                 United States Court of Appeals,

                         Fifth Circuit.

                          No. 93-4068.

   The SOCIETY OF the ROMAN CATHOLIC CHURCH OF the DIOCESE OF
LAFAYETTE AND LAKE CHARLES, INC., Plaintiff-Appellee-Cross
Appellant-Appellant and Cross-Appellee,

                               v.

       INTERSTATE FIRE & CASUALTY CO., et al., Defendants.

  ARTHUR J. GALLAGHER & COMPANY and Gallagher Bassett Services,
Inc., Defendants-Appellees-Cross Appellants,

                               v.

   INTERSTATE FIRE & CASUALTY COMPANY, Defendant-Appellee-Cross
Appellee and Cross-Appellant,

                               v.

  Allen Godfrey LEE and Lloyds of London, Defendants-Appellees-
Cross Appellees,

                               v.

   PACIFIC EMPLOYERS INSURANCE COMPANY, Defendant-Third Party
Plaintiff-Appellee-Appellant and Cross-Appellee,

                               and

Fireman's Fund Insurance, Defendant-Appellee-Appellant and Cross-
Appellee,

                               and

   Preferred Risk Mutual Insurance Company, Defendant-Appellee-
Appellant and Cross-Appellee.

        CENTENNIAL INSURANCE COMPANY, Defendant-Appellee,

                               v.

  HOUSTON GENERAL INSURANCE COMPANY, Defendant-Appellant-Cross-
Appellee and Appellee,

   LOUISIANA COMPANIES, INC., Third Party Defendant-Appellee.

                          May 27, 1994.

                                1
Appeals from the United States District Court for the Western
District of Louisiana.

Before REAVLEY, GARWOOD and HIGGINBOTHAM, Circuit Judges.

     REAVLEY, Circuit Judge:

     Two pedophilic priests of the Diocese of Lafayette1 molested

thirty-one children over a period of seven years, prompting a spate

of claims from the children and their parents.    The Diocese and its

insurance carriers, unable to compromise on the allocation of loss

under the "occurrence" policies, settled the claims against the

Diocese with contributions on a pro rata basis (using years of

coverage as a benchmark) and agreed to let a court decide their

coverage dispute.    The Diocese filed a declaratory judgment action

in state court, which was removed upon diversity jurisdiction to

federal court.      The parties then submitted motions for summary

judgment, and the court granted summary judgment on all claims.   We

affirm in part, reverse in part, and remand.

                            I. Background

     The sordid picture underlying this insurance coverage dispute

is that of two miscreant priests, who subjected thirty-one children

to extended periods of sexual molestation.        These molestations

began in August of 1976 and ended in June of 1983.      During these

seven years, the Diocese did nothing to rein in the errant priests:

it did not investigate, it did not intercede.    The record on appeal


     1
      The Society of the Roman Catholic Church of the Diocese of
Lafayette, Inc. and the Diocese of Lake Charles, Inc. are both
appellants in this appeal. At oral argument the parties
indicated that one Diocese is the successor of the other, so we
will refer to the appellants as "the Diocese."

                                  2
does not show how many times each child was molested, nor the

extent of damage resulting from each encounter.        The parties,

however, have stipulated to the dates when the molestations began

and ended for each child (the "grid").2    And during oral argument,

the parties further agreed that each child was molested at least

once during each stipulated year of molestation.

A. The Insurance Policies

     The complexity of this case arises from the different periods

of the Diocese's insurance coverage, primary and excess. Fireman's

Fund Insurance Company was the primary carrier from 1975 to 1978,

and Preferred Risk Mutual Insurance Company covered the Diocese

from 1978 through July 1981. Houston General Insurance Company was

the excess carrier from 1975 to 1979, and Pacific Employers'

Insurance Company was the succeeding excess carrier through July

1981.

