Largo Corp. v. Crespin, 84SC365

• Decision Date: 17 November 1986
• Docket Number: No. 84SC365,84SC365
• Citation: 727 P.2d 1098
• Parties: LARGO CORPORATION, d/b/a The New Chapter IV and Little Vegas, Petitioner, v. Karen T. CRESPIN, individually and on behalf of the minor children, Angela R. Crespin, Manuel Crespin III, and James F. Crespin, Respondents.
• Court: Colorado Supreme Court

Page 1098

727 P.2d 1098

55 USLW 2307

LARGO CORPORATION, d/b/a The New Chapter IV and Little

Vegas, Petitioner, v. Karen T. CRESPIN, individually and on behalf of the minor

children, Angela R. Crespin, Manuel Crespin III,

and James F. Crespin, Respondents.

No. 84SC365.

Supreme Court of Colorado,

En Banc.

Nov. 17, 1986.

Tilly & Graves, John W. Grund, K. Michele Anderson, Thomas H. May, Denver, for petitioner.

Sylvian R. Roybal, Denver, for respondents.

ERICKSON, Justice.

We granted certiorari to review the court of appeals decision in Crespin v. Largo Corp., 698 P.2d 826 (Colo.1984). We affirm, and hold that a common law negligence action may be brought against a tavern owner who sells alcohol to an intoxicated patron who thereafter injures a third party. In such an action, the defendant's violation of section 12-47-128(1)(a), 5 C.R.S. (1985), constitutes negligence per se.

I. FACTS

On March 27, 1980, James Hauenstein, who worked in Denver, was unable to return to his home in Loveland because of blizzard weather conditions. Hauenstein checked into a motel near his workplace at approximately 3:00 p.m., and had "probably half a dozen" beers at the motel bar before driving to the Little Vegas, a bar owned by petitioner Largo Corporation (Largo). At the Little Vegas, Hauenstein sat at the bar and drank two or three more beers. He then went to a booth with a woman he met at the bar and consumed an additional eight to ten beers, which were served by a cocktail waitress. While Hauenstein was in the Little Vegas, he experienced periodic blackouts and lost two payroll checks. He stumbled over chairs, tables, and stairs during several trips to the restroom. According to Hauenstein, he became "drunk" over the course of four or five hours at the Little Vegas.

Shortly after leaving the Little Vegas in his car, Hauenstein drove into oncoming traffic and collided with a car driven by Manuel Crespin. Crespin suffered fatal injuries in the accident.

Respondent Karen Crespin, the widow of Manuel Crespin, filed this action on her own behalf and on behalf of her three minor children, seeking to recover damages from Largo Corporation for the death of her husband. Crespin alleged that Largo's employees negligently served alcoholic beverages to Hauenstein after he became visibly intoxicated, and that such negligence was the proximate cause of Manuel Crespin's death. Crespin also claimed that Largo was liable because its employees violated sections 12-47-101 to -143, 5 C.R.S. (1985), of the Colorado Liquor Code, by serving alcoholic beverages to Hauenstein when he was intoxicated. Although not specifically characterized as such, Crespin's second claim for relief was a negligence per se claim predicated upon Largo's alleged violation of the Liquor Code.

Largo filed a motion to dismiss Crespin's complaint for failure to state a claim upon which relief could be granted. Largo maintained that Colorado's dramshop act, section 13-21-103, 6 C.R.S. (1973), provides the exclusive remedy against a tavern owner who negligently furnishes alcohol to an intoxicated person who thereafter injures a third party. With respect to Crespin's negligence per se claim, Largo asserted that the claim should be dismissed because violations of the liquor code do not provide a foundation for civil liability.

The trial court denied Largo's motion, and held that the dramshop act did not preclude Crespin's common-law negligence action. In the court's view, Crespin could recover against Largo if she proved that it breached a duty not to serve alcohol to a visibly intoxicated person, and that the breach proximately caused Manuel Crespin's death. In addition, the trial court refused to dismiss Crespin's negligence per se claim. The court held that section 12-47-128(1)(a), 5 C.R.S. (1985), prohibits the sale of alcohol to a visibly intoxicated person, and was enacted to prevent the type of injury that Manuel Crespin suffered. The trial court concluded that Crespin was a member of the class of persons protected by the statute and, based on the facts alleged in the complaint, negligence per se was an issue to be determined at trial.

At the close of Crespin's evidence, the trial court granted a directed verdict for Largo on Crespin's common-law cause of action, but allowed the negligence per se claim to go forward. However, at the close of Largo's evidence, the trial court reversed its earlier ruling and permitted Crespin's common-law claim and negligence per se claim to go to the jury. ¹ In a special verdict, the jury found that Largo was negligent, and that such negligence proximately caused Manuel Crespin's death, but did not specify which of Crespin's theories it relied upon in reaching the verdict. The jury awarded Crespin $500,000 in compensatory damages, and the trial court entered judgment on the verdict. Largo's motion for a new trial was denied.

