Court Opinion

ID: 2963511
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:11:12.429033+00
Date Added: 2024-06-11T15:01:43.123248
License: Public Domain

USCA1 Opinion

	

          June 22, 1995     UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 94-1764

                     WINDSOR MOUNT JOY MUTUAL INSURANCE COMPANY,
                                Plaintiff - Appellant,

                                          v.

                       JOHN GIRAGOSIAN AND DEBORAH GIRAGOSIAN,
                               Defendants - Appellees.

                                 ____________________

                                     ERRATA SHEET

               The opinion of this court issued on June 16, 1995 is amended
          as follows:

               Bottom of  page 8, the  last two lines  should be  placed in
          quotation marks and read:   "in deference to state  hegemony over
          insurance, to discourage the fashioning of new federal law and to
          favor the application of state law."

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 94-1764

                     WINDSOR MOUNT JOY MUTUAL INSURANCE COMPANY,

                                Plaintiff - Appellant,

                                          v.

                       JOHN GIRAGOSIAN AND DEBORAH GIRAGOSIAN,

                               Defendants - Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                            Coffin, Senior Circuit Judge,
                                    ____________________

                               and Cyr, Circuit Judge.
                                        _____________

                                _____________________

               Michael J.  Calabro, with whom Flanagan &  Hunter, P.C., was
               ___________________            ________________________
          on brief for appellant.
               Thomas  M. Neville,  with whom  Segalini &  Neville, was  on
               __________________              ___________________
          brief for appellees.

                                 ____________________

                                    June 16, 1995
                                 ____________________

                    TORRUELLA,  Chief  Judge.   Windsor  Mount  Joy  Mutual
                    TORRUELLA,  Chief  Judge.
                                ____________

          Insurance  Company  ("Windsor")  sought a  declaration  from  the

          district court of its  rights and obligations with respect  to an

          insurance policy held  by John and  Deborah Giragosian for  their

          34-foot  sailboat Escape, which had  sunk in Boston  Harbor.  The
                            ______

          Giragosians  counterclaimed for contract damages due to Windsor's

          allegedly improper failure to  honor the policy.1  After  a bench

          trial,  the   district  court  determined  that   Windsor  had  a

          contractual duty  to indemnify the Giragosians  in the stipulated

          loss amount of  $58,000.  Windsor now  appeals this ruling.   For

          the following reasons, we affirm.

                                      BACKGROUND
                                      BACKGROUND

                    In 1989,  the Giragosians purchased the  Escape, a 1987
                                                             ______

          model  34-foot Catalina  sailboat  with  a  12-horsepower  diesel

          auxiliary.  The Giragosians insured the Escape with Windsor under
                                                  ______

          a  fairly standard  marine insurance  policy which  contained the

          following warranty of seaworthiness:

                      Seaworthiness  Warranty.   Warranted that
                      at  the  inception  of  this  Policy  the
                      vessel  shall be in a seaworthy condition
                      and, thereafter, during  the term of this
                      Policy,  the  Assured shall  exercise due
                      diligence  to  maintain  the  boat  in  a
                      seaworthy condition.

                    In   the   months   before   the   Escape   was   lost,
                                                       ______

          Mr. Giragosian's adverse experiences relating  to the vessel were
                              
          ____________________

          1   The Giragosians also  counterclaimed for violations  of Mass.
          Gen. L. chapters 93A  and 176D, prohibiting unfair  and deceptive
          practices in the business of insurance.  The district court ruled
          that Windsor  did  not  commit  any  unfair  or  deceptive  trade
          practices, and the Giragosians do not appeal this decision.

                                         -2-

          limited to  the following:  During one  excursion, Giragosian ran

          the  vessel  aground,  and  called  for  help  using  his  radio.

          Occasionally,  the diesel engine stalled.  In August of 1991, the

          engine stalled as Giragosian was entering Scituate Harbor after a

          pleasure cruise.   He was unable to restart the  engine, and thus

          obtained  permission to moor the vessel in Scituate Harbor.  Most

          significantly,  on October  19,  1991, someone  noticed that  the

          Escape was  lying very low in  the water and the  Coast Guard was
          ______

          called to  pump the  boat out.   The Coast  Guard pumped  out the

          vessel and promptly informed the Giragosians of the situation.