     In July 1981, the Diocese switched its coverage to a form of

limited   self-insurance.   Under   this   self-insurance   plan,   the

Diocese contributed $400,000 to a yearly loss fund, from which the

     2
      Represented as uncontested facts, Lloyd's of London
presented a grid, along with its motion for summary judgment,
listing when each child's molestation began and ended. On
appeal, Houston General Insurance Company does not contest its
accuracy, though it once did. See Cinel v. Connick, 15 F.3d
1338, 1345 (5th Cir.1994) ("An appellant abandons all issues not
raised and argued in its initial brief on appeal.") (emphasis
omitted). Pacific Employers' Insurance Company argues that the
dates of child molestation are disputed fact questions. But
because Pacific failed to contest the grid under the district
court's local rules, it has waived any objection it may have had
to the grid. Local Rule 2.10 ("Opposition to Summary Judgment.
... All material facts set forth in the statement required to be
served by the moving party will be deemed admitted, for purposes
of the motion, unless controverted as required by this rule.").

                                3
Diocese was responsible for the first $100,000 of each occurrence.

If more than four claims of over $100,000 each exhausted the loss

fund, Lloyd's of London, as the excess aggregate insurer, paid the

first $100,000 of each occurrence, up to Lloyd's aggregate limit of

$450,000.3     Once the Lloyd's policy was exhausted, the Diocese

again became responsible for the first $100,000 of each successive

occurrence for the rest of the year.         Interstate Fire & Casualty

Company's $25 million umbrella policy covered all losses above

$100,000 per occurrence.

     All     insurance   policies   are   "occurrence"   based   policies,

meaning their limits of coverage are capped on a per occurrence

basis.    Under such a policy, it is the date of the occurrence, and

not the date of the claim, that determines coverage.         When bodily

injury results from an occurrence during a policy period, coverage

is triggered.    This coverage extends to all resulting damages—both

present and future—emanating from the injury. The policy does not,

however, cover bodily injury occurring outside of the policy

period.

     Because the insurance companies and the Diocese could not

agree on the proper definition of "occurrence," they opted to

settle the molestation claims among themselves on a pro rata basis

and leave the proper allocation of loss to the court.       Accordingly,

the Diocese filed a declaratory judgment action in state court,

which was removed to federal court on diversity grounds.          Decision

     3
      Centennial Insurance Company, also a party to this appeal,
participated in 207 of the Lloyd's policy. It did not issue a
separate policy insuring the Diocese.

                                     4
of   the    issues   affect    either    the      allocation     of   loss    between

successive primary carriers and the Diocese or between primary and

excess carriers.

B. The District Court's Opinion

1. Occurrence and First Encounter

      The district court relied on Interstate Fire & Cas. Co. v.

Archdiocese of Portland, 747 F.Supp. 618 (D.Or.1990) to conclude

that "occurrence" should be defined on a per child basis, with all

subsequent     molestation     treated       as   injury   resulting      from      that

"occurrence."        With     thirty-one      children     molested,      the      court

reasoned     that    there    were    thirty-one       occurrences.          It     also

considered     the    parents'       claims       as   arising    from    the       same

"occurrences,"       meaning    that     the      parents'     injuries      did     not

constitute separate occurrences under the policies.                       The court

allocated the loss using the "first encounter rule": the insurance

carrier covering the Diocese during the occurrence of the first

molestation of each child was responsible for all resulting damages

to   that    child    (and     his    parents),        including      damages       from

molestations occurring after the expiration of that carrier's

policy.4

      Depending upon their interests, all parties appeal from the

court's judgment.       Some disagree with the court's definition of

"occurrence," others contest the court's use of the first encounter

rule.

      4
      The parties submitted nine other molestation claims to
arbitration, and the district court held the arbitration binding.
No party contests this ruling on appeal.

                                         5
2. The Diocese's Claim Against Gallagher and Bassett

     The Diocese sued Arthur J. Gallagher & Company, the insurance

agent that procured the self-insurance program, alleging that

Gallagher failed to provide "full coverage" above the loss fund as

warranted.         The court granted Gallagher's motion for summary

judgment, and the Diocese appeals.

