IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-30802

PIONEER EXPLORATION, L.L.C.,

Plaintiff - Appellant

v.

STEADFAST INSURANCE COMPANY,

Defendant - Appellee

Appeal from the United States District Court

for the Western District of Louisiana

Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

In this diversity action, plaintiff-appellant Pioneer Exploration, L.L.C. 

(“Pioneer”) appeals the grant of summary judgment to defendant-appellee 

Steadfast Insurance Co. (“Steadfast”). We agree with the district court that 

coverage for Pioneer’s damages is unavailable under Steadfast’s umbrella

policy and AFFIRM.

United States Court of Appeals

Fifth Circuit

FILED

September 22, 2014

Lyle W. Cayce

Clerk

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I

A

Pioneer, an oil and gas exploration company, operated a gas well 

(“Meaux No. 1 Well”) in Cameron Parish, Louisiana.1 The well was located on 

property owned by John Brent Meaux and Jimmi Meaux McLean (“the 

Meauxes”). At the time of the blowout, the well was leased by Pioneer pursuant 

to a 1958 mineral lease—between the Meauxes’ predecessor-in-interest and 

Pioneer’s predecessor-in-interest—covering approximately 284.52 acres in 

Cameron Parish. The well was located near the southern boundary of the 

Meauxes’ property in a small limestone parking area or “pad,” which occupied 

a little more than half an acre of the Meauxes’ land. Pioneer conducted its 

operations for the Meaux No. 1 Well on this limited portion of land.2

The well suffered a blowout in January 2008, and salt water and other 

fluids flowed from the wellhead until March 2008. The contamination covered 

roughly 12 acres of land, with some portion of the contamination seeping into 

neighbors’ property.

Pioneer began response and cleanup operations immediately. First, 

Pioneer began by hiring a company3 to furnish crews to control and plug the 

well. It took approximately 50 days to control and plug the well, explaining the 

flow from January to March 2008. Second, as part of the cleanup efforts, 

Pioneer hired another company4 to construct levees and impoundments to 

1 The gas well was known as the MRA SUB; J.M. Meaux No. 1, Louisiana Office of 

Conservation Serial Number 101203 (“Meaux No. 1 Well”).

2 At various points, Pioneer operated other wells on the same pad. At the time of the 

blowout, Pioneer operated a salt water disposal well (“Meaux No. 2 SWD”) on the pad. In the 

past, Pioneer had operated another well (“Meaux No. 4 Well”) on the pad as well. 

Unrelated to the southern pad, Pioneer also had a pad near the northern boundary of 

the Meauxes’ land. There, Pioneer operated another well (“Meaux No. 5 Well”). The Meauxes 

had the use of the rest of the property, subject to Pioneer’s rights. 3 Wild Well Control, Inc. performed this task.

4 Roy Bailey Construction, Inc. performed this task.

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contain the fluids and prevent them from flowing onto nearby land—an act 

that Pioneer claims prevented the contamination from spreading to roughly 

315 acres beyond the Meaux property. Third, when the levees and 

impoundments threatened to overflow, Pioneer hired several contractors5 to 

provide specialized “vacuum trucks” to suction and remove the fluids and 

transport them to commercial disposal facilities. Fourth, after the well was 

successfully plugged, Pioneer hired a company6 to perform environmental

remediation on the affected land, which included both the Meauxes’ property 

as well as the property of one of their neighbors, Kevin Rutherford. This 

remediation process lasted from May 2008 until the summer of 2011.

During the course of these events, the Office of Conservation of the 

Louisiana Department of Natural Resources issued an order threatening to 

fine Pioneer $5,000 per day if Pioneer did not commence cleanup. Pioneer was 

also sued by Rutherford and the owners of another adjacent property, Andrew 

J. Vaughan and Gaylin Richard.

When the blowout occurred, Pioneer was insured under three different 

policies. Pioneer had a “control of well” insurance policy, issued by Lloyds of 

London, which provided $5 million in coverage for costs incurred because of a 

well failure. Pioneer also had two policies from Steadfast: a commercial general 

liability (“CGL”) policy and an umbrella policy. Both had terms from April 7, 

2007 to April 7, 2008. Because Pioneer’s costs exceeded the $5 million in 

coverage under the Lloyds policy, Pioneer requested coverage for the 

remaining amount from Steadfast. Steadfast denied coverage.

On January 28, 2009, Pioneer filed this lawsuit in Louisiana state court, 

seeking coverage under both the CGL and umbrella polices. Pioneer sought 

5 Roy Bailey Construction, Inc., Cameron Rental & Tank, and others performed this 

task.

6 Carr Environmental Group, Inc. performed this task.

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costs and expenses incurred in cleaning up and remediating the property; a 

declaratory judgment that Steadfast is obligated to defend or indemnify 

Pioneer with respect to the two lawsuits by the neighboring landowners; and 

penalties, costs, and attorney’s fees for Steadfast’s alleged violation of its good 

faith duty.7 On February 25, 2009, Steadfast timely removed to the U.S. 

District Court for the Western District of Louisiana based on diversity of 

citizenship. Pioneer amended its petition for coverage to include the fact that 

the Meauxes had filed suit against Pioneer, and Steadfast had denied this 

claim as well. The Rutherford and Vaughan/Richard suits settled in December 

2009 and the Meaux suit was dismissed in January 2012 after Pioneer finished 

remediation.

