Lydia v. Horton

• Decision Date: 14 July 2003
• Docket Number: No. 25675.,25675.
• Citation: 583 S.E.2d 750,355 S.C. 36
• Parties: Mitchell LYDIA, Respondent, v. Steve C. HORTON, Petitioner. Lisa Mullinax Lydia, Respondent, v. Steve C. Horton, Petitioner.
• Court: South Carolina Supreme Court

355 S.C. 36

583 S.E.2d 750

Mitchell LYDIA, Respondent, v. Steve C. HORTON, Petitioner.

Lisa Mullinax Lydia, Respondent, v. Steve C. Horton, Petitioner.

No. 25675.

Supreme Court of South Carolina.

Heard December 4, 2002.

Decided July 14, 2003.

Samuel W. Outten, John Patrick Riordan, both of Leatherwood Walker Todd & Mann, of Greenville, for Petitioner.

Andrew C. Barr, of Fulton & Barr, of Greenville, for Respondent.

Chief Justice TOAL.

We granted certiorari to review the Court of Appeals' determination that Petitioner is liable on a first party negligent entrustment claim because he allowed an intoxicated person to borrow his car.

Factual/Procedural Background

According to the Complaint, Respondent, Mitchell Lydia ("Lydia"), was intoxicated on April 27, 1995, when Petitioner, Steve Horton ("Horton"), allowed Lydia to borrow his car. Lydia's Complaint alleges that Horton either knew or should have known that Lydia was not competent to operate the vehicle. Lydia then drove the car in his intoxicated state and wrecked the vehicle in a single-car accident that rendered him a quadriplegic.

Lydia brought an action against Horton for first party negligent entrustment. The trial court granted Horton's motion for judgment on the pleadings holding that Lydia's admitted negligence precluded any recovery on his part because, under South Carolina's modified comparative negligence system, his negligence outweighed Horton's negligence. The Court of Appeals reversed and remanded, holding that a first party negligence claim can be brought in this state. Lydia v. Horton, 343 S.C. 376, 540 S.E.2d 102 (Ct.App.2000).

This Court granted Horton's petition for certiorari to review the Court of Appeals decision. Horton raises the following issue on appeal:

Did the Court of Appeals err in recognizing a first party negligent entrustment cause of action brought by an adult who was intoxicated when injured?

Law/Analysis

Horton argues that the Court of Appeals erred in adopting a first party negligent entrustment cause of action asserted by an intoxicated party. We agree.

Whether South Carolina recognizes a first party negligent entrustment claim is a novel question of law. In finding that this state should recognize the cause of action, the Court of Appeals adopted the Restatement (Second) of Torts §§ 308 and 390 (1965).

Section 308 provides:

It is negligence to permit a third person to use a thing or to engage in an activity which is under the control of the actor, if the actor knows or should know that such person intends or is likely to use the thing or to conduct himself in the activity in such a manner as to create an unreasonable risk of harm to others.

Section 390 provides:

One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.

We conclude that the policy considerations which support the legal theory of third party negligent entrustment are undermined by applying them to a first party cause of action. The Restatement provides seven illustrations of when a negligent entrustment claim arises. Only one illustration, Illustration 7, refers to a first party claim, and we do not believe that a pure first party claim can be extrapolated from the illustration.¹ The example involves a lessee/lessor relationship where a third-party is injured, which is not analogous to the facts of this case.

We hold that Lydia cannot recover on a first party negligent entrustment cause of action for two reasons: (1) South Carolina's modified comparative negligence scheme would bar recovery for this type of claim, and (2) public policy considerations addressed by this Court in Tobias v. Sports Club, Inc., 332 S.C. 90, 504 S.E.2d 318 (1998).

