DUILiquor Store Liability
The Texas Supreme Court recently dealt a blow to third-party plaintiffs who file dram shop suits against alcohol retailers by reversing a decision the court made just two years earlier.
On Sept. 3, 2004, the court originally affirmed a $35 million judgment against a liquor store in F.F.P. Operating Partners v. Xavier Duenez et al., but seven months later, after three justices who voted with the majority left the court, the justices voted to rehear the case.
As a result of the rehearing, on Nov. 3 the court released another opinion in Duenez, which some plaintiffs lawyers believe guts the Texas Dram Shop Act and protects alcohol retailers from liability to innocent third parties, such as victims of drunk drivers. But some appellate lawyers say the high court merely interpreted the 1987 law the way the Legislature intended.
According to the opinion, the facts are as follows: The Duenezes filed a negligence suit against F.F.P. Operating Partners and F.F.P.'s store, Mr. Cut Rate #602, after a clerk in the store sold a 12-pack of beer to Roberto Ruiz. Ruiz had entered the store after consuming a case and a half of beer. He then got into his truck, opened a beer, drove down the highway and swerved, hitting the Duenezes' car. Police arrested Ruiz at the scene of the accident. He subsequently pleaded guilty to intoxication assault and was sentenced to prison, according to the opinion.
The Duenezes sued F.F.P., Ruiz and several other parties but eventually nonsuited all of the defendants except F.F.P.
F.F.P filed a cross-action naming Ruiz as a responsible third party, and the trial court severed the cross-action from the Duenezes' suit.
The Duenezes obtained a partial summary judgment, in which the trial judge ruled that Texas Civil Practice & Remedies Code Chapter 33's proportionate responsibility statute did not apply to their innocent third-party plaintiff suit and that the Dram Shop Act's exclusive remedy provision did apply.
Chapter 33 governs the apportionment of responsibility generally and applies to "any cause of action based on tort in which a defendant, settling person, or responsible third party is found responsible for a percentage of harm." It makes parties responsible only for their proportionate share of damages awarded. The Dram Shop Act's exclusive remedy provision assigns all liability to providers of alcohol "for the actions of their employees, customers, members or guests who become intoxicated ... in lieu of common law or other statutory law."
At trial, the jury found for the Duenezes, awarding $35 million. Since Chapter 33 did not apply, under the Dram Shop Act, F.F.P. was liable for the full amount of the judgment, even though Ruiz caused the accident.
The 13th Court of Appeals affirmed the trial court ruling, holding that Chapter 33's proportionate responsibility statute did not apply to the case, and upheld the jury verdict.
In its September 2004 opinion, a 5-4 high court found that the proportionate responsibility statute did apply in an innocent third-party case such as Duenez. Under Chapter 33, that would have meant F.F.P. was only liable for its share of the verdict, Justice Harriet O'Neill wrote for the majority. But the jury never apportioned responsibility.
The majority concluded that the trial court should have submitted the question of Ruiz's percentage of responsibility to the jury. O'Neill found that the fact-finder should apportion responsibility between the dram shop and the intoxicated patron, but with a caveat: "The resulting judgment should aggregate the dram shop's and driver's liability so that the plaintiff fully recovers from the provider without assuming the risk of the driver's insolvency. The dram shop may then recover from the driver based upon the percentages of responsibility that the jury assessed between them."
Nonetheless, the majority affirmed the trial court's ruling, because F.F.P. "is responsible to the Duenezes for its own percentage of the liability and that of Ruiz and because there is nothing that would prevent a jury from fairly apportioning responsibility between F.F.P. and Ruiz in the severed action."
Although the high court majority agreed with the first Duenez decision that Chapter 33 applied, on Nov. 3 it rejected how the original majority applied proportionate responsibility to the Dram Shop Act -- points that were hotly debated in dissents by O'Neill and Chief Justice Wallace Jefferson.
"The legislative intent to protect the public and provide a potential remedy against an alcohol provider does not equate to a guarantee of recovery against a provider by an injured party," Justice Dale Wainwright wrote for the 7-2 majority. "While the dissents' positions might express sound public policy, we are constrained to conclude that neither correctly applies the legislature's statutory proportionate responsibility scheme. Both read more into the Dram Shop Act than the words chosen by the legislature can bear."
In her dissent, O'Neill pointed out the curious circumstances in which the court reversed her 2004 majority opinion -- including that the court voted to rehear the case only months after three justices who voted with her in that majority left the court. The three departing justices were Chief Justice Thomas Phillips and Justices Michael Schneider and Steven Wayne Smith.
"The motion for rehearing raises no new issues; every point was thoroughly considered by the court in its prior decision," O'Neill wrote. "While the motion for rehearing was pending, the legislature convened without taking any action to alter this court's original interpretation. Nevertheless, the court today withdraws the prior opinion, reaches the opposite result, and accomplishes judicially what the legislature itself declined to do."
In his dissent, Jefferson noted that the Legislature intended for alcohol providers to pay for the damages caused by a drunk driver when it created the Dram Shop Act.
"The dram shop thus has a perverse incentive to establish at trial that its customer was in such a drunken state that selling him 'one for the road' could not have contributed to the harm his intoxication later caused," Jefferson wrote. "I cannot agree that the legislature intended as a defense to liability proof that the dram shop complete a sale that the statute quite sensibly forbids."
NUMEROUS AMICI
John Griffin, a partner in Victoria, Tex.'s Houston, Marek & Griffin who represents the Duenezes, believes that the high court has rendered the Dram Shop Act ineffective as applied to alcohol retailers.
"They've made it virtually impossible for them to be liable under the statute," says Griffin, who plans to ask the court to reconsider the case a third time. "The liquor store can always say, 'It's the drunk's fault.' I'm not sure the majority has an appreciation for how this is going to work. Because you don't think they want to judicially veto a carefully worded statute."
But Russell "Rusty" McMains, a Corpus Christi solo who represents F.F.P., says the opinion will take the Dram Shop Act back to how courts viewed it two years ago when applied to innocent third parties.
He believes the decision will not have a dramatic effect at the trial court level, because juries found alcohol providers liable before the first Duenez opinion, and they will continue to do so in the future.
"Juries didn't have any trouble at all allocating responsibility in part to the provider -- including sometimes more than 50 percent," McMains says.
While O'Neill's dissent questioned why the court reconsidered the case when there were no new issues presented, the high court was free to do exactly what it did, says Alan Daughtry, an appellate partner in Jackson Walker's Houston office who is not involved in the case.
"It's not like they are reversing course on prior law. They still have plenary power, and they are still considering this case," says Daughtry, who notes that the reversal on rehearing is not a sign the high court is willing to ignore stare decisis, which requires a court to abide by its previous rulings.
"Stare decisis is not terribly compelling in that type of circumstance. They are always free to change their mind on rehearing," Daughtry says. "And sometimes they do when more compelling arguments and practical points are raised in amicus briefs."
The court heard from numerous amici in Duenez. Many were alcohol sellers who feared they would lose their insurance coverage if the original 2004 opinion stood. One of the only amici to urge the court to stand by its previous decision was Mothers Against Drunk Driving (MADD).
Oscar H. Villarreal, a partner in San Antonio's Villarreal & Moreno who filed MADD's amicus brief, is disappointed the court changed its opinion.
Notes Villarreal, "It's come to the point where the law is only what five guys say it is at any given time."
Source: http://www.law.com
In the News
