Three customers of a night club called Club Mirage filed suit against the club to recover for damages received when, at 2:00 A.M. on November 11, 1994, they were shot by other club customers (no club employees were involved). (Editor's note: no additional details concerning the shooting were available). At the time of the incident, T.H.E. Insurance provided a commercial general liability policy for Club Mirage. The CGL policy excluded bodily injury or property damage due to assault and battery. The exclusion contained additional wording which stated that NO coverage was available for assault and battery losses which alleged that negligent hiring, supervision or retention was involved in the loss. T.H.E. Insurance Company denied coverage. On March 18, 1996, the injured customers (Stafford, Jones and Bain), filed suit, asking the court to declare that the exclusion was not applicable to the loss. T.H.E. Insurance filed a motion for summary judgment affirming that their exclusion did apply, so no obligation to insure or defend existed.

The plaintiffs argued that the additional wording rendered the exclusion ambiguous and that the insurer is obligated to indemnify Club Mirage. T.H.E. Insurance contended that their policy clearly barred coverage for assault & battery losses. The insurer's position was that the additional wording acted to separately exclude such losses involving allegations in which employment-related practices were contributing factors.

T.H.E. Insurance filed an appeal after the trial judge ruled in favor of the plaintiff's argument that the exclusion was ambiguous and, therefore, inapplicable. The appellate court then reviewed the facts. The appeals court stated that the plaintiffs failed to submit any cases which included elements that were similar to the case under review. The appeals court held the opinion that the policy language plainly excluded assault & battery losses. Further, the higher court found that the plaintiff's argument that employee actions contributed to the assault & battery involved a theory of liability and did not affect the fact that the policy language clearly excluded the resultant injuries. The appeals court reversed the trial courts decision and directed the trial court to find in favor of the T.H.E. Insurance Company.

(Stafford et al., Plaintiff-Respondents v. T.H.E. Insurance Company, Defendant Appellant. NJ SuperCApDiv. No. A-3987-96T2. March 5, 1998. CCH 1998 Personal and Commercial Liability Cases, Paragraph 7019)