Bernhard v. Harrah's Club

Decision Date02 March 1976
Docket NumberS.F. 23242
Citation546 P.2d 719,16 Cal.3d 313,128 Cal.Rptr. 215
Parties, 546 P.2d 719 Richard A. BERNHARD, Plaintiff and Appellant, v. HARRAH'S CLUB, Defendant and Respondent.
CourtCalifornia Supreme Court

Frederick W. Stephenson, Sacramento, for plaintiff and appellant.

Hardy, Erich & Brown and Leo H. Schuering, Jr., Sacramento, for defendant and respondent.

SULLIVAN, Justice.

Plaintiff appeals from a judgment of dismissal entered upon an order sustaining without leave to amend the general demurrer of defendant Harrah's Club to plaintiff's first amended complaint.

Plaintiff's complaint, containing only one count, alleged in substance the following: Defendant Harrah's Club, a Nevada corporation, owned and operated gambling establishments in the State of Nevada in which intoxicating liquors were sold, furnished to the public and given away for consumption on the premises. Defendant advertised for and solicited in California the business of California residents at such establishments knowing and expecting that many California residents would use the public highways in going to and from defendant's drinking and gambling establishments.

On July 24, 1971, Fern and Philip Myers, in response to defendant's advertisements and solicitations, drove from their California residence to defendant's gambling and drinking club in Nevada, where they stayed until the early morning hours of July 25, 1971. During their stay, the Myers were served numerous alcoholic beverages by defendant's employees, progressively reaching a point of obvious intoxication rendering them incapable of safely driving a car. Nonetheless defendant continued to serve and furnish the Myers alcoholic beverages.

While still in this intoxicated state, the Myers drove their car back to California. Proceeding in a northeasterly direction on Highway 49, near Nevada City, California, the Myers' car, driven negligently by a still intoxicated Fern Myers, drifted across the center line into the lane of oncoming traffic and collided head-on with plaintiff Richard A. Bernhard, a resident of California, who was then driving his motorcycle along said highway. As a result of the collision plaintiff suffered severe injuries. Defendant's sale and furnishing of alcoholic beverages to the Myers, who were intoxicated to the point of being unable to drive safely, was negligent and was not proximate cause of the plaintiff's injuries in the ensuing automobile accident in California for which plaintiff prayed $100,000 in damages.

Defendant filed a general demurrer to the first amended complaint. In essence it was grounded on the following contentions: that Nevada law denies recovery against a tavern keeper by a third person for injuries proximately caused by the former by selling or furnishing alcoholic beverages to an intoxicated patron who inflicts the injuries on the latter; that Nevada law governed since the alleged tort was committed by defendant in Nevada; and that section 25602 of the California Business and Professions Code which established the duty necessary for liability under our decision in Vesely v. Sager (1971) 5 Cal.3d 153, 95 Cal.Rptr. 623, 486 P.2d 151, was inapplicable to a Nevada tavern. The trial court sustained the demurrer without leave to amend and entered a judgment of dismissal. This appeal followed.

We face a problem in the choice of law governing a tort action. As we have made clear on other occasions, we no longer adhere to the rule that the law of the place of the wrong is applicable in a California forum regardless of the issues before the court. (Hurtado v. Superior Court (1974) 11 Cal.3d 574, 579, 114 Cal.Rptr. 106, 522 P.2d 666; Reich v. Purcell (1967) 67 Cal.2d 551, 555, 63 Cal.Rptr. 31, 432 P.2d 727.) Rather we have adopted in its place a rule requiring an analysis of the respective interests of the states involved--the objective of which is 'to determine the law that most appropriately applies to the issue involved.' (Hurtado, supra, 11 Cal.3d at pp. 579--580, 114 Cal.Rptr. 106, 522 P.2d 666, quoting from Reich, supra, 67 Cal.2d at p. 555, 63 Cal.Rptr. 31, 34, 432 P.2d 727, 730.)

The issue involved in the case at bench is the civil liability of defendant tavern keeper to plaintiff, a third person, for injuries allegedly caused by the former by selling and furnishing alcoholic beverages in Nevada to intoxicated patrons who subsequently injured plaintiff in California. Two states are involved: (1) California--the place of plaintiff's residence and domicile, the place where he was injured, and the forum; and (2) Nevada--the place of defendant's residence and the place of the wrong.

