Jackson v. Cadillac Cowboy, Inc.

986 S.W.2d 410, 337 Ark. 24, 1999 Ark. LEXIS 132

• Court: Supreme Court of Arkansas
• Decided: March 18, 1999
• Docket: 98-574
• Status: Published

Opinions

Robert L. Brown, Justice.

This appeal brings to the forefront once again the issue of whether this court should recognize common-law liability for the negligence of vendors licensed by the state who sell alcoholic beverages to intoxicated persons who, in turn, cause injury to third persons. In our previous decisions, we have declined to establish that liability judicially, beginning with the seminal case of Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965). The trial court, in the instant case, followed our past decisions and dismissed the complaint of the appellant, Pam Jackson, for failure to state facts upon which relief could be granted. Jackson now urges on appeal that either our decision in Shannon v. Wilson, 329 Ark. 143, 947 S.W.2d 349 (1997), decides the issue concerning the validity of her claim, or, in the alternative, we should recognize a cause of action for vendors who sell alcohol to inebriated persons. We agree with Jackson that she has stated facts upon which relief may be granted, and we reverse the trial court’s dismissal and remand for further proceedings.

The facts as alleged in Pam Jackson’s complaint are these. On August 31 and September 1, 1994, appellee Cadillac Cowboy, Inc., and its owners through their agents and employees served alcoholic beverages at the Sundowners Club to Kevin Holliday, an adult, who they knew or should have known was extremely intoxicated and intended to drive his motor vehicle while intoxicated. At about 12:45 a.m. on September 1, 1994, a 1977 Chevrolet pickup truck driven by Holliday struck the side of the vehicle driven by James Jackson, causing it to overturn and kill Jackson. Pam Jackson, individually and as administratrix of the Estate of James Jackson, sued Cadillac Cowboy, Inc., and its owners and asserted that their conduct constituted negligence per se due to their violation of certain provisions of the Arkansas Alcoholic Control Act.

Cadillac Cowboy, Inc., and its owners moved to dismiss Jackson’s complaint under Ark. R. Civ. P. 12(b)(6) for failure to state facts upon which relief could be granted. The trial court granted the motion and in its order wrote that our decision in Shannon v. Wilson, supra, narrowly modified Carr v. Turner, supra, and only extended liability for the sale of alcohol to minors. The trial court concluded that in all other respects Carr remained intact and refused to extend Shannon to include sales to intoxicated adults.

Jackson first urges in her appeal that our decision in Shannon v. Wilson, supra, where we recognized a cause of action for the sale of alcohol to minors, also included the sale of alcohol to intoxicated persons. We disagree. The facts and decision in Shannon manifestly involved the sale of liquor to minors. We do agree with Jackson, however, that she has stated facts sufficient for a negligence cause of action against Cadillac Cowboy, Inc., and its owners for the sale of alcohol to an intoxicated person.

In 1965, we observed that a distinct minority of jurisdictions extended liability to vendors for sale of alcohol to minors or intoxicated persons. See Carr v. Turner, supra. In Carr, we declined for the first time to amend our common law and to judicially create a cause of action for negligence against a vendor for selling alcohol to an intoxicated person. The facts in Carr were similar to those in the instant case. Alcoholic drinks were sold at a club to the club’s patron and co-defendant until she became visibly intoxicated. The patron left the club in her car and ran into a parked taxicab which injured the plaintiff. We held that there was no liability on the part of the club because the proximate cause of the injuries was the consumption of alcohol by the patron, not the sale of it. We further remarked on the fact that our criminal statute was not limited to the sale of alcohol to minors and intoxicated persons but also included giving away alcoholic beverages to those groups. We stated in Carr that, as a practical matter, we could not confine liability to vendors of alcohol as opposed to social hosts serving alcohol to guests.

In our cases since Carr, we have continued to decline to recognize liability for the licensed vendor who sells liquor to an inebriated person or to other high-risk groups such as minors. See, e.g., Mann v. Orrell, 322 Ark. 701, 912 S.W.2d 1 (1995); Rone v. H.R. Hospitality, Inc., 297 Ark. 107, 759 S.W.2d 549 (1988); First American Bank of North Little Rock v. Associated Hosts, Inc., 292 Ark. 445, 730 S.W.2d 496 (1987); Yancey v. The Beverage House of Little Rock, Inc., 291 Ark. 217, 723 S.W.2d 826 (1987); Milligan v. County Line Liquor, Inc., 289 Ark. 129, 709 S.W.2d 409 (1986). In most of these cases, we reiterated that consumption of alcohol was the proximate cause of alcohol-related injuries and repeatedly-stated that if there was to be a change in our public policy for licensed vendor liability, it was for the General Assembly to decide.