     The Diocese also sued Gallagher Bassett Services Inc., the

administrator of the self-insurance plan, claiming that Bassett

breached its obligation to properly administer the plan by refusing

to contribute money from the loss fund toward the settlement of

molestation    claims       arising     before   1981.         The   court   granted

Bassett's motion for summary judgment, and the Diocese appeals.

3. Pacific's Claim Against Louisiana Companies

     Pacific,       an     excess    carrier,    sued    its    insurance     agent,

Louisiana      Companies,           alleging     that    Louisiana       Companies

misrepresented       the     Diocese's    underlying      primary     coverage    as

$500,000 per year, when it was actually a three-year policy with a

$500,000     per    occurrence       limit     (Preferred's      policy).      With

"occurrence" defined on a per child basis and with liability

allocated under the first encounter rule, the court concluded that

Pacific suffered no prejudice from the alleged misrepresentation

and granted Louisiana Companies' motion for summary judgment.

Pacific appeals.

                                     II. Analysis

A. Allocation of Loss Under the Insurance Policies

     With the claims by the children and their parents settled, we


                                          6
must determine the proper allocation of loss among the insurance

companies and the Diocese.       Because this declaratory judgment

action is based upon diversity jurisdiction, we apply Louisiana law

in interpreting the insurance policies.

1. Defining "Occurrence"

a. The Children's Claims

         What constitutes an "occurrence" is central to this appeal

because each policy's limits of liability are on a per occurrence

basis;     the larger the number of "occurrences," the greater the

loss borne by the primary insurers and the Diocese.     The Lloyd's

policy is representative of the other policies involved in both its

scope of coverage and its definition of "occurrence":

     Underwriters hereby agree ... to indemnify the Insured for all
     sums which the Insured shall be obligated to pay by reason of
     the liability imposed upon the Insured by law ... for damages
     ... on account of personal injuries ... arising out of any
     occurrence happening during the period of the Insurance.

     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
     result in personal injury, or damage to property during the
     policy period. All such exposure to substantially the same
     general conditions existing at or emanating from one location
     shall be deemed one occurrence. (emphasis added).

The definition of "occurrence" affords little assistance because "a

continuous or repeated exposure to conditions" and "substantially

the same general conditions" are malleable.   An "occurrence" could

be the church's continuous negligent supervision of a priest, the

negligent supervision of a priest with respect to each child, the

negligent supervision of a priest with respect to each molestation,

or each time the Diocese became aware of a fact which should have


                                  7
led it to intervene, just to name a few possibilities.5                        The

meaning of "occurrence," as used in the insurance policies, can be

perplexing in application.          Cf. Insurance Co. of North Am. v.

Forty-Eight Insulations, Inc., 633 F.2d 1212, 1222 (6th Cir.1980),

cert. denied, 454 U.S. 1109, 102 S.Ct. 686, 70 L.Ed.2d 650 (1981).

When a term in an insurance policy has uncertain application,

Louisiana courts interpret the policy in favor of the insured.                 See

Hebert   v.    First     Am.    Ins.       Co.,    461     So.2d   1141,      1143

(La.Ct.App.1984), writ denied, 462 So.2d 1265 (La.1985).

     While    there    are   many   possible      applications     of   the   term

"occurrence," we are not without guidance.               In Lombard v. Sewerage

& Water Bd. of New Orleans, 284 So.2d 905 (La.1973), where the

ongoing construction of a drainage canal damaged many adjacent

property owners, the Louisiana Supreme Court discussed the proper

method for determining an "occurrence" when the cause of harm

continues to injure different persons:

     The word "occurrence" as used in the policy must be construed
     from the point of view of the many persons whose property was
     damaged.   As to each of these plaintiffs, the cumulated
     activities causing damage should be considered as one
     occurrence, though the circumstances causing damage consist of

     5
      We have couched the underlying tort in language of
negligent supervision, assuming that the Louisiana Supreme Court
would not consider the priests' actions to be within the scope of
their employment, nor would it consider the molestations a "risk
of harm fairly attributable to the employer's business." See
Roberts v. Benoit, 605 So.2d 1032, 1040-41 (La.1991); McClain v.
Holmes, 460 So.2d 681, 683-84 (La.Ct.App.1984), writ denied, 463
So.2d 1321 (La.1985). But even if the Diocese is liable for the
priests' intentional acts under a respondeat superior theory, see
Miller v. Keating, 349 So.2d 265, 268-69 (La.1977), such
liability does not affect our decision on what constitutes an
"occurrence" or the number of occurrences suffered by each child.


