Bartholomew County Beverage Co., Inc. v. Barco Beverage Corp., Inc.

• Decision Date: 16 June 1988
• Docket Number: No. 73A01-8707-CV-163,73A01-8707-CV-163
• Citation: 524 N.E.2d 353
• Parties: BARTHOLOMEW COUNTY BEVERAGE COMPANY, INC. and Edna J. Howe, Defendants- Appellants, v. BARCO BEVERAGE CORPORATION, INC., Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 353

524 N.E.2d 353

BARTHOLOMEW COUNTY BEVERAGE COMPANY, INC. and Edna J. Howe Defendants- Appellants, v. BARCO BEVERAGE CORPORATION, INC., Plaintiff-Appellee.

No. 73A01-8707-CV-163.

Court of Appeals of Indiana First District.

June 16, 1988.

Ferd Samper, Samper, Hawkins, Atz & Greuling, Indianapolis, for defendants-appellants.

Patrick W. Harrison, Beck & Harrison, William H. Stone, Columbus, for plaintiff-appellee.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Bartholomew County Beverage Co., Inc. appeals from the Shelby Circuit Court a judgment in favor of Barco Beverage Corp., Inc. We affirm.

FACTS

Barco Beverage Corp., Inc. (hereinafter Barco) is a family owned beer wholesale business located in Columbus, Indiana. Robert Welmer and his children operated the business. Welmer started the business in 1961. Over time, the business grew. Barco acquired a franchise to sell Lite beer by Miller and the brewery assigned the Bartholomew County area to Barco as a primary area of responsibility. When Miller Lite beer became a big seller, Barco's business expanded rapidly, and through Robert and his family's hard work and good will, Barco acquired almost all the Miller Lite beer accounts in Bartholomew County. By late 1983 Barco served seventy-two (72) of seventy-five (75) Miller Lite accounts in Bartholomew County. Barco's Miller Lite sales accounted for approximately seventy percent (70%) of Barco's total business. Due to the increased sales, Barco outgrew its original headquarters and had to build a new warehouse.

Bartholomew County Beverage Company, Inc. (hereinafter BCB) is owned and operated by Edna Howe and her children. BCB sells Budweiser, Bud Light, Busch products, Miller High Life, and Miller Lite. The record reveals that in the fall of 1983 BCB attempted to put Barco out of business by cutting the price of Miller Lite. In the fall of 1983, BCB began its attack on Barco by offering to sell Miller Lite to Barco's customers at a price that was five cents (5cents) lower than Barco's price. This tactic failed as Barco retained its Miller Lite customers. Thereafter, in late October of 1983, BCB offered Miller Lite to Barco's customers in Columbus, Indiana, at a drastically reduced price. BCB dropped the price for a case of twenty-four twelve ounce cans from Eight Dollars and Ninety Cents ($8.90) to Six Dollars and Ninety Cents ($6.90). At the same time BCB retained the higher price per case for BCB's customers not located in Columbus, Indiana. Barco's customers could not ignore the drastic price reduction offered by BCB. Thus, Barco had to either meet the price or lose customers. However, because of a required sales quota, Barco had to keep the customer's accounts or risk loss of its Miller Lite franchise. Barco lowered its Miller Lite price. Barco's business was damaged as a result of the price cuts.

On February 10, 1984, Barco filed a Verified Petition for Temporary Restraining Order alleging among other things that BCB was violating Indiana Code section 7.1-5-5-7 which prohibits price discrimination. On March 6, 1984, Barco filed an additional complaint for the damages caused by BCB's illegal pricing practices. On May 11, 1984, prior to a scheduled hearing on Barco's request for a temporary restraining order, BCB stipulated in an agreed judgment to obey the price discrimination statutes. In February of 1987, the damage suit proceeded to trial. On March 5, 1987, a jury returned a verdict in favor of Barco for Fifty-Seven Thousand Dollars ($57,000). BCB appeals this judgment.

ISSUES

BCB presents three (3) issues on appeal:

1. Whether the exhaustion of administrative remedies doctrine barred Barco from pursuing a suit for damages in the Shelby Circuit Court?

2. Whether the trial court erred by allowing a civil cause of action based upon a violation of a criminal statute, Indiana Code section 7.1-5-5-7,?

