Horak v. Argosy Gaming Co.

• Decision Date: 17 July 2002
• Docket Number: No. 99-1941.,99-1941.
• Citation: 648 N.W.2d 137,2002 AMC 1919
• Parties: Shelley A. HORAK, Administrator of the Estate of Leticia B. Morales, and Antonia Ramona Holguin, Francisco Holguin Morales, and Marc Anthony Abney, Appellees, v. ARGOSY GAMING CO. d/b/a Belle Casino of Sioux City, Iowa, Appellant.
• Court: Iowa Supreme Court

648 N.W.2d 137

2002 AMC 1919

Shelley A. HORAK, Administrator of the Estate of Leticia B. Morales, and Antonia Ramona Holguin, Francisco Holguin Morales, and Marc Anthony Abney, Appellees, v. ARGOSY GAMING CO. d/b/a Belle Casino of Sioux City, Iowa, Appellant.

No. 99-1941.

Supreme Court of Iowa.

July 17, 2002.

Patrick J. McNulty of Grefe & Sidney, P.L.C., Des Moines, Edward L. Wintroub and Steven Renteria of Wintroub, Rinden, Sens & McCreary, Omaha, Nebraska, for appellant.

John M. Loeschen of Loeschen & Loeschen, Burlington, for appellees.

NEUMAN, Justice.

This is an appeal of the jury's verdict for the plaintiffs in an action brought under our state's dram shop act, Iowa Code section 123.92 (1999). Because the dram shop at issue is a riverboat casino, the principal question on appeal is whether the district court erred when it refused to apply federal admiralty law instead of Iowa statutory law. We conclude that because there is no federal maritime dram shop law, federal preemption principles do not apply and the district court properly instructed the jury to consider the casino's civil liability in accordance with section 123.92.

Although many other errors are cited in the trial of the case, none warrant reversal. We therefore affirm the judgment entered upon the jury's verdict.

I. Background.

A jury could have found the following facts. Leticia Morales, a thirty-one year old mother of three children, dropped her daughter off at a birthday party. There she met Juan Jurado and Gerardo Graciano. After socializing briefly with the young people, Morales and the two men left the party and headed to the Belle of Sioux City riverboat and gambling casino. The casino is owned by defendant, Argosy Gaming Company.

The record reveals that Morales may have drunk some beer before arriving at the casino, but she was by no means intoxicated. That situation soon changed. While Jurado and Graciano played blackjack, Morales began ordering cocktails and playing the slot machines. Estimates of how many drinks Morales consumed over the next three or four hours varied widely, but witnesses described her as becoming very inebriated. Her loud and obnoxious behavior eventually led security officers to forcibly remove her from the boat. When she attempted to start her car, police were called to the scene. Jurado and Graciano, who had not been drinking, convinced officers to let them get her home. The trio left with Graciano behind the wheel of Morales' car.

What happened in the next hour is the subject of some dispute. Graciano, unfamiliar with operating a manual transmission, quickly stalled Morales' car. He testified that this angered Morales, who demanded that she be allowed to drive and literally kicked him out of the vehicle. He said that Jurado got out of the car as well, and the two walked to his house and then to a nearby convenience store. Jurado, on the other hand, testified that he asked to be dropped off first because he was tired. He said that Graciano joined him within half an hour or so, explaining that Morales had kicked him out of the car and suggesting that they walk to the house where they had first met her to see if she had returned to retrieve her daughter. On the way they stopped at the convenience store.

Upon leaving the convenience store, Jurado and Graciano saw emergency vehicles and Morales' car sitting on its top in the yard of a nearby duplex. An off-duty officer who witnessed the one-car collision testified that he saw the vehicle careening down the street at a high rate of speed. It then missed the turn and flipped over several times, landing against the house. The car's only passenger—Morales—was thrown from the vehicle. She suffered severe injuries in the collision, including a fatal blow to her head.

A forensic toxicologist reported that, at the time of the accident, Morales' blood alcohol count was .250, more than twice the legal limit. She was found some distance from the car, partially wrapped in a blanket. A police investigation determined that the blanket came from a motel room rented that night by Juan Jurado. The motel was located roughly a mile from the scene of the collision.

Suit was brought on behalf of Morales' three minor children by Shelley A. Horak, administrator of the decedent's estate. Plaintiffs brought their petition under Iowa Code section 123.92, alleging that the defendant, Argosy Gaming, sold and served intoxicants to plaintiffs' decedent while she was a patron on defendant's riverboat casino. The defendant answered with a general denial and asserted the affirmative defense that the injuries and damages claimed neither resulted from, nor were proximately caused by, the alleged intoxication of Leticia Morales.

