IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 19-60875

Summary Calendar

BURROUGHS DIESEL, INCORPORATED, 

 Plaintiff - Appellant

v.

THE TRAVELERS INDEMNITY COMPANY OF AMERICA, 

 Defendant - Appellee

Appeal from the United States District Court

for the Southern District of Mississippi

USDC No. 2:18-CV-48

Before JOLLY, JONES, and SOUTHWICK, Circuit Judges.

PER CURIAM:*

The plaintiff sued its insurance company for breach of contract, breach 

of good faith and fair dealing, and tortious breach of contract due to the 

company’s failure to pay a claim. The district court entered summary 

judgment in favor of the defendant, concluding that an exclusion in the policy 

applied. We AFFIRM.

* 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

July 31, 2020

Lyle W. Cayce

Clerk

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FACTUAL AND PROCEDURAL BACKGROUND

On October 14, 2016, over 5,000 gallons of hydrochloric acid leaked from 

a storage tank in Laurel, Mississippi, on property adjacent to that owned by 

the plaintiff, Burroughs Diesel, Incorporated (“BDI”). The acid was a liquid, 

but it quickly created a cloud that traveled across the street and engulfed BDI’s 

property. According to BDI, this cloud caused extensive damage to its 

buildings, vehicles, inventory, tools, machines, and equipment. BDI promptly 

reported the loss to its insurance company, Travelers Indemnity Company of 

America. Following this report, two Travelers adjusters separately went to 

BDI’s property to investigate BDI’s claim of loss. Travelers retained a

professional engineer to assist in the investigation. That engineer concluded 

that the hydrochloric acid did in fact damage BDI’s property. Nonetheless, 

Travelers denied coverage, relying on pollution exclusion in BDI’s insurance 

policy. 

Over the next year, BDI continued to request that Travelers pay the 

claim and Travelers continued to deny coverage. After Travelers issued a final 

denial of coverage, BDI brought suit in the United States District Court for the 

Southern District of Mississippi, seeking coverage under the policy and other 

relief. Both parties filed motions for summary judgment. The district court 

held that BDI’s alleged damages were “excluded from coverage by the policy’s 

pollution exclusion,” and that BDI failed to demonstrate that any exception to 

the pollution exclusion applied. The district court entered judgment for 

Travelers, dismissing the suit. BDI appealed. 

DISCUSSION

We review a district court’s granting a summary judgment de novo. 

Federal Ins. Co. v. Singing River Health Sys., 850 F.3d 187, 194 (5th Cir. 2017). 

Summary judgment is appropriate if the “movant shows that there is no 

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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). “A genuine dispute as to a material 

fact exists if the evidence is such that a reasonable jury could return a verdict 

for the nonmoving party.” Rogers v. Bromac Title Servs., L.L.C., 755 F.3d 347, 

350 (5th Cir. 2014) (quotation marks omitted). All the facts and possible 

inferences are viewed “in the light most favorable to the nonmoving party.” 

State Farm Mut. Auto. Ins. Co. v. LogistiCare Sols., LLC, 751 F.3d 684, 688 

(5th Cir. 2014). Because this is a diversity case, we apply the substantive law 

of the forum state. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). 

Mississippi is that state.

Mississippi courts considers the interpretation of an insurance policy to 

be a question of law. LogistiCare Sols., 751 F.3d at 688. BDI bears the burden 

of proving its right to recover under the policy; Travelers has the burden to 

prove the applicability of a policy exclusion. See Tuepker v. State Farm Fire & 

Cas. Co., 507 F.3d 346, 356 (5th Cir. 2007). The district court concluded that 

once the insurer proved the applicability of an exclusion, the insured then 

would have the burden to establish a relevant exception to the exclusion. 

Although we have not discovered controlling Mississippi law to support such 

burden shifting, we conclude that is the most reasonable understanding of how 

state courts would proceed. We will do the same.

