Baatz v. Arrow Bar, 15875

• Citation: 426 N.W.2d 298
• Decision Date: 16 February 1988
• Docket Number: No. 15875,15875
• Parties: Kenny BAATZ and Peggy Baatz, Plaintiffs and Appellants, v. ARROW BAR a/k/a Arrow Bar, Inc., Edmond E. Neuroth, LaVella J. Neuroth, and Jacquette J. Neuroth, Defendants and Appellees. . Considered on Briefs
• Court: Supreme Court of South Dakota

Page 298

426 N.W.2d 298

Kenny BAATZ and Peggy Baatz, Plaintiffs and Appellants, v. ARROW BAR a/k/a Arrow Bar, Inc., Edmond E. Neuroth, LaVella J. Neuroth, and Jacquette J. Neuroth, Defendants and Appellees.

No. 15875.

Supreme Court of South Dakota.

Considered on Briefs Feb. 16, 1988.

Decided June 15, 1988.

Rehearing Denied July 19, 1988.

Flynn Fischer, Wessington Springs, for plaintiffs and appellants.

David Alan Palmer of Strange & Palmer, P.C., Sioux Falls, for defendants and appellees.

SABERS, Justice.

Facts

Kenny Baatz claims he and his wife, Peggy, were seriously injured when a vehicle operated by a drunk driver, Roland McBride, crossed the center line of a Sioux Falls street and struck and crushed them. Baatz also claims the Arrow Bar served alcoholic beverages to McBride while he was intoxicated prior to the accident. Therefore, Baatz claims that the Arrow Bar's negligence in serving alcoholic beverages to an already intoxicated person contributed further to McBride's intoxication and to their injuries. ¹

The trial court granted summary judgment to the Arrow Bar based on acts passed by the legislature in 1985 which are as follows:

SDCL 35-11-1: The Legislature finds that the consumption of alcoholic beverages rather than the serving of alcoholic beverages, is the proximate cause of any injury inflicted upon another by an intoxicated person. Therefore, the rule in Walz v. City of Hudson, 327 N.W.2d 120 (S.D.1982) is hereby abrogated.

Amendment to SDCL 35-4-78: ... However, no licensee is civilly liable to any injured person or his estate for any injury suffered, including any action for wrongful death, or property damage suffered because of the intoxication of any person due to the sale of any alcoholic beverage in violation of the provisions of this section.

Baatz appeals, claiming that the state legislature cannot constitutionally, by statute, abrogate a cause of action recognized by the state Supreme Court.

History

In Griffin v. Sebek, 90 S.D. 692, 245 N.W.2d 481 (1976), ² we refused to recognize a common law cause of action against persons selling or furnishing liquor by persons injured as a result of acts of intoxicated persons. Six years later, in Walz v. City of Hudson, 327 N.W.2d 120 (S.D.1982), we held that a cause of action for injured persons against liquor licensees existed under SDCL 35-4-78 (the unlawful sale of liquor to a minor or an intoxicated person). Walz held that violation of SDCL 35-4-78 was negligence as a matter of law.

The majority opinion, authored by Chief Justice Fosheim and joined by Justices Dunn and Henderson, was persuaded by the view of the minority in Griffin, as expressed by then Chief Justice Dunn's dissent:

I would respectfully submit that the time has come for this court to recognize a common law cause of action by an injured party against a seller of alcoholic beverages to an intoxicated person who causes injury by his intoxication. While it is true that this right of recovery was not recognized originally, there is a great difference between an intoxicated person driving a horse and buggy on a dirt road in 1889 and an intoxicated teenager hurtling down the highway at great speed in a five-thousand-pound automobile in 1972.

Griffin, supra, 245 N.W.2d at 486-87. Justice Wollman's special concurrence in Walz was joined by Justice Morgan and stated:

I would go further and hold that there is now in this state a common law right of action to recover such damages. I would reach this result because I believe that those of us who were in the majority in Griffin v. Sebek took too narrow ^{[ 3} aviewofthe responsibility of the judiciary to fill a void by common law adjudication in the face of legislative in action.

Walz, supra at 123.

1. RETROSPECTIVE OR PROSPECTIVE APPLICATION OF SDCL 35-4-78(2) AND WALZ

A. Prospective Effect of SDCL 35-4-78(2)

The majority in Walz noted that the court in Griffin had "declined to expand the common law to afford a remedy" and "also did not extend SDCL 35-4-78(2) to impose a civil liability duty." Walz, supra at 122. However, the court went on to state that "[s]ince Griffin essentially turned on a reluctance to impose a common law duty ⁴ in the absence of express civil liability legislation, we did not fully reach Justice Dunn's interpretation of SDCL 35-4-78(2). We do now." Id. The court then discussed SDCL 35-4-78(2) and concluded that the statute had established "a standard of care or conduct, a breach of which is negligence as a matter of law." (emphasis added) Id. at 123. Clearly, the Walz decision is based upon a cause of action existent under SDCL 35-4-78(2), (which should control the date of application).