Modified Comparative Negligence System

In South Carolina, a plaintiff is barred from recovery if his negligence outweighs the defendant's. Nelson v. Concrete Supply Co., 303 S.C. 243, 399 S.E.2d 783 (1991). We believe that this state's modified comparative negligence system also bars an intoxicated adult's recovery on a first party negligent entrustment cause of action. We cannot imagine how one could be more than fifty percent negligent in loaning his car to an intoxicated adult who subsequently injured himself.² We agree with the trial judge that Lydia's admission that he was "appreciably impaired" and that he lost control of the vehicle supports only one conclusion, that Lydia's negligence exceeded Horton's. See Creech v. South Carolina Wildlife & Marine Resources Dep't, 328 S.C. 24, 491 S.E.2d 571 (1997)

(if the evidence supports only one conclusion, then the comparative fault of the plaintiff and defendant becomes a question of law for the trial judge).

Public Policy

Even in a situation where comparative negligence would not bar a claim for negligent entrustment, South Carolina's public policy prohibits a first party negligent entrustment action under this factual scenario. The public policy considerations which govern our decision as to whether to allow civil suits based on negligent entrustment grow out of South Carolina's regulation of the sale of alcohol.

South Carolina first criminalized the sale of alcohol to an intoxicated person in 1874. The state had no statutorily or judicially imposed civil liability. Nationally, in this era, many states were adopting "dram shop laws," imposing civil liability on tavern owners for injuries caused by intoxicated patrons to whom the tavern owner had sold alcohol. Meanwhile, in 1909, South Carolina enacted total prohibition, 10 years before federal Prohibition was adopted. The federal Prohibition amendment was repealed in 1933. Although alcohol sales were also legalized in South Carolina in 1933, this state did not permit full-blown sale of liquor by the drink until 1973.³ Nationally, after Prohibition ended, many states with a more developed system of legalized bars began to repeal their dram shop laws.⁴

At common law in American courts, a tavern owner could not be held civilly liable for injuries caused by an over served, intoxicated patron. With the repeal of dram shop laws in all but 18 states, the majority of states did not impose liability upon tavern owners.⁵ In the 1950s, several state supreme courts began to develop a theory of tavern owner civil liability based on violations of state criminal statutes forbidding the serving of alcohol to intoxicated patrons.⁶ By 1987, 41 states had some form of tavern liability.⁷ South Carolina's General Assembly did not enact a dram shop law, but in 1985, the South Carolina Court of Appeals held that a bar owner's violation of the criminal statute forbidding service to intoxicated persons could support a civil suit against the bar for injuries caused by the intoxicated patron. Christiansen v. Campbell, 285 S.C. 164, 328 S.E.2d 351 (Ct.App.1985). In Christiansen, the plaintiff was struck by an automobile as he stepped off the curb in front of a bar where he had consumed a number of beers. The bar owner had continued to serve Christiansen after he became intoxicated. Christiansen sued the automobile driver and the bar owner. The Court of Appeals held that Christiansen had a private right of action against the bar owner based on the violation of a penal statute. The Court of Appeals found that the statute existed both to protect the public and to protect intoxicated persons. Id.

In Tobias v. Sports Club, Inc., 332 S.C. 90, 504 S.E.2d 318 (1998), this Court expressly overruled Christiansen holding that we would not permit an intoxicated adult to bring a first party cause of action against a tavern proprietor predicated on a violation of the dram shop statutes. This Court stated, "public policy is not served by allowing the intoxicated adult patron to maintain a suit for injuries which result from his own conduct." Id. at 90, 504 S.E.2d at 320. Our Court noted that its decision did not preclude a third party from bringing a cause of action under the statutes. Id. at 90, 504 S.E.2d at 319.

We apply these same public policy considerations to this case. We disagree with the Court of Appeals' conclusion that Tobias public policy considerations only have bearing in comparing fault but have no bearing on whether or not to impose an outright bar to a first party negligent entrustment cause of action. The essence of this case and the Tobias case are the same, for in both cases, the plaintiff, who was voluntarily intoxicated when the accident occurred, is attempting to deflect the responsibility that should be imposed upon himself towards another. Just as this plaintiff cannot bring a first party cause of action to challenge the discretionary conduct of the tavern owner, he cannot bring the same action to challenge the discretionary conduct of his entrustor.

Conclusion

We REVERSE the Court of Appeals and conclude that Lydia's first party negligent entrustment claim is barred because his negligence outweighed Horton's and because of the public policy considerations we set forth in Tobias. We also decline to adopt ...