U.S. Liability Ins. Co. v. Selman, 95-1435

• Decision Date: 06 November 1995
• Docket Number: No. 95-1435,95-1435
• Citation: 70 F.3d 684
• Parties: UNITED STATES LIABILITY INSURANCE COMPANY, Plaintiff, Appellant, v. Livingstone R. SELMAN, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 684

70 F.3d 684

UNITED STATES LIABILITY INSURANCE COMPANY, Plaintiff, Appellant, v. Livingstone R. SELMAN, et al., Defendants, Appellees.

No. 95-1435.

United States Court of Appeals First Circuit.

Heard Nov. 6, 1995.

Decided Nov. 28, 1995.

Alice Olsen Mann, with whom Mark P. Bailey, and Morrison, Mahoney & Miller, Boston, MA, were on brief, for appellant.

Kenneth H. Soble, and Soble, Van Dam, Pearlman and Gittelsohn, Chestnut Hill, MA, on brief, for appellee Livingstone R. Selman.

Clyde D. Bergstresser, with whom Angela M. Vieira, and Bergstresser and Associates, Boston, MA, were on brief, for appellee Robin Razza.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and BOUDIN, Circuit Judge.

SELYA, Circuit Judge.

In this appeal, plaintiff-appellant United States Liability Insurance Company (USLIC) strives to extricate itself from coverage obligations owed to its insured, Livingstone R. Selman, vis-a-vis personal injury claims brought by Robin Razza on behalf of her minor daughter. The district court ruled that USLIC had a duty to indemnify Selman with respect to those injuries that occurred while the subject policies were in force. See USLIC v. Selman, 882 F.Supp. 1163 (D.Mass.1995). USLIC appeals. We affirm.

I. BACKGROUND

The chronology of events is not in dispute. Selman owned an apartment house situated at 2 North Avenue, Roxbury, Massachusetts. In 1982, he rented apartment # 3A to Robin Razza. On May 6, 1983, Robin gave birth to Carol Ann Razza. In the fall of 1984, a physician discovered that Carol Ann had contracted lead poisoning. On February 5, 1985, an inspector from the Massachusetts Child Lead Poisoning Prevention Program (the Agency) found that both the Razzas' apartment and the building's common areas contained lead paint. The Agency informed Selman of its findings. Shortly thereafter, a fire damaged apartment # 3A, and Selman, responding to his tenant's expressed desire to relocate, moved the Razzas to apartment # 1A. He also requested that the Agency inspect the apartment.

The inspection occurred on March 7, 1985, and disclosed the presence of lead paint. The Agency notified Selman and he made arrangements to purge the entire building (including apartment # 1A). ¹ Inspection reports reveal that by March 29 lead removal in apartment # 1A was "95% complete." Beyond that date, the pace of lead removal in the Razzas' apartment is unclear: all that we can tell from the record is that, by September of the following year (when the Razzas departed), Selman had rid the entire building of the residue of lead paint.

At all times material hereto, Selman purchased insurance coverage annually. For four consecutive one-year periods commencing May 4, 1981, Selman insured the apartment house with Mutual Fire & Marine Insurance Company. In May of 1985, his allegiance shifted. ² Coincident with the expiration of the latest Mutual Fire policy, Selman bought a one-year policy from USLIC, effective May 4, 1985. The next year, USLIC issued a renewal policy effective May 4, 1986. Each policy covered claims for bodily injuries arising out of Selman's ownership, maintenance, and use of the property. The policies define "bodily injury" as "bodily injury, sickness or disease sustained by any person which occurs during the policy period," and define an "occurrence" as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured."

Long after the second of USLIC's two one-year policies lapsed, Robin Razza asserted a claim against Selman for Carol Ann's lead paint poisoning. Bent on exonerating itself from all responsibility under its policies in regard to this claim, USLIC brought a declaratory judgment action against Selman and the Razzas in the United States District Court for the District of Massachusetts. ³ See 28 U.S.C. Secs. 2201-2202 (1988); Fed.R.Civ.P. 57. It premised jurisdiction on diversity of citizenship and the existence of a controversy in the requisite amount. See 28 U.S.C. Sec. 1332(a).

In due course, the parties tried the case to the court on stipulations of fact, documentary submissions, and the live testimony of the Razzas' expert witness, Dr. John Graef. The district judge determined that USLIC had no duty to indemnify Selman in respect to claims for injuries resulting from the ingestion of lead paint prior to May 4, 1985 (the inception date of its first policy), and the defendants do not challenge this determination on appeal. The judge also concluded, however, that USLIC had a duty to indemnify Selman with respect to claims arising out of Carol Ann's ingestion of lead paint while USLIC's policies were in force, that is, from May 4, 1985 until May 3, 1987. ⁴ After the district court entered a declaratory judgment to this effect, ⁵ USLIC appealed.

