
USCA1 Opinion

	




          December 19, 1994 United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________          No. 94-1526                         COMMERCIAL UNION INSURANCE COMPANY,                                Plaintiff, Appellant,                                          v.                         WALBROOK INSURANCE CO., LTD., ET AL.                                Defendants, Appellees.          No. 94-1561                         COMMERCIAL UNION INSURANCE COMPANY,                                 Plaintiff, Appellee,                                          v.                            NATIONAL CASUALTY CO. ET AL.,                               Defendants, Appellants.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Rya W. Zobel, U.S. District Judge]                                           ___________________                                 ____________________                                     ERRATA SHEET                                     ERRATA SHEET               On page 10, line 14, delete "Interest" and insert "Intent".                                            ________              ______                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________        No. 94-1526                         COMMERCIAL UNION INSURANCE COMPANY,                                Plaintiff, Appellant,                                          v.                         WALBROOK INSURANCE CO., LTD., ET AL.                                Defendants, Appellees.        No. 94-1561                         COMMERCIAL UNION INSURANCE COMPANY,                                 Plaintiff, Appellee,                                          v.                            NATIONAL CASUALTY CO. ET AL.,                               Defendants, Appellants.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Rya W. Zobel, U.S. District Judge]                                           ___________________                                 ____________________                                        Before                                 Selya, Circuit Judge,                                        _____________                           Campbell, Senior Circuit Judge,                                     ____________________                              and Stahl, Circuit Judge.                                         _____________                                 ____________________            Richard L. Neumeier with whom Parker,  Coulter, Daley & White  was            ___________________           _______________________________        on brief for Commercial Union Insurance Company.            James B. Dolan with whom Erin  R. Boisvert, Badger, Dolan,  Parker            ______________           _________________  ______________________        & Cohen, Robert J. Brown,  Mark A. DiTaranto, and Mendes &  Mount were        _______  _______________   _________________      _______________        on brief for Walbrook Insurance Co., Ltd., et al.                                 ____________________                                   December 5, 1994                                 ____________________                      STAHL,  Circuit Judge.    For the  second time,  we                      STAHL,  Circuit Judge.                              _____________            examine issues  arising out  of a dispute  between Commercial            Union Insurance Company ("CU")  and Walbrook Insurance et al.            (collectively, "Weavers") concerning Weavers's  obligation to            indemnify CU under an insurance contract.  On initial appeal,            we reversed the district court's grant of summary judgment in            favor  of   Weavers  and   remanded  the  case   for  further            proceedings consistent with  our opinion.   Commercial  Union                                                        _________________            Ins.  Co. v. Walbrook  Ins. Co., 7 F.3d  1047 (1st Cir. 1993)            _________    __________________            ("Commercial  Union  I").   Both  parties  now challenge  the              ____________________            district court's  entry  of judgment  for  CU and  denial  of            cross-motions to amend  or alter that judgment.   Weavers has            also  moved to  dismiss CU's appeal.   We deny  the motion to            dismiss and affirm the entry of judgment below.                                                   I.                                          I.                                          __                       FACTUAL BACKGROUND AND PRIOR PROCEEDINGS                       FACTUAL BACKGROUND AND PRIOR PROCEEDINGS                       ________________________________________                      Between   1973  and  1975,   a  CU  loss-prevention            inspector  conducted   several  safety  inspections   of  the            Peterson/Puritan aerosol-packing plant  in Cumberland,  Rhode            Island.   On January  17, 1976,  a gas  line exploded  at the            plant, killing four people and  injuring several others.  Two            years  later,  victims  filed  several  suits  naming  CU  as            defendant ("Peterson  claims").   CU  eventually settled  the            Peterson claims.   CU expended $2,502,874.30  for defense and            in settlement of the claims.  Ultimately, CU obtained primary                                         -2-                                          2            indemnification  in  the amount  of $1,000,000  from American            Employers  Insurance  Company  ("American  Employers"),  CU's            primary corporate insurer for the period July 1, 1976 through            July 1, 1979.1                      At  the   time  of  the  explosion,  the  Travelers            Insurance  Company  had  issued  to CU  a  primary  corporate            liability  policy ("Travelers Policy") effective from January            1,  1976, to  July 1,  1976.   The Travelers  Policy provided            occurrence-based  coverage2 during the  policy period  for up            to  $1  million  of CU  liability.    The  main body  of  the            Travelers Policy specifically excluded  occurrences involving            malpractice by CU's engineers.  This gap was partially filled            by  a separate  Engineers Professional  Liability Endorsement            issued  by  Travelers  ("Travelers EPL  Endorsement").    The            Travelers EPL Endorsement provided claims-based coverage.3                          As  the  Commercial  Union  I  panel  noted,  the                                 ____________________            Travelers Policy  and the  Travelers EPL Endorsement  left CU            with  a  gap  in its  coverage  with  respect  to occurrences            resulting from  engineer malpractice  for which no  claim was            filed during the policy period.  Consequently, at the time of                                            ____________________            1.  American Employers is not a party to this case.            2.  Occurrence-based insurance provides  coverage if the  act            giving rise to the  claim occurred during the policy  period,            regardless of when the claim is filed.            3.  Claims-based insurance provides  coverage for claims made            during the policy  period regardless of when the  acts giving            rise to the claims occurred.                                         -3-                                          3            the explosion, CU also  carried an umbrella policy  issued by            Weavers ("Weavers  Umbrella").4   Under the first  section of            the main body of  the Weavers Umbrella, captioned "COVERAGE,"            the policy expressly  covered "all  sums . .  . imposed  upon            [CU] by law . . . or assumed under contract or  agreement . .            . for damages on account of . . . personal injuries, property            damage,  [or] advertising liability . . . arising out of each            occurrence happening anywhere in the world."5                      The next  section of the  main body of  the Weavers            Umbrella,  captioned  "LIMIT  OF  LIABILITY,"  provided  that            Weavers would only  be liable  for the ultimate  net loss  in            excess of either "(a) the limits of the underlying insurances            as  set out  in  the attached  schedule  in respect  of  each                                            ____________________            4.  "Umbrella" policies differ from standard excess insurance            policies in that they  are designed to fill gaps  in coverage            both   vertically   (by   providing  excess   coverage)   and            horizontally (by  providing  primary coverage).    Commercial                                                               __________            Union  I,  7  F.3d at  1053.   In  the  latter  instance, the            ________            Umbrella is said  to "drop down" to  provide primary coverage            where the underlying policy provides no coverage at all.              5.  Under  the  Weavers  policy, the  term  "occurrence"  was            defined as follows:                      The   term  "Occurrence"   wherever  used                      herein  shall  mean  an  accident   or  a                      happening  or  event or  a  continuous or                      repeated  exposure  to  conditions  which                      unexpectedly and  unintentionally results                      in  personal  injury, property  damage or                      advertising  liability during  the policy                      period.      All    such   exposure    to                      substantially the same general conditions                      existing   at   or  emanating   from  one                      premises  location  shall  be deemed  one                      occurrence.                                         -4-                                          4            occurrence  covered  by said  underlying insurances"  or "(b)            $25,000 ultimate net  loss in respect of each  occurrence not            covered by said underlying insurances . . . ."                      To   the  Weavers  Umbrella  was  attached  an  EPL            Endorsement ("Weavers  EPL Endorsement").   The terms  of the            Weavers  EPL Endorsement  provided  that it  was to  "include            Engineers Professional  Liability as more fully  described in            the underlying General Liability Policy/ies" (referencing the            Travelers Policy) and that  such coverage "is subject to  the            same  warranties, terms and conditions . . . as are contained            in the said underlying policy/ies . . . ."  The parties agree            that  because  this  language specifically  incorporates  the            provisions of the Travelers  EPL Endorsement, the Weavers EPL            Endorsement provided claims-based coverage.                        Subsection  (a)  of  the  Weavers  EPL  Endorsement            captioned  "LIMIT OF LIABILITY,"  provided that Weavers would            only be liable for the ultimate net  loss in excess of "[t]he            limits  of the  underlying  insurances  as  set  out  in  the            attached schedule  in respect  of each occurrence  covered by            said  underlying  insurances."    If the  liability  was  not            covered by another policy, subsection  (b) of the Weavers EPL            Endorsement  ("Liability  Amendment")  provided coverage  for            "the excess  of . .  . $25,000  ultimate nett  [sic] loss  in            respect  of each  occurrence not  covered by  said underlying            insurances but in  respect of engineering  services liability                                         -5-                                          5            $250,000 ultimate  nett [sic] loss [for]  each occurrence not            covered   by  said  underlying   insurances."     In  effect,            subsection (b)  provides for  a deductible when  the Umbrella            "drops  down"  to  provide  coverage not  covered  under  the            underlying policy  ("$250,000  deductible").   An  attachment            captioned  "Schedule  of  Underlying  Insurances"  lists  the            Travelers Policy.                        Initially,  Travelers undertook the  defense of the            Peterson  claims.  Then, in  1982, CU determined  that it had            not made its claim  for coverage during the  Travelers Policy            period.  Accordingly, CU  released Travelers from any further            obligations in  connection with the explosion.   Weavers then            informed CU that  its Umbrella would  not cover the  Peterson            claims.   In November  1982, CU  brought the  present action,            seeking  a judicial  declaration  as to  whether the  Weavers            Umbrella covered the Peterson claims.                        Following extensive discovery, both  parties sought            summary  judgment.   CU  argued that  the  main body  of  the            Weavers Umbrella  covered EPL  claims on an  occurrence basis            and  that the  Weavers  EPL  Endorsement provided  additional            coverage  on a claims basis.  Weavers argued that the Weavers            EPL Endorsement  was the  sole  source of  EPL coverage  and,            because the  EPL  Endorsement was  claims-based,  there  was,            accordingly, no coverage under either the Weavers Umbrella or            the  Weavers EPL  Endorsement.   The  district court  largely                                         -6-                                          6            adopted the  latter reading and granted  Weavers's motion for            summary judgment.                        On appeal,  the Commercial Union  I panel reversed.                                      ___________________            Interpreting  the  various   policy  provisions,  the   panel            concluded that the main body of the Weavers Umbrella provided            occurrence-based EPL  coverage and thus covered  the Peterson            claims.  Commercial Union  I, 7 F.3d at 1049.   Consequently,                     ___________________            the  panel ordered that the  judgment in favor  of Weavers be            vacated and that judgment  be entered for CU, in  proceedings            consistent with the panel's  opinion.  Weavers's petition for            rehearing and rehearing en banc was denied.                         In  this  appeal, we  are  asked  to review  issues            arising from  the subsequent proceedings before  the district            court.  CU moved  that the district court enter  judgment for            $1,502,874.30  plus interest6  to be  calculated at  12%, the            prejudgment  interest rate  for  contractual  disputes  under            Massachusetts law.  In its response, Weavers  argued that the            $1,502,874.30 was subject to the $250,000 deductible and that            prejudgment  interest should  be determined  by  reference to            federal law.   As to the  prejudgment-interest issue, Weavers            argued  in the  alternative that  if state  law applied,  the                                            ____________________            6.  In  its  brief  in  Commercial  Union  I,  CU  explained:                                    ____________________            "Commercial Union . .  . does not seek to hold Weavers liable            for  $2,227,874.30  [sic]   ($2,502,874.30  [settlement   and            defense  costs  related  to  the Peterson  claims]  less  the            $250,000 retention).  Commercial  Union seeks to recover only            the  amount it is out of pocket caused by Weavers'[s] breach:            $1,502,874.30 plus interest."                                         -7-                                          7            correct  Massachusetts  statute  set the  rate  at  6%.   The            district court, finding that the Commercial Union I panel had                                             __________________            "rested  judgment   upon"  the  validity   of  the   $250,000            deductible, applied the deductible, ordered entry of judgment            for CU in  the amount  of $1,252,874.30, found  state law  to            govern  interest, and  ordered that  prejudgment interest  be            calculated  at the rate of  12%.  