Therefore, Pioneer sought recovery of the following approximate sums: 

$7.1 million to control and plug the well, $6.4 million to construct the levees 

and impoundments and haul the fluids away, $1.2 million to perform 

remediation on the affected property, $91,814 to defend the three lawsuits it 

faced, and $56,354.16 in settlement costs for the Rutherford and 

Vaughan/Richard lawsuits.

While Pioneer originally sought coverage under both policies, it has now 

conceded that coverage is unavailable under the CGL policy. The only policy at 

issue in this appeal is the umbrella policy.

B

1

The umbrella policy has two types of coverage: Coverage A and Coverage 

B. Whether Coverage A or Coverage B applies depends on whether coverage is 

7 See La. Rev. Stat. §§ 22:1973, 22:1892.

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afforded by underlying insurance, a term defined in the umbrella policy.8 If 

coverage is afforded by underlying insurance, then Coverage A applies. If not, 

then Coverage B applies. Both parties agree that coverage was not provided by 

underlying insurance, and therefore, Coverage B applies. 

As relevant to this appeal, the umbrella policy has two parts: the main 

part of the policy, which is a standard ISO form,9 and various attached 

endorsements that modify the policy in some way. The provisions at issue in

this appeal come from both parts. The general description of Coverage B under 

Section I in the main part of the policy states:

B. Coverage B – Umbrella Liability Insurance

Under Coverage B, we will pay on behalf of the 

insured, sums as damages the insured becomes legally 

obligated to pay by reason of liability imposed by law 

or assumed under an insured contract because of 

bodily injury, property damage, or personal and 

advertising injury covered by this insurance but only 

if the injury, damage or offense arises out of your 

business, takes place during the policy period of this 

policy and is caused by an occurrence happening 

anywhere. We will pay such damages in excess of the 

Retained Limit specified in Item 5 of the Declarations 

or the amount payable by other insurance, whichever 

is greater.

Within the main part of the policy, the retained limit is specified as $10,000.

Thus, Pioneer has to bear the cost of the initial $10,000 before Steadfast pays 

its share. A representative of Steadfast admitted during deposition that the 

well blowout meets the definition of an occurrence that happened during the 

8 Underlying insurance has a specific meaning in the umbrella policy, and refers to 

policies listed on a “Schedule of Underlying Insurance.” The CGL policy, i.e., the primary 

policy, qualified as underlying insurance.

9 ISO is an insurance industry organization that develops and publishes standardized 

policy forms and endorsements used by insurance companies.

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policy period and that the blowout arose out of Pioneer’s business. On its face, 

then, coverage seems available. But Steadfast points to several other 

provisions to demonstrate that Pioneer’s claims are not covered. 

2

First, Section IV(C)(8) of the main part of the policy contains a Property 

Damage exclusion. The exclusion states that Coverage B does not apply to 

property damage to: 

Property you own, rent or occupy, including any costs 

or expenses incurred by you, or any person or 

organization or entity, for repair, replacement, 

enhancement, restoration or maintenance of such 

property for any reason, including prevention of injury 

to a person or damage to another’s property.

The Property Damage exclusion thus precludes coverage for any property 

“owned, rented or occupied” by Pioneer.

3

Second, the umbrella policy contains an Oil Industry Limitation (“OIL”)

endorsement. The endorsement begins by stating that it changes the policy. It 

then states that both Coverage A and Coverage B are subject to additional 

exclusions. Specifically, the endorsement provides that:

This policy shall not apply to any obligation or liability 

incurred by or imposed upon any insured arising out 

of:

...

A. 2. any cost or expense incurred by or at the request 

of any insured or any co-owner of a working interest in 

connection with controlling or bringing under control 

any oil, gas or water well which becomes out of control. 

A well shall be deemed out of control only so long as 

there is a continuous flow of drilling fluid, oil, gas or 

water above the ground or ocean floor which is 

uncontrollable;

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...

B. 2. injury to or destruction of property located on or 

above the surface of the earth arising from a blowout 

or cratering of any well.

The OIL endorsement precludes coverage for any costs connected with 

controlling or bringing under control any out-of-control well.

4

Third, there is the Blended Pollution endorsement. This endorsement 

replaces two pollution exclusions in the main part of the policy, specifically 

Sections IV(B)(1) and IV(C)(6). These exclusions, identical in wording, preclude 

coverage for almost all pollution-related expenses under Coverage A and 

Coverage B, respectively.

The Blended Pollution endorsement begins by stating that it changes the 

policy. In Paragraph A, it states that the pollution exclusions in Sections 

IV(B)(1) and IV(C)(6) are deleted. In Paragraphs B(1) and B(2), the 

endorsement reproduces much of the language of the deleted exclusions, 

essentially excluding “any liability, damage, loss, cost or expense” arising from 

actual, alleged, or threatened pollution. But in Paragraph B(3), the 

endorsement limits the preclusion of pollution-related damages. In other 

words, it “buys back” coverage for certain pollution-related damages. 

