In this appeal, plaintiff-appellant United States Liability Insurance Company (USL-IC) strives to extricate itself from coverage obligations owed to its insured, Livingstone R. Selman,
vis-a-vis
personal injury claims brought by Robin Razza on behalf of her minor daughter. The district court ruled that USLIC had a duty to indemnify Selman with respect to those injuries that occurred while the subject policies were in force.
See USLIC v. Selman,
I. BACKGROUND
The chronology of events is not in dispute. Selman owned an apartment house situated at 2 North Avenue, Roxbury, Massachusetts. In 1982, he rented apartment # 3A to Robin Razza. On May 6, 1983, Robin gave birth to Carol Ann Razza. In the fall of 1984, a physician discovered that Carol Ann had contracted lead poisoning. On February 5, 1985, an inspector from the Massachusetts Child Lead Poisoning Prevention Program (the Agency) found that both the Razzas’ apartment and the building’s common areas contained lead paint. The Agency informed Selman of its findings. Shortly thereafter, a fire damaged apartment #3A, and Selman, responding to his tenant’s expressed desire to relocate, moved the Razzas to apartment # 1A. He also requested that the Agency inspect the apartment.
The inspection occurred on March 7, 1985, and disclosed the presence of lead paint. The Agency notified Selman and he made arrangements to purge the entire building (including apartment # 1A). 1 Inspection reports reveal that by March 29 lead removal in apartment # 1A was “95% complete.” Beyond that date, the pace of lead removal in the Razzas’ apartment is unclear: all that we can tell from the record is that, by September of the following year (when the Razzas departed), Selman had rid the entire building of the residue of lead paint.
At all times material hereto, Selman purchased insurance coverage annually. For four consecutive one-year periods commencing May 4, 1981, Selman insured the apartment house with Mutual Fire & Marine Insurance Company. In May of 1985, his allegiance shifted. 2 Coincident with the expiration of the latest Mutual Fire policy, Selman bought a one-year policy from USLIC, effective May 4, 1985. The next year, USLIC issued a renewal policy effective May 4,1986. Each policy covered claims for bodily injuries arising out of Selman’s ownership, maintenance, and use of the property. The policies define “bodily injury” as “bodily injury, sickness or disease sustained by any person which occurs during the policy period,” and define an “occurrence” as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”
Long after the second of USLIC’s two one-year policies lapsed, Robin Razza asserted a claim against Selman for Carol Ann’s lead paint poisoning. Bent on exonerating itself from all responsibility under its policies in regard to this claim, USLIC brought a declaratory judgment action against Selman and the Razzas in the United States District Court for the District of Massachusetts. 3 See 28 U.S.C. §§ 2201-2202 (1988); Fed. R.Civ.P. 57. It premised jurisdiction on diversity of citizenship and the existence of a controversy in the requisite amount. See 28 U.S.C. § 1332(a).
*687 In due course, the parties tried the case to the court on stipulations of fact, documentary submissions, and the live testimony of the Razzas’ expert witness, Dr. John Graef. The district judge determined that USLIC had no duty to indemnify Selman in respect to claims for injuries resulting from the ingestion of lead paint prior to May 4, 1985 (the inception date of its first policy), and the defendants do not challenge this determination on appeal. The judge also concluded, however, that USLIC had a duty to indemnify Selman with respect to claims arising out of Carol Ann’s ingestion of lead paint while USLIC’s policies were in force, that is, from May 4, 1985 until May 3, 1987. 4 After the district court entered a declaratory judgment to this effect, 5 USLIC appealed.
II. STANDARD OF REVIEW
We face a preliminary dispute as to the applicable standard of review. Citing
Pallet v. Gallagher,
To be sure, it is for the court to determine whether the terms of an integrated agreement are unambiguous and, if so, to construe them according to their plain meaning.