                                       8
     a continuous or repeated exposure to conditions resulting in
     damage arising out of such exposure. Thus, when the separate
     property of each plaintiff was damaged by a series of events,
     one occurrence was involved insofar as each property owner was
     concerned. Notwithstanding, therefore, that the same causes
     may have operated upon several properties at the same time
     resulting in varying degrees of damage, it cannot be regarded
     as one occurrence, but the damage to each plaintiff is a
     separate occurrence.

Id. at 915-16.   Following Lombard, "the damage to each [child] is

a separate occurrence."   See also Interstate, 747 F.Supp. at 624

("Each time this negligent supervision presented Father Laughlin

with the opportunity to molest a different child, the Archdiocese

was exposed to new liability," which constitutes an "occurrence"

under the policy language.);   Maurice Pincoffs Co. v. St. Paul Fire

& Marine Ins. Co., 447 F.2d 204, 206 (5th Cir.1971) (holding that

the liability creating event constitutes an "occurrence").

b. The Parents' Claims

     Interstate argues that the injuries suffered by the children's

parents are separate "occurrences" under the policies.       In its

brief, Interstate launches a flotilla of Louisiana cases showing

that the parents have a direct cause of action against the church

for their injuries, but Interstate misses the mark.     Whether the

parents' claims are direct under Louisiana law is not relevant.

The issue is whether, under the policy language, the parents'

injuries are derivative of an "occurrence."     If the children had

not been molested, the parents would have gone unharmed. Thus, the

parents' injuries do not amount to separate "occurrences" under the

policies.   See Crabtree v. State Farm Ins. Co., 632 So.2d 736, 738

(La.1994) (finding that while the wife's claim for mental anguish


                                 9
constituted "bodily injury" separate from that suffered by her

husband,    entitling     her   to   a   separate   "per   person"    limit    of

coverage, her claim was nevertheless subject to the "per accident"

limit in the policy);       Lantier v. Aetna Cas. & Sur. Co., 614 So.2d

1346, 1357 (La.Ct.App.1993) (concluding that spouses' wrongful

death suits were derivative of a single "occurrence");                Geico v.

Fetisoff, 958 F.2d 1137, 1143 (D.C.Cir.1992) (holding that while a

spouse may have a legally independent claim for loss of consortium,

it is nevertheless derivative of the "occurrence" under the policy

language).

2. The Number of "Occurrences" Per Child

     While Lombard instructs that the molestation of each child is

a separate occurrence, it does not answer the question of how many

"occurrences" each child suffered, because the issue of multiple

occurrences during successive policy terms never arose.                       The

court's opinion in Davis v. Poelman, 319 So.2d 351 (La.1975) is

equally unhelpful because it dealt with a single injury resulting

in continuing damage over a period of time.             It did not address a

situation    where   an   individual      was   repeatedly    injured    during

multiple policy terms.

     The most applicable line of Louisiana cases dealing with

multiple    injuries    during   successive     years   are   the    asbestosis

cases.6    See e.g., Cole v. Celotex Corp., 599 So.2d 1058 (La.1992);

     6
      The district court refused to follow the asbestos cases
because under these stipulated facts, the time of injury is
certain. True, the courts dealing with the asbestos cases
wrestled with the issue of when bodily injury occurred: was the
employee injured when he inhaled asbestos fibers (the exposure

                                         10
Houston v. Avondale Shipyards, Inc., 506 So.2d 149 (La.Ct.App.),

writ denied, 512 So.2d 460 (La.1987);       Ducre v. Mine Safety

Appliances Co., 645 F.Supp. 708 (E.D.La.1986) (applying Louisiana

law), approved, 833 F.2d 588 (5th Cir.1987);     Porter v. American

Optical Corp., 641 F.2d 1128 (5th Cir.) (applying Louisiana law),

cert. denied, 454 U.S. 1109, 102 S.Ct. 686, 70 L.Ed.2d 650 (1981).