Paragraph B(3) provides:

Paragraph [B(1) and B(2)(a)] of this endorsement does 

not apply to bodily injury or property damage:

c. Directly caused by any discharge, dispersal, 

seepage, migration, release or escape of 

pollutants that:

(1) Is instantaneous and demonstrable as 

having first commenced at a specific 

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time and day during the policy period 

of this policy;

(2) Is accidental and neither expected nor 

intended from the standpoint of any 

insured;

(3) Is first discovered by any insured 

within seventy-two (72) hours of its 

first commencement; and

(4) Is reported to us by you no later than 

thirty (30) days following the first 

discovery by any insured.

Thus, where there is bodily injury or property damage directly caused by 

pollution and the insured meets the four conditions outlined, coverage is not 

precluded under Paragraphs B(1) and B(2). But the endorsement goes on to 

impose additional conditions on this buyback. Paragraph B(4) explains that 

“coverage afforded under [Paragraph B(3)] of this endorsement does not apply 

to any liability, damage, loss, cost or expense arising out of”:

Clean up, removal, containment, treatment, 

detoxification or neutralization of pollutants existing 

at, or under or within the boundaries of any premises, 

site or location owned, rented or occupied by any 

insured.

Therefore, the Blended Pollution endorsement has its own “owned, rented or 

occupied” exclusion. Next, Paragraph B(8) changes the retained limit to 

$1,000,000 for any insurance that is afforded under the endorsement. In other 

words, even if the insured is entitled to coverage for pollution-related damages, 

it must pay the first $1,000,000. Paragraph B(9) clarifies that for any 

insurance that is afforded under the endorsement:

We will not be obligated to assume the charge of the 

investigation, settlement or defense of any claim 

made, suit brought or proceeding instituted against 

any insured. We will, however, have the right and 

shall be given the opportunity to participate in the 

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defense and trial of any claims, suits or proceedings 

relative to any occurrence which, in our opinion, may 

create liability on our part under the terms of this 

policy. If we exercise such right, we will do so at our 

own expense.

Finally, the endorsement notes that “[a]ll other terms and conditions of the 

policy remain unchanged.”

C

On September 10, 2012, Steadfast moved for summary judgment. After 

briefing and oral argument, the district court granted Steadfast summary 

judgment on all claims, holding that: 1) the OIL endorsement precluded 

coverage for the costs of controlling and plugging the well; 2) the Blended 

Pollution endorsement precluded coverage for the costs of defending the three 

lawsuits; 3) the retained limit precluded coverage for the costs of settling with 

the neighboring landowners; 4) the inability to allocate remediation costs

precluded coverage for the costs of remediating the Rutherford property; 5) the 

Property Damage exclusion and the Blended Pollution endorsement precluded 

coverage for the costs of remediating the Meauxes’ property; 6) the Property 

Damage exclusion and the Blended Pollution endorsement precluded coverage 

for the costs of containment; and 7) the attorneys’ fees sought by Pioneer were 

unwarranted.

Pioneer now timely appeals.

II

We review a district court’s grant of summary judgment de novo, 

applying the same standards applied by the district court.10 Summary 

judgment is appropriate where “the movant shows that there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a 

10 Frakes v. Crete Carrier Corp., 579 F.3d 426, 429 (5th Cir. 2009).

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matter of law.”11 “A genuine issue of material fact exists if the evidence is such 

that a reasonable jury could return a verdict for the non-moving party.”12 In 

reviewing the entire record, we consider “all evidence in a light most favorable 

to the non-moving party and draw[] all reasonable inferences in favor of the 

non-moving party.”13

The movant bears the initial burden and must identify “those portions of 

the pleadings, depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any, which it believes demonstrate the absence 

of a genuine issue of material fact.”14 But the movant “need not negate the 

elements of the nonmovant’s case.”15 Summary judgment must be granted 

“against a party who fails to make a showing sufficient to establish the 

existence of an element essential to that party’s case, and on which it will bear 

the burden of proof at trial.”16 “If the moving party fails to meet this initial 

burden, the motion must be denied, regardless of the nonmovant’s response.”17

The burden then shifts to the nonmovant to demonstrate a genuine issue 

of material fact, but the nonmovant cannot rely on the allegations in the 

pleadings alone.18 Instead, the nonmovant “must go beyond the pleadings and 

designate specific facts showing that there is a genuine issue for trial.”19

11 Fed. R. Civ. P. 56(a).

12 Paz v. Brush Engineered Materials, Inc., 555 F.3d 383, 391 (5th Cir. 2009) (citation 

omitted) (internal quotation marks omitted).

13 Id.

14 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks 

omitted).

15 Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005) (quoting Little v. 

Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)).

16 Malacara v. Garber, 353 F.3d 393, 398 (5th Cir. 2003) (internal quotation marks 

omitted).

17 Kee v. City of Rowlett, Tex., 247 F.3d 206, 210 (5th Cir. 2001) (internal quotation 

marks omitted).

18 Lincoln General Ins. Co. v. Reyna, 401 F.3d 347, 349–50 (5th Cir. 2005).

19 Boudreaux, 402 F.3d at 540 (internal quotation marks omitted).

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“Conclusional allegations and denials, speculation, improbable inferences, 

unsubstantiated assertions, and legalistic argumentation do not adequately 

substitute for specific facts showing a genuine issue for trial.”20 “Only disputes 

over facts that might affect the outcome of the suit under the governing law 

will properly preclude the entry of summary judgment.”21

Finally, we review de novo the interpretation of a contract, including any 

questions about whether the contract is ambiguous.22

III

In diversity cases, we apply the choice-of-law rules of the forum state in 

which the federal court sits.23 Here the forum state is Louisiana. Under 

Louisiana’s choice-of-law rules, the law of the state where the insurance 

contract was issued and executed generally governs the interpretation of that 

contract.24 The umbrella policy was issued and executed in Texas. Moreover, 

the policy states that it was issued and delivered pursuant to the Texas 

insurance statutes. This indicates that Texas law applies.

