 196 F.3d 589, 591 (5th Cir. 1999). Here, the alleged injury resulted 

from the alleged misappropriation of trade secrets. Regardless of whether the 

trade secrets were used to advertise, Lexington still could have brought the 

same claim. 

The Gum Tree Defendants are not entitled to coverage for an advertising 

injury. 

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IV. Claims Against Bost and the Nowell Agency 

On the same day that the district court granted summary judgment in 

favor of Nationwide, it also issued a separate opinion granting summary 

judgment for Bost and the Nowell Agency. The court concluded that because 

there was no coverage, Bost and the Nowell Agency could not have violated 

either the fiduciary duty to procure coverage or the implied covenant of good 

faith and fair dealing. The Gum Tree Defendants appeal this ruling but have 

not meaningfully briefed the argument. Accordingly, review of that judgment 

is waived. See Willis v. Cleo Corp., 749 F.3d 314, 319 (5th Cir. 2014). 

AFFIRMED. 

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