INSURANCE COVERAGE: Connecticut District Court finds assault exclusion does not preclude coverage for negligent supervision

In an action brought by the Hartford Roman Catholic Diocesan Corporation (Archdiocese) against Interstate Fire and Casualty (Interstate) for indemnification of claims paid by the Archdiocese to four victims of sexual misconduct by three priests, both parties filed motions for summary judgment as to Interstate’s affirmative defense that Interstate had no duty to indemnify the Archdiocese since the underlying claims were barred by the assault and battery exclusion of the insurance policy. The policy exclusion stated that the policy did not apply:

“to liability of any Assured for assault and battery committed by or at the direction of such Assured except liability for Personal Injury or Death resulting from any act alleged to be assault and battery for the purpose of preventing injury to persons or damage to property.”

(Emphasis added.)  The court’s interpretation of this exclusion focused on the relationship between the terms “any assured” and “such assured,” and the role of the intervening language.  The court referenced a Ninth Circuit decision in Interstate Fire & Cas. Co. v. Roman Catholic Church Diocese of Phoenix, 761 F.3d 953 (9^th Cir. 2014), where the court found identical insurance policy language to preclude coverage for innocent co-insureds reasoning the phrase “such assured” referred back to “any assured.”  In the Ninth Circuit decision, Judge Nelson dissented, finding the exclusion only applied to assureds who committed or directed the assault or battery giving rise to liability.  The dissent reasoned that the exclusion applied to having committed or directed the assault and battery.  The Connecticut District Court agreed with the dissent of the Ninth Circuit, finding that “the better interpretation of ‘such’ as referring to ‘any Assured’ who commits or directs assaults or batteries.”  The court found that there was no evidence of a shared intent by the parties to bar coverage for plaintiff’s negligent supervision of persons under its control or supervision.   The Hartford Roman Catholic Diocesan, Corp. v. Interstate Fire and Casualty Co., No. 3:12 CV 1641