Cable v. Sahara Tahoe Corp.

• Decision Date: 23 May 1979
• Citation: 155 Cal.Rptr. 770,93 Cal.App.3d 384
• Court: California Court of Appeals Court of Appeals
• Parties: Candace C. CABLE, Plaintiff and Appellant, v. SAHARA TAHOE CORPORATION, Defendant and Respondent. Civ. 53549.

Page 770

155 Cal.Rptr. 770

93 Cal.App.3d 384

Candace C. CABLE, Plaintiff and Appellant, v. SAHARA TAHOE CORPORATION, Defendant and Respondent.

Civ. 53549.

Court of Appeal, Second District, Division 3, California.

May 23, 1979.

As Modified June 12, 1979.

Ronald L. M. Goldman, Marina Del Rey, for plaintiff and appellant.

Haight, Dickson, Brown & Bonesteel, and Roy G. Weatherup, Los Angeles, for defendant and respondent Sahara Tahoe Corp.

POTTER, Acting Presiding Justice.

Plaintiff Candace C. Cable appeals from a judgment (order of dismissal) in favor of defendant Sahara Tahoe Corporation in her suit for damages for personal injuries sustained in a single vehicle accident which occurred in Douglas County, Nevada, near Stateline. The dismissal followed an order sustaining, without leave to amend, defendants' demurrer to the complaint.

The fifth cause of action sought recovery from defendant on the theory that Louis Michael Schaefer, driver of a vehicle in which plaintiff was a passenger, lost control of it as a result of becoming "excessively intoxicated" through consumption of alcoholic beverages "negligently and carelessly served or permitted to be served" to him by defendant with knowledge that he was becoming drunk and "was about to drive a motor vehicle on a public street and highway . . .."

The complaint alleged that at all relevant times, plaintiff was a resident of the State of California and that defendant was a foreign corporation operating as the Sahara Tahoe Hotel in Stateline, Nevada, the facility at which Schaefer consumed the excessive quantity of alcoholic beverage.

The demurrer was sustained on the basis of the trial court's conflict of laws ruling that the Nevada law denying liability of tavern keepers for injury caused by customers was applicable. In reaching this ruling, the trial court properly considered a large volume of factual material not stated in the complaint but supplied by declarations in support of and in opposition to a motion to quash service of process (which was denied), answers to interrogatories and additional declarations filed in support of plaintiff's claim that she should be given leave to amend. (Saltares v. Kristovich (1970), 6 Cal.App.3d 504, 511, 85 Cal.Rptr. 866 (1979) 89 Cal.App.3d 133, 136-137, 152 Cal.Rptr. 373.) Except as otherwise noted below, this material did not give rise to any factual issues. It showed that at the time of the accident on August 26, 1975, plaintiff and Schaefer were driving in his car from Stateline, Nevada, to his mobile home (where he resided) in a mobile home park in the Kingsbury Grade area, a few miles east of the Stateline casino center.

Plaintiff had been employed for several months at the Sahara Tahoe Hotel and had until August 1, 1975, resided in South Lake Tahoe, California. There was room for argument as to whether plaintiff lived with Schaefer in the Nevada mobile home; she admitted staying there occasionally, and she had applied for and received a Nevada driver's license. However, plaintiff categorically denied any intent to abandon her status as a California domiciliary and for the purpose of testing the propriety of the ruling on the demurrer we will assume that she was a California citizen.

Defendant was a corporation incorporated in Nevada. Its business was the operation of the Sahara Tahoe Hotel in Nevada. However, it was involved in a considerable amount of business activity in California. For the most part, that activity consisted of extensive advertising and other promotional activity designed to attract California residents to its hotel and casino in Nevada. This activity alone entailed expenditure of hundreds of thousands of dollars annually in California with the result that approximately 70 percent of the hotel's guests were California residents. Large purchases of equipment and supplies were regularly made by defendant in California and it leased and maintained a 100-passenger airplane in California from 1971 to 1973. In connection with such activities, defendant maintained a continuing and regular bank account in California, with an average monthly balance of $70,000. It also incurred California personal property tax liability in the amount of $21,000 for the year 1974.

