Browder v. International Fidelity Ins. Co.

• Decision Date: 28 June 1982
• Docket Number: No. 7,Docket No. 65520,7
• Citation: 321 N.W.2d 668,413 Mich. 603
• Parties: Willodean BROWDER, Plaintiff-Appellant, v. INTERNATIONAL FIDELITY INSURANCE COMPANY, a Foreign Corporation, Defendant- Appellee. Calendar
• Court: Michigan Supreme Court

Page 668

321 N.W.2d 668

413 Mich. 603

Willodean BROWDER, Plaintiff-Appellant, v. INTERNATIONAL FIDELITY INSURANCE COMPANY, a Foreign Corporation, Defendant- Appellee.

Docket No. 65520.

Calendar No. 7.

Supreme Court of Michigan.

Argued Nov. 10, 1981.

Decided June 28, 1982.

Lopatin, Miller, Freedman, Bluestone, Erlich & Rosen by Steven G. Silverman, Detroit, for plaintiff-appellant.

Zemke & Hirschhorn, P.C. by Peter J. Lyons, Southfield, for defendant-appellee.

WILLIAMS, Justice.

This dramshop case raises one principal question: may an injured party sue the surety on a bar's liquor bond in contract and enjoy the six-year statute of limitations available to contract actions, or is the injured party limited to the dramshop act's ¹ tort action and its two-year period of limitations? There is a subsidiary question whether the plaintiff, having brought the dramshop tort action within two years against the bar and the unknown bar employee and obtained judgment, may, after the expiration of the two years amend her complaint to add a count in contract against the bond's surety on the liquor bond.

To reach the question on the merits, we hold that plaintiff, even after judgment, can amend her complaint to include the surety as a defendant. However, on the merits, we hold that the Legislature in drafting the dramshop act intended to establish a self-contained provision to accomplish its particular objectives and that the tort remedy and two-year statute of limitations provided therein are exclusive. Consequently, a suit in contract enjoying a six-year statute of limitations is not available. We affirm the judgment of the trial court and the Court of Appeals.

I. FACTS

In the early hours of November 12, 1973, plaintiff Willodean Browder, while a patron at the Grapevine Lounge in Detroit, was shot in the left leg by an intoxicated employee. The assailant, known only as Shay, was never apprehended. Suit was timely filed on October 15, 1974, against lounge owner James Stein, doing business as the Grapevine Lounge, and the unknown assailant ² under Michigan's "dramshop act". ³ M.C.L. Sec. 436.22; M.S.A. Sec. 18.993. An amended complaint was filed on March 15, 1976, adding defendant International Fidelity Insurance Company [Fidelity] as surety of the Grapevine Lounge's class "C" $5,000 liquor bond. A default judgment was entered against defendant Stein and the Grapevine Lounge on April 19, 1977, but, due to defendant's insolvency, has remained unsatisfied. ⁴ Defendant Fidelity's motion for accelerated judgment was stayed pending a February 1977 bench trial. Wayne Circuit Judge Patrick Duggan, rejecting claims that the dramshop act permits a concurrent common-law action in contract, found plaintiff's action against Fidelity to be barred by the two-year statute of limitations [Trial Court Opinion, March 30, 1979, Plaintiff's Appendix, 43a]. An order granting defendant accelerated judgment was entered on April 19, 1979. The Court of Appeals affirmed in a per curiam opinion, 98 Mich.App. 358, 296 N.W.2d 60 (1980), from which we granted leave. 411 Mich. 972 (1981).

II. PARTIES' ARGUMENTS

Plaintiff-appellant Browder admits that the action against defendant-appellee Fidelity was not brought prior to the expiration of the dramshop act's two-year period of limitations [Plaintiff's Brief, p. 4], but insists that her cause of action is founded in contract and thus is controlled by a six-year statute of limitations. See M.C.L. Secs. 600.5807 and 600.5813; M.S.A. Secs. 27A.5807 and 27A.5813 [Plaintiff's Brief, p. 10; see Plaintiff-Appendix, p. 35a]. The plaintiff states:

"Plaintiff-appellant contends that the Court of Appeals misconstrued the intended nature of plaintiff-appellant's action against the surety. Plaintiff-appellant asserts that the allegations against defendant-appellee were based on the obligation of the surety to its principal, based on the bond. Plaintiff-appellant's action against defendant-appellee was, therefore, in the nature of a third-party beneficiary action in contract. Thus, the two-year statute of limitations does not apply." (Emphasis in original.)

