McKEOWN, Circuit Judge:
Does "any" mean "any," or does "any" mean "any one"? The answer to this seemingly simple question dictates the result in this insurance coverage case, which arises from the alleged sexual abuse of adolescent males by priests in the Roman Catholic Church of the Diocese of Phoenix ("the Diocese"). The excess indemnity policy provided by Interstate Fire & Casualty Company, Inc. ("IFC") to the Diocese excludes "liability of any Assured for assault and battery committed by or at the direction of such Assured...." Based on the ordinary meaning of this exclusion and consistent with Arizona law, we conclude that "the language `any insured' ... express[es] a contractual intent to prohibit recovery by innocent co-insureds." Am. Family Mut. Ins. Co. v. White, 204 Ariz. 500, 65 P.3d 449, 457 (Ariz.Ct.App.2003). We reverse the district court's judgment in favor of the Diocese, and vacate and remand its grant of attorneys' fees and taxable costs.
This action follows the Diocese's settlement of four lawsuits for alleged sexual abuse by its priests, after which the Diocese filed a declaratory judgment action seeking entitlement to indemnification under IFC's excess liability indemnity policies. IFC's policies typically "follow[ed] form" with those of Lloyd's of London, the Diocese's primary excess insurer. The general liability clause in Lloyd's of London's insuring policy provided:
The policy described the term "Assured" as including the Diocese and "any official, trustee or employee of the [Diocese]," working "in any parishes, schools, cemeteries, and other agencies or directly connected organizations of the Diocese," and "acting within the scope of his duties as such...." The policy excluded coverage for claims that alleged assault and battery:
On cross motions for summary judgment, the district court in relevant part granted summary judgment in favor of the Diocese on the assault and battery exclusion.
On appeal, as before the district court, IFC contends that, because the exclusion precludes coverage for "any assured" — and because "such assured" refers back to "any assured" — the assault and battery exclusion categorically excludes coverage for both the insured who committed the assault and battery as well as innocent co-insureds. We agree with IFC's reading of the exclusion.
Neither party disputes that the "Assured" under the policy covers not only the Diocese itself but also its priests and other employees working in the schools, parishes, agencies, and organizations directly connected to the Diocese. The question is the scope of the assault and battery exclusion, which uses the term "Assured" in two places: "any Assured," followed by "such Assured." Two principles guide our analysis. In interpreting the policy under Arizona law, the words "any" and "such" are to be given their ordinary meaning. See Phelps Dodge Corp. v. Brown, 112 Ariz. 179, 540 P.2d 651, 653 (1975). We read these words in the context of the policy and do not rewrite its text. See id.; see, e.g., Barber v. Old Republic Life Ins. Co., 132 Ariz. 602, 647 P.2d 1200, 1202 (Ariz.Ct.App.1982) ("[T]he court must read the policy as a whole ... with an appropriate regard for the context of the various component parts" and without "rewrit[ing] a policy.....").
We turn first to the plain meaning of the term "such Assured." As relevant here, the word "such" is defined as "of a kind or character about to be indicated, suggested, or exemplified" or "having a quality already or just specified — used to avoid repetition of a descriptive term." Webster's Third New International Dictionary 2283 (2002). This definition indicates that "such Assured" in the exclusion carries the precise meaning as the assured "just specified." See id.; see, e.g., Spartan Petroleum Co. v. Federated Mut. Ins. Co., 162 F.3d 805, 809 (4th Cir.1998) (holding that "such" property damaged referred back to the last mentioned "property damage" in the policy at issue). Here, the assured "just specified" is "any Assured" — those who allegedly committed the assault and battery as well as innocent co-insureds.
The Diocese maintains that the phrases "any Assured" and "such Assured" should be "presumed to have different meanings" and that IFC should have used language clearly communicating a limitation of coverage. Yet the Diocese's reading can only be reached by ignoring the plain meaning of the exclusion and jumping to the conclusion that the text is unclear. This effort to infuse ambiguity into an otherwise clear agreement is unavailing. As the Arizona Court of Appeals noted in Brown v. United States Fidelity & Guaranty Company, "when an exclusionary clause precludes recovery to `any insured,' the term is not ambiguous and clearly encompasses all persons insured under the policy." 194 Ariz. 85, 977 P.2d 807, 817 (Ariz.Ct.App. 1998). Reading the policy in context, the ordinary meaning provides that "such" refers back to "any," thus indicating that the exclusion applies to "any official, trustee or employee" of the Diocese.
The Diocese's argument also requires that we read additional language into the text. The only assured "just specified" in
The plain meaning of "such Assured" also comports with Arizona law. In White, an Arizona Court of Appeals joined a "majority" of Arizona courts in "constru[ing] the phrase `any insured' in an exclusion" as "bar[ring] coverage for any claim attributable to the excludable acts of any insured...." 65 P.3d at 456, 457; see TIG Specialty Ins. Co. v. Pinkmonkey.com Inc., 375 F.3d 365, 372 (5th Cir.2004) (holding that coverage was foreclosed because a policy exclusion "use[d] the specific term `such Insured' to indicate the same insured as previously referred to," namely, "an Insured"). We too conclude that "if any one of the insureds [violates the exclusion], no other insureds can recover." White, 65 P.3d at 457 (alteration in original) (internal quotation marks omitted). Because we determine that the assault and battery exclusion applies to innocent co-insureds, we need not reach the remainder of the arguments raised on appeal.