The court of appeals affirmed, and rejected Largo's contention that the dramshop act was Crespin's exclusive remedy for the injuries to her husband. The court of appeals held that Largo owed a duty to Crespin not to serve Hauenstein alcoholic beverages when he was intoxicated, and that the trial court's instruction regarding negligence per se was proper. We have not previously determined whether Colorado recognizes common-law dramshop liability.

II. COMMON-LAW DRAMSHOP LIABILITY

Until the late 1950's, it was universally held that a common-law negligence action could not be brought by a third party against a tavern owner who sold alcoholic beverages to an intoxicated person. See Rinden, Judicial Prohibition? Erosion of the Common Law Rule of Non-Liability for Those Who Dispense Alcohol, 34 Drake The modern era of dramshop liability began in 1959, when two courts--the Seventh Circuit in Waynick v. Chicago's Last Department Store, 269 F.2d 322 (7th Cir.1959), cert. denied, 362 U.S. 903, 80 S.Ct. 611, 4 L.Ed.2d 554 (1960), and the New Jersey Supreme Court in Rappaport v. Nichols, 31 N.J. 188, 156 A.2d 1 (1959)--held that a third party injured by an intoxicated person may bring a negligence action against the commercial vendor who sold liquor to the intoxicated person. Both decisions rejected the defendants' contention that the sale or service of an alcoholic beverage could not, as a matter of law, be the proximate cause of injury to a third party. The Rappaport court said: "Where a tavern keeper sells alcoholic beverages to a person who is visibly intoxicated or to a person he knows or should know from the circumstances to be a minor, he ought to recognize and foresee the unreasonable risk of harm to others through action of the intoxicated person or the minor." 156 A.2d at 8. The court concluded that the danger was "particularly evident in current times when traveling by car to and from the tavern is so commonplace and accidents resulting from drinking are so frequent." Id.

L.Rev. 937, 938 (1985-86). The rationale underlying the rule was that the consumption, and not the furnishing of alcohol, was the proximate cause of the injury to the third party. See Ontiveros v. Borak, 136 Ariz. 500, 667 P.2d 200 (1983); Klingerman v. SOL Corp. of Maine, 505 A.2d 474 (Me.1986). In the past twenty-five years, however, an increasing number of courts, now a majority, have rejected the traditional rule and permitted negligence actions against vendors of alcoholic beverages. See Nazareno v. Urie, 638 P.2d 671 (Alaska 1981); Note, Crespin v. Largo Corporation and the Legislative Response: The Turbulent State of Dram Shop Liability in Colorado, 57 U.Colo.L.Rev. 419, 423 (1986).

Since Waynick and Rappaport, the overwhelming majority of courts have abandoned the old common-law rule and allowed negligence actions against commercial vendors of alcoholic beverages. See, e.g., Nazareno v. Urie, 638 P.2d 671 (Alaska 1981); Ontiveros v. Borak, 136 Ariz. 500, 667 P.2d 200 (1983); Ono v. Applegate, 62 Hawaii 131, 612 P.2d 533 (1980); Klingerman v. SOL Corp. of Maine, 505 A.2d 474 (Me.1986); Jardine v. Upper Derby Lodge No. 1973, Inc., 413 Pa. 626, 198 A.2d 550 (1964). See generally Annot., Common-Law Right of Action for Damage Sustained by Plaintiff in Consequence of Sale or Gift of Intoxicating Liquor or Habit-Forming Drug to Another, 97 A.L.R.3d 528 (1980). Commentators have applauded the new trend. See, e.g., Colman, Krell & Mosher, Preventing Alcohol-Related Injuries: Dram Shop Liability in a Public Health Perspective, 12 W.St.U.L.Rev. 417 (1985); Rinden, Judicial Prohibition? Erosion of the Common Law Rule of Non-Liability For Those Who Dispense Alcohol, 34 Drake L.Rev. 937 (1985-86); Note, Crespin v. Largo Corporation and the Legislative Response: The Turbulent State of Dram Shop Liability in Colorado, 57 U.Colo.L.Rev. 419 (1986); Comment, Third Party Liability for Drunken Driving: When "One for the Road" Becomes One for the Courts, 29 Vill.L.Rev. 1119 (1983-84).

Largo cites Hull v. Rund, 150 Colo. 425, 374 P.2d 351 (1962), for the proposition that Colorado adheres to the traditional common-law rule of nonliability. Hull, however, did not resolve the question we address here. In Hull, the plaintiffs were attacked by two intoxicated patrons of the defendant's tavern. The plaintiffs alleged that the defendant had violated the Liquor Code by selling alcohol to one of the assailants while she was intoxicated. On the basis of the trial court record, we said:

Plaintiffs based their action entirely on the theory of strict liability, predicating their right to recover on the proposition that the statute was violated and that proof thereof ipso facto entitled them to judgment as a matter of law....

150 Colo. at 426, 374 P.2d at 352.

We specifically noted that the plaintiffs had not relied upon a negligence theory:

"There was no allegation in the complaint and no proof at the trial that defendant failed to exercise due care or failed to protect plaintiffs against unforeseen danger...." Id. We upheld the trial court's dismissal of

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