See Allen v. Adage, Inc.,
These principles resonate here. The appellant attempts to escape from its contractual obligations on three alternative grounds. First, it denies that coverage was ever triggered, taking the position that Carol Ann sustained no discernible injuries while its insurance policies were in force. Second, the appellant says that, because Carol Ann’s injuries were bound up with her earlier in- *688 gestión of lead paint (first diagnosed in 1984), they fell outside the scope of its policies (which were written in 1985 and 1986, respectively). Both of these defenses have sizeable factual components, hinging, as they do, on whether the evidence shows that discrete injuries occurred during the relevant coverage periods. Third, the appellant says that, because Selman knew about the looming liability on the inception date of the first policy, the known loss doctrine precludes him from insuring against the Razzas’ claims. The potency of this defense likewise depends on the facts: what Selman knew and when he knew it. At bottom, then, USLIC’s appeal challenges the district court’s factfinding; Fed.R.Civ.P. 52(a) applies in full flower; and appellate review is circumscribed by the jurisprudence of clear error.
This is of appreciable importance because clear error review ordinarily heralds a rocky road for an appellant. Under this standard, “appellate courts cannot presume to decide factual issues anew.”
Cumpiano v. Banco Santander P.R.,
In the last analysis, an appellate tribunal “ought not to upset findings of fact or conclusions drawn therefrom unless, on the whole of the record, [the judges] form a strong, unyielding belief that a mistake has been made.”
Cumpiano,
III. ANALYSIS
We divide our analysis into four segments, adding to the three grounds of appeal just mentioned a matter that speaks to the interrelationship of the liability ceilings contained in USLIC’s two insurance policies.
A. Was Coverage Triggered?
Massachusetts law supplies the basis for decision in this diversity case.
See Erie R. Co. v. Tompkins,
The court below understood these rules and applied them appropriately. After reviewing the documentary evidence and considering Dr. Graef s erudite testimony on the nature of lead poisoning and its manifestations in Carol Ann Razza’s case, the court found that “at least a portion” of Carol Ann’s claimed damages arose as a result of exposure to lead paint at the apartment building during the currency of the appellant’s policies.
USLIC,
The nisi prius roll includes a summary of Carol Ann’s blood toxicity levels (which, after lead paint poisoning was first diagnosed, remained abnormally high throughout her stay at 2 North Avenue). In explaining the significance of the data, Dr. Graef testified that the sharp increases which occurred from time to time (sometimes called “spikes”) were directly traceable to the child’s sporadic ingestion of lead paint chips. The data showed — and Dr. Graef confirmed — that sev *689 eral such episodes occurred during the interval when the appellant’s policies were in force. Judge Tauro queried Dr. Graef as to whether he regarded the spikes as “a manifestation of lead that [Carol Ann] had in her system” before May 4, 1985. The witness responded negatively, indicating that such levels were “spontaneously reportable.” Moreover, in the doctor’s opinion the roent-genographie evidence demonstrated that Carol Ann consumed additional chips of lead paint during the currency of the appellant’s policies.
The district court’s finding that these new incidents caused further injury, see id. at 1165, is also supportable. Dr. Graef spelled out in considerable detail the effects of ingesting lead on neurological development in early childhood, and testified that Carol Ann had suffered brain damage, including “significant gaps” in her auditory and verbal performance, as the direct result of ingesting lead while USLIC was on the risk. When Judge Tauro pressed Dr. Graef about whether a tie existed between the spikes in Carol Ann’s toxicity levels and her resulting injuries, the doctor responded in the affirmative. He testified, among other things, that the predictable consequence of each major ingestion of lead paint “probably is that some damage is done to the brain,” and that increases in toxicity levels measurable by standard tests “refleet[ ] injury.” 6
Given this dialogue and certain other insights — for example, the appellant neither impeached Dr. Graefs testimony nor adduced any contradictory evidence — we cannot impute clear error to the judge’s finding that Carol Ann Razza suffered new and further injuries during the relevant coverage periods. Accordingly, coverage was triggered and the district court correctly shifted the burden to the appellant to demonstrate that some contractual exclusion or other policy defense foreclosed indemnification.
The appellant claims to have carried that burden twice over. The district court disagreed. It is to those disputed defenses that we now turn.
B. The Post-Manifestation Doctrine.
The appellant raises no contractual provision as a defense to coverage here. Instead, it contends that what it euphemistically terms the “post-manifestation doctrine” has the same inhibitory effect. Under the guise of this euphemism, USLIC hypothesizes that when a disease process of a certain type manifests itself before an insurance policy incepts, all future injury of the same genre should be deemed to relate back to the original condition even if the victim incurs subsequent injury from continued exposure to the causative agent during the policy period. As applied in this case, the hypothesis holds that if a person contracts lead poisoning prior to the inception of the tortfeasor’s insurance policy but continues to be exposed to lead paint and thereby suffers further injury while the policy is in force, any claim that she may assert against the tortfeasor will not be covered because lead poisoning constitutes a single injury “occurring” before the policy incepted.