We vacate the award of attorneys' fees and taxable costs and remand to the district court to determine whether IFC is the "successful party" under Arizona Revised Statute § 12341.01, and if so, whether to award attorneys' fees. See Med. Protective Co. v. Pang, 740 F.3d 1279, 1280 (9th Cir.2013). Costs on appeal shall be taxed against the appellee.
D.W. NELSON, Senior Circuit Judge, dissenting:
Because I believe that the plain language of the policy provision relied on by IFC excludes coverage only for those individuals who commit or direct an assault or battery, I would affirm the district court. I respectfully dissent.
I agree with the majority that this case turns on what exactly the plain meaning of the phrase "such Assured" refers back to. See Sparks v. Republic Nat. Life Ins. Co., 132 Ariz. 529, 647 P.2d 1127, 1132 (1982). In my view, however, the definition of "such" adopted and applied by the majority — "having a quality already or just specified — used to avoid repetition of a descriptive term[,]" — does not refer back to the class of "any Assured[s]" "just specified." Instead, "such" refers to those Assureds "having a quality already or just specified." Maj. Op. at 955 (emphasis added). Referring to the language of the exclusion, I see three possible qualities that "such" can refer to. First, the exclusion identifies "the liability of any Assured," so "such" may refer to those Assureds facing liability. Second, the exclusion references "any Assured," meaning that "such" might refer to the entire class of those covered by the policy. Finally, the exclusion references "assault and battery committed by or at the direction of," which means that "such" might refer to those Assureds who committed
Moreover, the word "quality," a word central to the definition of "such," is defined as a "peculiar or essential attribute" or "distinguishing attribute[.]" Webster's Ninth New Collegiate Dictionary 963 (9th ed.1987). That is, a quality is an attribute used to differentiate individuals within a class, compare them to one another, or explain why one individual in a class or subset of a class is different from others within the wider class. Out of the three possible "qualities" in the exclusion, only two serve to differentiate from the wider class — the subset of assureds facing liability for assault and battery and the subset of assureds who committed or directed assault and battery. It is least likely that "such" refers back to "any Assured" because "any Assured" is the complete class of assureds, not a subset of the class identified by some unique characteristic. Nor is "any Assured" the quality "just specified." Finally, if "such" refers back to the entire class of "any Assured," the exclusion is redundant, but using such to refer to either of the other qualities gives meaning to the phrase "such Assured" that is consistent with the plain and common usage of the word "such."
Considering the plain and customary usage of the word "such," it is difficult to construct a hypothetical sentence that carries the same structure as the policy exclusion in this case where the word "such" refers back to the entire universe of individuals under consideration. For example:
Do all students in Mr. Jones' class lose recess privileges, or is it plain that only those students who act up lose recess privileges? If such referred back to "that just specified," then "any Student," or the entire class of students who attended Mr. Jones' class, would lose recess privileges. That is not the commonly understood meaning of the sentence. It is also relevant that it is easy to construct
Or:
Where these examples would unambiguously preclude coverage for the underlying claims, in order to reach the same result with the actual exclusion applicable here, "such Assured" must be, for all practical purposes, stripped from the policy language. I therefore do not think that the exclusion applies to the Diocese's vicarious liability for the torts of its employees.
Finally, although I believe the exclusion is inapplicable to the vicarious claims against the Diocese on its plain language, even if the exclusion is merely ambiguous it should be construed in favor of coverage. Sparks, 647 P.2d at 1132. Arizona law resolves ambiguities in favor of the insured
Nothing in the authority cited by the majority compels a different result. American Family Mutual Insurance Co. v. White construed the following provision to preclude coverage for innocent co-insureds:
204 Ariz. 500, 65 P.3d 449, 452 (Ariz.Ct. App.2003) (emphasis omitted). White relied on Brown v. United States Fidelity & Guaranty Corporation, which interpreted a similar provision to also preclude coverage for innocent co-insureds:
194 Ariz. 85, 977 P.2d 807, 817 (Ariz.Ct. App.1998). The provisions interpreted in White and Brown use materially different language than the exclusion in the Diocese's policy. The precluding provisions from White and Brown use the term "any insured" once to unambiguously identify the class of insureds referenced, i.e. all of the individuals covered under the policy. Thus, the precluding provisions from White and Brown exclude coverage entirely based solely on the type of liability. But the exclusion in the Diocese's policy references assureds twice. First, "Assured" identifies the type of liability excluded — liability arising from acts of assault and battery committed by "any Assured." Second, "such Assureds" limits the exclusion to those whose acts gave rise to the liability.
I would hold that the policy exclusion does not apply in this case and would reach the parties' remaining arguments. I respectfully dissent.