The opinion of the court was delivered by: FERN M. SMITH
This action arises from a dispute between Essex Insurance Company ("Essex") and its insureds, Frank Yi and Sandra Chu Yi, and Ryan J. De Jesus, a claimant against the Yis. Essex seeks a declaratory judgment that it has no obligation to defend and/or indemnify the Yis in De Jesus's pending state court action against the Yis for personal injury, general negligence and intentional tort. This Court has jurisdiction pursuant to 28 U.S.C. section 1332.
Essex moves for summary judgment seeking a declaration that the insurance policy at issue does not require Essex either to defend the Yis or to indemnify them for claims arising from the underlying action. The Yis and De Jesus counter that this matter is not ripe for declaratory relief. They also seek sanctions against Essex pursuant to Rule 11 of the Federal Rules of Civil Procedure.
Essex's policy no. 3AC2779 (the "policy"), issued to the Yis, affords general property and liability insurance for the Yis' Amusement Center/Video Arcade located at 447 Broadway, San Francisco. The original policy period ran from April 11, 1989 to April 11, 1990. The policy was renewed by endorsement to extend coverage under the same terms and conditions from April 11, 1990 to April 11, 1991. The policy contains the following general provision:
the company will pay on behalf of the insured all sums the insured shall become legally obligated to pay as damages because of A. Bodily injury and B. Property damage to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental thereto, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage,
The policy includes the following definitions for "bodily injury" and "occurrence":
"Bodily injury" means bodily injury, sickness or disease sustained by any person which occurs during the policy period;
"occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured;
The policy further contains an "Assault and Battery Exclusion:"
Essex argues that the latter provision bars defense and/or coverage of the ...