It can be argued that Walz should not be applied retroactively because: (1) the Walz majority did not address the application issue, (2) caselaw holds that where prior settled law is overturned, the decision should be prospectively applied, and (3) to apply Walz retroactively would be inequitable.

We believe the Walz majority opinion, read in its entirety, clearly demonstrates that the court determined that "[s]ince this decision applies existing statutory law," it was unnecessary to state that the decision was both prospective and retrospective. SDCL 35-4-78(2) was a statute within the Codified Laws of South Dakota before any of the actions in this case or Walz occurred. As such, it provided a standard of care or conduct from the moment it became law. There has been criticism of the negligence per se rule, see Prosser, Law of Torts Sec. 36 (4th ed. 1971); 3 Cooley on Torts Sec. 481 (4th ed. 1932); 5 The Law of Torts Sec. 17.6 (1988), however, it is clear that this rule has been adhered to by this court for some time. "The violation of a statute enacted to promote safety constitutes negligence per se." Engel v. Stock, 88 S.D. 579, 581, 225 N.W.2d 872, 873 (1975); Bothern v. Peterson, 83 S.D. 84, 155 N.W.2d 308 (1967); Blakey v. Boos, 83 S.D. 1, 153 N.W.2d 305 (1967). It is inconceivable that violation of a statute may be negligence per se on one day, but cannot be the day before.

Walz did not overrule prior settled law. Griffin dealt with the common law cause of action and there was no "prior settled law" construing civil liability under SDCL 35-4-78(2).

Finally, it is no more inequitable to apply Walz retrospectively than it is, in any case, to acknowledge that violation of a criminal statute may result in a finding of civil liability. Generally, bar owners were aware of SDCL 35-4-78(2) and the acts it prohibited and cannot assert ignorance. The negligence per se rule has never been restricted to only those laws which facially provide both civil and criminal remedies and the wisdom of so doing is not a question before this court.

Therefore, based upon a clear reading of Walz and the application of the well-settled rule of negligence per se, we hold that the decision in Walz was intended to apply both retrospectively and prospectively.

B. Retrospective Application of Walz

Even if it were conceded that Walz impliedly overrules the precedent established in Griffin, Walz can and should be applied retroactively.

The general rule in civil cases seems to be that unless the overruling decision declares that it shall have only prospective effect, which the court overruling its prior decision generally has the power to do, the judicial overruling of a precedent has both prospective and retroactive effect.

20 Am.Jur.2d Courts Sec. 233 (1965). This general rule has been denominated the "Blackstonian Doctrine," Fitzgerald v. Meissner & Hicks, Inc., 38 Wis. 571, 157 N.W.2d 595, 596 (1968), and appears to have evolved from a traditional view of the judiciary as the interpretors of law. "As a matter of constitutional law, retroactive operation of an overruling decision is neither required nor prohibited." Comment, "Prospective or Retroactive Operation of Overruling Decision," 10 A.L.R.3d 1371 Sec. 2; Annotation, "United States Supreme Court's Views as to Retroactive Effect of Its Own Decisions Announcing New Rules," 22 L.Ed.2d 821, 830 (hereinafter S.Ct. Annotation). The United States Supreme Court has developed criteria for determining retroactivity of new rules which are substantially the same as those enunciated by this court in State v. One 1966 Pontiac Auto., 270 N.W.2d 362, 365 (S.D.1978). These criteria are: "(1) the purpose to be served by the particular new rule; (2) the extent of reliance which had been placed upon the old rule; and (3) the effect on the administration of justice of a retroactive application of the new rule." S.Ct. Annotation, supra at 832.

The first criteria is the purpose to be served by the new rule. Clearly, one general purpose of the rule in Walz was to recognize an implied civil cause of action under a criminal statute. If retroactive application is necessary to effectuate the purpose of the new rule, then this is a significant factor in giving the new rule retroactive effect. S.Ct. Annotation Sec. 4[b] at 832. The court in Walz believed that SDCL 35-4-78(2) was enacted to protect citizens "from the risk of being killed or injured 'as a result of the drunkenness to which the particular sale of alcoholic liquor contributes.' " Walz, 327 N.W.2d at 122-123. Thus, to effectuate the interpreted intent and purpose of the statute, it was and is necessary to give the decision retroactive application.

It is argued that there was good-faith reliance on the old rule (i.e., Griffin ) and, therefore, Walz should not be applied retroactively. Specifically, it is argued that it is inequitable to apply the new rule because many bar owners did not have liability insurance coverage for these situations prior to Walz and thus could suffer severe monetary losses, and that the state of the law was and is unclear. Although we agree that the imposition of liability, where proven, may be financially harsh for bar owners who were not covered by insurance, this must be balanced against the harsh effect...