“We have previously held, however, that [i]f the laws of the states do not 

conflict, then no choice-of-law analysis is necessary, and we simply apply the 

law of the forum state.”25 The district court found that Texas and Louisiana 

law do not conflict on the issue of insurance policy interpretation and applied 

Louisiana law. Neither party challenges this determination, and we continue 

to do the same.

20 Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).

21 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

22 Am. Elec. Power Co. Inc. v. Affiliated FM Ins. Co., 556 F.3d 282, 285 (5th Cir. 2009).

23 Klaxon Co v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941); Am. Int’l Specialty 

Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 260 (5th Cir. 2003).

24 Woodfield v. Bowman, 193 F.3d 354, 360 (5th Cir. 1999).

25 Mumblow v. Monroe Broad., Inc., 401 F.3d 616, 620 (5th Cir. 2005) (internal 

quotation marks omitted).

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IV

Under Louisiana law, insurance policies are contracts between the 

parties and “should be construed by using the general rules of interpretation 

of contracts set forth in the Louisiana Civil Code.”26 When interpreting a 

contract, the court must discern the parties’ common intent.27 “The parties’ 

intent as reflected by the words in the policy determine[s] the extent of 

coverage.”28

Where the terms of the contract are clear and explicit and do not lead to

absurd consequences, no further interpretation may be made in search of the 

intent of the parties.29 “[W]ords of a contract must be given their generally 

prevailing meaning,” but “[w]ords of art and technical terms must be given 

their technical meaning when the contract involves a technical matter.”30 “An 

insurance policy should not be interpreted in an unreasonable or a strained 

manner so as to enlarge or restrict its provisions beyond what is reasonably 

contemplated by its terms or so as to achieve an absurd conclusion.”31 “If the 

policy wording at issue is clear and unambiguously expresses the parties’ 

intent, the insurance contract must be enforced as written.”32

If the insurance contract terms are ambiguous, these ambiguities are 

generally strictly construed against the insurer and in favor of coverage.33 This 

rule of strict construction “applies only if the ambiguous policy provision is 

susceptible to two or more reasonable interpretations; for the rule of strict 

26 Cadwallader v. Allstate Ins. Co., 2002-1637 (La. 6/27/03); 848 So. 2d 577, 580.

27 La. Civ. Code Ann. art. 2045.

28 Louisiana Ins. Guar. Ass’n v. Interstate Fire & Cas. Co., 93-0911 (La. 1/14/94); 630 

So. 2d 759, 763.

29 La. Civ. Code Ann. art. 2046.

30 La. Civ. Code Ann. art. 2047.

31 Reynolds v. Select Props., Ltd., 93-1480 (La. 4/11/94); 634 So. 2d 1180, 1183.

32 Cadwallader, 848 So. 2d at 580 (citations omitted).

33 Louisiana Ins. Guar. Ass’n , 630 So. 2d at 764.

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construction to apply, the insurance policy must be not only susceptible to two 

or more interpretations, but each of the alternative interpretations must be 

reasonable.”34

Finally, “[t]he issue of whether an insurance policy, as a matter of law, 

provides or precludes coverage is a dispute that can be resolved properly within 

the framework of a motion for summary judgment.”35 “In seeking a declaration 

of coverage under an insurance policy, Louisiana law places the burden on the 

plaintiff to establish every fact essential to recovery and to establish that the 

claim falls within the policy coverage.”36

V

Pioneer first argues that the district court erred by finding that the 

exclusions within the Property Damage exclusion and the Blended Pollution 

endorsement precluded coverage for any damage on the surface property on 

which Pioneer held the mineral lease. The district court held that the 

remediation costs for the Meauxes’ property and the containment costs were 

excluded. The gravamen of Pioneer’s argument is that the “owned, rented or 

occupied” exclusions in both provisions are not applicable because it does not 

own, rent, or occupy the surface property; rather, it only has a mineral lease.

We have dealt with this problem before, albeit in an unpublished 

opinion. In Aspen Insurance UK, Ltd. v. Dune Energy, Inc.,37 an oil and gas 

company operated wells on a tract of land pursuant to a mineral lease.38 The 

company found a leak caused by the failure of a flowline, which resulted in 146

34 Cadwallader, 848 So. 2d at 580.

35 Parekh v. Mittadar, 2011-1201 (La. App. 1 Cir. 6/20/12); 97 So. 3d 433, 437.

36 McDonald v. Am. Family Life Assurance Co., 2010-1873 (La. App. 1 Cir. 7/27/11); 

70 So. 3d 1086, 1089.

37 400 F. App’x 960 (5th Cir. 2010) (per curiam).

