Assault Exclusion Trumps Negligent Supervision Coverage.
Staley was a resident of the William Street Center halfway house (the Center). Staley escaped from the Center and embarked on a crime spree during which he killed Reed. Reedís family filed suit against the Center, alleging that the Center had acted negligently and that its negligence was the proximate cause of Reedís death.
Essex Insurance Company provided general and professional liability insurance coverage to the Center [the policy edition cannot be determinedí. Essex brought suit against the Center, seeking a declaration that the assault and battery exclusion precluded coverage for the claim. The district court entered summary judgment in favor of the Center.
On appeal, the Center argued that the professional liability provision of the policy conflicted with the assault and battery exclusion. The professional liability provision, according to the Center, established broad coverage whereby Essex would pay all sums resulting from professional liability. The conflict between these two provisions, according to the Center, created an ambiguity which must be construed in favor of the Center. The appellate court held that the assault and battery exclusion did not conflict with the professional liability provision, but rather the exclusion served to limit the broad liability coverage set forth in the professional liability provision.
The Center also argued that when it originally purchased the Essex policy, it included an exclusion for negligent hiring or supervising. This exclusion was subsequently deleted from the policy. This deletion, according to the Center, showed Essexís intent that the Center be covered for claims of negligent supervision arising out of an assault and battery.
The court held, however, that the deletion of the negligent hiring exclusion did not show the intent to delete the assault and battery exclusion. All other provisions in the Essex policy, including the assault and battery exclusion, remained in force after the deletion of the negligent hiring exclusion.
Accordingly, the court reversed the decision of the district court and held that the Essex policy unambiguously excluded coverage for assault and battery arising out of negligent supervision.
Essex Insurance Company v Vincent, 52 F3d 894 (10th Cir 1995).