Dram Shop Liability: Bar, Restaurant and Individual Exposure for - - PowerPoint PPT Presentation

Dram Shop Liability: Bar, Restaurant and Individual Exposure for Over-Serving Customers and Guests

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WEDNESDAY , AUGUST 7, 2019

Presenting a live 90-minute webinar with interactive Q&A Drew Hamilton Butler, Shareholder, Richardson Plowden, Charleston & Columbia, S.C. David Lail, Attorney, Yarborough Applegate Law Firm, Charleston, S.C.

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David Lail, Esq.

dlail@yarboroughapplegate.com

Dram Shop Cases

5

The Problem

6

Drunk Driving

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SC : 2nd in Nation for Drunk Driving Deaths

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The Other Problem

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Bars Getting Drivers Drunk

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It is ILLEGAL to Get Patrons Drunk

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Bars Putting Drunks on the Road

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The Solution

14

Criminal Side: DUI Convictions

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Civil Side: Helping Victims & Families

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Dram Shop Cases

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What is a “Dram”?

A “dram” is a small unit of liquid, and historically, the term was used to describe a small drink of alcohol.

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What is a “Dram Shop”?

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“Dram Shop” Law

• The area of law that is focused on civil liability in

connection with the sale, service, and consumption of alcohol.

• In South Carolina, “Dram Shop” Law includes:
• “Tavern Liability”
• “Liquor Liability”
• “Alcohol Liability”
• “Social Host Liability”

20

Dram Shop Acts

State specific legislation creating civil liability

21

South Carolina

NO

“Dram Shop Act”

22

The “Dram Shop” Statutes

• 1. 61-4-580
• 2. 61-6-2220
• 3. 61-4-50
• 4. 61-4-90
• 5. 61-6-4070

23

§ 61-4-580. Prohibited acts.

(A) No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder’s permit: (1) sell beer or wine to a person under twenty-

• ne years of age;

(2) sell beer or wine to an intoxicated person;

24

§ 61-6-2220. Sales to intoxicated persons. A person or establishment licensed to sell alcoholic liquors or liquor by the drink pursuant to this article may not sell these beverages to persons in an intoxicated condition; these sales are considered violations of the provisions thereof and subject to the penalties contained herein.

25

§ 61-4-50. Sales to underage persons.

(A) It is unlawful for a person to sell beer, ale, porter, wine, or other similar malt or fermented beverage to a person under twenty-one years of age.

26

§ 61-4-90. Transfer of beer or wine for underage person’s consumption.

(A) It is unlawful for a person to transfer or give to a person under the age of twenty-one years for the purpose of consumption of beer or wine in the State….

27

§ 61-6-4070. Transfer to person under the age of twenty-one years.

(A) It is unlawful for a person to transfer or give to a person under the age of twenty-one years for the purpose of consumption of alcoholic liquors in the State….

28

Where do “Dram Shop” Laws Apply?

29

Insurance Coverage!

S.C. Dram Shop Bill (S. 116), July 1, 2017

• Requires establishments licensed or permitted to sell alcoholic

beverages for on-premises consumption after 5:00 P.M. to maintain liquor liability insurance of at least $1 million.

• Applies to both new applicants for liquor permits and licenses,

as well as those renewing permits or licenses.

30

Basis for Civil Liability

Commercial

Civil liability for injuries related to the commercial sale or service of alcohol arises out of violations of state criminal alcohol control statutes.

31

Basis for Civil Liability

Non-Commercial – “Social Host”

Civil liability related to the non-commercial provision of alcohol, or social host liability, is based on common law duties – not statutes.

32

Key Legal Distinctions

How to determine whether or not dram shop liability exists

33

Is there a dram shop case?

• Who is the Defendant?
• Commercial or Non-Commercial?
• How old is the Plaintiff?
• Adult or Underage?
• What type of Plaintiff?
• 1st Party or 3rd Party?

34

Commercial Defendant

Violations of the “Dram Shop Statutes”

35

Negligence Cause of Action

• “Dram Shop Statute” = DUTY
• Violation of the Statute = BREACH
• Constitutes proof of negligence per se

36

1st Party vs. 3rd Party

Commercial Provider Setting: key distinctions under the law

37

Purpose of Dram Shop Liability

The purpose of recognizing a private cause of action based on a violation of South Carolina’s dram shop statutes has been to:

“promote public safety, and to prevent an already intoxicated person from becoming even more intoxicated, and thus an even greater risk to the public at large, when he leaves the establishment.”

Tobias v. Sports Club, Inc.

• HOWEVER. . .

38

Limitations on Liability

• HOWEVER. . . the South Carolina Supreme Court

has also held that:

“public policy is not served by allowing the intoxicated adult patron to maintain a suit for injuries which result from his own conduct.”

Tobias v. Sports Club, Inc.

39

The Statutory Violation

Proving a statutory violation to establish the breach

40

The Question (Most Often)

Did the bar “knowingly” sell alcohol to an “intoxicated person”?

See § 61-4-580

41

Best Place to Start

Hartfield v. Getaway Lounge & Grill, Inc.

