    11-5054-cv (L)
    Gelwan v. Vermont Mutual


                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                      SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

            At a stated term of the United States Court of Appeals for the Second Circuit, held at the
    Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
    on the 4th day of January, two thousand thirteen.

    PRESENT:
                GUIDO CALABRESI,
                GERARD E. LYNCH,
                DENNY CHIN,
                      Circuit Judges.
    _____________________________________

    Lloyd A. Gelwan,

                               Plaintiff-Appellant-Cross-Appellee,

                     v.                                                 11-5054-cv (Lead)
                                                                        11-5196-cv (XAP)
    Vermont Mutual Insurance Company,

                       Defendant-Appellee-Cross-Appellant.
    _____________________________________


    FOR APPELLANT:                    LLOYD A. GELWAN, New York, New York.

    FOR APPELLEES:                    JOSEPH T. DOYLE, JR. (Matthew W. Perkins, on the brief),
                                      Lecomte, Emanuelson and Doyle, Quincy, Massachusetts.

            Appeal from a judgment of the United States District Court for the Southern District of

    New York (Lawrence M. McKenna, J.).
       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part,

and the case is REMANDED.

       Lloyd A. Gelwan brought this action against Vermont Mutual Insurance Company after

the parties failed to settle Gelwan’s claims arising from water damage to his summer home in

Massachusetts, on which Gelwan held an insurance policy issued by Vermont Mutual. After a

bench trial, the district court (Lawrence M. McKenna, J.) awarded Gelwan $130,997.75,

representing actual damages plus prejudgment interest on his breach of contract claim, but found

that Vermont Mutual had not committed unfair claims settlement practices and thus declined to

award multiple damages. Gelwan now appeals the denial of his unfair claims settlement claim

and also raises various damages issues; Vermont Mutual cross-appeals as to liability. We

assume familiarity with the factual and procedural history of the case and the issues on appeal,

and we recount only what is necessary to explain our disposition.

       We turn first to both sides’ liability arguments. Vermont Mutual contends that it was

largely not liable under the policy, while Gelwan contends that it was so obviously liable that its

failure to settle the claim after liability had become “reasonably clear” violated Mass. Gen. Laws

ch. 176D, § 3(9)(f), triggering multiple damages under Mass. Gen. Laws ch. 93A, § 9 because

the failure to settle was “willful or knowing.” The parties do not dispute the actual sequence of

events that caused the damage: in 1999, a contractor re-roofed the house but did a poor job,

creating an imperfect seal against water; over the course of several years, various structures

within the house were damaged by water and consequent rotting of structural beams and joists,

even after additional work in 2001 to repair the roof. The parties also do not seriously contest


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that Gelwan’s policy covers water damage. Instead, they disagree whether the district court,

relying on the doctrine of efficient proximate causation in Massachusetts insurance law, properly

found that the damage was legally caused by water, a covered risk, rather than by rot or faulty

workmanship, which the policy lists as exclusions.

       We see no error in the district court’s application of the doctrine of efficient proximate

cause under Jussim v. Massachusetts Bay Insurance Co., 610 N.E.2d 954 (Mass. 1993). That

case holds that when a covered risk causes an excluded risk, “there will be coverage even though

the final form of the property damage, produced by a series of related events, appears to take the

loss outside of the terms of the policy,” id. at 955-56, at least absent clear contractual language to

the contrary, see id. at 957-58. Here, the district court properly found the policy’s rot exception

inapplicable where the rot was caused by prior, covered water damage. Although the roof had

been poorly laid, the policy language covered ensuing losses from faulty workmanship if such

losses were insured risks under the policy, and the district court therefore found that the covered

water damage fell within the ensuing-loss exception. Furthermore, the question of proximate

cause is quintessentially factual, not legal. Solimene v. B. Grauel & Co., K.G., 507 N.E.2d 662,

665 (Mass. 1987) (“Generally, questions of causation, proximate and intervening, present issues

for the jury to decide.”). We cannot find clear error in the district court’s determination, after a

13-day bench trial, that water, rather than faulty workmanship, proximately caused the damage.

However, given the demanding factual and legal analysis necessary to resolve the dispute, we

also cannot say that liability should have been so clear to Vermont Mutual that its failure to settle

was unfair, in violation of Mass. Gen. Laws ch. 176D, § 3(9)(f), or that the district court was

compelled to find that Vermont Mutual’s failure to offer settlement sooner amounted to a


                                                  3
“willful or knowing” violation necessary to trigger multiple damages under Mass. Gen. Laws ch.

