An exclusion for the liability of "any insured" for assault and battery precluded coverage for the Diocese sued in a sexual abuse case. Interstate Fire & Cas. Co., Inc. v. Roman Catholic Church of the Diocese of Phoenix, 2014 U.S. App. LEXIS 14735 (9th Cir. July 30, 2014).

   The Diocese settled four lawsuits for alleged sexual abuse by its priests. The Diocese filed a declaratory judgment action seeking indemnification under Interstate Fire & Casualty's excess liability policy. The policy promised to indemnify "the Assured for all sums which the Assured shall be obligated to pay by reason of the liability imposed upon the Assured." The policy described the "Assured" to include the Diocese and "any official, trustee or employee of the Diocese working in any parishes, schools, cemeteries, and other agencies of the Diocese."

   The policy excluded coverage for alleged assault and battery claims:

THIS INSURANCE DOES NOT APPLY –

   (a) to liability of any Assured for assault and battery committed by or at the direction of such Assured . . .

   On cross motions for summary judgment, the district court granted summary judgment in favor of the Diocese on the assault and battery exclusion. The district court construed the assault and battery exclusion as applying only to the offending priest. "Such insured" meant "that insured", i.e., the assured who committed the assault and battery.

   On appeal, the insurer argued that because the exclusion precluded coverage for "any assured" – and because "such assured" refers back to "any assured" – the assault and battery exclusion categorically excluded coverage for both the insured who committed the assault and battery as well as innocent co-insureds.

    The Ninth Circuit agreed.The word "such" was defined as "having a quality already or just specified, used to avoid repetition of a descriptive term." This definition indicated that "such Assured" in the exclusion carried the precise meaning as the assured "just specified." The assured "just specified" was "any Assured" – those who allegedly committed the assault and battery as well as innocent co-insureds. 

   Consequently, the district court was reversed.