38 Id. at 961.

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barrels of oil being released onto the property covered by the mineral lease.39

The insurer denied coverage based on an “owned, leased, rented or occupied” 

exclusion,40 which provided that the:

policy does not apply to any actual or alleged liability: 

. . . for seepage, pollution or contamination of property 

which is or was, at any time, owned, leased, rented or 

occupied by any insured, or which is or was, at any 

time, in the care, custody or control of any insured 

(including the soil, minerals, water or any other 

substance on, in or under such owned, leased, rented 

or occupied property or property in such care, custody 

or control).41

The company argued it leased only mineral rights and not surface rights, 

meaning that the damaged property (the surface property) did not fall within 

the exclusion.42

We disagreed under two rationales. First, the surface property was in 

the “care, custody or control” of the company, bringing it within the exclusion.43

The mineral lease gave the company broad authority over the land, subjecting 

any future use of the surface to the company’s right to explore for and produce 

oil and gas.44 Additionally, Louisiana law allows the “concurrent use of the 

land by the surface owner and the mineral owner with neither owner deemed 

to have a paramount right of use.”45

39 Id.

40 Id.

41 Id.

42 Id.

43 Id. at 963.

44 Id.

45 Id. (quoting Caskey v. Kelly Oil Co., 1998-1193 (La. 6/29/99); 737 So. 2d 1257, 1265); 

see also La. Rev. Stat. Ann. § 31:11(A) (“The owner of land burdened by a mineral right or 

rights and the owner of a mineral right must exercise their respective rights with reasonable 

regard for those of the other.”); Musser Davis Land Co. v. Union Pac. Res., 201 F.3d 561, 568 

(5th Cir. 2000) (concluding that Louisiana law allows the holder of a mineral lease to conduct 

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Second, even if the surface property was not within the “care, custody or 

control” of the company, the language of the exclusion was broad enough to 

encompass the surface property.46 The exclusion excluded coverage for the 

“soil, minerals, water or any other substance on, in or under such owned, 

leased, rented or occupied property or property in such care, custody or 

control.”47 The company admitted it occupied at least some of the property; the 

mineral lease gave the company the right to occupy all of the land for the 

purpose of exploring for and producing oil and gas; and “the pollution resulting 

from the leak affected the soil, minerals, water, and other substances on that 

leased and occupied property.”48 As a result, we found the exclusion applicable. 

The company “presented no evidence, and no legal authority, for the premise 

that its Lease somehow gave it an intangible right to the minerals without a 

right to occupy the property—in fact the language of the Lease and established 

Louisiana law [gave the company] substantial rights to occupy, care for, take 

custody over, and control the property, soil, and minerals polluted by [the] 

leaking flowline.”49

We find Aspen’s logic equally compelling here. First, the language of the 

Blended Pollution endorsement is broader than Pioneer suggests. That 

endorsement excludes coverage for pollution “existing at, or under or within 

the boundaries of any premises, site or location owned, rented or occupied” by 

Pioneer. Even if we agreed with Pioneer that it does not own, rent, or occupy

the surface property, we think that this broad exclusion would still operate to 

preclude coverage. Second, and more importantly, we hold that the “owned, 

seismic operations to explore for oil and gas, despite protestations of the owner of the land 

and lessor of the mineral lease).

46 Aspen, 400 F. App’x. at 963.

47 Id.

48 Id.

49 Id.

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rented or occupied” exclusions in both the Property Damage exclusion and the 

Blended Pollution endorsement operate to preclude coverage. Pioneer had a 

mineral lease that gave it broad rights to the land, giving Pioneer

the exclusive right to enter upon and use the land . . . 

for the exploration of oil, gas, sulphur, and all other 

minerals, together with the use of the surface of the 

land for all purposes incident to the exploration for 

and production, ownership, possession, storage and 

transportation of said materials . . . and the right to 

dispose of salt water, with the right of ingress and 

egress to and from said lands at all times for such 

purposes, including the right to construct, maintain 

and use roads, pipelines, and/or canals thereon . . . , 

and including the right to remove from the land any 

property placed by Lessee thereon and to draw and 

remove casing from wells drilled by Lessee on said 

land.

Thus, Pioneer had the right to occupy the land for the purpose of exploring for

and producing minerals. Next, Louisiana law gives the mineral lessee broad 

rights to use the surface property for the same purposes.50 It is also

uncontested that Pioneer occupied some part of the land. Finally, the pollution 

affected the land that Pioneer had the right to occupy under the terms of its 

lease and Louisiana law. For these reasons, we think it evident that Pioneer 

“owned, rented or occupied” the property within the meaning of the exclusions.

Pioneer argues that Aspen is inapplicable for several reasons. Pioneer 

points to Devon Energy Production Co. v. American International Specialty 

Lines Insurance Co.,51 where a district court seems to have held that the 

“owned, rented or occupied” exclusion did not apply because the insured

50 Aspen, 400 F. App’x at 963; Caskey, 737 So. 2d at 1265; La. Rev. Stat. Ann. §

31:11(A); see also Musser Davis Land Co., 201 F.3d at 568.

51 No. 08-1353, 2009 WL 1256971 (S.D. Tex. May 4, 2009).

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company did not own or occupy the surface property, despite a mineral lease.52

We decline to rely on this ruling, however, because in that case the surface 

damage occurred solely to the land of the neighbors.53 To our eyes, that 

damage would not fall within the exclusion so as to preclude coverage, whereas 

damage to the land subject to the mineral lease would. 