                    Giragosian went to Scituate Harbor on October 24, 1991,

          accompanied by his friend Daniel Likely.  The two planned to sail

          the Escape  to the Bay Point  Marina in Quincy to  have it hauled
              ______

          for the season.  Giragosian and Likely rowed  to where the Escape
                                                                     ______

          was moored.  Once on board, however, they realized that the locks

          to her cockpit had been changed  by the Coast Guard personnel who

          had  pumped  the boat  out five  days  earlier.   Giragosian came

          ashore and  retrieved the key from  the Coast Guard  station.  At

          the  station,  Giragosian had  a  conversation  with Coast  Guard

          officials, who suggested  that perhaps the water  had gotten into

          the vessel's bilges by running down  the mast, i.e., that it  was
                                                         ____

          rainwater.

                    After  retrieving   the  key  from  the   Coast  Guard,

          Giragosian and Likely returned  to the Escape, boarded the  boat,
                                                 ______

          and  prepared to  cast  off.   Before  the Escape  left  Scituate
                                                     ______

          Harbor, Giragosian looked into  the bilge and noticed one  to two

                                         -3-

          inches  of water.   He  considered this  to be  normal.   He also

          noticed water  stains indicating  that there  had been  about six

          inches of water in the bilges at one time.

                    Giragosian  unsuccessfully  attempted   to  start   the

          vessel's  diesel  engine.     Because  the  batteries  were  low,

          Giragosian turned  off the  radio, but  kept  the depthfinder  on

          throughout most of the voyage.  Because he intended to operate by

          "dead  reckoning" from Scituate  Harbor to the  Bay Point Marina,

          Giragosian did not think that he needed the electronic equipment.

          He also decided to make the trip solely under sail,  as the winds

          were light, the day clear, and the sea calm.

                    At about 3:00 p.m., Giragosian headed the Escape out of
                                                              ______

          Scituate  Harbor  under sail,  towing  a  small inflatable  dingy

          behind.  He sailed northeast  out of Scituate Harbor,  navigating

          by  compass and dead reckoning.  He estimated that he was sailing

          at about six knots.  At around 4:30 p.m., his depthfinder failed.

          Later, between 5:00 and 6:00 p.m. and well out  in greater Boston

          Harbor, Giragosian noticed that  his floorboards were now covered

          with sloshing water and that they had begun to float.  He checked

          the  bilges  and found  that they  contained  about four  feet of

          water, so he and Likely attempted to pump the water out manually.

          At this point, the  Escape still had sufficient power  to operate
                              ______

          the  navigation lights, but only  dimly.  Giragosian  tried to go

          below to  get a flashlight, but  could not find one  as the water

          was now flooding the  cockpit and the flashlight  was underwater.

          He tried to use his radio tocall for help, but could raise noone.

                                         -4-

                    It  was getting close to sunset, and the sea had become

          slightly choppy.   Giragosian and Likely  donned life preservers,

          retrieved the flare  gun, dropped  the sails, and  hooked up  the

          outboard  motor to  the inflatable  dinghy.   They  abandoned the

          Escape and started toward a drilling rig light some distance away
          ______

          in the  harbor.  Their dinghy  engine ran out of gas,  so it took

          them  two hours  to paddle by  hand to  the rig,  where they were

          rescued after some time  by the Coast Guard.   Neither Giragosian

          nor Likely saw the Escape go  down.  The Coast Guard searched for
                             ______

          the vessel but was unable to find any sign of it.

                    The Giragosians gave proper notice to Windsor.  Windsor

          conducted its own search for the vessel with underwater detection

          devices.  This search, however, proved futile, and the Escape was
                                                                 ______

          never seen again.  Windsor eventually denied Giragosian's claim.

                    The district  court found, based on the totality of the

          facts and  circumstances presented  during trial, that  the water

          pumped out of the hold  of the vessel by the Coast  Guard had not

          actually come down the mast, but  rather was the result of a leak

          in  the hull,  a  defect  which  was aggravated  by  Giragosian's

          attempts to sail the boat.   The court went on to  find, however,

          that Giragosian  was  not  actually  aware that  the  vessel  was

          leaking  at  or below  the  waterline,  and he  did  not  know or

          appreciate that sailing the vessel was aggravating the leak.

