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The state’s Dram Shop Act modified, but did not eliminate, common law liability for entities that serve alcohol, the Indiana Supreme Court ruled Monday.
In its opinion, the high court noted the term “dram shop,” which is a bar, tavern or store that sells alcohol.
In 1986, the Legislature passed the Dram Shop Act, which limited civil liability to those with actual knowledge of the injury causing a person’s visible intoxication.
“This case presents an issue of first impression: the Dram Shop Act’s impact on common-law liability against entities that serve alcohol,” the opinion states.
According to court records, Nathan Blount suffered fatal injuries when an intoxicated driver, Eric Adair, crossed the center line and crashed his car into Blount’s. Before the accident, Adair was served alcohol at both Wings, Etc. Grill & Pub and El Cantarito.
Leah Niebauer, as special representative of Blount’s estate, filed a wrongful death complaint that included two counts against the restaurants’ respective owners: WEOC Inc. and Romo LLC.
In the second count, the estate alleged the restaurants “knew or should have known” that Adair was “visibly intoxicated at the time” they served him alcohol, in violation of Indiana Code § 7.1-5-10-15.
And in a third count, the estate alleged the restaurants were negligent by “failing ‘to exercise reasonable care under the circumstances when they furnished alcoholic beverages’ to Adair, allowing him to drive away from their premises when they ‘knew or should have known’ that he was intoxicated, failing ‘to notify law enforcement’ that he drove away intoxicated, and failing to obtain ‘alternative transportation’ for him.”
The restaurants moved to dismiss only the third count under Indiana Trial Rule 12(B)(6), asserting that the estate was seeking recovery on common law “theories that aren’t recognized under Indiana law.”
The restaurants argued that the Dram Shop Act is the only path to civil liability for furnishing alcoholic beverages to someone who later causes injury.
The LaPorte Superior Court denied the motion and certified the order for interlocutory appeal.
The Court of Appeals accepted jurisdiction and affirmed.
The restaurants then petitioned for transfer, which the high court granted.
Chief Justice Loretta Rush wrote the court’s Monday opinion.
According to Rush, the court reviewed the Dram Shop Act and found it did not abrogate the common law in either express terms or by unmistakable implication.
“Rather, the statute provides additional requirements — actual knowledge of visible intoxication and specific proximate causation — to establish liability in any civil action,” she wrote. “We then hold that the Estate’s negligence claim in Count III satisfies these requirements and alleges facts capable of supporting relief. As a result, the trial court properly denied the Restaurants’ motion to dismiss.”
According to the chief justice, since its enactment, the high court has not considered the Dram Shop Act’s impact on the common law.
But other courts have, with the Court of Appeals splitting on whether the Dram Shop Act precludes independent common law liability against those furnishing alcohol.
“In sum, the Dram Shop Act does not expressly or by unmistakable implication eliminate common-law liability against entities that furnish alcohol,” the justices held. “And thus, a plaintiff is not precluded from bringing a negligence claim premised on a business’s common-law duty to exercise ordinary and reasonable care when providing alcoholic beverages. But the Dram Shop Act impacted these claims by limiting the scope of liability.”
Specifically, the Dram Shop Act modified the common law claims by imposing two requirements that limit the scope of liability: “actual knowledge” that the individual “was visibly intoxicated,” which is “a proximate cause of the death, injury, or damage.”
Because the negligence count satisfies the Dram Shop Act’s requirements and includes operative facts that are capable of supporting relief, the trial court properly denied the motion to dismiss, Rush concluded. She added that the third count puts the restaurants on notice of a factual scenario in which a legally actionable injury has occurred: an act of common law negligence that includes the Dram Shop Act’s requirements.
All justices concurred in WEOC, Inc. d/b/a Wings, Etc. and Romo, LLC d/b/a El Cantarito v. Leah Niebauer, Special Representative of the Estate of Nathan Blount, Deceased, 23S-CT-184.
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