The  district court entered            judgment for $2,749,326.48.                      Pursuant to  Fed. R. Civ. P. 59, both parties filed            motions seeking to alter or amend the judgment.  The district            court denied both  motions.7  CU appealed, and  Weavers cross            appealed.   CU requested that Weavers post a bond pursuant to            Fed.  R. Civ.  P. 62.   When Weavers refused,  CU obtained an            execution.   CU  then  received payment  from all  defendants            except Walbrook  and Slater,  Walker and has  accepted checks            totaling $2,314,758.61.  CU refused to execute a satisfaction            of  judgment.   Weavers moved  to dismiss  CU's appeal.   The            motion  to  dismiss  was  denied  without  prejudice  pending            reconsideration by this panel.                                           II.                                         II.                                         ___                                      DISCUSSION                                      DISCUSSION                                      __________                                            ____________________            7.  The  judgment  was amended  by  joint  motion to  correct            technical errors.                                         -8-                                          8                      Where, as  here, the issues on  appeal involve pure            questions  of  law,  our review  is  de  novo.8   See,  e.g.,                                                 __  ____     ___   ____            Villafane-Neriz v. Federal Deposit Ins. Corp., 20 F.3d 35, 39            _______________    __________________________            (1st  Cir.  1994).    On  appeal,  CU  makes  two   principal            arguments:  (1) that the district court erred in stacking the            $250,000  deductible  on top  of  the  payment received  from            American Employers; and  (2) that Weavers waived its right to            argue for alternate relief  in application of the deductible.            In its cross appeal,  Weavers argues:  (1) that  the district            court  erred  in  applying  state law  to  award  prejudgment            interest; and,  in the  alternative, (2) that,  if state  law            applies, the  district court applied  the incorrect law.   On            its motion to  dismiss CU's appeal,  Weavers argues that,  in            executing the district court's  judgment, CU waived its right            to appeal.   We first  address Weavers's  motion to  dismiss,            then CU's appeal and, finally, Weavers's cross appeal.            A.  Weavers's Motion to Dismiss            _______________________________                      In  its  motion to  dismiss,  Weavers argues  that,            because CU  executed judgment  against all defendants  except            Walbrook  and   Slater,  Walker,   CU  has   "accept[ed]  the                                            ____________________            8.  We review the district court's  decision to deny a motion            to  alter  or  amend  a   judgment  for  manifest  abuse   of            discretion.    See,  e.g.,  Jorge  Rivera  Surillo  &  Co. v.                           ___   ____   ______________________________            Falconer Glass Indus., No.  94-1047, slip op. at 5  (1st Cir.            _____________________            Oct. 12, 1994).   As our discussion below indicates,  we find            that  the  district  court  properly  entered   judgment  and            therefore did not abuse its discretion in denying the motions            under Rule 59.  Accordingly, we hold that the parties' cross-            motions under Fed. R. Civ. P. 59 were properly denied.                                         -9-                                          9            substantial   benefits   of  a   judgment,   voluntarily  and            intentionally, and  with  knowledge of  the facts,"  Fidelcor                                                                 ________            Mortgage Corp. v. Insurance Co. of  N. Am., 820 F.2d 367, 370            ______________    ________________________            (11th  Cir. 1987)  (citations omitted), and  therefore waived            its  right  to appeal.   CU  argues  that Fidelcor,  on which                                                      ________            Weavers principally  relies, should be  distinguished because            in that  case Fidelcor  executed a satisfaction  of judgment,            whereas CU has refused to do so.                        Our  analysis  must  start  with  United States  v.                                                        _____________            Hougham, 364 U.S. 311, 312 (1960), in which the Supreme Court            _______            held  that "where a judgment  is appealed on  the ground that            the damages awarded are  inadequate, acceptance of payment of            the amount of the  unsatisfactory judgment does not, standing            alone, amount  to an  accord and  satisfaction of  the entire            claim."   Commentary  has  noted that  the dimensions  of the            Court's  holding  are  vague   and  courts  of  appeals  have            subsequently  developed  disparate  "acceptance of  benefits"            doctrines.    See, e.g.,  9 James  W.  Moore et  al., Moore's                          ___  ____                               _______            Federal Practice   203.06 (2d ed. 1994) (hereinafter, Moore's            ________________                                      _______            Federal Practice); Benson K.  Friedman, Note, An Intent-Based            ________________                              _______________            Approach  to  the  Acceptance  of Benefits  Doctrine  in  the            _____________________________________________________________            Federal  Courts, 92  Mich.  L. Rev.  742 (1993);  Annotation,            _______________            Right to  Appeal From Judgment  As Affected By  Acceptance of            _____________________________________________________________            Benefit Thereunder  -- Federal  Cases, 5 L.Ed.2d  889 (1960).            _____________________________________            This Circuit  has not  explicitly addressed this  issue since                                         -10-                                          10            Hougham.  Notably, in Fidelcor, the Eleventh Circuit does not            _______               ________            discuss Hougham.    Instead, Fidelcor  relies on  pre-Hougham                    _______              ________                 _______            common  law that  strictly applied  the bar  to appeal  after            acceptances  of benefits, subject to only limited exceptions.            We decline to follow this approach.                        While the use of the phrase "standing alone" by the            Hougham Court does  lead to some  uncertainty, we think  that            _______            the  unique  circumstances  presented  here  fit  comfortably            within the rule of that case.  As discussed fully below, CU's            appeal  focuses on  the district  court's application  of the            $250,000 deductible.   Weavers argued for  the application of            the deductible before the district  court and, except for its            challenge to  the rate of prejudgment interest  raised in its            cross appeal, Weavers does not otherwise dispute the entry of            judgment.  Under these circumstances, we do not think that CU            should be  foreclosed  from appealing  the  deductible  issue            simply because  it collected payment on  what was essentially            an undisputed amount.  Indeed, this case bears out the wisdom            of  the relative  flexibility  incorporated  in  the  Hougham                                                                  _______            rule.9  Accordingly, we deny Weavers's motion to dismiss.                                              ____________________            9.  We note that  we would  have reached the  same result  by            applying the post-Hougham test adopted by at least four other                              _______            circuits.  Under this  test, a party who accepts  the benefit            of   a  judgment   is   precluded  from   appealing  if   the            circumstances indicate  a mutual intent to  settle all claims            in dispute and thereby terminate the  litigation.  See, e.g.,                                                               ___  ____            Gadsden v. Fripp, 330 F.2d 545,  548 (4th Cir. 1964).  As the            _______    _____            discussion  below amply  illustrates,  no such  mutual intent            exists in this case.                                         -11-                                          11            B.  Commercial Union's Appeal            _____________________________                      CU challenges the  district court's  interpretation            of Commercial Union  I and  argues that the  language of  the               ___________________            Weavers Umbrella prohibits  stacking the $250,000  deductible            on  top  of  the  amount received  from  American  Employers.            Characterizing  the deductible  as  "alternative relief,"  CU            further argues that,   because Weavers raised the application            of the deductible only after Commercial Union I, the issue is                                         __________________            waived.  We address each argument in turn.                      1.  The $250,000 Deductible                      ___________________________                      The  doctrine of the law of the case directs that a            decision of an  appellate court  on an issue  of law,  unless            vacated or set aside, governs the issue during all subsequent            stages of litigation  in the nisi prius  court and thereafter                                         ____ _____            on any further appeal.  United States v. Rivera-Martinez, 931                                    _____________    _______________            F.2d 148 (1st  Cir.), cert.  denied, 112 S.  Ct. 184  (1991).                                  _____  ______            When a case is appealed and remanded:                      "the  decision  of  the  appellate  court                      establishes the law  of the  case and  it                      must be  followed by  the trial court  on                      remand.   If there is an  appeal from the                      judgment   entered   after  remand,   the                      decision of the first  appeal establishes                      the law of the case to be followed on the                      second."              Id. (quoting 1B Moore's  Federal Practice   0.404[1] (2d  ed.            ___             _________________________            1991)).  When the reviewing court, in its mandate, prescribes            that  a court shall proceed in accordance with the opinion of            the  reviewing court,  it incorporates  its opinion  into its                                         -12-                                          12            mandate.  Jones v. Lewis, 957 F.2d 260, 262 (6th Cir.), cert.                      _____    _____                                _____            denied, 113  S. Ct. 125 (1992).  Cf. Elias v. Ford Motor Co.,            ______                           ___ _____    ______________            734 F.2d 463, 465  (1st Cir. 1984) ("A mandate  is completely            controlling as to all matters before the appellate court  and            disposed  of by  its decree.");  accord  Rivera-Martinez, 931                                             ______  _______________            F.2d at  150; Federal  Deposit Ins. Corp.  v. Ramirez-Rivera,                          ___________________________     ______________            869 F.2d 624, 627  (1st Cir. 1989).  The  mandate constitutes            the law  of the case on  such issues of law  as were actually            considered  and decided  by the  appellate court, or  as were            necessarily  inferred from  the  disposition on  appeal.   1B            Moore's Federal Practice   0.404[10] (2d ed. 1993).            ________________________                      In  Commercial Union  I, the  mandate  directed the                          ___________________            district court to conduct further proceedings "in accordance"            with  the panel's  opinion.   The legal  issue in  Commercial                                                               __________            Union I was whether the Weavers Umbrella provided occurrence-            _______            based coverage  for the  Peterson claims; resolution  of that            issue required  the panel to interpret  the Weavers contract.            As  noted above, the panel  determined that the  main body of            the Weavers Umbrella provided  coverage and that the Peterson            claims resulted  from an  "occurrence" within the  meaning of            the  policy's definition of that term.  Commercial Union I, 7                                                    __________________            F.3d at 1051.  Importantly, the panel stated:                      Our  integrated  reading  of the  Weavers                      Umbrella   policy   as    a   whole    is                      corroborated by the specific terms of the                      Liability  Amendment,  which  contemplate                      "engineering services liability"  subject                      to    a     $250,000    deductible,    in                                         -13-                                          13                      circumstances where, as here, the Weavers                      Umbrella "drops down" to  provide primary                      coverage  of  risks  not  covered  by the                      underlying [Travelers] insurance  policy.                      Thus,  the  Liability  Amendment  clearly                      replaces  corresponding  language in  the                      "LIMIT  OF LIABILITY" section of the main                      body of the  Weavers Umbrella.   We  find                                                       ________                      untenable  an interpretation  which would                      _________________________________________                      provide a $250,000 EPL "deductible" for a                      _________________________________________                      risk not covered in the first place.                       ____________________________________            Id.  at  1053 (emphasis  added).   As  the panel  stated, its            ___            reading  gave "full effect" to all terms  in the main body of            the Weavers  Umbrella and  the Weavers EPL  Endorsement, thus            satisfying the  obligation to  give reasonable effect  to all            contractual  terms whenever  possible.   Id. at  1052 (citing                                                     ___            Jimenez v.  Peninsular &  Oriental Steam  Nav. Co.,  974 F.2d            _______     ______________________________________            221, 223 (1st  Cir. 1992);  Feinberg v. Insurance  Co. of  N.                                        ________    _____________________            Am.,   260  F.2d   523,   527  (1st   Cir.  1958)   (applying            ___            Massachusetts law)).                        CU argues, in essence, that the  panel's references            to  the  $250,000  deductible   are  dicta  and  thus  cannot                                                 _____            constitute law of  the case.  See, e.g.,  Dedham Water Co. v.                                          ___  ____   ________________            Cumberland Farms Dairy,  Inc., 972  F.2d 453,  459 (1st  Cir.            _____________________________            1992) ("Dictum contained in  an appellate court's opinion has                    ______            no preclusive  effect in subsequent proceedings  in the same,            or any other,  case.").  