                    The  district court  found  that the  Escape  was in  a
                                                          ______

          seaworthy condition at the commencement of the policy's coverage,

          and  that the Giragosians exercised due diligence to maintain the

                                         -5-

          boat  in this  condition.   The court  went on  to find  that the

          Escape  was,  however,  unseaworthy  on  October  24,  1991  when
          ______

          Giragosian and Likely sailed her out into open waters.  The court

          specifically found, however,  that Giragosian did not know of the

          boat's  unseaworthy condition,  and  that the  condition was  not

          caused by any lack of due diligence on Giragosian's part.

                    The court nevertheless  ruled as a  matter of law  that

          Giragosian  was  negligent in  taking the  Escape  out to  sea on
                                                     ______

          October 24,  1991.    According  to  the  court,  the  "objective

          combination of the facts" -- that he knew that his  boat had been

          low in the water and had been pumped out by the Coast Guard,  and

          that he  was aware that  he had no  auxiliary power and  that his

          batteries were low  -- rendered Giragosian's decision to sail the

          Escape negligent.  Yet this negligence, the  court explained, did
          ______

          not  necessarily preclude  coverage under  the insurance  policy.

          Despite his  negligence, the court concluded,  Giragosian had not

          failed  to  exercise  due  diligence in  maintaining  the  boat's

          seaworthiness,  and therefore he  is entitled  to indemnification

          from Windsor under the policy.  Windsor now appeals.

                                  STANDARD OF REVIEW
                                  STANDARD OF REVIEW

                    Our standard  for reviewing a district court's findings

          of fact and conclusions  of law made in conjunction with  a bench

          trial is  well settled.  We review claimed errors of law de novo.
                                                                   __ ____

          Williams v. Poulos, 11  F.3d 271, 278 (1st Cir.  1993); Blanchard
          ________    ______                                      _________

          v. Peerless Ins.  Co., 958 F.2d  483, 487 (1st  Cir. 1992).   The
             __________________

          district court's findings of fact, however, will not be set aside

                                         -6-

          unless they are demonstrated to be clearly erroneous.   Williams,
                                                                  ________

          11 F.3d at 278;  Fed. R. Civ. P. 52(a).  In  other words, we will

          give  such findings  effect unless,  after carefully  reading the

          record and according due deference to the trial court, we form "a

          strong,  unyielding  belief  that   a  mistake  has  been  made."

          Cumpiano v. Banco Santander  Puerto Rico, 902 F.2d 148,  152 (1st
          ________    ____________________________

          Cir.  1992).    Where there  are  two  permissible  views of  the

          evidence,  the interpretation  assigned by  the trial  court will

          therefore be adopted.  Williams, 11 F.3d at 278.
                                 ________

                    "The clearly erroneous standard also ordinarily applies

          to our review of a district court's resolution of mixed questions

          of law and  fact.  In such situations,  however, we are obligated

          to  determine whether the court's  decision was infected by legal

          error.  And if a  trial court bases its findings upon  a mistaken

          impression of applicable legal principles, the reviewing court is

          not  bound  by the  clearly erroneous  standard."   Id. (internal
                                                              __

          quotations omitted).

                                       ANALYSIS
                                       ANALYSIS

                    Windsor   appeals  the  district  court's  decision  on

          several grounds.  First, Windsor  contends that the court applied

          an incorrect  legal standard both  to the  interpretation of  the

          warranty of seaworthiness  in the marine insurance policy, and to

          the warranty's "due diligence"  requirement.  Windsor also argues

          that  certain   factual  findings  of  the   district  court  are

          inconsistent, and  that  as a  matter of  law, the  terms of  the

                                         -7-

          insurance policy  preclude coverage  for  loss due  to a  "latent

          defect."  We address these arguments in turn.

                    A.   Did the district court apply the appropriate legal
                    A.   Did the district court apply the appropriate legal
                         __________________________________________________
                         standard   for   interpreting   the  warranty   of
                         standard   for   interpreting   the  warranty   of
                         __________________________________________________
                         seaworthiness?
                         seaworthiness?
                         _____________

                    In   interpreting   the   marine    insurance   policy,

          particularly  the warranty  of seaworthiness, the  district court

          applied principles of Massachusetts insurance law rather than the

          maritime  doctrine,  applicable  in marine  insurance  cases,  of

          uberrimae  fidei.2   Citing Wilburn  Boat Co.  v. Fireman's  Fund
          ________________            _________________     _______________

          Ins. Co., 348 U.S.  310, 320-21 (1955), the court  explained that
          ________

          "regarding  matters of insurance, . . . the doctrine of uberrimae
                                                                  _________

          fidei gives way to the state's  . . . interests in regulating the
          _____

          relationship between insurer and insured."  Appellant Windsor now

          argues that this choice of law ruling was erroneous. 