As doctrines go, this one has very little in the way of a pedigree. The appellant cites no reported case discussing anything that resembles such a doctrine,
7
and our independent research has come up equally dry. In any event, we need not tarry over the hypothesis. As we have already indicated,
see supra
Part 111(A), the district court had before it compelling evidence that Carol Ann Razza ingested several “big meals” of lead paint chips while the appellant’s policies were in force, and Dr. Graef testified that each such ingestion caused (or potentially could cause) discrete injury. On this basis, the district court warrantably found a “clear nex
*690
us” between Carol Ann’s “big meals” and the spikes in her toxicity levels.
USLIC,
C. The Known Loss Doctrine,
The appellant next asseverates that the known loss doctrine renders the risk of further injury to Carol Ann uninsurable because Selman knew prior to the inception date of the initial policy that his apartment building contained lead paint and that Carol Ann was suffering from lead poisoning. The argument takes the following form. The purpose of insurance is to protect against misfortune by permitting an actor to whom the law assigns the risk of a particular kind of loss to shift the burden of it to an institution better able to assume and manage the particular risk through diversification across risk categories.
See Group Life & Health Ins. Co. v. Royal Drug Co.,
There are two iterations of the known loss doctrine. The doctrine exists both as a function of the standard general liability insurance contract and at common law. We discuss the first iteration briefly, mainly for the sake of completeness.
Since 1966, the insurance industry has defined an “occurrence” as that word is used in the standard general liability policy to include only accidents that result in bodily injury or property damage that is “neither expected nor intended from the standpoint of the insured.”
See
Barry R. Ostrager & Thomas R. Newman,
Handbook on Insurance Coverage Disputes
§ 8.03[a] (7th ed. 1994); 11 Couch,
supra,
§ 44:289. Under this policy provision (which graces the policies in question here), it has been held that if an insured “knew ... that there was a substantial probability that certain consequences” would result from his acts or omissions, there is no “occurrence” within the meaning of a general liability policy, and, hence, no coverage.
City of Carter Lake v. Aetna Cas. & Sur. Co.,
The common law version of the known loss doctrine is part of the warp and woof of Massachusetts insurance law. The Massachusetts Supreme Judicial Court (SJC) recently inspected its composition in
SCA Servs., Inc. v. Transportation Ins. Co.,
Subsequently, SCA purchased an insurance policy. Several of the same residents then brought a class action seeking damages for personal injuries suffered as the result of exposure to the conditions limned in the initial nuisance action. SCA sought a declaration that its insurer had a duty to defend and indemnify with respect to the class action. The SJC determined that, because the prior adjudication in Illinois put SCA on actual notice that the class members had suffered injuries as the result of the same conduct and conditions that led to the shutdown of the
*691
site, it had “full knowledge” of its probable liability for their damages prior to purchasing the insurance policy.
SCA,
Before we can measure the case at bar against the specifications of the common law doctrine as elucidated in
SCA
we must address two threshold questions. The first concerns the standard — objective or subjective — by which the insured’s state of mind is to be gauged. Though Massachusetts law is not explicit on the point, there is spoor for the cognoscenti.
SCA
strongly suggests the use of a subjective standard to determine whether a given loss was “known.”
See id.
(stating that “insurance risk is eliminated ... where an insured knows, when it purchases a policy, that there is a substantial probability that it will suffer or has already suffered a loss”). The quoted language is almost identical to that used (and more fully explicated) in
Quincy Mut Fire Ins. Co. v. Abernathy,
Guided by these clearly visible signposts, we hold that the applicability vel non of the known loss doctrine, in its common law form, depends on the insured’s actual knowledge of the looming loss. The test, therefore, is subjective, not objective.