Pioneer argues that the Aspen exclusion was different. The Aspen

exclusion excluded coverage for any property in the “care, custody or control”

of the insured. Moreover, the Aspen exclusion was an “owned, leased, rented or 

occupied” exclusion, not simply an “owned, rented or occupied” exclusion. 

These distinctions make no difference. The lack of the “care, custody or control” 

phrase suggests that Aspen’s first rationale is inapplicable. But as explained 

above, the Blended Pollution endorsement is broader than Pioneer claims

because it precludes coverage for damages “existing at, or under or within the 

boundaries of any premises, site or location owned, rented or occupied by” 

Pioneer. Moreover, Aspen’s second rationale is applicable. Here, too, the 

property falls within the meaning of “owned, rented or occupied” under both 

the Property Damage exclusion and the Blended Pollution endorsement. 

Finally, the lack of “leased” fails to make a substantial difference because both 

“rented” and “occupied” still appear within the exclusion.

Pioneer’s argument that it occupied only a small limestone pad fails to 

convince. The dispositive fact is that it had the right to occupy all the land for 

its exploration and production purposes. Next, Pioneer points to a 1996 

agreement between the Meauxes and another one of Pioneer’s predecessors-ininterest that allowed Pioneer to dispose salt water at some of the Meauxes’ 

wells. Pioneer claims that the agreement demonstrates that its rights are

52 Id. at *3.

53 Id. at *3.

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subordinate to the surface rights, and therefore, that it does not own, rent, or 

occupy the surface. We reject this argument because the 1996 agreement 

clearly states that “all rights herein granted are subject to and subordinate to” 

the 1958 mineral lease. The agreement does not purport to change the mineral 

lease, and it is the mineral lease that is the object of our inquiry. Pioneer’s 

insistence that the exclusion had to include the words “right to occupy” instead 

of “occupy” also fails because the absence of those words does not make a 

difference.

Pioneer argues that the exclusions do not apply because it does not “rent” 

the surface property. Pioneer discusses at length the Louisiana mineral code, 

and how bonus, rental, and royalty payments are not “rent” in the traditional 

sense. This inquiry misses the mark altogether. The term “occupy” by itself is 

enough to activate the exclusions. Steadfast had not argued, nor have we held, 

that Pioneer’s obligation to make rental payments equate to Pioneer renting 

the surface property. Rather, the 1958 mineral lease gives Pioneer enough 

rights so that the surface property comes within the meaning of “rented” or 

“occupied” property. As in Aspen, there is no legal authority “for the premise 

that [Pioneer’s lease] somehow gave it an intangible right to the minerals 

without a right to occupy the property—in fact the language of the Lease and 

established Louisiana law [give Pioneer] substantial rights to occupy, care for, 

take custody over, and control the” property polluted by the leak.54

Pioneer would distinguish this case on its facts. It argues that in Aspen, 

the company, in answering interrogatories, admitted that it leased the 

impacted property and that it restored the property for its own enjoyment. The 

district court in Aspen did find this dispositive, but we never relied on these 

54 Aspen, 400 F. App’x at 963.

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answers.55 Pioneer also argues that here, unlike in Aspen, there is a claim of 

actual damage to third-party property. This might be true: part of the 

remediation is claimed to have been done on the Rutherford property. But the 

district court properly accounted for this fact—it only denied coverage for the 

costs of remediating the Meaux property and containment based on the 

“owned, rented or occupied” exclusions. It denied the costs for remediating 

third-party property on a different basis. Finally, Pioneer points to parol

evidence—namely, that Steadfast knew the nature of Pioneer’s operations and 

knew how to write exclusions using broader language. This evidence cannot be 

considered because the umbrella policy is not ambiguous. 

The district court did not err by holding that the exclusions within the 

Property Damage exclusion and the Blended Pollution endorsement were 

applicable, thus precluding coverage for the costs of remediating the Meaux 

property and containment.

VI

Pioneer argues that despite the “owned, rented or occupied” exclusions, 

the district court erred by holding that coverage for containment costs was

precluded. Pioneer asserts that the containment costs were not to enhance or 

repair the “owned, rented or occupied” property but rather to prevent potential 

third-party liability. As a result, Pioneer argues that the exclusion should be 

abrogated to allow coverage for containment costs.

In Figgie International, Inc. v. Bailey,56 we acknowledged that “there is 

little consensus on the application of the owned- or alienated-property

exclusions in cases involving mere threats of contamination to property.”57 We

55 Compare Aspen Ins. UK, Ltd. v. Dune Energy, Inc., No. 09-2906, 2010 WL 996550, 

at *3 (E.D. La. 2010), with Aspen, 400 F. App’x at 961–64.

56 25 F.3d 1267 (5th Cir. 1994).