93A, § 3.1

       We turn next to Gelwan’s damages arguments. At the outset, we note that although

Gelwan produced significant evidence about the costs of repairing the house, the district court

found that Gelwan had not sufficiently shown which of his damages stemmed from covered

risks. The district court needed only to make a reasonably precise calculation of damages based

on what Gelwan was able to show by a preponderance of the evidence. See, e.g.,

Stuart v. Town of Brookline, 587 N.E.2d 1384, 1387 (Mass. 1992) (some uncertainty with

respect to damages will not bar recovery); accord Boyce v. Soundview Tech. Group, Inc., 464

F.3d 376, 391 (2d Cir. 2006). We find no clear error in the district court’s calculation of the

principal damages award, which was not only based on a reasonable estimate of expenses up to a

certain point plus costs to complete repairs, but also (after the inclusion of prejudgment interest)

nearly equals Gelwan’s own pretrial demand of $150,000.2

       However, Gelwan also appeals the district court’s failure to account for three minor

damages claims unrelated to, and therefore unaccounted for in, the main damages award. These

include a claim for reimbursement for personal property damage (under a separate section of the

policy) for $751.23; a claim for unpaid recoverable holdback, i.e., money to be paid at the

completion of repairs, of $2946.51; and a claim that Vermont Mutual erroneously charged the


       1
          We also reject Gelwan’s contention that the district’s failure to find a violation of ch.
176D, § 3(9) or ch. 93A, § 3 for alleged procedural irregularities in adjudicating Gelwan’s claim
rested on a clearly erroneous view of the facts or legal error.
        2
          Because they are also attributable to the overall cost of repairs and depend on the same
evidence that the district court relied on for calculating the award, we also reject Gelwan’s
arguments that the district court erred by failing to specifically add to his damages the costs of
removing a skylight, excess electric energy spent during repairs, and cleaning.

                                                 4
Policy’s $500 deductible twice. Gelwan presented significant evidence, including testimony by

Vermont Mutual’s claim manager, Richard Delaney, showing his prima facie entitlement to

these amounts. As to the personal property damage and recoverable holdback figures, Vermont

Mutual now argues that the district court must have subsumed these amounts into the main

damages award but offers no record evidence demonstrating either that the court did so or should

have done so. Given the absence of countervailing evidence and argument on appeal as to the

personal property and recoverable holdback amounts, we are persuaded that the district court

clearly erred by not adding these two figures to the total damages award.3 However, because

Vermont Mutual introduced testimony reasonably supporting the conclusion that it had charged

Gelwan only one deductible, we are persuaded that the district court did not clearly err by failing

to add $500 to the award.

       Finally, Gelwan argues that the district court erred in setting the date from which

prejudgment interest should run. Although Gelwan cites a single federal case for this point, he

has not even cited the relevant Massachusetts statute, Mass. Gen. Laws ch. 231, § 6C, much less

offered an interpretation of its language in light of the facts of the case. Moreover, he has failed

to argue how, as a matter of law, an October demand could trigger interest on failure to pay for

injuries some of which did not occur until November. We therefore deem the argument forfeited


       3
          The record includes two different figures for recoverable holdback: $2464.44,
referenced in an August 25, 2005 letter to Gelwan from Peter Venie, a claims adjuster working
on behalf of Vermont Mutual; and $2946.51, referenced in a January 30, 2006 letter to Gelwan
from Roger Emanuelson, attorney for Vermont Mutual. Gelwan requested the larger amount
below, and Vermont Mutual did admit below in post-trial briefing that it had never paid at least
the smaller amount. Because Vermont Mutual now offers no argument for why the larger
amount, calculated after the November 2005 storm and resulting damage, is not correct, and
because Emanuelson’s letter admitted Gelwan’s entitlement to the larger amount, we conclude
that the larger figure of $2946.51 is proper.

                                                 5
on appeal. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998) (“Issues not sufficiently

argued in the briefs . . . normally will not be addressed on appeal.”).

       For the foregoing reasons, the judgment of the district court is AFFIRMED as to liability

and VACATED as to damages. The case is REMANDED with instructions to recalculate the

amount of damages and interest in a manner consistent with this order.



                                              FOR THE COURT:
                                              Catherine O’Hagan Wolfe, Clerk




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