The remaining threshold issue relates to the devoir of persuasion. The SJC apparently placed the burden of proof on this issue on the insurance company in a suit invoking the contract-based interaction of the known loss doctrine,
see, e.g., City of Newton v. Krasnigor,
For these reasons, we hold that, under Massachusetts law, the common law version of the known loss doctrine only applies when the insured actually knows on or before the effective date of the policy either that a loss has occurred or that one is substantially certain to occur. Relatedly, we hold that the common law version of the known loss doctrine is an affirmative defense to a suit on a Massachusetts policy. Accordingly, the insurer bears the burden of proving the insured’s actual knowledge.
*692
The district court seems to have anticipated these rulings. It treated the known loss doctrine as an affirmative defense. After reviewing the evidence, it found the defense not proven.
See USLIC,
To be sure, the matter is not open and shut. Selman knew by the spring of 1985 that his building contained lead paint. He also knew that Carol Ann Razza was suffering from lead poisoning. But these two facts, naked and unadorned, do not necessarily prove that Selman insured against a known loss. Three critical elements are lacking. First, there is nothing in the record to show definitively that the lead paint in Selman’s building constituted the source of Carol Ann’s lead poisoning (and, more to the point, that Selman knew of the connection). Without such a showing, the known loss doctrine does not apply. Second, nothing in the record establishes that Selman actually knew that Carol Ann would suffer further injury from continued exposure to lead paint, and the trial court found in essence that he lacked any such appreciation of the disease process. See id. Third, by late March of 1985 — six weeks before the first of the USL-IC policies became effective — the Razzas were living in an apartment in which lead removal was at least 95% complete. Selman could easily have assumed that Carol Ann was no longer exposed to any significant dose of lead paint, and would therefore suffer no further injury. These are not merely theoretical possibilities.
The deposition testimony contained in the record strongly suggests that Selman had not drawn any connection in his mind between the ongoing removal of lead paint at 2 North Avenue and the future medical risks that the condition of the premises portended to Carol Ann Razza. The court had the right to credit that testimony,
see Anthony v. Sundlun,
The district court’s finding is strengthened by the utter lack of any evidence that Selman attempted to conceal or misrepresent the presence of lead paint in his apartment house when he applied for insurance. To the extent that the appellant’s application form did not request such information, the appellant was the author of its own misfortune.
See Vappi & Co. v. Aetna Cas. & Sur. Co.,
The short of it is that the appellant had the burden to prove that its insured knew of a probable loss, and the district court’s finding that he did not, viewed in light of the record evidence, is not clearly erroneous.
The appellant attempts to steer the appeal into a different channel by way of two expedients. First, it asks us to treat this ease and SCA as a matched pair of ponies. But SCA is a horse of a much different hue. The Agency’s informal notification that Selman’s apartment building contained lead paint is at a considerable remove from the adjudication of a nuisance. The agency action here at issue lacks both the finality and the preclu-sive effect of a court judgment. Moreover, the nature and causes of the injuries alleged *693 in the class action against SCA were identical to those alleged in the prior nuisance suit. As the SJC observed, the insured actually knew on the basis of the earlier litigation that the class action plaintiffs claimed to have been injured — and it also knew that those claims had already been adjudicated (unfavorably to it). The scenario here is not the same. The Agency in this case only informed Selman that his apartment building contained lead paint; it did not conclude that any particular injuries, much less Carol Ann’s injuries, had been caused by the lead in Selman’s building.
In a nutshell, accepting the appellant’s view that,
as a matter of law,
the known loss doctrine encompasses this situation would take us several steps beyond the holding in
SCA
We are unwilling to take those steps. The appellant, presumably to suit its own convenience, selected a federal forum in preference to an available state forum. It has no right to grouse if a federal court, sitting in diversity jurisdiction, declines to push state law past previously established frontiers.
See Martel v. Stafford,
The appellant’s second effort to skirt the district court’s factfinding involves its contention that the court applied the wrong legal standard in determining whether Selman knew of his likely liability to Carol Ann Raz-za for injuries related to future ingestions of lead paint. This gambit is conceptually sound in the sense that a “finding of fact predicated upon, or induced by, a misapprehension of law is robbed of its customary vitality.”