In Cole, the most recent Louisiana Supreme Court decision in this

area, the court answered the question of how to determine the

number of occurrences when the victim is repeatedly injured during

multiple policy years.    Adopting the exposure rule, the court

concluded that the inhalation of asbestos fibers causes bodily

injury as defined in the "occurrence" policies.     The court held

that an employee suffered bodily injury from an occurrence when the

employee inhaled asbestos fibers during a policy year, and all

subsequent inhalation during that year arose out of the same

occurrence.   When the employee inhaled asbestos during the next

policy year, again, the employee suffered bodily injury from an

occurrence. Thus, each employee suffered injury from an occurrence

during each year in which he inhaled asbestos.   Cole, 599 So.2d at

1075-80.

      We believe the Louisiana Supreme Court would apply the same

analysis to the stipulated facts of this case.       When a priest



rule) or was the employee injured once asbestosis manifested
itself (the manifestation rule)? But the court overlooked the
similarity, based upon this record, concerning the indivisibility
of the injury. The asbestos cases provide significant direction
regarding the number of occurrences when a victim suffers
repeated injuries during multiple policy years.

                                11
molested a child during a policy year, there was both bodily injury

and    an    occurrence,        triggering     policy       coverage.        All   further

molestations of that child during the policy period arose out of

the same occurrence.                 When the priest molested the same child

during the succeeding policy year, again there was both bodily

injury       and   an    occurrence.           Thus,       each    child     suffered   an

"occurrence" in each policy period in which he was molested.                            See

Diocese of Winona v. Interstate Fire & Cas. Co., 841 F.Supp. 894,

898-99       (D.Minn.1992)       (accepting        that     the    church's     negligent

supervision of a priest can constitute an occurrence during each

policy period in which a child was molested);                       Cole, 599 So.2d at

1075-80 (holding that policy coverage is triggered in each year

that the plaintiff inhaled asbestos);                      Houston, 506 So.2d at 150

("It    is    reasonable        to    conclude     that     each   year     during   which

plaintiff was exposed, he suffered additional injury for which

there may be liability which triggers [the insurer's] risk exposure

under       each   of     its    policies        in   effect       during     plaintiff's

exposure.");            Ducre,       645   F.Supp.    at    713    ("Thus,    this   Court

concludes that liability under the [insurer's] insurance policies

shall be determined on a yearly basis, and that [the insurer] is on

the risk for each plaintiff asserting a claim, for each policy

period during which the plaintiff was exposed to silica dust.");

Porter, 641 F.2d at 1145;                  Forty-Eight Insulations, 633 F.2d at

1226.

         In the case of Preferred and Fireman's Fund, both of which




                                              12
issued a three-year occurrence policy, the analysis is the same.7

For each child who was molested while either of these carriers was

on the risk, coverage was triggered.               All subsequent molestations

during     the    policy    period    constitute      "repeated    exposure    to

conditions which unexpectedly ... result in personal injury." (The

"condition" is the Diocese's negligent supervision of the priest

during the       policy    period).     Houston      General   argues   that   the

carriers issuing three-year policies should bear the same burden as

if they had issued three one-year policies, thus allocating the

loss on a per year basis.              Not only does this ignore policy

language, but it is also inconsistent with the intent of the

parties.       Clearly, a three-year "occurrence" policy provides less

coverage than three one-year policies, because an occurrence could

last longer than one year.            While an insurance policy should be

interpreted in favor of the insured, we see no justification for

providing more insurance coverage than the insured bargained for.

Pareti    v.     Sentry    Indem.    Co.,    536   So.2d   417,   420   (La.1988)

("[C]ourts have no authority to alter the terms of policies under

the guise of contractual interpretation when the policy provisions

are couched in unambiguous language.").

