Opinion ID: 501184
Heading Depth: 1
Heading Rank: 2

Heading: universal's liability

Text: 14 In the district court, Universal maintained that it was justified in paying the whole of the $418,217 insurance proceeds to Rodriguez, and that it owed nothing to CG. Following the district court's adverse judgment, Universal dropped its defense as to the $164,000 relating to structural damage, and now concedes liability in that amount. The only remaining issue before this court on the CG-Universal dispute is whether Universal also owes another $254,217 to CG for the damage to personal property at the hotel. 15 In support of its claim that it is entitled to the personal property loss proceeds, CG makes two arguments, one substantive and one procedural. Substantively, CG maintains that the mortgage clause of the insurance policy, read in the context of the stipulation and the policy as a whole, provides that Universal should have paid all property loss proceeds to CG. CG emphasizes that the buildings referred to in the mortgage clause are the buildings [as] described in the Declarations. CG then points to certain declarations which describe personal property, alleging that they are the relevant declarations for the mortgage clause. 16 We disagree. First, while the overall policy insures the hotel buildings and their contents, as well as protecting against other losses such as business interruption, the mortgage clause applies only to buildings. Forms MP-0013 and MP-0014 of the policy illustrate the distinction between buildings and contents, by defining those terms in detail on separate policy documents entitled, respectively, Special Building Form and Special Personal Property Form. To attempt to incorporate items listed on the personal property form into the protection afforded the mortgagee under the mortgage clause would directly contradict the mortgage clause's explicit limitation to buildings. 17 Second, even if we were to find that the mortgage clause is ambiguous as to coverage of personal property, we do not think that the stipulation has any relevance in resolving that ambiguity. Universal was not a party to the stipulation nor was the stipulation incorporated into or referenced by the insurance policy. Indeed, the Universal policy was not procured until over a year after the stipulation was signed. We are aware that, under the stipulation, Rodriguez and the hotel corporation were obliged to obtain insurance protecting CG's full interest in the mortgaged hotel, both buildings and personal property. But to the extent that the insurance policy issued by Universal fails to meet the requirements of the stipulation, the fault lies not with Universal. It lies with Rodriguez, who obtained the policy, and with CG itself, which should have ensured that a policy meeting the requirements of the stipulation was in effect. 18 We also reject CG's related assertion that the district court's interpretation of the mortgage clause is contradicted by the court's factual findings and by the admissions of Universal. To be sure, the district court, in setting out the general background of this case, referred briefly to the insurance policy in question as meeting the requirements of the [stipulation]. By no means, however, can this offhand reference be said to defeat the court's later, detailed discussion of the mortgage clause, in which it carefully distinguished between coverage for loss to buildings and personal property. The district court's conclusion that the mortgage clause applied only to buildings is unmistakable and is amply supported by the policy provisions. As for Universal, it maintained throughout the proceedings below that it owed nothing to CG under the policy. The fact that Universal also argued, in the alternative, that, should it be found liable to CG, it deserved restitution for any amount erroneously paid to Rodriguez, cannot be taken as any admission of liability on its part. 19 In its procedural argument, CG assigns error to the district court for even considering the issue of whether the $418,217 payment to Rodriguez included compensation for loss to personal property which was not includible under the mortgage clause. The issue of allocation of the payment between buildings and personal property did not emerge until late in trial, during the testimony of Universal's claims adjuster. CG now argues that this testimony, as well as the corresponding portions of the adjuster's report, should not be considered as relevant evidence because it represents a change in the position adopted by Universal in pretrial filings. This argument is not only flawed, but untimely. 20 As noted above, Universal's consistent position before the district court was that it owed nothing to CG: nothing for loss to buildings and nothing for loss to personal property. At trial, both CG and Universal consented to the entry into evidence of Universal's entire claim file on the hotel fire. Included in that file was the final and closing report of Luis Morales Morales, Universal's claims adjuster for the loss in question. The report contains detailed calculations of the covered loss at the hotel, and ends with a summary of acceptable amounts for a loss claim by Rodriguez: 21 Structural $164,000.00 Content 258,217.00 Business Interruption 138,000.00 Debris Removal 6,000.00 ----------- $566,217.00 22 Morales testified at trial as CG's witness. In cross-examining Morales, counsel for Universal inquired about how the $418,217 amount for the payment to Rodriguez was calculated. Morales responded that the check represented coverage for property damage alone, not business interruption; the check was equal to the combined amounts listed in his report for Structural, Content and Debris Removal, minus the $10,000 deductible amount of the policy. Morales further testified that the Structural claim was adjusted to correspond to the MP-0013 Special Building Form of the policy and that the Content claim was adjusted to correspond to the policy's MP-0014 Special Personal Property Form. 23 CG never objected to this testimony by Morales. Indeed, CG objected only once during the cross-examination of Morales, to testimony about Morales's interpretation of the mortgage clause, on the ground that Morales was not qualified as an expert. 1 CG never argued to the district court that Universal should not be permitted to explore with Morales the issue of allocation of loss between structure and content, on the ground that it represented an improper change in Universal's pretrial position. CG did not move for a mistrial on that ground. Nor did it ask for a continuance or for extra time for briefing because it was suprised by Morales's testimony. And it did not rebut or impeach either Morales's testimony or his report. It is by now axiomatic that an issue not presented to the trial court cannot be raised for the first time on appeal. Johnston v. Holiday Inns, Inc., 595 F.2d 890, 894 (1st Cir.1979). Because it did not make this argument to the district court, CG cannot now rightly complain that Universal impermissibly changed its strategy midstream. Likewise, CG's belated attempt to dispute the $164,000 figure assigned to structural loss--by comparing the adjuster's report to Form MP-0013 of the policy and to provisions of the Civil Code of Puerto Rico--is not properly before us. 24 In order to adjudicate CG's claim to insurance proceeds from the hotel fire, the district court had to interpret the mortgage clause of the policy. The court's conclusion that the clause applied only to loss to building structure was correct. The court therefore necessarily and properly considered the only relevant evidence before it on the issue of how much money was paid by Universal to Rodriguez for structural loss as opposed to personal property loss: the adjuster's report put into evidence by CG and the testimony of CG's own witness. The district court's entry of a $164,000 judgment for CG against Universal is affirmed. 25 CG's request for prejudgment interest and attorney's fees on account of Universal's obstinacy is denied. We find no indication on the record that CG raised this issue before the district court. Moreover, as CG concedes, the relevant Puerto Rico rule provides that such awards are left to the court's discretion and that, in the case of attorneys' fees and prejudgment interest, the judge must find that the party against whom such award is requested has been obstinate. Heddinger v. Ashford Memorial Community Hosp., 734 F.2d 81, 86 (1st Cir.1984). The district court made no finding of obstinacy and there is nothing in the record to warrant such a finding by us.