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November 5, 2021

The Arizona Supreme Court reversed a decision from the Arizona Court of Appeals by finding that a night club’s duty to the public did not end when an overserved and intoxicated patron safely arrived home, but decided to go out and drive again. Instead it found that the patron who went home to rest, and then resumed driving, killing two people in the process, was still within the night club’s scope of risk for liability.

Why This Case is Important?

The issue before the Supreme Court was whether an overserved patron’s decision to resume driving while still intoxicated, but after previously safely reaching home, qualifies as an intervening and superseding act, thus, relieving the liquor licensee of liability.

This case is noteworthy because it essentially broadens the duty and scope of risk that a liquor licensee faces in Arizona dram shop cases. The duty and scope of risk now essentially runs until the time the intoxicated patron is sober. Whatever occurs between the time the overserved patron leaves an establishment until the time they are sober, creates potential liability for liquor licensees in Arizona.

With the Supreme Court’s Decision, the Scope of Liquor Licensee’s Liability Does Not Necessarily End When the Intoxicated Patron Arrives Home

By way of further background, the subject patron, Cesar Villanueva, was kicked out of the Jaguar Gentleman’s Club owned by JAI Dining Services, Inc. (hereinafter, “JAI”) after getting into an altercation with a club employee. Villanueva drove his truck to his brother’s home, where he remained for more than an hour. Thereafter, a friend used Villanueva’s truck to drive Villanueva, his girlfriend, and her friend to Villanueva’s house and drop off the truck. Once home, Villanueva slept for a short time before his girlfriend woke him, and he agreed to take her friend home. Still intoxicated, he violently rear-ended a car stopped at a red light at 86 mph, killing the two people inside. Villanueva was subsequently convicted of two counts of manslaughter, and he is currently serving a lengthy prison sentence.

As a holder of a liquor license, JAI was required to conform to a certain standard of care and had a duty to exercise due care in serving alcohol to patrons who may later find themselves driving. In order to prove negligence, a plaintiff must show that the tavern owner had a duty of care to its patrons as well as the public, that it breached that duty, that its actions were the actual and proximate cause of the resulting injury. Ryan v. Napier, 245 Ariz. 54,59 (2018).

Here JAI, as a liquor licensee, had a duty to exercise due care in serving alcohol to patrons, including Villanueva. This duty existed not only for the protection of Villanueva and other guests, but also for the protection of the traveling public using the roadways in the area who may be injured as a result of Villanueva’s intoxication.

In determining actual causation the Supreme Court looked at and analyzed whether JAI’s actions helped cause the final result. In other words, would the deaths have occurred “but for” JAI’s role in the situation? JAI did not dispute actual causation, but challenges proximate causation. The Court framed proximate causation by asking whether JAI’s acts resulted in the deaths in a “natural and continuous sequence, unbroken by any efficient intervening cause.” An intervening cause is one that occurs between the time of the defendant’s negligent act and the final injury. The independent act must be necessary in bringing about the harm.

JAI argues that Villanueva’s decision to leave home and resume driving at least an hour after arriving home was an independent and intervening cause of the car accident. His act of going home and taking a nap broke the chain of the natural sequence of events and relieved JAI of any subsequent liability. JAI claims that its liability ended the moment Villanueva arrived safely home from its establishment. Extending the risk of liability beyond that, JAI argues, would open up a black hole of liability for liquor licensees.

Plaintiffs, however, argued that the risk of liability should stay with the patron as long as that person is still intoxicated and choosing to drive in that compromised condition. A temporary stop at home does not negate any liability on the part of the club for overserving a patron while in their care.

What is the Scope of the Risk in Dram Shop Cases in Arizona?

The most obvious risk associated with overserving alcohol is that the patron may drive while intoxicated and harm others on the roadway. It is well established that it is foreseeable to a tavern owner that an intoxicated patron may drive drunk and subsequently injure others in an auto accident. Neither JAI, nor the Court of Appeals, cited to any authority supporting the argument that the risk of liability should be more narrow in scope, or specifically that the risk of liability should only include the drive from the tavern to the intoxicated person’s home, or similar place of repose.