Last year, in the case of Shannon v. Wilson, supra, this court noted that thirty-five years after Carr v. Turner, supra, the vast majority of jurisdictions now recognize vendor liability for the sale of alcohol to high-risk groups. In Shannon, we further recognized that the sale of alcohol to a minor that resulted in injuries was a proximate cause of those injuries. Now we are confronted with a comparable situation relating to intoxicated persons. We see no distinction between the two high-risk groups of minors and intoxicated persons when it comes to causation. Just as the sale of alcohol to a minor may be one proximate cause of resulting injury, so may such sales to those who are intoxicated. Indeed, the abundant authority from other jurisdictions that we cited in Shannon were cases that involved minors as well as intoxicated persons.

The question then becomes whether there is a duty of reasonable care owed by licensed vendors of alcohol to their patrons. This question, too, was answered by our decision in Shannon v. Wilson, supra. In 1989, the General Assembly passed Act 695, which fixed a high duty of care for all license holders who sell alcoholic beverages. This legislation was passed twenty-four years after our decision in Carr v. Turner, supra. Act 695 stated in pertinent part:

(a) It is the specifically declared policy of the General Assembly of the State of Arkansas that all licenses issued to establishments for the sale or dispensing of alcoholic beverages are privilege licenses, and the holder of such privilege license is to be held to a high duty of care in the operation of the licensed establishment.

(b) It is the duty of every holder of an alcoholic beverage permit issued by the State of Arkansas to operate the business wherein alcoholic beverages are sold or dispensed in a manner which is in the public interest, and does not endanger the public health, welfare, or safety. Failure to maintain this duty of care shall be a violation of this act and grounds for administrative sanctions being taken against the holder of such permit or permits.

1989 Ark. Acts 695 (codified at Ark. Code Ann. § 3-3-218(a) & (b) (Repl. 1996)). In Shannon v. Wilson, supra, we relied on Act 695 coupled with statutes prohibiting the sale of alcohol to minors to establish a duty of care. We said:

We conclude that the statutes establishing affirmative obligations upon license holders authorized to sell alcohol and the statute classifying the criminal act of selling or furnishing alcohol to minors for monetary gain a felony create a duty for licensees to exercise a high standard of care for the protection of minors. A breach of this duty can lead to a suit for negligence.

Shannon, 329 Ark. at 159-160, 947 S.W.2d at 357. The same reasoning applies to this case in establishing a duty of care for sales by licensed vendors to intoxicated persons.

Among the prohibited practices in the Arkansas Alcoholic Beverage Control Act is the sale of alcohol “to a habitual drunkard or an intoxicated person,” which is a misdemeanor offense. See Ark. Code Ann. § 3-3-209 (Repl. 1996). When we read this statute in conjunction with Act 695, it is clear to us, as it was in Shannon v. Wilson, supra, that the General Assembly has spoken on this point and has established a high duty of care on the part of holders of alcohol licenses, which includes the duty not to sell alcohol to high-risk groups, including intoxicated persons. Stated a different way, a duty of care exists on the part of licensed alcohol vendors not to endanger the public health, welfare, or safety, and that duty is breached when vendors sell alcohol to intoxicated persons in violation of § 3-3-209. Although these ABC statutes do not specifically provide for civil liability, a duty of care and the attendant standard of care may be found in a statute that is silent on civil liability. See Restatement (Second) of Torts § 286 Comt. d (1965).

That is precisely what is alleged in Jackson’s complaint in the case before us. When considering a motion to dismiss on Rule 12(b)(6) grounds, we treat the allegations made in the complaint as true and view them in the light most favorable to the plaintiff. See Mann v. Orrell, supra; Perrodin v. Rooker, 322 Ark. 117, 908 S.W.2d 85 (1995). This means that we must accept as true the allegation that Cadillac Cowboy’s employees or agents served Holliday alcohol when he was extremely intoxicated, knowing that he intended to drive his motor vehicle while intoxicated. We conclude that Jackson states the case correctly when she maintains that serving alcohol to Holliday, an intoxicated person, knowing that he intended to drive his motor vehicle, breached the high duty of care set by the General Assembly for licensed vendors of alcohol. The risk of harm to the public at large by an intoxicated driver is not only foreseeable but beyond dispute.