57 Id. at 1274.

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found no occasion to decide whether under Louisiana law such exclusions 

“would preclude coverage for measures taken to eliminate or to mitigate a

threat to third-party property.”58

Since then, one Louisiana court has been willing to abrogate an “owned”

property exclusion to cover costs incurred to prevent harm to third-parties. In 

Norfolk Southern Corp. v. California Union Insurance,59 the Louisiana Court 

of Appeal, First Circuit considered whether the “owned” property exclusion 

defeats coverage of the “remediation of an insured’s property undertaken to 

eliminate or mitigate a threat to third-party property.”60

The Louisiana First Circuit began by noting that “[t]he purpose of owned 

property exclusions in [insurance] policies is to effectuate the intent that 

liability insurance is designed to provide compensation for damages to property 

not owned or controlled by the insured.”61 The court noted that there were two 

trends among courts abrogating the “owned” property exclusion. On the one 

hand, some courts abrogate the “owned” property exclusion “where there is 

evidence of a verifiable, actual, and imminent threat to groundwater or 

adjacent property not owned by the insured.”62 But the abrogation is “only to 

the extent that the costs were incurred either to remedy damage to third-party 

property or to prevent future damage to such property.”63 On the other hand, 

some courts do not abrogate the exclusion where the costs were “expended to 

prevent only threatened harm to third-party property, even if future harm to 

third-party property was prevented.”64 But even these courts abrogate the 

58 Id.

59 2002-0369 ((La. App. 1 Cir. 9/12/03); 859 So. 2d 167.

60 Id. at 193.

61 Id.

62 Id. at 194 (citing to Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 

1565 (9th Cir. 1991)).

63 Id.

64 Id. (citing State v. Signo Trading Int’l Inc., 612 A.2d 932, 938–39 (1992)).

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exclusion where there is an actual injury to third-party property, so that “costs 

of measures intended to prevent imminent or immediate future damage to [the 

third-party] property would not be excluded from coverage.”65

Turning to the facts at hand, the Louisiana First Circuit found that the 

relevant “owned” property exclusion did not preclude coverage for remediation 

costs where those remediation costs had been incurred to prevent imminent or 

immediate harm to third-parties; this because there was evidence of actual 

damage to third-party property.66 Importantly, the court did not reproduce in 

its opinion the language of the “owned” property exclusion at issue. Thus, in 

Louisiana, the rule seems to be that costs incurred for the prevention of future 

harm to third-parties do not fall within the “owned” property exclusion, as long 

as some third-party harm has already been demonstrated. This suggests that

the containment costs would not be excluded because they were incurred to 

prevent harm to third-parties and because there was actual harm to thirdparties as evidenced by the remediation of the Rutherford tract.

Even in light of this abrogation doctrine, the district court held that the 

containment costs were precluded because of the clear language of the Property 

Damage exclusion and Blended Pollution endorsement.

The district court noted that the Blended Pollution endorsement

precludes costs for “clean up, removal, containment, treatment, detoxification 

or neutralization of pollutants.” Similarly, the Property Damage exclusion 

precludes costs for “repair, replacement, enhancement, restoration or 

maintenance of . . . property for any reason, including prevention of injury to a 

person or damage to another’s property.” Faced with this unambiguous 

65 Id.

66 Id. at 194–95.

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language, the district court refused to abrogate the exclusions. We agree with 

its assessment.

Pioneer argues that the district court erred in not abrogating the 

exclusions. First, according to Pioneer, the Property Damage exclusion was 

superseded by the Blended Pollution endorsement. The clear upshot of this 

argument is that Pioneer would not have to deal with the clear language of the 

Property Damage exclusion, precluding costs incurred for the “prevention of 

injury to a person or damage to another’s property.” This argument was not 

made before the district court, has been waived, and cannot be considered on 

appeal.67 Even if not waived, this argument fails. Under Louisiana law, 

provisions in a contract are to be interpreted in a way that renders them 

effective.68 Here, there is no inherent conflict between the Property Damage 

exclusion and the Blended Pollution endorsement. Both provisions can operate 

to preclude the same type of costs without losing meaning. Moreover, the 

Blended Pollution endorsement specifically deleted certain exclusions, 

Sections IV(B)(1) and IV(C)(6), but did not delete the Property Damage 

exclusion. As noted earlier, the endorsement declares that the rest of the 

umbrella policy remains unchanged. Second, Pioneer asserts that the Property 

Damage exclusion was meant to apply to non-pollution-related damages 

because the original pollution exclusions, Sections IV(B)(1) and IV(C)(6), dealt 

with pollution-related damages. Again, nothing in the umbrella policy suggests 

that the Property Damage exclusion and the original pollution exclusions could 

not apply to the same types of damages. Therefore, we reject Pioneer’s 

67 LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d 383, 387 (5th Cir. 2007).

68 See La. Civ. Code Ann. art. 2049 (“A provision susceptible of different meanings 

must be interpreted with a meaning that renders it effective and not with one that renders 

it ineffective.”).

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arguments. In any case, the Blended Pollution endorsement is broad enough: 

it specifically excludes containment costs. 

The district court did not err in holding that the costs of containment 

were precluded by the clear language of the policy.

VII

Pioneer argues that the district court erred by holding that the costs of 

remediating Rutherford’s property were unavailable due to its inability to 

allocate remediation costs.

According to the district court, the applicable retained limit was the $1 

million limit found in the Blended Pollution endorsement. Pioneer provided 

evidence that it spent $1.2 million on remediation. But it did not provide an 

itemization to show how much of that amount was spent on remediating 

Rutherford’s property as opposed to the Meauxes’ property. Since there was 

more damage to the Meauxes’ land than Rutherford’s land, the district court 

found it unlikely that Pioneer had exceeded the retained limit based on the 

costs of remediating the Rutherford land.

Steadfast argues that the district court should be affirmed. We agree. 