While recognizing that the dramshop act is in derogation of the common law, plaintiff argues that since the act is remedial it should be liberally construed and thereby not be held to provide an exclusive remedy [Id., p. 5].

Defendant-appellee admits that it would be liable on the $5,000 liquor bond to plaintiff had the amended complaint been filed within two years of the injury [Defendant's Brief, p. 8], but insists that 1) the Court of Appeals was correct in finding that "the plaintiff's complaint against the defendant surety indicates that the plaintiff was basing liability upon a negligence theory as established under the dramshop act", 98 Mich.App. 361, 296 N.W.2d 60, and that therefore plaintiff's action is barred by the statutory limitation period [Defendant's Brief, p. 8]; 2) even were plaintiff's action well-pled, the cause of action provided in the dramshop act is exclusive [Id., pp. 1-2]; and 3) liability on the bond to the injured party is not derived from any contractual obligation, but is created by the statute [Id., pp. 2-3, 8-9].

III. AMENDMENT OF THE COMPLAINT TO CONFORM TO THE EVIDENCE

We will first address the issue concerning the pleadings.

A two-count complaint was timely filed on October 15, 1974, against defendants Stein and the unknown assailant for negligence and assault and battery. On March 15, 1976, two years and four months after the shooting, plaintiff amended her complaint to include a third count adding defendant Fidelity.

The Court of Appeals held:

"This Court's review of the plaintiff's complaint against the defendant surety indicates that the plaintiff was basing liability upon a negligence theory as established under the dramshop act. Where the plaintiff has alleged liability based upon the dramshop act, the act's limitation period should govern." 98 Mich.App. 361, 296 N.W.2d 60.

We agree that the amended complaint does not allege a cause of action in contract. ⁵ However, the breach of contract theory was forcefully argued by plaintiff before the trial court [Tr. 56-57, 71-72, 74] and in a supplemental memorandum of law following the trial [filed February 20, 1979]. Defendant never objected to the inclusion of this contract theory, and the trial judge fully addressed this issue in his opinion [Plaintiff's Appendix, pp. 37a-38a].

The Michigan General Court Rules permit a complaint to be amended to conform to the evidence. GCR 1963, 118.3, in part, states:

"When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. In such case an amendment of the pleadings to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment."

Plaintiff requests that should this Court find the amended complaint not to allege an action in contract then "in the interest of justice" this case ought to be remanded to the trial court to allow plaintiff to "more specifically plead an action in contract on the bond" [Plaintiff's Brief, p. 7, fn. 1]. A remand for amendment of the complaint would be a mere formality. Since this point has been fully briefed and argued before the lower courts and this Court on the contract theory and in the interest of judicial economy, we deem the pleadings to be amended under GCR 1963, 118.3.

IV. IS THE DRAMSHOP REMEDY EXCLUSIVE?

The principal issue of this case, of course, is whether the dramshop act provides an exclusive cause of action and period of limitations. At the time of injury, the pertinent provisions of the dramshop act were:

"Every wife, husband, child, parent, guardian or other persons who shall be injured in person or property, means of support or otherwise, by a visibly intoxicated person by reason of the unlawful selling, giving or furnishing to any such persons any intoxicating liquor, and the sale is proven to be a proximate cause of the injury or death, shall have a right of action in his or her name, against the person who shall by such selling, or giving of any such liquor have caused or contributed to the intoxication of said person or persons or who shall have caused or contributed to any such injury, and the principal and sureties to any bond given under this law shall be liable, severally and jointly, with the person or persons selling, giving or furnishing any spirituous, intoxicating or malt liquors as aforesaid, and in any action provided for in this section, the plaintiff shall have the right to recover actual damages in such sum not less than $50.00 in each case which the court or jury may determine that intoxication was a proximate cause of the injury or death, but no surety shall be liable in excess of the amount of the bond required by this act. Any action shall be instituted within 2 years after the happening of the event and all factual defenses open to the alleged intoxicated person or minor shall be open and available to the principal and surety. In case of the death of either party, the action or right of action given in this section shall survive to or against his or her executor or administrator, and in every such action by a husband, wife, child or parent, the general reputation of the relation of husband and wife or parent and child shall be prima facie evidence of such relation, and the amount so recovered by either husband or wife or parent and child shall be his or her sole and separate property. Such damages together with the costs of suit shall be recovered in an action of trespass on the case before any court of competent jurisdiction; and in any case where the parents shall be entitled to any such damages, either the father or mother may sue alone therefor but recovery by one of such parties shall be a bar to suit brought by the other. No action against a...