We do not agree  with CU's argument.            To resolve the  legal issue presented in  Commercial Union I,                                                      __________________            it was essential that the panel, to the extent possible, give            reasonable effect to  all contractual terms.  As the language                                         -14-                                          14            from the opinion quoted above suggests, giving full effect to            the $250,000 deductible was an especially critical element in            resolving the case.   Simply stated, it was the  key piece of            the  puzzle.  The availability  of the deductible  lay at the            heart  of   the  integrated  interpretation  of  the  Weavers            Umbrella  and the  Weavers  EPL Endorsement.   Moreover,  the            panel concluded  that, because  the Travelers Policy  did not            provide  coverage  for  the  Peterson   claims,  the  Weavers            Umbrella   "dropped   down"    to   provide   coverage   and,            consequently,  the $250,000  deductible applied.   Therefore,            the  district court correctly interpreted the law of the case            and we hold that the entry of judgment was in accordance with            Commercial Union I's mandate.            __________________                      Of  course, the  law of  the case  is a  prudential            doctrine  and  does  not serve  as  an  absolute  bar to  our            reconsideration of  an issue.   Rivera-Martinez, 951  F.2d at                                            _______________            150-51.  We do not  reconsider a decision, however,  "`unless            the  evidence  on   a  subsequent  trial   was  substantially            different, controlling  authority has  since made a  contrary            decision  of law applicable  to such issues,  or the decision            was clearly erroneous and  would work a manifest injustice.'"            Id. (quoting White  v. Murtha,  377 F.2d 428,  432 (5th  Cir.            ___          _____     ______            1967)).  On this appeal, CU essentially argues that the third            condition obtains;  that is,  the Weavers contract  cannot be                                         -15-                                          15            interpreted to  permit application  of the deductible  to the            American Employers indemnification obligation.                      According to CU, the $250,000 deductible should not            be   stacked  upon  the  American  Employers  indemnification            because Travelers,  and not American Employers,  is listed on            the "Schedule  of Underlying  Insurance" and the  Weavers EPL            Endorsement did  not contain a reference  to "other insurance            not scheduled which may have been collectible by CU" to which            the deductible would apply.                         Any  confusion  on  the  reader's  part  is  to  be            excused.   After years of pointing to the deductible as prima            facie evidence  of Weavers's liability,10 CU  now argues that            the $250,000 deductible should not apply.  Based on the plain                                            ____________________            10.  For  example, the  Commercial  Union I  panel summarized                                    ___________________            CU's argument as follows:                      [O]n  CU's  reading,   the  Weavers   EPL                      Endorsement extends claims-based coverage                      "for  those  EPL  claims arising  out  of                      accidents or occurrences that  took place                      prior  to  the  Weavers  Umbrella  period                      where claim was made during the [Weavers]                      policy period itself."   Furthermore,  CU                      reasons,  the  language of  the Liability                      Amendment   (amending   the   "LIMIT   OF                      LIABILITY"   section  so  as   to  add  a                      $250,000  "self-insured  retention"   for                      EPL)  supports its  claim  that the  main                      body of the Weavers Umbrella  covers EPL.                      We   think  the  plain  language  of  the                      insurance  contract as  a whole,  and the                      reasonable  expectations of  the parties,                      are effectuated  under the interpretation                      urged by CU.            Commercial Union I, 7 F.3d at 1052.            __________________                                         -16-                                          16            language of the Weavers  contract, we cannot agree  with CU's            new argument.  The  Liability Amendment provides coverage for            "each occurrence  not covered by  said underlying  insurances                              ___________________________________________            [referencing the attached schedule]"  subject, in the case of            engineering services, to a $250,000 deductible.  Both parties            agree  that  the  "attached  schedule"  refers  only  to  the            Travelers Policy.   The Liability Amendment  must be read  to            provide primary coverage, subject to the deductible, when the            Travelers Policy does not provide coverage.  As CU repeatedly            argued,  that is  exactly what  occurred in  this case:   the            Weavers Umbrella "drops down" to provide coverage not covered            by  the Travelers  Policy, and  thus the  $250,000 deductible            must  apply.  In short, the language of the contract requires            application  of  the  deductible.    That  Weavers  may  have            included additional language in the insurance contract has no            bearing on the outcome.                        In  Commercial  Union  I,  CU  offered  a  somewhat                          ____________________            different  explanation  of  the  amount  it  is  entitled  to            recover.  Rather  than arguing  that the  deductible did  not            apply  because  of  the contractual  language,  CU  expressly            stated that it only  sought to recover that amount  for which            it  was  "out of  pocket,"  or  $1,502,874.30 plus  interest.            Under CU's view,  because its "out of  pocket" figure already            affords Weavers a $750,000 "savings" (ignoring interest) from            its total potential exposure  (amount of Peterson claims less                                         -17-                                          17            deductible less "out of  pocket" amount), they should  not be            entitled  to  the  benefit   of  an  additional  $250,000  in            "savings".  Critically, however, there was never an agreement            among the  parties that the deductible would  not still apply            to whatever amount CU sought to  recover.  We can discern  no            basis  in  the  contractual  language to  effect  what  would            essentially be a "waiver"  of the deductible.  The  fact that            CU sought judgment for an amount less than it might otherwise            be  owed  cannot  obviate  the  plain  language  of  a  valid            contractual  provision.   Indeed,  given the  course of  this            litigation,  we  find  that  the  invitation  to  ignore  the            $250,000 deductible is, to say the least, ironic.                        In  sum,  we find  no  error in  the  prior panel's            interpretation   of  the  contractual   provisions  or  their            application   in  this   case.     Accordingly,  as   to  the            deductibility issue, we  hold that entry  of judgment by  the            district court is  unassailably proper.                      2.  Waiver of the Deductibility Issue                        _____________________________________                      CU argues that, because Weavers failed to raise the            application  of the  deductible until  after the  mandate had            issued in Commercial Union I, the argument should be rejected                      __________________            as untimely.   