Chastain v. Litton Systems, Inc.

• Decision Date: 04 January 1983
• Docket Number: No. 81-2034,81-2034
• Parties: John Boyd CHASTAIN, Jr., Administrator of the Estate of Marilyn Gail Chastain, deceased, Appellant, v. LITTON SYSTEMS, INC., Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 957

694 F.2d 957

John Boyd CHASTAIN, Jr., Administrator of the Estate of Marilyn Gail Chastain, deceased, Appellant, v. LITTON SYSTEMS, INC., Appellee.

No. 81-2034.

United States Court of Appeals, Fourth Circuit.

Argued March 2, 1982.

Decided Dec. 2, 1982.

Rehearing Denied Jan. 4, 1983.

Herbert L. Hyde, Asheville, N.C. (Herbert L. Hyde, P.A., Asheville, N.C., on brief), for appellant.

Landon Roberts, Asheville, N.C. (Roberts, Cogburn & Williams, Asheville, N.C., on brief), for appellee.

Before MURNAGHAN, Circuit Judge, BUTZNER, Senior Circuit Judge, and JAMES C. CACHERIS, District Judge for the Eastern District of Virginia, sitting by designation.

BUTZNER, Circuit Judge:

The administrator of the estate of Marilyn Gail Chastain, deceased, appeals from the district court's grant of summary judgment dismissing his wrongful death claim against Litton Systems, Inc. ¹ We vacate the order of dismissal and remand the case for trial.

I

George Beck, a Litton employee, drove through a red traffic light and struck the car Chastain was driving. Earlier in the day, Beck had attended a Christmas party that Litton sponsored for 861 of its employees. The affair, held on Litton's premises, began at approximately 8:00 a.m. and continued during normal working hours. All of the employees were required to check in by 8:00 a.m. in order to be paid for that day, but they could leave at any time. At Litton's machine shop Beck and other employees drank alcoholic beverages, and a number of them became intoxicated.

Summarizing the evidence in the light most favorable to Chastain, the district court stated:

[T]he evidence shows that Litton through its employees furnished alcohol to Beck, allowed him to become intoxicated and knowingly permitted him to leave in his van in the intoxicated state. Thereafter, within one hour and twenty minutes and several miles from Litton's plant, Beck while operating his own motor vehicle collided with a motor vehicle occupied by [Chastain] causing injuries from which [she] died. 527 F.Supp. at 531. ²

For the purpose of deciding the motion for summary judgment, the district court defined the issue as: "[W]hether a social host who gratuitously furnishes alcohol to an able-bodied adult is liable for personal injuries and death inflicted on an innocent third party by that intoxicated adult." It noted that the complaint did not allege "that Litton was in the business to sell or distribute alcoholic beverages for pecuniary profit." Consequently, it held that "Litton is at worst a social host providing its employees with Christmas cheer and hospitality." 527 F.Supp. at 530-31.

After establishing Litton's status, the district court ruled that under the common law "Litton as a social host is not liable for [Chastain's death] caused by the intoxicated George Beck to whom Litton furnished alcoholic beverages. The proximate cause of the [death] was the voluntary consumption of alcohol by an able-bodied adult, and not the furnishing of the alcohol by the Defendant." 527 F.Supp. at 531.

The court also ruled that Litton did not violate any North Carolina alcoholic beverage control statutes and, consequently, it was not guilty of negligence per se. 527 F.Supp. at 532. Finally, it held that Litton was not liable under the doctrine of respondeat superior because at the time of the collision Beck had left the company's premises and was not acting within the scope of his employment. 527 F.Supp. at 532. ³

II

This case presents questions of first impression in North Carolina, whose law governs this action. Although we can turn to no state statute or decision dispositive of the issues, we are not left without guiding principles of North Carolina law. Because North Carolina does not impose statutory liability on social hosts for the torts of their intoxicated guests, we accept the district court's conclusion that the common law is applicable. We also agree with the court that under common law a social host is not liable. But, contrary to the district court, we believe that these principles do not end the inquiry and justify summary judgment, for the parties differ over whether Litton was a social host.