                    The  propriety of  maritime  jurisdiction  over a  suit

          involving a  marine insurance  policy is unquestionable.   Albany
                                                                     ______

          Ins.   Co.  v.  Wisniewski,  579  F.  Supp.  1004,  1013  (D.R.I.
          __________      __________

          1984)(citing  Kossick v.  United  Fruit Co.,  365  U.S. 731,  735
                        _______     _________________

          (1961);  Wilburn Boat,  348  U.S. at  313).   When,  however,  no
                   ____________

          established  maritime  rule  governs   the  issues  of  a  marine

          insurance dispute, the Wilburn  Boat inquiry becomes  applicable.
                                 _____________

          In the absence of  a settled federal maritime rule,  Wilburn Boat
                                                               ____________

          has generally been interpreted,  "in deference  to state hegemony

          over insurance, to discourage  the fashioning of new federal  law

                              
          ____________________

          2   "The most perfect  good faith."   Black's Law Dictionary 1363
          (5th ed. 1979).

                                         -8-

          and to favor the application of state law."  Albany Ins. Co., 579
                                                       _______________

          F. Supp. at 1013-14 (listing cases).  Where, on the other hand, a

          settled maritime rule directly  governs the litigation, that rule

          controls.  See  Ingersoll Milling  Mach. Co. v.  M/V Bodena,  829
                     ___  ____________________________     __________

          F.2d  293,  305-06 (2d  Cir. 1987),  cert.  denied sub  nom. J.E.
                                               _______________________ ____

          Bernard  &  Co. v.  Ingersoll Milling  Mach.  Co., 484  U.S. 1042
          _______________     _____________________________

          (1988).   State law may supplement maritime law when maritime law

          is silent or a local matter is at issue, but state law may not be

          applied where  it is materially  different from maritime  law, or

          where  it would  defeat  the reasonably  settled expectations  of

          maritime actors.  See Albany  Ins. Co. v. Anh Thi Kieu,  927 F.2d
                            ___ ________________    ____________

          882, 887 (5th Cir.  1991); Floyd v.  Lykes Bros. S.S. Co.,  Inc.,
                                     _____     ___________________________

          844  F.2d 1044 (3d Cir. 1988); Coastal  Iron Works, Inc. v. Petty
                                         _________________________    _____

          Ray  Geophysical, Div. of Geosource, Inc., 783 F.2d 577 (5th Cir.
          _________________________________________

          1986); Steelmet, Inc. v.  Caribe Towing Corp., 747 F.2d  689, 695
                 ______________     ___________________

          (11th  Cir. 1984); Fireman's Fund  Am. Ins. Co.  v. Boston Harbor
                             ____________________________     _____________

          Marina, Inc.,  406 F.2d 917,  919 (1st  Cir. 1969);  cf. Pace  v.
          ____________                                         __  ____

          Insurance  Co. of No. Am.,  838 F.2d 572  (1st Cir. 1988)(holding
          ________________________

          that  the admiralty  clause  of  the  U.S. Constitution  did  not

          necessarily  bar a state law claim against a maritime insurer for

          its bad faith refusal to honor a claim).

                    Given  these  choice-of-law  principles,  the  narrower

          issue  is  whether  an  established  rule  of   maritime  law  is

          applicable to the dispute  at bar.  If  a maritime rule  controls

          the disputed issue,  and that rule  is materially different  from
                               ___

          state law, then the district court's decision to abandon maritime

                                         -9-

          law  was  legal  error.   Windsor  argues  that  the doctrine  of

          uberrimae  fidei3  is  directly  applicable here,  and  that  the
          ________________

          district  court should  have employed  this doctrine  rather than

          Massachusetts insurance law in formulating its conclusions.

