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, sit