The court reasoned that the risk that an intoxicated patron will drive and injure or kill someone as a result, does not end simply because that person stops at home to take a nap, change their clothes, or otherwise. People under the influence of alcohol often make poor decisions, including not staying home to sober up before getting behind the wheel again. If the person is still intoxicated at the time he or she decides to resume driving, as a result of being over-served, and subsequently injures or kills someone, the liquor licensee can continue to be at least partially liable for the resulting harm.

JAI argued that this widening of the scope of liability potentially imposes “never-ending” liability on liquor licensees. The Supreme Court disagreed stating that the liability is not limitless, but rather terminates when the individual returns to a legally sober state. The court went on further and noted that in this way the degree of liability directly correlates to the degree in which the liquor licensee oversees the patron while present in the establishment.

The Supreme Court ultimately held that it was foreseeable that Villanueva would drive in an intoxicated state after being kicked out of the club for unruly behavior and could cause an accident. Of note, the Supreme Court also noted that the club manager in question did not attempt to separate Villanueva from his truck, or offer him a safe ride home via taxi, rideshare services, etc. No one at the club took any action to prevent him from driving. This evidence in addition to the lack of case law supporting the defendant’s position resulted in the Supreme Court reinstating the prior decision of the lower court.

A side issue that was not directly addressed by the Supreme Court was with regard to a number of relevant and related Arizona statutes. JAI and the amicus asked the Court to decide whether Plaintiffs’ negligence and common law dram shop claims have been preempted by A.R.S. § 4-312(B).1 The Supreme Court declined to address that issue. It reasoned that it did not grant review of that issue, and therefore, Plaintiffs did not address preemption in their brief. Similarly, other parties interested in this significant issue had not been notified of the opportunity to submit amicus briefs. Also, JAI did not raise this issue to the trial court, although it did argue it before the Court of Appeals. The Supreme Court put the issue back before the Court of Appeals to decide in the first instance. The issue there will be whether an exception to the waiver doctrine is warranted and, if so, what the proper disposition on the merits should be. That may be another decision to come in the future of Arizona dram shop law.

Tactics to Consider to Help Limit Potential Liability Under Arizona’s Dram Shop Laws

  • Ensure that staff and managers are well versed in identifying the signs of intoxication before it gets too far.
  • Do not serve alcohol to customers who appear to be intoxicated.
  • Avoiding serving too many drinks too quickly and cut off intoxicated patrons.
  • Send servers and bartenders to a recognized education course on this topic, and renew and update the courses on a regular basis.
  • If valet services exist at the establishment, management should communicate with the valets so car keys are not turned over to intoxicated patrons.
  • Ensure that obviously intoxicated patrons are offered alternate transportation such as a taxi or rideshare, suggest calling a friend, and make efforts to get them to accept those options.
  • Promote the availability of non-alcoholic beverages.
  • Always request proof of age before serving alcohol.

The attorneys at WSHB are well-versed in the area of dram shop law risks and liability. Please do not hesitate to reach out to the author of this article or anyone on our team with any questions or concerns.

___

1 4-312. Liability limitation

A. A licensee is not liable in damages to any consumer or purchaser of spirituous liquor over the legal drinking age who is injured or whose property is damaged, or to survivors of such a person, if the injury or damage is alleged to have been caused in whole or in part by reason of the sale, furnishing or serving of spirituous liquor to that person. A licensee is not liable in damages to any other adult person who is injured or whose property is damaged, or to the survivors of such a person, who was present with the person who consumed the spirituous liquor at the time the spirituous liquor was consumed and who knew of the impaired condition of the person, if the injury or damage is alleged to have been caused in whole or in part by reason of the sale, furnishing or serving of spirituous liquor.

B. Subject to the provisions of subsection A of this section and except as provided in section 4-311, a person, firm, corporation or licensee is not liable in damages to any person who is injured, or to the survivors of any person killed, or for damage to property which is alleged to have been caused in whole or in part by reason of the sale, furnishing or serving of spirituous liquor.

 

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