                    We need  not undertake this  analysis, however, because

          we find  that the  stringent uberrimae  fidei  doctrine does  not
                                       ________________

          relieve Windsor of  its liability  to the  Giragosians under  the

          policy.   True,  the doctrine  requires the  parties to  a marine

          insurance policy to accord one another the highest degree of good

          faith.   Knight v. U.S.  Fire Ins. Co.,  804 F.2d 9,  13 (2d Cir.
                   ______    ___________________

          1986).  In particular, the doctrine imposes  a strict duty on the

          insured  to disclose to the insurer  all known circumstances that

          materially  affect the insurer's risk,  the default of which duty

          renders the  insurance  contract voidable  by the  insurer.   Id.
                                                                        __

          Once  policy  coverage has  commenced,  the  doctrine imposes  an

          equally  strict, continuing  obligation  on the  vessel owner  to

          ensure  that the  vessel will  not, through  either bad  faith or

          neglect, knowingly be permitted to break ground in an unseaworthy
                   _________
                              
          ____________________

          3   The  doctrine  traditionally  applied  to  insurance  law  in
          general.  See Stipchich  v. Metropolitan Life Ins. Co.,  277 U.S.
                    ___ _________     __________________________
          311, 316 (1928)("Insurance  policies are traditionally  contracts
          uberrimae  fidei  and  a  failure  by  the  insured  to  disclose
          ________________
          conditions  affecting the risk, of  which he is  aware, makes the
          contract  voidable at the insurer's  option.").  Insurance law is
          primarily  a matter of state concern, however, and over the years
          most states,  including Massachusetts, have abandoned  the strict
          uberrimae fidei  doctrine for insurance policies  generally.  See
          _______________                                               ___
          Anh  Thi Kieu,  927 F.2d  at 888  (tracing history  of doctrine).
          _____________
          Today, virtually the sole remaining vestige of the doctrine is in
          maritime insurance law.  Id.  Even then, however, it is debatable
                                   __
          whether  the doctrine can still be deemed an "entrenched" rule of
          law.  Id. at  889-90 (discussing marine insurance cases  in which
                __
          courts refused to apply doctrine in its strictest form). 

                                         -10-

          condition.  Austin  v. Servac  Shipping Line, 794  F.2d 941  (5th
                      ______     _____________________

          Cir. 1986)(citations  omitted)(emphasis  added).4   The  doctrine

          has  long been  considered  to be  one of  limited applicability,

          however,  in light of the  Supreme Court's Wilburn Boat decision,
                                                     ____________

          see  348 U.S. at  316-317 (explaining limitations  of doctrine in
          ___

          marine insurance contract context).  Whatever the exact extent of

          the  applicability of  the  strict uberrimae  fidei standard,  we
                                             ________________

          cannot  believe that in these  times it requires  a pleasure boat

          owner to notify the insurer every time the craft takes on a small

          amount  of  water,  or has  engine  trouble,  at  pain of  losing

          coverage.

                    As the  district court specifically  found, the  Escape
                                                                     ______

          was indeed unseaworthy when  Giragosian set sail, but he  did not

          know  of its unseaworthy condition, and the condition was not the

          result of his neglect or lack of due diligence.  Windsor does not

          challenge  these  factual  findings,   but  instead  argues  that

          Giragosian failed  to exercise due diligence  in ascertaining the

          vessel's  condition before setting sail  on August 24,  1991.  We

          disagree.   Although the Coast Guard had recently pumped her out,

          the officials  told Giragosian  that the  water had  probably run

          down  the  mast,  and  Giragosian  was  certainly  reasonable  in

          accepting their  opinion.  Windsor claims  that Giragosian should

          have  consulted a marine  mechanic in Scituate.   As a  matter of

          law,  however, we  do not  think that  the doctrine  of uberrimae
                                                                  _________

                              
          ____________________

          4  Although strict, this continuing obligation is not "absolute,"
          contrary to Windsor's assertions.

                                         -11-

          fidei  requires boat  owners to  hire mechanics,  at the  risk of
          _____

          losing their insurance coverage, every time a boat takes on small

          amounts of  water.  As any  boat owner knows, most  boats leak at

          some time.  Moreover, a full five days after the  Coast Guard had

          pumped water out of the vessel,  Giragosian found only one to two

          inches of water in the bilges -- a normal amount for the Escape -
                                                                   ______

          -  and the  water was  easily pumped  out.5   These circumstances

          simply  do  not support  a  conclusion  that  the district  court

          committed  clear error  in  finding Giragosian  duly diligent  in

          maintaining  and  ascertaining the  seaworthiness  of  the Escape
                                                                     ______

          before setting sail on August 24, 1991.   We therefore affirm the

          district court's determination that Giragosian did not breach the

          warranty of seaworthiness of the insurance policy.6

                    B.   Were   the   district  court's   factual  findings
                    B.   Were   the   district  court's   factual  findings
                         __________________________________________________
                         inconsistent?
                         inconsistent?
                         ____________