RCI Northeast,
The appellant derides the district court’s finding that Selman did not know Carol Ann Razza would sustain new injuries after May 4, 1985. Embedded in this finding, appellant claims, is the legal benchmark by which the district court evaluated the evidence in determining Selman’s state of knowledge. This benchmark is wrong, appellant postulates, because the substantive law that governs Sel-man’s putative liability is based not on knowledge but on strict liability.
See Bencosme v. Kokoras,
This is a red herring. Whether Massachusetts law renders Selman strictly liable for Carol Ann’s damages is irrelevant to whether Selman knew he was virtually certain to experience a loss as the inevitable result of his tenant’s continued exposure to lead paint during the policy periods. It is the answer to this pivotal question that determines the applicability of the known loss doctrine to this case — and that question, as we have said, is predominantly a question of fact.
To say more would be supererogatory. Because the district court’s findings of fact are not clearly erroneous, its rejection of the appellant’s known loss defense must be upheld.
D. Applicability of Policy Limits.
In this instance, the appellant issued two consecutive one-year policies to Selman. Each policy contains a stipulation limiting the insurer’s liability to $300,000 “per occurrence,” and each policy states that “continuous or repeated exposure to conditions” is to be treated as a single “occurrence.” In its complaint for declaratory relief, the appellant prayed that, if it were found to have any obligation at all to indemnify Selman vis-a-vis the Razza claims, then in such event, the limits of liability contained in its two policies should be interpreted so as to cap the insurer’s total potential liability at $300,000. The district court did not entertain this prayer for relief. The appellant now invites us to do so. We decline the invitation.
In general, declaratory relief is discretionary.
See, e.g., Ernst & Young v. Depositors Economic Protection Corp.,
45
*694
F.3d 530, 534 (1st Cir.1995);
El Dia, Inc. v. Hernandez Colon,
The trial judge did not spell out his reasons for declining to declare the parties’ rights in this regal'd. While courts should articulate grounds for them actions,
see Pearson v. Fair,
IV. CONCLUSION
We need go no further. This case pivots on the facts, not on the law — and factual issues that are resolved in a bench trial may not freely be relitigated on appeal. Discerning no error, we hold the appellant to its contractual duty.
Affirmed.
Notes
. Selman eliminated the hazard by scraping lead paint from the walls in some locations and covering over lead paint in other locations. Since the method of abstersion is not important for present purposes, we refer to both processes as “removal.”
. The record contains no hint either that Mutual Fire canceled Selman's coverage or that the change in carriers was somehow connected to the discovery of lead paint on the premises.
.While pretrial discovery was ongoing, Robin Razza sued Selman to her daughter's behoof in a Massachusetts state court, seeking damages for injuries allegedly sustained as a result of Carol Ann's exposure to lead paint in the apartment building. That suit is still pending.
. In reality, the cutoff date is probably September 27, 1986 (when the Razzas moved from 2 North Avenue).
. The district court’s holding, while obvious from its reasoning, is not explicitly articulated in the text of its opinion. The final judgment cured this omission. There, the court declared that:
[I]n regard to the lawsuit filed against Livingstone Selman by Robin Razza, as mother and next friend of Carol Ann Razza ...:
1. The plaintiff has no duty to indemnify Livingstone Selman with respect to injuries to Carol Ann Razza resulting from ingestions of lead paint prior to May 4, 1985;
2. The plaintiff has a duty to indemnify Livingstone Selman with respect to injuries to Carol Ann Razza resulting from ingestions of lead paint on and after May 4, 1985, and;
3. The case is closed.
. There is nothing unorthodox about these views. Courts have found in other (similar) cases that each ingestion of lead paint leads to discrete injury.
See, e.g., USLIC v. Farley,
. The appellant does direct us to an opinion of a Maryland state court,
Harford Mut. Ins. Co. v. Jacobson,
. The SJC repeatedly emphasized the presence of actual knowledge both in the case before it and in its discussion of the precedents on which it relied.
See, e.g., SCA,
. Furthermore, the appellant made no compelling demonstration of a need for the declaration. For instance, there is no showing that Carol Ann’s claim against Selman for the injuries she sustained within the coverage period could support a recovery of more than $300,000, and, thus, insofar as the trial court was concerned, the policy limit question may have appeared to be academic. The Declaratory Judgment Act notwithstanding, courts have no obligation to answer hypothetical questions.
See El Dia,