Pioneer provided no evidence in response to the summary judgment motion as 

to how much money could be accounted for the costs of remediating the 

Rutherford land. Not only that, but Pioneer conceded in discovery that such an

accounting is not possible: “Because the invoices sent Pioneer for remediation 

work did not distinguish between charges for work done on Meaux land and 

work done on other land, it is difficult at present for Pioneer to say precisely 

and with certainty how much costs were incurred remediating other lands.”

Once Steadfast met its initial burden that there was no genuine issue that 

Pioneer could not demonstrate that any of the money had been spent on 

remediating the Rutherford land, it was Pioneer’s burden to produce some 

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specific facts to show such a dispute. This Pioneer did not do. The district court

did not err in granting summary judgment on this point.

VIII

Pioneer also argues that the district court erred by holding that the costs 

of settling the lawsuits were unavailable due to the retained limit. Looking to 

the retained limit of $1 million in the Blended Pollution endorsement, the 

district court reasoned that the settlement costs for the Rutherford and 

Vaughan/Richard suits would be unavailable because Pioneer had the 

responsibility of paying the first $1 million. Pioneer did not contest that the $1 

million retained limit was applicable. Moreover it provided evidence that the 

settlement costs were only $56,354.16. Based on this evidence, the district 

court held that the retained limit clearly had not been satisfied.

Pioneer argues on appeal that Steadfast conceded that the settlement 

amount would be recoverable but for the retained limit. Because Pioneer 

believes that the other costs it seeks, such as the remediation and containment 

costs, are covered, it argues that the retained limit would be met in total.

Therefore, Pioneer seeks a remand to determine whether the settlement costs 

should be covered. Steadfast denies that it conceded that the settlement costs 

would be recoverable but for the retained limit. Instead, Steadfast argues that 

these settlement costs would be precluded regardless of the retained limit due 

to various exclusions. During oral argument before the district court, however,

Steadfast did seemingly concede that settlement costs would be covered under 

the umbrella policy but for the retained limit, stating that: “[Pioneer] paid 

these people to settle that claim, and I think that’s probably covered. It would 

be subject to the one million dollar retained limit. So it’s not recoverable due 

to the one million dollar retained limit in this case.” Additionally, it is clear 

that in its motion for summary judgment, Steadfast made the same concession.

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We need not reach the issue of whether the settlement costs are 

precluded by any of the exclusions in the policy. Rather when Steadfast moved

for summary judgment, it met its burden by showing that there was no genuine 

issue that the settlement costs were unavailable because the retained limit had 

not been satisfied. Pioneer did not meet its burden to show specific facts that 

the retained limit had been satisfied. The district court did not err in granting 

summary judgment on this point.

IX

Finally, Pioneer argues that the district court erred by holding that the 

costs of plugging the well were precluded by the OIL endorsement.

The district court held that the costs of both controlling and plugging the 

well were precluded by the OIL endorsement. Pioneer argued below that the 

plugging costs were different than the controlling costs, and that they were not 

precluded by the endorsement’s language. But the district court disagreed on 

two grounds. First, it held that Pioneer had not provided evidence to allocate

how much of the $7.1 million was spent on bringing the well under control as 

opposed to plugging the well. Second, it held that plugging the well was simply 

the final step in bringing the well under control. The entire $7.1 million was 

excluded by the clear terms of the policy.

Pioneer renews its argument that the costs of controlling the well are 

different from the costs of plugging the well. According to Pioneer, while the 

former is excluded by the OIL endorsement, the latter is not. This reasoning 

derives from the language of the endorsement, which excludes “any cost or 

expense incurred by or at the request of any insured or any co-owner of a 

working interest in connection with controlling or bringing under control any 

oil, gas or water well which becomes out of control.” The endorsement also 

provides a definition of an out-of-control well: “A well shall be deemed out of 

control only so long as there is a continuous flow of drilling fluid, oil, gas or 

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water above the ground or ocean floor which is uncontrollable.” According to 

Pioneer, the effort to stop the flow from the wellhead should be viewed as two 

distinct acts. In the first act, Pioneer changed the flow of fluids from 

uncontrollable to controllable. This act resulted in the costs of controlling the 

well. In the second act, Pioneer plugged the well thus stopping the flow of 

fluids. This act resulted in the costs of plugging the well. Pioneer thus asks for 

remand so that the district court may determine when the well was under 

control, and therefore, when coverage began.

Steadfast argues first that Pioneer did not make this argument at the 

district court level. We disagree. Pioneer’s argument was presented to the 

district court; indeed, the district court opinion specifically rejects this

argument.

Steadfast next provides a litany of reasons why plugging costs are 

precluded by the umbrella policy. We need not reach these issues, however, 

because we find the district court’s reasoning apt. Steadfast met its initial 

burden of showing that there was no genuine issue that Pioneer could not prove 

allocation of the $7.1 million between controlling costs and plugging costs. And 

Pioneer did not meet its burden to show that the costs could be so allocated. 

Indeed, Pioneer’s summary judgment motion conflates the two costs. In an 

affidavit attached to its response for summary judgment, for example, 

Pioneer’s CFO does not make a distinction between the two acts or the costs as 

to each. The district court did not err in granting summary judgment on this 

point.

X

For these reasons, we AFFIRM the district court.

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