As we have already noted, the vast majority of jurisdictions in this country now have established vendor liability for sales to high-risk groups either by statute or judicial opinion. Indeed, a majority of states has done so by basing this liability on the duty of care established'in alcoholic beverage control statutes. The first jurisdiction to premise liability on the duty of care set forth in local alcoholic beverage control statutes was New Jersey. See Rappaport v. Nichols, 156 A.2d 1 (N.J. 1959). According to our research, at least thirty-two jurisdictions have allowed civil causes of action based on the duty of care established in ABC statutes. See Nazareno v. Urie, 638 P.2d 671 (Alaska 1981); Ontiveros v. Borak, 667 P.2d 200 (Ariz. 1983); Largo Corp. v. Crespin, 727 P.2d 1098 (Colo. 1986); Rong Yao Zhou v. Jennifer Mall Restaurant, Inc., 534 A.2d 1268 (D.C. 1987); Davis v. Shiappacossee, 155 So.2d 365 (Fla. 1963); Ono v. Applegate, 612 P.2d 533 (Haw. 1980); Fischer v. Cooper, 775 P.2d 1216 (Idaho 1989); Elder v. Fisher, 217 N.E.2d 847 (Ind. 1966); Haafke v. Mitchell, 347 N.W.2d 381 (Iowa 1984); Pike v. George, 434 S.W.2d 626 (Ky. Ct. App. 1968); Garcia v. Jennings, 427 So.2d 1329 (La. Ct. App. 1983); Klingerman v. SOL Corp. of Maine, 505 A.2d 474 (Me. 1986) (now abrogated by Me. Rev. Stat. Ann. tit. 28-A, § 2511); Michnik-Zilberman v. Gordon’s Liquor, Inc., 453 N.E.2d 430 (Mass. 1983); Trail v. Christian, 213 N.W.2d 618 (Minn. 1973); Munford, Inc. v. Peterson, 368 So.2d 213 (Miss. 1979); Sampson v. W.F. Enters., Inc., 611 S.W.2d 333 (Mo. Ct. App. 1981); Jenning v. Skyline Bar, 726 P.2d 326 (Mont. 1965); Ramsey v. Anctil, 211 A.2d 900 (N.H. 1965); Rappaport v. Nichols, 156 A.2d 1 (N.J. 1959); Lopez v. Maez, 651 P.2d 1269 (N.M. 1982); Hutchens v. Hankins, 303 S.E.2d 584 (N.C. Ct. App. 1983); Mason v. Roberts, 294 N.E.2d 884 (Ohio 1973); Brigance v. Velvet Dove Restaurant, 725 P.2d 300 (Okla. 1986); Davis v. Billy’s Con-Teena, Inc., 587 P.2d 75 (Or. 1978); Jardine v. Upper Darby Lodge No. 1973, Inc., 198 A.2d 550 (Pa. 1964); Christianson v. Campbell, 328 S.E.2d 351 (S.C. Ct. App. 1985); Brookins v. The Round Table, Inc., 624 S.W.2d 547 (Tenn. 1981); Poole v. El Chico Corp., 713 S.W.2d 955 (Tex. Ct. App. 1986); Purchase v. Meyer, 737 P.2d 661 (Wash. 1987); Bailey v. Black, 394 S.E.2d 58 (W. Va. 1990); Sorenson v. Jarvis, 350 N.W.2d 108 (Wis. 1984); McClellan v. Tottenhoff, 666 P.2d 408 (Wyo. 1983).

The rationale for the approach taken by these jurisdictions, and now by this court, is best summarized by the North Carolina Court of Appeals:

Most state and federal courts that have considered these issues since 1960 have reevaluated and rejected as patently unsound the rule that a seller cannot be held liable for furnishing alcoholic beverages to an intoxicated or minor patron who injures a third person on the grounds that sale or service is causally remote from the subsequent injurious conduct of the patron. A substantial majority have decided that the furnishing of alcoholic beverages may be a proximate cause of such injuries and that liability may be imposed upon the vendor in favor of the injured third person, and nearly every court recognizing such a claim for relief against a licensed vendor has premised the action for negligence upon the violation of statutes imposing a duty upon licensees to refrain from selling or serving alcoholic beverages to a visibly intoxicated person.

Hutchens v. Hankins, 303 S.E.2d 584, 589 (N.C. Ct. App. 1983), petition denied, 309 N.C. 191, 305 S.E.2d 734 (1983).¹

We have no doubt that the high duty of care established by Act 695 was essentially for regulatory purposes, but it also is legislative recognition of the vital and weighty responsibility that our state places on licensed alcohol vendors. We emphasize the point that this high duty of care fixed by the General Assembly is on licensed vendors of alcohol, and we view the liability as confined to this group by Act 695. Though we said in Carr v. Turner, supra, that we could not see how liability could be confined to vendors as opposed to social hosts, this was before the enactment of Act 695 establishing the duty of care for licensed vendors. Now it is clear under Shannon v. Wilson, supra, as well as our decision today that the liability does not extend to social hosts.