                    Windsor also  claims that the  district court's factual

          finding  that  the sinking  of the  Escape was  due to  a "latent
                                              ______

          defect"  is  inconsistent  with  its  alleged  finding  that  the
                              
          ____________________

          5   We agree with the Giragosians that the case of Prado, Inc. v.
                                                             ___________
          Lexington  Ins. Co., 1990 WL  255535, *8 (D.  Mass. 1990), aff'd,
          ___________________                                        _____
          930  F.2d 906 (1st Cir.  1991), is entirely  distinguishable.  In
          that case,  although their  vessel had been  leaking considerably
          for an extended period  of time, the insureds made  absolutely no
          attempt to ascertain the  source of the highly unusual  amount of
          water in the vessel, and did not  consult with either Coast Guard
          personnel or mechanics.  These facts are not present here.

          6    Our  conclusion  is  unaffected  by  the  district   court's
          determination that  Giragosian was negligent for  setting sail in
          the Escape that day because  he had no auxiliary power and  a low
              ______
          radio  battery.  For as  the district court  also correctly held,
          his  decision to set sail, negligent or not, is simply irrelevant
          to whether he was in breach of the insurance policy's warranty of
          seaworthiness.

                                         -12-

          Giragosians were "on notice" of the boat's condition.  In support

          of this argument, Windsor  claims that "latent defect" is  a term

          of  art  meaning  a  flaw  which  is  not   discoverable  through

          inspection by  a reasonably  skilled person.   Because Giragosian

          was  "on notice" of  the vessel's condition,  Windsor argues, the

          Escape's defect could not have been latent, and Giragosian lacked
          ______

          due diligence in finding it.

                    As  the  Giragosians  correctly  point   out,  however,

          nothing  in  the  district  court's findings  even  suggest  that

          Giragosian was "on notice" of the boat's defect; to the contrary,

          the  court specifically found that Giragosian did not know of it.
                                                            ___

          Based on the evidence,  we see no inconsistency, much  less clear

          error,  in the court's factual  findings.  Furthermore, when read

          in  context, it is  clear that the district  court did not employ

          the term  "latent defect"  as a  term of art,  but merely  in the

          ordinary, common-sense meaning of the phrase  -- i.e., an unknown
                                                           ____

          or  unsuspected flaw.   Essentially, Windsor's argument here is a

          reiteration  of their previous  contention that Giragosian should

          have located the source of the water in the bilges,  and that his

          failure  to  do so  constitutes  lack of  due  diligence.   As we

          explained above, however, the district court's determination that

          Giragosian  was duly diligent was  not clear error.  Accordingly,

          we  affirm the  district  court's findings  and reject  Windsor's

          contention on this point.7
                              
          ____________________

          7   Windsor  also  argues  that accepting  the  district  court's
          finding that the leak in the Escape's hull was a "latent defect,"
                                       ______
          the policy  does not  provide coverage for  the boat's loss.   In

                                         -13-

                                      CONCLUSION
                                      CONCLUSION

                    For the  foregoing reasons,  we affirm the  judgment of
                                                    ______

          the district court.

                              
          ____________________

          support of this  contention, Windsor points to  two paragraphs in
          the  policy.  The first paragraph states that the policy provides
          coverage  for  any physical  loss  or damage  from  "any external
          cause."  The second paragraph specifically excludes from coverage
          "loss, damage  or expense arising from or in consequence of . . .
          the repair or replacement of a part in which a  latent defect has
          been found,  mechanical breakdown or  faulty manufacture. .  . ."
          Under the  language of these clauses,  Windsor contends, coverage
          should have been denied.

             Windsor raises these arguments now  for the first time,  never
          having  presented any evidence nor,  as far as  the record shows,
          even discussed  these clauses before the district court.  Because
          Windsor most  certainly could  have raised these  arguments below
          and gives  no explanation for its  failure to do so,  we deem the
          arguments waived.   Havinga v.  Crowley Towing &  Trans. Co.,  24
                              _______     ____________________________
          F.3d 1480,  1483 (1st Cir. 1994); FDIC v. Caporale, 931 F.2d 1, 2
                                            ____    ________
          (1st Cir. 1991). 

                                         -14-