Fox v. Mercer

• Decision Date: 04 June 1985
• Citation: 489 N.Y.S.2d 792,109 A.D.2d 59
• Parties: Janet F. FOX, Individually and as Parent and Natural Guardian of Michelle Fox, Kenneth Fox, Jr. and Christopher Fox, Minor Children and as Administratrix of the Estate of Kenneth W. Fox, Sr., Deceased, Respondent, v. Charles P. MERCER and Charles A. Wedel, d/b/a Goodtime Charley's, Appellants, Panorama Bowl, Inc., County of Monroe and Town of Greece, Defendants.
• Court: New York Supreme Court — Appellate Division

Page 792

489 N.Y.S.2d 792

109 A.D.2d 59

Janet F. FOX, Individually and as Parent and Natural Guardian of Michelle Fox, Kenneth Fox, Jr. and Christopher Fox, Minor Children and as Administratrix of the Estate of Kenneth W. Fox, Sr., Deceased, Respondent, v. Charles P. MERCER and Charles A. Wedel, d/b/a Goodtime Charley's, Appellants Panorama Bowl, Inc., County of Monroe and Town of Greece, Defendants.

Supreme Court, Appellate Division Fourth Department.

June 4, 1985.

Harris, Beach, Wilcox, Rubin & Levey, Rochester (Douglas Foss, Rochester of counsel), for appellants.

Robert L. Brenna, Jr., Rochester, for respondent.

Before DILLON, P.J., and DOERR, DENMAN, BOOMER and SCHNEPP, JJ.

SCHNEPP, Justice.

Kenneth W. Fox, Sr., was killed in a single-car accident while driving in an alleged intoxicated condition and his widow brought this action on behalf of herself individually and their three children under the Dram Shop Act (General Obligations Law § 11-101) for damages suffered by reason of the loss of his society, companionship, support and maintenance. This action has been consolidated with a wrongful death action instituted against the County of Monroe and the Town of Greece. The Dram Shop defendants seek discovery of insurance policies on decedent's life, trust instruments, annuities, bank statements documents concerning payment of death benefits, and other information relating to plaintiff's financial circumstances since the death of her husband and her current means of support. They appeal from the denial of their motion to compel disclosure of such information.

The narrow issue for our determination is whether the Dram Shop defendants are entitled to disclosure of this information in defense of plaintiffs' claim under the statute that they have been "injured in * * * means of support" (General Obligations Law § 11-101). In our view, defendants are seeking information which is not material and necessary in the defense of the Dram Shop action, does not pass the test of "usefulness and reason" and is not "sufficiently related to the issues in litigation to make the effort to obtain it in preparation for trial reasonable" (Allen v. Crowell-Collier Pub. Co., 21 N.Y.2d 403, 406-407, 288 N.Y.S.2d 449, 235 N.E.2d 430). Disclosure of this information would have no bearing on the controversy since damages to plaintiffs' "means of support" should be measured as of the time of death and without regard to receipts from collateral sources.

The Dram Shop Act created a cause of action unknown at common law by allowing recovery against a tavern owner for injuries caused as a result of patron's intoxication (see, Mead v. Stratton et al., 87 N.Y. 493; Volans v. Owen, 74 N.Y. 526; Moyer v. Lo Jim Cafe, 19 A.D.2d 523, 240 N.Y.S.2d 277, affd 14 N.Y.2d 792, 251 N.Y.S.2d 30, 200 N.E.2d 212) and was enacted for the dual purposes of suppressing the sale and use of intoxicating liquor, and of protecting and providing a remedy for dependents and persons injured by the unlawful sale of liquor (Matalavage v. Sadler, 77 A.D.2d 39, 43, 432 N.Y.S.2d 103). Since its inception in 1873 (L.1873, ch. 646) the Dram Shop Act has given a right of action for injury to "means of support" and punitive damages. Thus, a means of recovering damages has been established for persons injured by reason of the intoxication of a dram shop's vendee. In the leading cases of Volans v. Owen, 74 N.Y. 526, supra and MEAD V. STRATTON, 87 N.Y. 493,¹ supra the Court of Appeals considered the legislative intent underlying this statutory liability. Finding that the Legislature's purpose "was the protection of the dependent and helpless" (Volans v. Owen, supra, 74 N.Y., p. 530), the court limited the remedy created to those situations where the plaintiff could show that "his accustomed means of maintenance have been cut off or curtailed, or that he has been reduced to a state of dependence, by being deprived of the support which he had before enjoyed" (supra ). Mere diminution of income is not sufficient proof of damage "if the plaintiff, notwithstanding, has adequate means of maintenance, from accumulated capital or property, or his remaining income is sufficient for his support." (supra.) In Mead, which affirmed a judgment in favor of the plaintiff widow, the court softened its position somewhat, stating that a cause of action for injury to means of support lies "when the party is deprived of the usual means of maintenance, which he or she was accustomed to enjoy previously" (87 N.Y. 493, 496, supra ). Minor children also have been permitted to recover for injury to means of support arising from the death of a parent by reason of intoxication (Neu v. McKechnie, 95 N.Y. 632). These cases have never been overruled and are accepted as established jurisprudence (see, 3 NY Jur 2d, Alcoholic Beverages, § 130 but see, Valicenti v. Valenze, 108 A.D.2d 300, 488 N.Y.S.2d 834. ²