To date, there are six states that impose no vendor liability for the sale of alcohol to high-risk groups, either judicially or by statute — Nevada, Nebraska, Delaware, Virginia, Kansas, and Maryland. Our neighboring states impose vendor liability in a variety of ways:

• Missouri has addressed the issue by statute. Mo. Ann. St. § 537.053 (West 1988) imposes limited liability against licensed vendors of alcohol by the drink for consumption on the premises. A cause of action exists only if (1) the vendor is convicted of or receives a suspended sentence for selling alcohol to a minor or obviously intoxicated person, and (2) that sale is the proximate cause of the injury or death sustained by that person. Prior to the enactment of the statute, Missouri judicially recognized a common-law cause of action. See Sampson v. W.F. Enters., 611 S.W.2d 33 (Mo. Ct. App. 1981).

• Oklahoma is a common-law jurisdiction. One who furnishes liquor may be liable for damages for serving an obviously intoxicated person from which it can be determined that an unreasonable risk of harm to others was created by the impaired ability to operate a motor vehicle. See Mansfield v. Circle K. Corp., 877 P.2d 1130 (Okla. 1994); Brigance v. Velvet Dove Restaurant, Inc., 725 P.2d 300 (Okla. 1986).

• Tennessee has enacted Tenn. Code Ann. § 57-10-101 (Repl. 1989). This statute declares that consumption is the proximate cause and not the furnishing of alcohol. But § 57-10-102 sets up a standard of proof notwithstanding § 57-10-101: A jury of twelve must ascertain beyond a reasonable doubt that the sale of alcohol to a person known to be under 21 or obviously intoxicated caused the injury as a direct result of the consumption of the alcohol.

• Texas has addressed the issue by statute. Tex. Aleo. Bev. Code Ann. § 2.02 (West 1995) imposes liability for providing, selling, or serving an alcoholic beverage to an obviously intoxicated person to the extent that he presented a clear danger to himself and others and if the intoxication is the proximate cause of the injury.

• Louisiana has the most restrictive statute. La. Rev. Stat. Ann. § 9:2800.1 (West 1997) immunizes alcoholic beverage vendors who serve alcohol to persons who aré legally of age. In instances where the statute does not apply, such as where the consumer is under age 21, the courts resort to general negligence principles. See Godfrey v. Boston Old Colony Ins. Co., 718 So.2d 441 (La. Ct. App. 1998).

• Mississippi has addressed the issue by statute. Miss. Code Ann. § 67-3-73 (1991) limits liability to those cases in which licensed alcohol vendors furnish alcohol to visibly intoxicated patrons or in cases where a person causes the consumption of alcoholic beverages by force or false representations that the beverage contains no alcohol. Mississippi courts have also recognized a common-law cause of action. See Bryant v. Alpha Entertainment Corp., 508 So.2d 1094 (Miss. 1987).

In sum, the complaint by Jackson is that the employees of the Sundowners Club knowingly served an intoxicated person, Holliday, knowing he would drive while intoxicated. Jackson argues, in effect, that serving alcohol to Holliday, knowing that he would drive, was much like loading a pistol. Under these circumstances, we will not immunize licensed vendors of alcohol to engage in activity which is in blatant disregard of the standard of care set forth in Act 695 and § 3-3-209, especially since we declined to do so under comparable circumstances pertaining to alcohol sales to minors in Shannon v. Wilson, supra. Instead, we now consider the question of whether the duty of care fixed by statute for ABC license holders has been breached to be an issue for the fact-finder, and we hold that evidence of the sale of alcohol by a licensed vendor to an intoxicated person is some evidence of negligence. We overrule Carr v. Turner, 238 Ark. 889, 385 S.W.2d 656 (1965), and its progeny to the extent those cases are inconsistent with this opinion.

The dissent spends considerable time complaining that the majority opinion fails to give standards or guidelines to prove who is an intoxicated person. Of course, the proof required would be the same as would be necessary to enforce § 3-3-209. But, suffice it to say, the appellees do not argue the vagueness of that statute or its failure to provide standards and that was not an issue before the trial court or on appeal.

Reversed and remanded.

Glaze, J., concurs. Arnold, C.J., Corbin and Thornton, JJ., dissent.

1 There are nine jurisdictions that refuse to impose a civil cause of action based on ABC statutes and state as their reason that these statutes are meant to regulate an industry and not create civil liability. See Nichols, Drinking/Driving Litigation, § 37:07, n. 9.