Following trial, the jury returned verdicts finding the defendant liable for the losses sustained by Morales' children, assessing damages for past and future loss of parental consortium as follows: $250,000 for Antonia, $500,000 for Francisco, and $500,000 for Marc. Further facts and procedural events will be detailed as they pertain to the issues urged by the defendant on appeal.

II. Issues on Appeal.

A. State law versus maritime law. In advance of trial, Argosy filed an application to adjudicate law points which asserted that federal admiralty law applied, preempting the plaintiffs' state dram shop claim. The district court rejected the defendant's assertion, ruling that any decision concerning the applicable law would depend on the facts proved at trial and, even if maritime principles were implicated, Iowa's statutory dram shop act would not be preempted by federal law. The court reaffirmed its conclusion in response to Argosy's motions for directed verdict and judgment notwithstanding the verdict urged on the same ground at trial. We review these rulings for correction of errors at law. Iowa R.App. P. 6.4.

Our analysis begins with the fundamental observation that plaintiffs' suit rests solely on a statutory cause of action. Iowa's Dramshop Act, section 123.92, provides that anyone injured "in person or property or means of support" as a result of the intoxication of another

has a right of action for all damages actually sustained, severally or jointly, against any licensee or permittee ... who sold and served any beer, wine, or intoxicating liquor to the intoxicated person when the licensee or permittee knew or should have known the person was intoxicated, or who sold to and served the person to a point where the licensee or permittee knew or should have known the person would become intoxicated.

This court has long recognized that the dram shop statute was enacted because, at common law, no cause of action for negligence could be maintained against one who merely sold alcoholic beverages; as a matter of law, only the drinking of liquor—not the furnishing of it—satisfied the proximate cause element in an action by a third party for damages. Snyder v. Davenport, 323 N.W.2d 225, 226 (Iowa 1982); accord Haafke v. Mitchell, 347 N.W.2d 381, 384 (Iowa 1984), overruled on other grounds by Gail v. Clark, 410 N.W.2d 662 (Iowa 1987). In other words, the statute was "[c]onceived as a means to create liability where none existed at common law." Slager v. HWA Corp., 435 N.W.2d 349, 354 (Iowa 1989). Because the statute's benefits are plainly reserved to "innocent parties," comparative fault principles play no part in the trial of a dramshop case. Id. at 356, 358; accord Jamieson v. Harrison, 532 N.W.2d 779, 781 (Iowa 1995). And despite subsequent statutory changes and corresponding interpretive commentary by this court, it has remained the rule that "Iowa Code section 123.92 provides the exclusive remedy against liquor licensees and permittees for losses related to the furnishing of alcohol to an intoxicated adult." Summerhays v. Clark, 509 N.W.2d 748, 750 (Iowa 1993).

Against this backdrop, we consider Argosy's preemption claim. It is undisputed that the casino derives its authority to sell and serve alcoholic beverages from a license issued by the state of Iowa; it is a licensee as that term is used in section 123.92. Yet Argosy contends that the suit between the parties involves a "maritime tort." So, the argument continues, the suit is governed by admiralty law, not Iowa's dramshop statute. For the reasons that follow, we find the argument unpersuasive.

Maritime law. Any attempt to articulate a cogent explanation of the relationship between federal maritime law and state substantive law is a daunting task, at best. As even the Supreme Court has observed, "[i]t would be idle to pretend that the line separating permissible from impermissible state regulation is readily discernible in our admiralty jurisprudence, or indeed is even entirely consistent within our admiralty jurisprudence." Am. Dredging Co. v. Miller, 510 U.S. 443, 452, 114 S.Ct. 981, 987, 127 L.Ed.2d 285, 296 (1994) (emphasis added). We begin, then, with the basics.

Consistent with Article III of the United States Constitution, Congress has vested federal district courts with "original jurisdiction, exclusive of the courts of the States" in matters of admiralty or maritime jurisdiction, "saving to suitors in all cases all other remedies to which they are otherwise entitled." 28 U.S.C. § 1333(1) (2001). This "saving to suitors" clause effectively grants state courts concurrent jurisdiction in cases grounded in admiralty law. Keefe v. Bahama Cruise Line, Inc., 867 F.2d 1318, 1321 n. 1 (1989), aff'd, 902 F.2d 959 (11th Cir.1990); 2 Am.Jur.2d Admiralty § 9, at 656 (1996).

General "admiralty" or "maritime" law is not codified. It exists as "a species of judge-made federal common law." Yamaha Motor Corp. v. Calhoun, 516 U.S. 199, 206, 116 S.Ct. 619, 624, 133 L.Ed.2d 578, 586 (1996). Whether a particular controversy "sounds" in admiralty depends on factors most often discussed in cases where one of the disputants seeks removal from state to federal court or, conversely, dismissal for lack of...