3. Whether sufficient evidence exists to support the judgment?

DISCUSSION AND DECISION

Issue One

BCB argues the Shelby Circuit Court should have dismissed Barco's action as barred under the doctrine of exhaustion of administrative remedies. BCB is mistaken. The doctrine which requires an aggrieved party to exhaust administrative remedies does not apply when an administrative procedure and remedy does not exist or when the remedy is impossible or fruitless and of no value under the circumstances. Shlens v. Egnatz (1987), Ind.App., 508 N.E.2d 44, 48, trans. denied; Ahles v. Orr (1983), Ind.App., 456 N.E.2d 425, 426. In the present case, BCB has not indicated and this court is unable to find the alleged administrative remedy that Barco was supposed to exhaust. Although Indiana has provided an administrative procedure and remedies for the permit process, Indiana Code sections 7.1-3-23-1 et seq., no administrative procedure exists for the compensation of persons harmed by a violation of the criminal portions of the Alcoholic Beverages Act (hereinafter Act), Indiana Code sections 7.1-5-1-1 to 7.1-5-11-16. In fact, in the one section of the Act that mentions a remedy for persons injured due to a criminal violation, the Act gives the aggrieved party the right to seek an injunction from a circuit or superior court. Ind.Code Sec. 7.1-3-3-17. Furthermore, the Alcoholic Beverages Commission (hereinafter Commission) is not empowered to award damages to aggrieved parties under the Act. The commission's general powers are listed in Ind.Code Sec. 7.1-2-3-4, as follows:

"General powers.--The commission shall have the power:

(a) To hold hearings before the commission or its representative;

(b) To take testimony and receive evidence;

(c) To conduct inquiries with or without hearings;

(d) To receive reports of investigators or other governmental officers and employees;

(e) To administer oaths;

(f) To subpoena witnesses and to compel them to appear and testify;

(g) To issue and enforce subpoenas duces tecum;

(h) To take or institute proceedings to enforce subpoenas, the rules and regulations, orders, or requirements of the commission or its representative;

(i) To fix the compensation paid to witnesses appearing before the commission;

(j) To establish and use a seal of the commission;

(k) To establish copies of records of the commission or any other document or record on file with the commission;

(l) To fix the form, mode, manner, time, and number of times for the posting or publication of any required notices if not otherwise provided in this title;

(m) To issue letters of extension as authorized by IC 7.1-3-1-3.1; and

(n) To hold permits on deposit as authorized by IC 7.1-3-1-3.5."

The Act also grants implied powers to the Commission in I.C. Sec. 7.1-2-3-31, as follows:

"Commission and chairman.--Implied powers.--The commission and the chairman shall have, in addition to the express powers enumerated in this title, the authority to exercise all powers necessary and proper to carry out the policies of this title and to promote efficient administration by the commission."

Neither of these sections gives the Commission the power to award damages to a party who is aggrieved due to a violation of the Act. Therefore, since the Commission does not have the power and since an administrative procedure does not exist to remedy Barco for the damages BCB inflicted, the exhaustion doctrine is inapplicable. Therefore, the trial court did not err by allowing Barco to proceed with a suit for damages.

Issue Two

BCB argues next that the trial court erred by allowing Barco to base a suit on a violation of a criminal statute, Ind.Code Sec. 7.1-5-5-7. BCB argues that since the legislature did not expressly provide for a civil cause of action, one is not available. Barco's argument fails. A civil cause of action is not precluded merely because it involves a criminal act. Kestler v. Kern (1891), 2 Ind.App. 488, 492, 28 N.E. 726, 728; 1 I.L.E. Action Sec. 3 (1957); 1 C.J.S. Actions Sec. 12 (1936). As stated in Kestler, "the almost unbroken current of authority sanctions the right in an individual who has been specially damaged by an act which is in violation of a criminal statute, to maintain an action for his damages, notwithstanding the same act may subject the wrong-doer to a penalty in a public prosecution." Kestler, 2 Ind.App. at 492, 28 N.E. at 728. Although Kestler noted a special injury requirement, the determination of whether a civil cause of action exists for the violation of a criminal statute begins with an examination of legislative intent, as is indicated in 1 C.J.S. Actions Sec. 12:

"It has been stated that, as a general rule, where an act is enjoined or forbidden by a penal statute, a person who sustains a special injury by a breach of the duty so imposed may, notwithstanding defendant may be subjected to a fine or penalty, maintain an action for such injury; but this is not always necessarily so. The true rule is that the question depends upon the intention of the legislature as construed from the provisions of the particular statute; and if it appears that the duty imposed is merely for the benefit of the public, and the fine or penalty a means of enforcing the duty and punishing a breach thereof, the fine or penalty is exclusive, and a private action cannot be maintained for injury sustained by reason of the breach. If, on the other hand, it appears that the duty imposed is also for the benefit of particular individuals or classes of individuals, a private right of action arises for injury sustained by reason of the breach, by any person the statute was designed to protect, provided the injury sustained by him is a special injury different from that inflicted on the general public, and has resulted proximately from and because of the violation."

Thus, the existence of a civil cause of action depends on the legislative intent.

In the present case, the criminal statute involved is Ind.Code Sec. 7.1-5-5-7, which provides as follows:

"Sales--Discrimination by permittee.--It is unlawful for a...