IFC v. Roman Catholic Church

If an insurance provision includes the phrase “any insured,” the plain language of the phrase clearly intends to include innocent co-insureds.

An insurance company, Interstate Fire & Casualty Company, Inc. (“IFC”), appealed the decision of a district court in Arizona pertaining to the interpretation and application of an excess indemnity policy supplied in an insurance contract between IFC and the Roman Catholic Church of the Diocese of Phoenix (“the Diocese”). The Diocese filed this indemnification action after it settled four lawsuits claiming sexual abuse by priests of the Diocese. IFC alleges the excess indemnity clause excludes the Diocese from collecting any amount from it. The Diocese reads the clause in such a way that allows it to collect from IFC, but does not allow the priests from collecting. The relevant provision reads: “This insurance does 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 purpose of preventing injury to persons or damage to property.” The parties do not dispute that both the Diocese and the priests constitute “assureds.” The panel stated the IFC's reading follows the plain language of the provision because the word “such” describes the character of something that is about to be indicated or was already indicated. “Such,” in the provision, refers back to “any assured.” Thus, the plain meaning of the provision prohibits indemnification of any assured, which includes innocent co-insureds. The Diocese's reading of the provision would force the court to immediately jump to an unclear interpretation. Instead, words, provisions, and the like should be given their plain, ordinary meaning. REVERSED in part; VACATED and REMANDED in part.