In Sharpley v. Brown, 43 Hun. 374 relied upon by the defendants, it was held that post-death changes in circumstances, in that case the remarriage of the plaintiff two and one-half years after her first husband's death, were analogous to "accumulated capital or property" within the meaning of Volans and relevant to determining the extent of injury to her means of support (supra, p. 376). The court stated that "if, shortly after her first husband's death, she had come into the possession of such property as gave her an ample support, it seems to us * * * that this might have been shown upon the trial." (supra.) The Sharpley court recognized that its holding represented a departure from the rule that "actions for common-law injuries to the person the damages would not be diminished by the possession of 'accumulated capital and property' by the injured person" but stated that in Dram Shop cases where "the primary purpose was the protection of the dependent and helpless, ... it is material to show to what extent the plaintiff is dependent and helpless." (supra.)

In our view, the holding in Sharpley (supra), that evidence of remarriage or other change in financial circumstances occurring after the decedent's death is admissible to defeat or diminish a plaintiff's claim of injury to "means of support", is not required by the Court of Appeals rulings in Volans and Mead, has never been followed in any other Dram Shop case, and represents an unnecessary and unwarranted departure from the well-established rule against allowing a defendant to mitigate damages through proof of compensation from collateral sources. Moreover, the holding undermines the emerging case law on contribution in Dram Shop actions.

Contrary to defendants' contention that Sharpley (supra) is dispositive, it is clear that the century-old decision represents one vintage approach only to the question of Dram Shop liability which has never been approved by the Court of Appeals or implicitly ratified by the Legislature. The Sharpley rule was rejected in Playford v. Perich, 2 Misc.2d 170, 152 N.Y.S.2d 201, which held that "there can be no diminution of the penalty in the way of damages fixed (by the Dram Shop Act), by applying in reduction or mitigation thereof, an amount of money fortuitously recovered in an action for wrongful death, either by way of settlement or verdict therein." (supra, p. 173, 152 N.Y.S.2d 201; see, Note, Liability of Tavern Owners Under the New York State Dram Shop Act, 30 Alb L Rev 271, 280-281 ). While Sharpley would permit Dram Shop defendants to be treated more liberally than common-law tort-feasors and allow them to mitigate damages through proof of post-death compensation from other sources, Playford (supra) treated them more harshly by refusing to permit proof of settlement with other tort-feasors; although in non-Dram Shop cases proof of such payment was then admissible in mitigation of damages (see, Livant v. Livant, 18 A.D.2d 383, 239 N.Y.S.2d 608, mot. for lv. to app. dsmd. 13 N.Y.2d 894, 243 N.Y.S.2d 676, 193 N.E.2d 503) ³. Thus, despite the holding in Sharpley, there was a different approach to the question of damages which not only limited a tavern owner's use of evidence of post-death compensation to the plaintiff, but in fact permitted the possibility of a double recovery for the same injury through the combination of actions for wrongful death and violation of the Dram Shop Act (Note, 30 Alb.L.Rev. 271, 280, supra ). ⁴

The disclosure sought by defendants concerning insurance policies, and the other materials which would reflect plaintiffs' financial condition following the death of their husband and father, is clearly directed to the discovery of compensation from "collateral sources". It is a well-established rule that the receipt of total or partial compensation from a source wholly independent of the wrongdoer may not be relied upon to diminish either plaintiffs' recovery or defendant's liability (see, Healy v. Rennert, 9 N.Y.2d 202, 213 N.Y.S.2d 44, 173 N.E.2d 777, 36 N.Y.Jur.2d, Damages, §§ 128, 129). "A tortfeasor cannot avail himself of the benefits of reimbursements which a plaintiff has received as a result of his own good judgment and foresight in insuring himself. Therefore, in actions for personal injury, insurance coverage is not a mitigating factor against the plaintiff's recovery." (36 N.Y.Jur.2d, Damages, § 129, p. 222; see, Szybura v. City of Elmira, 28 A.D.2d 1154, 284 N.Y.S.2d 190.) Here, plaintiffs seek to recover damages arising by reason of the injury to "means of support" occasioned by the death of plaintiffs' husband and father due to the acts of these Dram Shop defendants. The extent to which these damages may have been ameloriated from sources other than these defendants would not tend to establish that the claimed damage was not actually caused by the Dram Shop wrongdoer or that their "means of support" injury thereby became lessened or satisfied.

Moreover, allowing proof of collateral compensation to mitigate damages would frustrate public policy designed to...