Even where basic facts are not in dispute, summary judgment is inappropriate if the parties disagree about the inferences that properly may be drawn from the facts. American Fidelity & Casualty Co. v. London & Edinburgh Ins. Co., 354 F.2d 214, 216 (4th Cir.1965). Certainly it would be reasonable to infer from all the facts, including Litton's requirement that employees check into the plant while the party was in progress in order to earn a day's pay, that the affair was intended to promote Litton's business interests. Thus, whether Litton was simply entertaining its employees at a purely social gathering, or whether it was furthering a business purpose by improving working relationships, presented a jury question. See Harris v. Trojan Fireworks Co., 120 Cal.App.3d 157, 174 Cal.Rptr. 452, 456-57 (1981). The case on which Litton primarily relies, Miller v. Owens-Illinois Glass Co., 48 Ill.App.2d 412, 199 N.E.2d 300 (1964), does not require a different result, for there an employee's association, not the employer, was responsible for the party.

If the evidence establishes that Litton was acting as a social host, the common law of North Carolina bars recovery by Chastain's administrator. If, however, Litton was advancing its business interests and thus not acting as a social host, the question of liability requires further inquiry.

Courts differ about the liability of an employer whose employee, having become intoxicated at the employer's party, injures a third person. Compare Halvorson v. Birchfield Boiler, Inc., 76 Wash.2d 759, 458 P.2d 897 (1969) (employer absolved from liability) with Harris v. Trojan Fireworks Co., 120 Cal.App.3d 157, 174 Cal.Rptr. 452 (1981) (employer not absolved). To reach a decision about which course the Supreme Court of North Carolina would likely take, we must ascertain the state's policy toward persons who for business purposes dispense alcoholic beverages. This policy may be found in the state's statutes governing the conduct of businesses licensed to sell mixed alcoholic beverages and in judicial precedents pertaining to the North Carolina law of torts.

III

In 1977, before Chastain was killed, North Carolina modified the common law by providing that it is unlawful for a person licensed to sell mixed alcoholic beverages knowingly to sell such beverages to an intoxicated person. ⁴ Other courts have held that violation of such a law subjects the licensee to liability for torts of the intoxicated customer, notwithstanding the common law rule exculpating providers of alcohol. ⁵ 5] The rationale of these decisions is that these laws are safety regulations which impose a duty on the licensee, not only to the customer, but also to the public. Consequently, violation of such a law can give rise to an action for negligence against the licensee by a member of the public who has been injured by the intoxicated customer.

North Carolina follows the same rationale when an ordinance imposes a public duty. In Bell v. Page, 271 N.C. 396, 399-400, 156 S.E.2d 711, 715 (1967), the court said:

The violation of a municipal ordinance imposing a public duty and designed for the protection of life and limb is negligence per se. However, to impose liability therefor it must be established that such violation proximately caused the alleged injury. The general definition of proximate cause, including the element of foreseeability, is applicable in determining whether the violation of such ordinance constitutes actionable negligence....

"What is the proximate or a proximate cause of an injury is ordinarily a question for the jury. It is to be determined as a fact from the attendant circumstances. Conflicting inferences of causation arising from the evidence carry the case to the jury." (citations omitted)

We therefore conclude that the North Carolina Supreme Court would reach the same decision as the courts that have imposed civil liability on a licensee who violates a law prohibiting the sale of alcoholic beverages to a person known to be intoxicated.

We agree with the district court that because Litton was not a licensee, it cannot be held liable under the laws governing the sale of alcoholic beverages. These laws and judicial precedents pertaining to them, however, disclose state policy toward persons who dispense alcoholic beverages in capacities other than as social hosts.

If the jury were to find that Litton was not a social host, we believe that its liability should be governed by the law of torts as developed by the North Carolina Supreme Court. North Carolina subscribes to Secs. 302 and 303 of the Restatement of Torts (1934). ⁶ Toone v. Adams, 262 N.C. 403, 409, 137 S.E.2d 132, 136 (1964). North Carolina has defined proximate cause as follows:

In this jurisdiction, to warrant a finding that negligence, not amounting to a wilful or wanton wrong, was a proximate cause of an injury, it must appear that the tort-feasor should have reasonably foreseen that injurious consequences were likely to follow from his negligent conduct.... It is not necessary that a defendant anticipate the particular consequences which ultimately result from his negligence. It is required only "that a person of ordinary prudence could have reasonably foreseen that such a result, or some similar injurious result, was probable under the facts as they existed." (emphasis in original)

Sutton v. Duke, 277 N.C. 94, 107, 176 S.E.2d 161, 168-69 (1970).

North Carolina also holds that the negligence of one tortfeasor cannot be insulated by the negligence of another so long as the negligence of the first plays a "substantial and proximate part in the injury.... [T]he test by which the negligent conduct of one is to be insulated as a matter of law by the independent negligent act of another, is reasonable unforeseeability on...