II. STANDARD OF REVIEW

We face a preliminary dispute as to the applicable standard of review. Citing Pallet v. Gallagher, 725 F.2d 131, 134 (1st Cir.1984), the appellant insists that, inasmuch as its claims require construction of the terms of an insurance policy, appellate review is plenary. This generalization oversimplifies the matter, and, in the end, is wide of the mark.

To be sure, it is for the court to determine whether the terms of an integrated agreement are unambiguous and, if so, to construe them according to their plain meaning. See Allen v. Adage, Inc., 967 F.2d 695, 698 (1st Cir.1992); RCI Northeast Servs. Div. v. Boston Edison Co., 822 F.2d 199, 202 (1st Cir.1987); Robert Indus., Inc. v. Spence, 362 Mass. 751, 291 N.E.2d 407, 409-10 (1973). In this sense, questions about the meaning of contractual provisions are questions of law, and we review the district court's answers to them de novo. See ITT Corp. v. LTX Corp., 926 F.2d 1258, 1261 (1st Cir.1991). However, when the district court's answers rest not on plain meaning but on differential findings by the trier of fact, derived from extrinsic evidence as to the parties' intent with regard to an uncertain contract provision, appellate review proceeds under the "clearly erroneous" standard. See RCI Northeast, 822 F.2d at 202. The same standard pertains whenever the trial court decides factual matters that are essential to ascertaining the parties' rights in a particular situation (though not dependent on the meaning of contractual terms per se). See, e.g., Reliance Steel Products Co. v. National Fire Ins. Co., 880 F.2d 575, 576-77 (1st Cir.1989). In these types of cases, the issues are ordinarily fact-dominated rather than law-dominated, and, to that extent, the district court's resolution of them is entitled to deference. See In re Howard, 996 F.2d 1320, 1328 (1st Cir.1993) ("Many cases involve what courts term 'mixed' questions--questions which, if they are to be properly resolved, necessitate combining factfinding with an elucidation of the applicable law. The standard of review applicable to mixed questions usually depends upon where they fall along the degree-of-deference continuum: the more fact-dominated the question, the more likely it is that the trier's resolution of it will be accepted unless shown to be clearly erroneous."); Roland M. v. Concord Sch. Comm., 910 F.2d 983, 990-91 (1st Cir.1990) (similar), cert. denied, 499 U.S. 912, 111 S.Ct. 1122, 113 L.Ed.2d 230 (1991).

These principles resonate here. The appellant attempts to escape from its contractual obligations on three alternative grounds. First, it denies that coverage was ever triggered, taking the position that Carol Ann sustained no discernible injuries while its insurance policies were in force. Second, the appellant says that, because Carol Ann's injuries were bound up with her earlier ingestion of lead paint (first diagnosed in 1984), they fell outside the scope of its policies (which were written in 1985 and 1986, respectively). Both of these defenses have sizeable factual components, hinging, as they do, on whether the evidence shows that discrete injuries occurred during the relevant coverage periods. Third, the appellant says that, because Selman knew about the looming liability on the inception date of the first policy, the known loss doctrine precludes him from insuring against the Razzas' claims. The potency of this defense likewise depends on the facts: what Selman knew and when he knew it. At bottom, then, USLIC's appeal challenges the district court's factfinding; Fed.R.Civ.P. 52(a) applies in full flower; and appellate review is circumscribed by the jurisprudence of clear error.

This is of appreciable importance because clear error review ordinarily heralds a rocky road for an appellant. Under this standard, "appellate courts cannot presume to decide factual issues anew." Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir.1990). Rather, "Rule 52(a) commands, and our precedents ordain, that deference be paid to the trier's assessment of the evidence." Id. (citing representative cases). Moreover, the clearly erroneous rule loses none of its vigor "when the [lower] court's findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or inferences from other facts." Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); accord In re Tully, 818 F.2d 106, 108-09 (1st Cir.1987).

In the last analysis, an appellate tribunal "ought not to upset findings of fact or conclusions drawn therefrom unless, on the whole of the record, [the judges] form a strong, unyielding belief that a mistake has been made." Cumpiano, 902 F.2d at 152. As long as the district court's rendition of the record is plausible, our inquiry is at an end.

III. ANALYSIS

We divide our analysis into four segments, adding to the three grounds of appeal just mentioned a matter that speaks to the interrelationship of the liability ceilings contained in USLIC's two insurance policies.

A. Was Coverage...