Century Transit Systems, Inc. v. American Empire Surplus Lines Insurance

This appeal arises from the beating of two men who were attempting to film a political demonstration by gay rights activists in West Hollywood, California. The beating was administered by a cab driver who, at the time, was an employee of the cross-complainants Century Transit Systems, Inc., doing business as Celebrity Cab Co., Babaeian Transportation, Inc., Masood Babaeian and Mahmood Babaeian (collectively Century). When the two men sued Century for assault and battery and the negligent hiring, supervision and retention of the cab driver (and related causes of action not relevant to the dispute before us), Century tendered defense of the action to its insurer, American Empire Surplus Lines Insurance Company (American). When American denied coverage and refused to provide a defense, Century filed a cross-complaint for declaratory relief to resolve the coverage dispute. American responded with a motion for summary judgment based on the enforceability of an exclusion for assault and battery.

Our review of the undisputed facts reflected in this record, together with the relevant insurance policy provisions, satisfies us that no potential for coverage existed as to the…