BDI argues that the district court erroneously determined that an 

exclusion to coverage in the Travelers policy applied. As we analyze the policy, 

we must follow Mississippi law that unambiguous provisions in an insurance 

policy be interpreted “exactly as written.” See George v. Miss. Farm Bureau 

Mut. Ins. Co., 168 So. 2d 530, 531 (Miss. 1964). 

The necessary progression through the policy terms is this. The policy 

required Travelers to “pay for direct physical loss of or damage to Covered 

Property caused by or resulting from a Covered Cause of Loss.” Excluded from 

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coverage were losses caused by “pollution,” which is described in the policy as

“[d]ischarge, dispersal, seepage, migration, release or escape of ‘pollutants.’”

Then an exception to the exclusion arises, which says there is coverage if “the 

discharge, dispersal, seepage, migration, release or escape is itself caused by 

any of the ‘specified causes of loss.’” Travelers agreed to “pay for the loss or 

damage caused by such ‘specified causes of loss.’” 

The definitions section gives us the final required provisions. The 

“Specified Causes of Loss” include, among many others, “smoke (including the 

emission or puff back of smoke, soot, fumes or vapors from a boiler, furnace or 

related equipment).” “Pollutants” are “any solid, liquid, gaseous or thermal 

irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, 

chemicals, waste and any unhealthful or hazardous building materials.” 

Whether “smoke” as a specified cause of loss overcomes the inclusion of “acids” 

as an excluded pollutant is our only issue.

Travelers agrees that BDI’s property was covered by the policy. “Acids,” 

at least generally, clearly are excluded pollutants. BDI argues that the cloud

that resulted from the release of the hydrochloric acid constituted “smoke,” 

which is a “specified cause of loss.” The term “smoke” is not defined in the 

policy. BDI argues that because there is more than one dictionary definition 

of “smoke,” the term is ambiguous and should be resolved in favor of coverage. 

The controlling Mississippi law says policy terms are to be understood 

by “applying the ‘ordinary and popular meaning’ to any undefined terms.”

Noxubee Cnty. Sch. Dist. v. United Nat’l Ins. Co., 883 So. 2d 1159, 1165 (Miss. 

2004)(Graves, J.). “Ambiguities exist when a policy can be logically interpreted 

in two or more ways, where one logical interpretation provides for coverage.” 

United States Fid. & Guar. Co. of Miss. v. Martin, 998 So. 2d 956, 963 (Miss. 

2008). According to BDI, when the liquid acid leaked, it “turned into gas 

particulate upon contact with the ambient heat/humidity and formed a white 

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smoke cloud of [hydrochloric acid] gas particles suspended in water vapor (gas) 

that traveled across the street.” Looking for a dictionary definition that would 

at least create some ambiguity about the meaning of “smoke,” BDI latches onto 

a secondary one in one dictionary that defines it as “a suspension of particles 

in a gas.”1

We do not interpret state law to mean it was enough to locate some 

definition that fails to focus on smoke resulting from combustion. Instead, by 

using dictionaries, we are seeking the ordinary, popular, or logical meaning of

“smoke.” It is the first definition in that same dictionary: “the gaseous products 

of burning materials.”1

Because BDI failed to prove that an exception to the policy’s pollution 

exclusion applies, the district court did not err by granting Travelers’ motion 

for summary judgment on the issue of breach. Furthermore, because BDI 

cannot establish the existence of coverage for its claimed damages under the 

policy, it cannot recover on its claims of bad faith. See Stubbs v. Miss. Farm 

Bureau Cas. Ins. Co., 825 So. 2d 8, 13 (Miss. 2002). That means the district 

court did not err by entering summary judgment in favor of Travelers.

AFFIRMED. The motion by BDI’s counsel to withdraw is GRANTED.

1

.Smoke, MERRIAM-WEBSTER, https//www.merriam-webster.com/diction

ary/smoke (last visited by the plaintiff on Feb. 25, 2020).

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