42

Hartfield - Facts

• After visiting visited 3 bars one evening, the

second of which was the Getaway Lounge, Hoyt Helton drove his car across the center line and struck another car in which John Erik Hartfield was a passenger.

• Helton died at the scene.
• Hartfield was transported from the crash scene

by helicopter with severe injuries.

• SLED toxicologist recorded Helton’s blood

alcohol content (BAC) at .212.

43

Hartfield - Verdict

• The trial court granted a directed verdict motion for the

first bar Helton visited and the jury could not reach a verdict against the third establishment.

• The Supreme Court upheld the $10 million jury award

and also affirmed the trial court’s decision to permit Hartfield and his father to pierce the corporate veil of the Getaway Lounge.

44

Hartfield – Key Evidentiary Takeaways

• Expert testimony to determine how many beers Helton

would have to have consumed over the hours prior to the crash to reach a BAC of .212

• Sufficient circumstantial evidence presented to provide

reasonable support for Expert’s testimony which was properly admitted - .i.e.., timeline; drunken voicemail; testimony on amount of alcohol consumed; etc.

45

• Trial court charged the jury on a “permissive inference

that a person was under the influence of alcohol when that person has a blood alcohol of .10 percent or greater.”

• “…The civil remedy is predicated on criminal statutes,

thus it should be permissible for a trial judge to charge

• n the permissive inference of intoxication under our

criminal statutes….”

Hartfield – Key Evidentiary Takeaways

46

• “The statute does not contain a requirement that the

intoxicated person be visibly intoxicated, only that a person “knowingly” sell beer or wine to an intoxicated person. Consequently, the trial court’s refusal to adopt Appellants’ proposed instruction was not error.”

• “Though the present case focused on the visible symptoms

exhibited by Helton while at The Getaway, other cases under section 61–4–580 might concern knowledge acquired through a different medium.”

Hartfield – Key Evidentiary Takeaways

47

• The Charge: “The plaintiff has to prove under the statute ...

that businesses that sold the alcohol knew or should have known he was intoxicated.”

• “In our view, “knew or should have known” is an articulation
• f an objective “reasonable person” standard. We see no

difference between the “reasonable person” and “should have known” standards. Moreover, this instruction did not lessen the proof required under our law. Thus, the trial court did not err in instructing “knew or should have known.””

Hartfield – Key Evidentiary Takeaways

48

Non-Commercial Provider of Alcohol

“Social Host” Liability

49

Social Host Liability

50

2007 - Marcum v. Bowden

“An adult social host who knowingly and intentionally serves, or causes to be served, an alcoholic beverage to a person he knows or reasonably should know is between the ages of 18 and 20 is liable to the person served and to any other person for damages proximately resulting from the host’s service of alcohol.”

51

Common Law Duty

52

53

54

55

• Liz Trendowski - Dram Shop Forensics

56

57

58

59

60

61

62

63

64

First-Party vs. Third-Party Claim & Case Illustration

65

South Carolina no longer recognizes a “first party” cause of action against tavern owner by an intoxicated adult for alleged violation of the alcohol control statues Tobias v. Sports Club, Inc. 323 S.C. 345 (1998) In Tobias, the Court concluded that our alcohol control statutes do not create a first party cause of action for an intoxicated adult patron, but that they do permit a third party action. Public Policy is not served by allowing an intoxicated adult to maintain a suit for injuries which result from his own conduct. See Lydia v. Horton 583 S.E. 2d 750, 752 (2003)

66

First Party vs. Third Party Issues Post Tobias

67

68

69

Summary Judgment Granted in Favor of Tavern

70

Circuit Court described the Complaint as a “first-party negligence action against Green Apple,” and found “there was no duty of Green Apple to protect Moore who was voluntarily intoxicated” 71

What about a general negligence action against the tavern?

72

73

• Plaintiff’s position:
• Concedes that tavern did not violate a statutory

duty, but….

• Argues that Tavern owes a duty of care to its

employees

• Tavern had knowledge that Plaintiff lived 15 miles

for the restaurant, had no phone, and had no transportation

• Therefore, Tavern was negligent in forcing him

from the premises in an intoxicated state with no means of communication or safe transportation.

• Position supported by expert opinion

74

• Defendant’s position:
• Plaintiff, a tavern employee, was terminated by

manager for consuming alcohol while working

• Manager submitted Affidavit that she witnessed

Plaintiff make a phone call for a ride home

• At time of firing, Plaintiff clocked out at 9:06 p.m.

Plaintiff was struck and killed at 10:39 p.m.

• Traffic report stated that Plaintiff stepped directly in

front of the oncoming vehicle, and that a witness had attempted to convince Plaintiff to get out of the roadway

75

Ruling Anticipated Soon

76

Take Away First Party/Third Party Distinction

• Know your Plaintiff, issues of law, and

affirmative defenses

• With a first party Plaintiff, conduct discovery

through the lens of general negligence, i.e. legal duty owed to a first-party Plaintiff, as well as through the lens of a dram shop action

• Ensures the record is complete for purposes
• f appeal

77