D. Houston, Inc. v. Love

• Decision Date: 27 June 2002
• Docket Number: No. 00-1192.,00-1192.
• Citation: 92 S.W.3d 450
• Parties: D. HOUSTON, INC., d/b/a Treasures, Petitioner, v. Melissa LOVE, Respondent.
• Court: Texas Supreme Court

92 S.W.3d 450

D. HOUSTON, INC., d/b/a Treasures, Petitioner, v. Melissa LOVE, Respondent.

No. 00-1192.

Supreme Court of Texas.

Argued September 5, 2001.

Decided June 27, 2002.

Diane M. Guariglia, Beirne Maynard & Parsons, Beth McCahill Taylor, Taylor &amp Taylor, Joseph Todd Trombley, Michael W. Blaise, Lorance & Thompson, Houston, for Petitioner.

David E. Chapin, Houston, for Respondent.

Chief Justice PHILLIPS delivered the opinion of the Court.

In this case, an independent contractor sustained injuries in an alcohol-related automobile accident after her employer,¹ a commercial seller of alcohol, allegedly required her to consume alcohol on the job. We must determine whether the Texas Dram Shop Act provides the exclusive remedy for suing a commercial seller of alcohol in such a situation.

We conclude that the Dram Shop Act does not abrogate a commercial seller's common law duties as an employer to its employees and independent contractors. Further, we conclude that if an employer requires its independent contractor while working to consume alcohol in sufficient amounts to become intoxicated, it owes her a duty to take reasonable care to prevent her from driving when she leaves work. Because the employer has failed to negate this duty as a matter of law, we affirm the judgment of the court of appeals. 67 S.W.3d 244.

I At approximately 7:45 p.m. on October 6, 1996, Melissa Love completed her day-shift as a waitress at Treasures night club and began working at the same location as an exotic dancer. The parties agree that her status changed at that point from employee to independent contractor. While working as a dancer, Love consumed at least twelve alcoholic beverages with the customers and became intoxicated. She performed her last table dance at about 1:00 a.m. As Love was leaving Treasures about thirty minutes later, the club manager asked if she was alright. She replied that she was "fine." But while Love was driving herself home, her car struck a guardrail and she suffered serious personal injuries. At 4:00 a.m., Love's blood alcohol level as measured at the hospital was .225, more than twice the then-applicable .10 legal limit. Act of June 19, 1993, 73rd Leg., R.S., ch. 900, § 1.01, 1993 Tex. Gen. Laws 3696, amended by Act of May 28, 1999, 76th Leg., R.S., ch. 234, § 1, 1999 Tex. Gen. Laws 1082 (revising legal limit to .08).

Treasures offered its manager's affidavit testimony that he did not notice any signs of intoxication when Love left the bar to drive home, and it is undisputed that no one at Treasures attempted to keep her from driving. Treasures also offered Love's deposition testimony that when she left the club she had not had a drink since about 11:00 p.m., when she felt intoxicated and accidentally fell on a customer during a private table dance. She testified in that deposition that by 1:30 a.m. she felt competent to drive a motor vehicle. However, Love offered a doctor's affidavit that if her blood alcohol level was still .225 at 4:00 a.m., it would have been so high that she would have had trouble standing or walking when she left Treasures. The affidavit concluded: "Ms. Love would have been unmistakably intoxicated to anyone coming into contact with her and would have presented [as] a young woman well beyond being too intoxicated to drive."

Love sued Treasures under Chapter Two of the Texas Alcoholic Beverage Code, commonly called the Dram Shop Act, and for common law negligence and gross negligence. Treasures moved for partial summary judgment on the Dram Shop claims, asserting that it had satisfied the "trained-server" statutory defense, TEX. ALCO. BEV.CODE ANN. § 106.14 (Vernon Supp.2002), and that it had established as a matter of law that Love was not "obviously intoxicated to the extent that [she] presented a danger to [herself] and others" at the time Treasures served her alcohol. Id. § 2.02(b)(1). The trial court granted the motion only on the "trained-server" defense, making no reference to Treasures' no-obvious-intoxication defense. In a second summary judgment motion, Treasures claimed that Love's common law claims were barred because the Dram Shop Act is the exclusive cause of action for providing an alcoholic beverage to a person 18 years of age or older. Id. § 2.03. The trial court also granted this motion and ordered that Love take nothing in her suit against Treasures. Love appealed the second summary judgment only.