We do not agree.  As  the foregoing discussion            indicates,  there   can  hardly  be  any   dispute  that  the            deductible was  a central focus of this lengthy case.  It was            the  subject of intense review  before the Commercial Union I                                                       __________________                                         -18-                                          18            panel.   Given the pages of record devoted to the deductible,            it would simply be untenable to find waiver had occurred with            respect to  that issue.   We decline to  do so and  hold that            there was no such waiver.            C.  Weavers's Cross Appeal            __________________________                      On its cross appeal,  Weavers makes two alternative            arguments:   (1) that in  diversity actions brought under the            federal  Declaratory  Judgment  Act,  the   determination  of            prejudgment  interest is  governed  by federal  law; and  (2)            that,  if state law is  to apply, the  district court applied            the wrong law.  We address each argument in turn.                        1.    Prejudgment  Interest Under  the  Declaratory                      ___________________________________________________                      Judgment Act                      ____________                      In  determining the  rate of  prejudgment interest,            the district court held  that, because jurisdiction was based            on diversity,  Massachusetts  law governed.   Weavers  argues            that federal  law  should govern.   Reduced  to its  essence,            Weavers's  theory  is that  the  "procedural"  nature of  the            Declaratory  Judgment  Act ("DJA"),  28  U.S.C.     2201  and            2202,11  displaces a  "contrary  state  provision" under  the                                            ____________________            11.  Captioned  "Creation  of  remedy,"  28  U.S.C.      2201            provides in relevant part:                                             In  a case  of actual  controversy within                      its jurisdiction, . .  . any court of the                      United  States, upon  the  filing  of  an                      appropriate  pleading,  may  declare  the                      rights  and other legal  relations of any                      interested     party     seeking     such                                         -19-                                          19            rule of  Erie R.R. v.  Tompkins, 304 U.S. 64  (1938), and its                     _________     ________            progeny.   Thus, Weavers  argues that if  the district  court            grants "[f]urther  necessary or proper relief"  under the DJA            by awarding prejudgment interest, it should apply the federal            rule  governing  prejudgment  interest  under  which, Weavers            says, prejudgment interest is calculated at the "market" rate            of interest.  We find Weavers's analysis to be flawed.                      Where, as  in this  case, jurisdiction is  based on            diversity,   familiar principles  control.  "[F]ederal courts            sitting  in diversity  jurisdiction  are obligated  to  apply            state  law  unless applicable  federal  procedural rules  are            sufficiently broad  to control a particular  issue before the            court."  Daigle v. Maine Medical Ctr., Inc., 14 F.3d 684, 689                     ______    ________________________            (1st  Cir. 1994) (citing Walker v. Armco Steel Corp, 446 U.S.                                     ______    ________________            740, 749  (1980);  Hanna  v.  Plumer, 380  U.S.  460,  470-71                               _____      ______                                            ____________________                      declaration,   whether  or   not  further                      relief is  or could be sought.   Any such                      declaration  shall  have  the  force  and                      effect of a final judgment or decree  and                      shall be reviewable as such.            28 U.S.C.   2201 (1988)                      Captioned  "Further  relief,"  28  U.S.C.      2202            provides:                        Further necessary or proper  relief based                      on a declaratory  judgment or decree  may                      be granted, after  reasonable notice  and                      hearing, against any adverse  party whose                      rights  have  been  determined   by  such                      judgment.            28 U.S.C.   2202 (1988)                                         -20-                                          20            (1965)); see also Stewart Org., Inc. v. Ricoh Corp., 487 U.S.                     ___ ____ __________________    ___________            22, 26 (1988) (where  federal procedural statute is involved,            a  court  must determine  if  it  is "sufficiently  broad  to            control the issue").                      The DJA creates a particular remedy where a federal            district court already has  jurisdiction to entertain a suit.            See,  e.g., Nashoba  Communications v.  Town of  Danvers, 893            ___   ____  _______________________     ________________            F.2d 435, 437 (1st Cir. 1990).  Issues that would be governed            by state law  in a  coercive action are  equally governed  by            state  law when declaratory relief is sought.  10A Charles A.            Wright et al., Federal Practice and Procedure,   2771 (2d ed.                           ______________________________            1983) (hereinafter,  "Wright, Miller,  & Kane").   Indeed, as            one commentator has noted:                      Since  the  declaratory  remedy   is  not                      intended  to  affect substantive  rights,                      federal   substantive  rights   will,  of                      course, rule the adjudication  of federal                      rights.  Similarly, just as in  any other                      type   of   civil   action    where   the                      substantive issues  are non-federal, Erie                                                           ____                      R.R. v. Tompkins  requires a careful  and                      ____    ________                      loyal  application  of state  substantive                      law . . . .            6A Moore's Federal Practice   57.02[5] (2d ed. 1994).               ________________________                      Notwithstanding  these  well-established principles            governing  both federal-state  choice of law  and declaratory            judgment actions,  Weavers  argues, as summarized above, that            federal  law   should  govern   prejudgment  interest.     In            circumstances  such   as  this  where  a   federal  court  is            confronted with a  claim that  a state law  conflicts with  a                                         -21-                                          21            federal procedural rule or statute, the  court must first ask            whether the  dispute falls  within the scope  of the  federal            statute.  If a conflict exists,  then the court must then ask            whether  the  statute  is  a  valid  exercise  of  Congress's            authority.   See, e.g.,  Stewart, 487 U.S.  at 26-27.   If no                         ___  ____   _______            federal  statute  or  procedural  rule covers  the  point  in            dispute,  a  court must  then  proceed  to evaluate  "whether            application of federal judge-made  law would disserve the so-            called `twin aims of  the Erie rule: discouragement of  forum                                      ____            shopping and  inequitable administration of the  laws.'"  Id.                                                                      ___            at 27 n.6  (quoting Hanna, 380 U.S. at 468).   If application                                _____            of federal law  would disserve these two  policies, state law            applies.  Id.                      ___                      We find  that Weavers's  theory fails on  the first            inquiry:   no conflict exists between  the "procedural" DJA12            and state prejudgment  interest law.   Weavers reads the  DJA            broadly:  under  Weavers's  interpretation,  a  federal court            entertaining  a declaratory  judgment action may,  in effect,                                            ____________________            12.  As  Weavers  points  out, courts  and  commentators have            characterized the DJA as "procedural."  See, e.g., Skelly Oil                                                    ___  ____  __________            Co.  v.  Phillips Petroleum  Co.,  339 U.S.  667,  671 (1950)            ___      _______________________            ("`[T]he  operation  of  the  Declaratory  Judgment  Act   is            procedural  only.'  .  .  . Congress  enlarged  the  range of            remedies available  in the federal courts but  did not extend            their jurisdiction." (citation  omitted) (dicta)); Charles A.                                                      _____            Wright, Law of  Federal Courts    100 (5th  ed. 1994)  ("[The                    ______________________            DJA]  may  be  regarded  as  `procedural'  and  is  expressly            authorized by  Act  of  Congress.").   For  the  purposes  of            addressing   Weavers's   argument   only,   we   adopt   this            characterization.                                         -22-                                          22            apply  a  rule  of  decision13 that  would  fashion  "further            relief"  in a more restrictive  manner than would  apply in a            non-declaratory diversity case.  Thus, according to  Weavers,            a conflict with state law arises.14                          The plain  language of 28  U.S.C.    2201  and 2202            does  not  support Weavers's  broad  reading.   Section  2201            authorizes  a judicial  declaration "whether  or not  further            relief is  or  could be  sought,"   thus  "indicat[ing]  that            declaratory  relief  is  alternative  or  cumulative and  not            exclusive or extraordinary."   Fed. R.  Civ. P. 57  Committee            Notes.  Section 2202 gives effect to the cumulative nature of            the declaratory  device15 by authorizing a  district court to                                            ____________________            13.  When   a  district  court   sits  in   federal  question            jurisdiction,  prejudgment interest  has  been determined  by            federal  common law in the absence of a specific provision in            the  underlying  statute.    See,  e.g.,  Robinson  v.  Watts                                         ___   ____   ________      _____            Detective Agency,  Inc., 685 F.2d  729, 741 (1st  Cir. 1982),            _______________________            cert.  denied, 459  U.S. 1105,  1204  (1983).   Thus, Weavers            _____  ______            appears  to argue  that federal  common law  should similarly            apply  in  the  context  of  a   diversity-based  declaratory            judgment  action.   We note,  however, that  in at  least one            federal question  case, we  held  that a  district court  may            properly look to state  law where the underlying federal  law            is silent as  to awarding prejudgment interest.   Colon Velez                                                              ___________            v. Puerto Rico  Marine Mgmt.,  Inc., 957 F.2d  933, 941  (1st               ________________________________            Cir. 1992).  Hence, we held  that the district court did  not            abuse its  discretion in levying prejudgment  interest at the            12% rate applicable under local law.  Id.                                                  ___            14.  Notably, notwithstanding  the long  history of  the DJA,            Weavers does not point to a single case adopting its view.            15.  On this  point we also note  that under Fed. R.  Civ. P.            54(c),  a  court,  in   rendering  judgment,  may  grant  the            prevailing party any relief to which that party  is entitled,            even if such relief was not, but could have been, demanded in            the original pleadings.   See 6A  Moore's Federal Practice                                         ___     ________________________                                         -23-                                          23            grant   additional  relief  consistent  with  the  underlying            declaration even  though the  right to the  relief may  arise            long after  the court  has entered its  declaratory judgment.            See, e.g., Gant v. Grand Lodge, 12 F.3d 998, 1002  (10th Cir.            ___  ____  ____    ___________            1993) (citing Wright,  Miller, & Kane    2771), cert. denied,                                                            _____ ______            114 S. Ct. 1834  (1994).  The fact that a  declaratory action            was  brought in  lieu of  an action  seeking  coercive relief            "`does not  merge a claim in the judgment or bar it.'"  Gant,                                                                    ____            12 F.3d at 1002 (quoting Wright, Miller, & Kane   2771).                      Simply stated,  the DJA complements,  but does  not            displace,    relief    available   under    applicable   law.            Accordingly,  we  do  not   share  Weavers's  view  that  the            provision for district courts  to grant "further necessary or            proper relief"  is an  authorization to  formulate a  rule of            decision granting less relief  than would otherwise have been            available had a coercive action been brought instead.16                        Because  no  conflict  exists  between  a  specific            federal rule or statute and state law, we then must determine                                            ____________________            57.10 (2d ed. 1994).            16.  We  note here that in  Gant the Tenth Circuit reaffirmed                                        ____            an earlier holding interpreting section 2202 as authorizing a            district  court  sitting  in  a  diversity-based  declaratory            proceeding   to  grant   additional  relief,   not  otherwise                                     __________            authorized by state law,  if that relief were "`necessary  or            proper  to  effectuate  relief  based  upon  the  declaratory            judgment rendered in the proceeding.'"  Gant, 12 F.3d at 1003                                                    ____            (quoting  Security Ins. Co. v. White, 236 F.2d 215, 220 (10th                      _________________    _____            Cir.  1956)).   We take  no position  on the  Tenth Circuit's            interpretation of the statute.                                         -24-                                          24            whether application of  a federal-judge  made rule  governing            the  calculation of prejudgment  interest would  disserve the            twin aims  of Erie.  Assuming  for the moment that  a federal                          ____            court  would,  as   Weavers  argues,  calculate   prejudgment            interest  according to  the  "market"  rate,  the  difference            between  the application  and nonapplication  of a  state law            under which  interest  is  calculated at  12%  could  make  a            substantial difference in  terms of the plaintiff's  ultimate            monetary recover.   Moreover, if  the state law  were not  to            apply,  the  incentives  for forum  shopping  are  plain.   