We observe at the start that the laws of the two states--California and Nevada--applicable to the issue involved are not identical. California imposes liability on tavern keepers in this state for conduct such as here alleged. In Vesely v. Sager, supra, 5 Cal.3d 153, 166, 95 Cal.Rptr. 623, 632, 486 P.2d 151, 160, this court rejected the contention that 'civil liability for tavern keepers should be left to future legislative action . . .. First, liability has been denied in cases such as the one before us solely because of the judicially created rule that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication. As demonstrated, Supra, this rule is patently unsound and totally inconsistent with the principles of proximate cause established in other areas of negligence law . . .. Second, the Legislature has expressed its intention in this area with the adoption of Evidence Code section 669, and Business and Professions Code section 25602 . . .. It is clear that Business and Professions Code section 25602 (making it a misdemeanor to sell to an obviously intoxicated person) is a statute to which this presumption (of negligence, Evidence Code section 669) applies and that the policy expressed in the statute is to promote the safety of the people of California . . ..' Nevada on the other hand refuses to impose such liability. In Hamm v. Carson City Nuggett, Inc. (1969) 85 N.W. 99, 450 P.2d 358, 359, the court held it would create neither common law liability nor liability based on the criminal statute banning sale of alcoholic beverages to a person who is drunk, because 'if civil liability is to be imposed, it should be accomplished by legislative act after appropriate surveys, hearings, and investigations to ascertain the need for it and the expected consequences to follow.' It is noteworthy that in Hamm the Nevada court in relying on the common law rule denying liability cited our decision in Cole v. Rush (1955) 45 Cal.2d 345, 289 P.2d 450, later overruled by us in Vesely to the extent that it was inconsistent with that decision. (See Vesely v. Sager, supra, 5 Cal.3d at p. 167, 95 Cal.Rptr. 623, 486 P.2d 151.)

Although California and Nevada, the two 'involved states' (Reich v. Purcell, supra, 67 Cal.2d 551, 553, 63 Cal.Rptr. 31, 432 P.2d 727; see also Hurtado v. Superior Court, supra, 11 Cal.3d 574, 579, 114 Cal.Rptr. 106, 522 P.2d 666), have different laws governing the issue presented in the case at bench, we encounter a problem in selecting the applicable rule of law only if Both states have an interest in having their respective laws applied. ' (G)enerally speaking the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state. In such event he must demonstrate that the latter rule of decision will further the interest of the foreign state and therefore that it is an appropriate one for the forum to apply to the case before it. (Citations.)' (Hurtado, supra, 11 Cal.3d at p. 581, 114 Cal.Rptr. at p. 110, 522 P.2d at p. 670.)

Defendant contends that Nevada has a definite interest in having its rule of decision applied in this case in order to protect its resident tavern keepers like defendant from being subjected to a civil liability which Nevada has not imposed either by legislative enactment or decisional law. It is urged that in Hamm v. Carson City Nuggett, supra, 85 Nev. 99, 450 P.2d 358, 359, the Supreme Court of Nevada clearly delineated the policy underlying denial of civil liability of tavern keepers who sell to obviously intoxicated patrons: 'Those opposed to extending liability point out that to hold otherwise would subject the tavern owner to ruinous exposure everytime he poured a drink and would multiply litigation endlessly in a claim-conscious society. Every liquor vendor visited by the patron who became intoxicated would be a likely defendant in subsequent litigation flowing from the patron's wrongful conduct . . .. Judicial restraint is a worthwhile practice when the proposed new doctrine may have implications far beyond the perception of the court asked to declare it. They urge that if civil liability is to be imposed, it should be accomplished by legislative act after appropriate surveys, hearings, and investigations . . .. We prefer this point of view.' Accordingly defendant argues that the Nevada rule of decision is the appropriate one for the forum to apply.

Plaintiff on the other hand points out that California also has an interest in applying its own rule of decision to the case at bench. California imposes on tavern keepers civil liability to third parties injured by persons to whom the tavern keeper has sold alcoholic beverages when they are obviously intoxicated 'for the purpose of protecting members of the general public from injuries to person and damage to property resulting from the excessive use of intoxicating liquor.' (Vesely v. Sager, supra, 5 Cal.3d 153, 165, 95 Cal.Rptr. 623, 631, 486 P.2d 151, 159.) California, it is urged, has a special interest in affording this protection to all California residents injured in California.

Thus, since the case at bench involves a California resident (plaintiff) injured in this state by intoxicated drivers and a Nevada resident tavern...

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