         We reject the district court's use of the first encounter

rule for the following reasons. First, and foremost, it flouts the

     7
      This is an issue of first impression in Louisiana. While
the courts have dealt with multi-injury, multi-policy cases, they
have never addressed a situation where some of the policies last
for more than one year. See e.g., Cole, 599 So.2d at 1074 n. 47
(involving thirty-three one-year policies); Houston, 506 So.2d
at 150, 154 (involving one-year policies, except for one
six-month policy).

                                        13
policy language. The insurance policies all excluded bodily injury

occurring outside of the policy period.         The district court, and

Lloyd's in oral argument, failed to recognize the distinction

between the future damages resulting from a molestation and the

subsequent injurious acts of molestation.        All the policies cover

consequential damages resulting from a molestation.          However, a

subsequent molestation, occurring outside the policy period, is not

a consequential damage of the previous molestation;         it is a new

injury, with its own resulting damages. Second, under these facts,

the first encounter rule would prevent insurance companies from

limiting their coverage to damages emanating from molestations

taking place during their policy period.          And third, the first

encounter rule is an inequitable administrative rule.         The first

encounter rule would deny coverage to a child who was molested a

day before the Diocese procured insurance coverage, even though

separate molestations continued through the policy year and beyond.

     By allocating the loss according to the language of the

insurance policies, we avoid the shortcomings of the reductive

first encounter rule.       Each carrier is responsible, up to its

occurrence limits, for all damages emanating from molestations that

occur   during   the   insurer's   policy   period.   All   molestations

occurring outside a carrier's policy are covered by the insurer on

the risk at the time of the molestation.        This approach maximizes

coverage for the insured and allocates the loss according to the

policy language.

     If the number of molestations were known and the damages from


                                    14
each molestation proved, we could allocate the loss according to

the actual injury suffered by each child during each policy period.

It may be that a child's psychological injury wrought by prolonged

molestations during Preferred's three years of coverage dwarfs the

injury emanating from later molestations during the time the

Diocese was self-insured.      If that were the case, Preferred would

bear a significantly larger amount of the loss than would the

Diocese, Lloyd's and Interstate.           Unfortunately, there is no

measure of the amount of damage caused by the molestations during

any given policy period.      This leaves us with only one avenue under

the policies' language, which is to allocate the loss based solely

upon the policy periods.

B. Diocese v. Gallagher & Diocese v. Bassett

1. Diocese v. Gallagher

       In Gallagher's self-insurance proposal to the Diocese, it

stated that the Diocese would be "fully covered" for all losses

above the loss fund. Gallagher failed to mention that once Lloyd's

reached its excess aggregate limit of $450,000 for the year, the

$100,000 per occurrence obligation reverted to the Diocese.           The

Diocese, surprised by this gap in coverage, filed suit against

Gallagher.      While   the    Diocese   filed   within   the   ten   year

prescriptive period for a contractual claim, it missed the one-year

period for a delictual claim.        Thus, the Diocese's suit against

Gallagher will rise or fall on the nature of its claim.

       An insured's claim against its insurance agent is contractual

only   when   the   agent   expressly    warrants   a   specific   result;


                                    15
otherwise, it is delictual.               Roger v. Dufrene, 613 So.2d 947, 949

(La.1993).       In Roger, the insured, Crewboats, Inc., told its agent

"to     provide     full       coverage    for     Crewboats,    Inc.   under    all

circumstances."          Id. at 950.       An employee, using his own vehicle

for business purposes, collided with a motorist, spawning a lawsuit

against Crewboats, Inc.           To its surprise, Crewboats found that its

automobile policy did not cover employee-owned vehicles.                         The

Louisiana Supreme Court held that Crewboats claim against its agent

was delictual, because the insurance agent did not specifically

warrant that insurance coverage for employee-owned vehicles would

be obtained.       Id.