Another aspect of defendant's activity involved California residents. About 75 percent of its employees lived in California in the Lake Tahoe basin and defendant had, from time to time during peak seasons, advertised in the "Help Wanted" section of the only local paper which served the entire South Lake Tahoe area. It was clear, however, that plaintiff's employment was not the result of any such solicitation. ¹

Since her injury, plaintiff has returned to California. Her injuries are catastrophic, causing paralysis from the waist down with serious psychological effects and continuous physical pain resulting in narcotics addiction. At the time of the judgment, she was a patient at a California drug rehabilitation facility undergoing detoxification and counseling. She has become and, in all probability, will remain a public charge.

Further facts which bore upon the court's decision were the histories of the California and the Nevada laws with respect to tavern keepers' liability. Nevada law, for some years, had consistently denied recovery. In 1969, the Nevada Supreme Court considered the "persuasive arguments either way" (Hamm v. Carson City Nugget, Inc. (1969) 85 Nev. 99, 450 P.2d 358, 359) and ruled against imposing common law liability. It adopted in this respect the view urged by the defendant as follows (Ibid.):

"Those opposed to extending liability point out that to hold otherwise would subject the tavern owner to ruinous exposure every time he poured a drink and would multiply litigation needlessly in a claims-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. They urge that 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. We prefer this point of view. 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."

In addition, the court construed a Nevada criminal statute making it a misdemeanor "for one in charge of a saloon or bar to sell intoxicating liquor to any person who is drunk" (Ibid.) as not intending to impose civil liability. This state of Nevada law remained in effect until 1973 when the Nevada Legislature adopted an entirely new approach to the problem of alcohol abuse, eliminating it from the criminal justice system. At the same time, the misdemeanor of selling intoxicating liquors to a drunk was abolished.

The history of California law on the subject was dramatically different. Prior to the decision of our Supreme Court in Vesely v. Sager (1971) 5 Cal.3d 153, 95 Cal.Rptr. 623, 486 P.2d 151, a long line of California cases had held that a tavern keeper was not liable to third parties injured by intoxicated persons to whom he had served liquor. (See Cole v. Rush (1955) 45 Cal.2d 345, 356, 289 P.2d 450, denying liability on the theory that the consumption of the beverages, rather than their sale or gift, is the proximate cause of injury.)

Vesely v. Sager, supra, reevaluated common law concepts of proximate cause to hold that the sale or gift of the liquor was a proximate cause of the injury and found a statutory basis for liability in Business and Professions Code section 25602 which prohibited furnishing of alcoholic beverages to obviously intoxicated persons. By the time of the trial court's ruling herein, the doctrine in Vesely had been applied by our Supreme Court in Bernhard v. Harrah's Club (1976) 16 Cal.3d 313, 128 Cal.Rptr. 215, 546 P.2d 719, to impose liability upon a Nevada tavern keeper who had furnished intoxicants to a visiting California resident when the resident had foreseeably returned to California and caused injury in this State.

Further developments of the California law which occurred after the trial court's ruling include the decision of our Supreme Court in Coulter v. Superior Court (1978) 21 Cal.3d 144, 145 Cal.Rptr. 534, 577 P.2d 669, which extended the rule in Vesely to impose liability upon "noncommercial supplier(s) . . . (of) alcoholic beverages to . . . obviously intoxicated person(s)." (Id., at p. 152, 145 Cal.Rptr. at p. 538, 577 P.2d at p. 673.) More recently, the Legislature of this state reacted to this extension by substantially eradicating the whole doctrine of tavern keepers' liability in this state. Statutes of 1978, chapter 929, amended Business and Professions Code section 25602 to eliminate civil liability. At the same time, Civil Code section 1714 was amended so as to prohibit liability of any "(s)ocial host who furnishes alcoholic beverages . . . ." (Subd. (c).) The amendments to both sections contained strong statements of intent on the part of the Legislature to nullify the decisions in Vesely, Bernhard and Coulter. That contained in the amendment to Civil Code section 1714, subdivision (b), reads as follows:

"It is the intent of the Legislature to abrogate the holdings in cases such as Vesely v. Sager (5 Cal.3d 153), (95 Cal.Rptr. 623, 486 P.2d 151,) Bernhard v. Harrah's Club (16 Cal.3d 313), (128 Cal.Rptr. 215, 546 P.2d 719,) and Coulter v. Superior Court ((21) Cal.3d (144)), (145 Cal.Rptr. 534, 577 P.2d 669) and to reinstate the prior judicial interpretation of this section as it relates to proximate cause for injuries incurred as a result of furnishing alcoholic beverages to an intoxicated person, namely that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather the consumption of alcoholic beverages is the...