The court of appeals reversed and remanded, extending Otis Eng'g Corp. v. Clark, 668 S.W.2d 307 (Tex.1983), to hold that an employer who asserts control over an independent contractor with knowledge of his or her incapacity has a duty to exercise reasonable care to ensure that the independent contractor does not cause an unreasonable risk of harm to herself or others. Concluding that fact questions existed about Treasures' knowledge and control, the court reversed the summary judgment, and Treasures appealed.

II

Treasures first argues that the Dram Shop Act's exclusivity clause bars all common law causes of action against commercial sellers of alcohol for any conduct that in some way involves providing alcohol. If that is correct, then the court of appeals' judgment must be reversed and rendered, because Love did not appeal the trial court's summary judgment on her statutory claims.

Section 2.03 of the Dram Shop Act states:

The liability of providers under this chapter for the actions of their customers, members, or guests who are or become intoxicated is in lieu of common law or other statutory law warranties and duties of providers of alcoholic beverages. This chapter does not impose obligations on a provider of alcoholic beverages other than those expressly stated in this chapter. This chapter provides the exclusive cause of action for providing an alcoholic beverage to a person 18 years of age or older.

Treasures says that the "exclusive cause of action" language in the last sentence clearly bars any common law or other statutory basis for liability for providing alcohol to an adult, regardless of to whom or under what circumstances. Love replies that her cause of action is not barred because independent contractors are not included in the statutory class of "customers, members, or guests." Love's argument is unnecessary and Treasures' is incorrect, because the duty in this case arises from the employer-independent contractor relationship, not from Treasures' provision of alcohol.

The Dram Shop Act was clearly intended to pre-empt common law claims against commercial sellers of alcohol for claims that arise from the sellers' provision of alcohol. However, we conclude that it does not bar all common law liability for any conduct by a seller toward its employee or independent contractor whenever alcohol is involved. The duty underlying Love's cause of action is derived from Treasures' alleged failure to use reasonable care in exercising its retained control over its independent contractor's work. See Exxon Corp. v. Quinn, 726 S.W.2d 17, 20 (Tex.1987). In this case, if Treasures were merely an exotic night club that did not sell alcohol, the statute would not bar Love's common law claims. Nor, if the alcohol had not been purchased from or supplied by Treasures, would the statute bar her common law claims against Treasures.

Thus, Love is not suing Treasures as a "provider" under the Dram Shop Act. Instead, she is suing Treasures as her employer for failing to use reasonable care in exercising its retained control over her work as an independent contractor. Therefore, the Dram Shop Act, which "provides the exclusive cause of action for providing an alcoholic beverage to a person 18 years of age or older," TEX. ALCO. BEV.CODE ANN. § 2.03 (Vernon 1995)(emphasis added), does not bar Love's common law claims as an independent contractor against her employer.

III

A cause of action for negligence in Texas requires three elements. There must be a legal duty owed by one person to another, a breach of that duty, and damages proximately caused by the breach. El Chico Corp. v. Poole, 732 S.W.2d 306, 311 (Tex.1987). Proximate cause requires both cause in fact and foreseeability. Farley v. M M Cattle Co., 529 S.W.2d 751, 755 (Tex.1975). Foreseeability exists when "the actor as a person of ordinary intelligence should have anticipated the dangers his negligent act creates for others." El Chico Corp., 732 S.W.2d at 313.

An employer may breach a duty to its independent contractor by failing to exercise its retained control over the contractor with reasonable care. Exxon Corp. v. Quinn, 726 S.W.2d 17, 20 (Tex. 1987). An employer may retain control either by contract or by exercising actual control over the contractor's work. Koch Ref. Co. v. Chapa, 11 S.W.3d 153, 155 (Tex.1999). When disputed, control is an issue for the trier of fact. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 526 (Tex.1990).

Summary judgment is appropriate only when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). In reviewing a traditional motion for summary judgment, such as the one granted to Treasures here, the reviewing court must resolve every doubt and indulge every reasonable inference in the nonmovant's favor. Id. at 549. All evidence favorable to the nonmovant will be taken as true. Id. at 548-49. In appealing the court of appeals' reversal of the trial court's summary judgment, Treasures must disprove as a matter of law at least one essential element of each of Love's theories of recovery. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997).

A

Treasures argues that even if the statute does not foreclose this suit, it did not exercise sufficient control over Love as a matter of law to create a legal duty. We disagree. Love offered summary judgment evidence to support her contention that Treasures exercised control over her...