          Here, the Diocese argues that Gallagher warranted a specific

result when it told the Diocese:                 "If the Loss Fund is exhausted,

the Diocese[ ] becomes fully insured and losses are paid as they

would      be    under     a    conventional       insurance     program."      This

representation, however, is no more specific than "full coverage

for Crewboats, Inc. under all circumstances."                    As we read Roger,

for an insured to have a contractual claim against its agent, the

agent     must    describe      the   policy     coverage   in   specific    detail.

Gallagher's representation is a general assurance rather than the

warranty of specific coverage.              Under Louisiana law, the claim is

delictual, and the prescriptive period has run.8

      8
      The Diocese attempts to distinguish Roger by arguing that
in this case the insurance agent offered the coverage instead of
being requested to obtain the coverage. But the Roger court's
reliance on the President of Crewboats' testimony that he did not
"specifically" request that employee-owned vehicles be covered
suggests that if he had made such a request, Crewboats would have
had a contractual claim. Id. The court showed no interest in

                                            16
2. Diocese v. Bassett

     The Diocese alleges that Bassett, the administrator of the

self-insurance plan, breached its obligation to properly administer

the plan by refusing to contribute money from the loss fund toward

the settlement of molestation claims arising before July 1981, when

the self-insurance program began.             The Diocese has offered no

summary judgment evidence supporting any breach of duty.                    Bassett

refused to allocate loss fund monies toward molestation claims

arising before 1981 because those claims were not covered by the

insurance policies it was administering.

C. Pacific v. Louisiana Companies

      Pacific,       an   excess   carrier,      sued    its    insurance   agent,

Louisiana Companies, alleging that the agent failed to inform

Pacific that Preferred's policy (the underlying primary insurance

policy) was a three-year policy instead of a one-year policy.

Because of the alleged omission, Pacific believed Preferred's

coverage   to   be    $500,000     per   year,    instead       of   $500,000   per

occurrence   for     three   years.      Based    upon    our    analysis    above,

Preferred's coverage is $500,000 per occurrence per policy period.

Thus, the court erred when it granted Louisiana Companies' motion

for summary judgment.


who spoke first; instead, it focused on the specificity of the
representation itself.

          The Diocese also seeks to avoid the judgment by arguing
     that it is entitled to recovery based upon either a
     quasi-contract theory or detrimental reliance. Because
     these arguments were not raised below, we will not entertain
     them here. See In re Goff, 812 F.2d 931, 933 (5th
     Cir.1987).

                                         17
D. Interest

     The district court awarded interest, but failed to state when

it should begin to run. Some parties argue that only post-judgment

interest should be awarded, but because we reverse and remand for

reallocation of the loss, there is no post-judgment interest.     The

only other contention on interest charge is Interstate's argument

that Pacific should be responsible for prejudgment interest to the

extent that it failed to fully participate in the settlement of the

molestation claims, and we agree.     See Trustees of the Univ. of Pa.

v. Lexington Ins. Co., 815 F.2d 890, 908-09 (3d Cir.1987);       Mini

Togs Products, Inc. v. Wallace, 513 So.2d 867, 872-75 (La.Ct.App.),

writ denied, 515 So.2d 447 (La.1987).

                           III. Conclusion

     When a child was first molested during a policy period, there

was an occurrence triggering coverage. All subsequent molestations

of that child during the policy period, as well as the resulting

injury to the child's parents, arose out of that same occurrence.

Damages are attributed equally to the occurrence of molestations

within the respective policy periods.

     We AFFIRM the court's judgment in favor of Gallagher and

Bassett;    the judgment is otherwise REVERSED.    We REMAND the case

to the district court for further proceedings consistent with this

opinion.9

     9
      On appeal, Pacific floats the argument that they are not
bound by the district court's judgment because they did not agree
with the other insurers to be bound by it. If this were the
case, all judgments would be nothing more that advisory opinions.
The interpretation of an insurance policy is a question of law,

                                 18
     AFFIRMED in Part;   REVERSED in Part and REMANDED.




and Pacific is bound by the resulting judgment whether it likes
it or not.

                                19
