The case arose when Dominic Novak was injured after a group of men attacked and brutally beat him and his friend moments after they left a nightclub in 1998. The club required patrons to leave the building through a single door that led into an alley, and although the club employed several security officers, they were all inside the building during the attack. Novak and his friend left the club at approximately 2:35 a.m. and were immediately met with twelve to fifteen men who attacked them within view of the club's exit. After recovering from his injuries, Novak sued the club owner for negligence and the case proceeded to trial, where a jury found in Novak's favor and awarded him damages. Capital Management and Development Corp, owner and operator of the club, appealed the decision to the Court of Appeals, arguing that it did not owe Novak a duty of care because the attack occurred in a public alley, and the criminal attack was not foreseeable.

The court first held that Capital Management owed Novak a duty of care even though the attack occurred on public property. Capital Management argued that its "lack of exclusive control" over the alley relieved itself of any duty of care to patrons leaving the club. The court pointed out, however, that the District of Columbia utilizes a "substantial special use" test, rather than an exclusive control test, to determine when a business invitor's duty extends to injuries suffered by invitees. Under this test, a club owner may be liable if guests are injured in an area where the club exercises substantial special use. Because the club was set off from any public street and surrounded by alleys, and because patrons were required to utilize only one exit after closing, the court determined that the club exercised substantial special use over the alley. This determination was made stronger by the fact that no other businesses used the alley at such a late hour, and also because the club routinely used its security guards to clear the alley of loiterers to maintain order.

Next, the court held that Novak's attack was reasonably foreseeable given the facts and circumstances of his case. At trial, Novak produced evidence showing that employees were aware of fights occurring in the alley several times a month. One particular employee observed altercations in the club or in the alley "at least once a week." Morever, on the night in question, several patrons were specifically asked to leave because they were fighting inside the club. Taken together, it was reasonable to conclude that fights inside the club and in the alley would continue to occur regularly.

Notwithstanding its duty to provide some level of care to patrons leaving the nightclub, Capital Management defended by arguing it could not be liable to Novak because no evidence established that the presence of one or more security guards outside the door would have deterred or prevented the attack. The court was not persuaded by this argument. First, expert testimony established that customary procedure for nightclubs in the District called for security personnel to be posted outside exits during closing time until patrons have dispersed. Second, eyewitness testimony revealed that the attack lasted for nearly five minutes, and that Novak did not sustain serious injuries until the very end of the attack. Eyewitnesses also pointed out that the attack ceased immediately once security rushed outside and intervened. It would be inaccurate, the court therefore explained, to assert that Novak would have suffered serious injury regardless of the presence of security personnel outside the exit.

The holding of Novak v. Capital Mgm't and Dev., Corp. provides a clear warning: when businesses in the District exercise substantial special use over an area, their owners must take reasonable precautions to protect patrons from foreseeable injury even if the injury occurs on public property and is the result of the criminal acts of one or more third parties. In the context of a nightclub, reasonable precautions involve, at a minimum, posting security personnel outside exits during closing hours, especially where patrons utilize only one exit when leaving. While this case does not specifically address the duties of restaurant and bar owners, it is reasonable to conclude that they are held to the same standard because customers often leave restaurants and bars under identical circumstances as described in this case.