A            plaintiff would  likely bring  his action in  state court  to            take  advantage of  the more  favorable  prejudgment interest            law; similarly,  a non-Massachusetts defendant would  seek to            remove the  action to  avoid substantial  additional damages.            Because  the twin  aims of Erie  would not  be served  by the                                       ____            application of judge-made federal  law, state law must apply.            Stated another  way, prejudgment interest  is substantive law            and, therefore, state law  must be applied in diversity-based            proceedings.    This  conclusion comports  with  our repeated            statements  that  when  jurisdiction  is  diversity-based,  a            district court should  look to  the law which  a state  court            sitting  in  that   jurisdiction  would  apply  in   awarding            prejudgment interest.   See, e.g., Aubin v.  Fudala, 782 F.2d                                    ___  ____  _____     ______            287, 289 (1st Cir. 1986); Roy v. Star Chopper, Inc., 584 F.2d                                      ___    __________________                                         -25-                                          25            1124, 1135 (1st Cir. 1978), cert. denied, 440 U.S 916 (1979).                                        _____ ______                                   In sum, a district  court sitting in diversity when            it  awards  prejudgment interest  pursuant  to a  declaratory            judgment action must  apply the law of the state in which the            court   sits,   including   that    state's   conflict-of-law            principles.  See Klaxon  v. Stentor Elec. Mfg. Co.,  313 U.S.                         ___ ______     ______________________            487 (1941).  Here, the  parties agree that Massachusetts  law            governs the  substance of the underlying  transaction.  Under            these circumstances,  Massachusetts law directs  that a court            should apply  Massachusetts  law in  calculating  prejudgment            interest.   See, e.g., Morris v. Watsco, Inc., 385 Mass. 672,                        ___  ____  ______    ____________            674-75  (1982).    Thus,  we  hold  that  the  district court            properly calculated prejudgment interest  using Massachusetts            law.                      2.  The Applicable Rate of Interest Under                       __________________________________________                      Massachusetts Law                      _________________                      Weavers  next argues that even if Massachusetts law            is to govern the award of  prejudgment interest, the district            court  erred in  awarding  prejudgment  interest pursuant  to            Mass.  Gen. L. ch. 231,    6C17 rather  than under Mass. Gen.                                            ____________________            17.  Captioned,   "Interest  added  to  damages  in  contract            actions,"  Mass. Gen. L. ch.  231,   6C  provides in relevant            part:                      In  all  actions  based   on  contractual                      obligations, upon a  verdict, finding  or                      order for judgment for pecuniary damages,                                         -26-                                          26            L.  ch.  107,    3.18    Weavers  reasons  that, because  the            Massachusetts declaratory  judgment  act, Mass.  Gen. L.  ch.            231A,  does not specify the  rate of interest  to be awarded,            there is  no applicable  "provision  of law  for a  different            rate" and,  thus, chapter 107,  section 3 is  not supplanted.            In essence, Weavers seeks to avoid application of  section 6C            by  recharacterizing this  case  as  a "declaratory  judgment            action."  We decline to do so.19                                            ____________________                      interest  shall be added  by the clerk of                      the court  to the  amount of  damages, at                      the contract rate,  if established, or at                      the  rate of  twelve per  cent per  annum                      from  the date  of the breach  or demand.                      If the  date of  the breach or  demand is                      not established, interest shall  be added                      by  the  clerk  of  the  court,  at  such                      contractual  rate,  or  at  the  rate  of                      twelve per  cent per annum  from the date                      of the commencement of the action . . . .            Mass. Gen. L. ch. 231,   6C  (Supp. 1993)            18.  In relevant part, Mass. Gen. L. ch. 107,   3 provides:                      If there is no agreement or provision  of                      law for a different rate, the interest of                      money shall be at the rate of six dollars                      on each hundred for a year . . . .            Mass. Gen. L. ch. 107,   3 (1990)            19.  Weavers   makes   two   additional   arguments   against            application  of a  12% interest  rate: (1)  that the  rate is            "unreasonably high";  and (2)  that the statute  violates the            Massachusetts  Constitution  because   of  changed   economic            conditions.   Weavers's first contention is properly directed            to  the Massachusetts  legislature.    Whether  Massachusetts            should  adopt  a lower  rate of  interest  or a  scheme which            refers to the "market" rate of interest is not a matter for a            federal court to decide.                                            -27-                                          27                      As  explained  in  detail  above,  the  declaratory            device is a remedy by which parties may seek a declaration as            to their substantive rights.  A declaratory judgment is not a            theory  of recovery.   It is  clear that,  in this  case, the            underlying  substantive  theory  is contractual.    The plain            language of chapter 231A, section 6C establishes conclusively            that it is  to govern  the award of  prejudgment interest  in            contractual disputes.  Accordingly, Weavers's  reasoning must            be rejected.   The  district court properly  awarded interest            under chapter 231A, section 6C.                                         III.                                         III.                                         ____                                      CONCLUSION                                      CONCLUSION                                      __________                      For the foregoing reasons, the motion to dismiss is            denied and the decision of the district court is                       Affirmed.  Each party shall bear its own costs.                      Affirmed.  Each party shall bear its own costs.                      _________  ____________________________________                                            ____________________                      As  for Weavers's  second contention,  we are  at a            loss   to  determine  its   theory  for  unconstitutionality.            Indeed, Weavers does not point to a specific provision of the            state constitution that the prejudgment interest rate is said            to   violate.     Moreover,  Weavers   offers  no   developed            argumentation on this point.  We require far more, especially            when we are asked  to reach a state constitutional  question.            Accordingly, we deem  this argument waived.   See, e.g., Ryan                                                          ___  ____  ____            v.  Royal Ins. Co. of Am., 916  F.2d 731, 734 (1st Cir. 1990)                _____________________            ("issues  adverted  to on  appeal  in  a perfunctory  manner,            unaccompanied by some developed argumentation, are deemed  to            have been abandoned").                                         -28-                                          28
