McGuire v. C & L Restaurant Inc.

• Decision Date: 16 March 1984
• Docket Number: No. C6-83-146,C6-83-146
• Citation: 346 N.W.2d 605
• Parties: John H. McGUIRE, Appellant, v. C & L RESTAURANT INC., etc., Respondent, LeAn's Inc., et al., Respondents.
• Court: Minnesota Supreme Court

Page 605

346 N.W.2d 605

John H. McGUIRE, Appellant, v. C & L RESTAURANT INC., etc., Respondent, LeAn's Inc., et al., Respondents.

No. C6-83-146.

Supreme Court of Minnesota.

March 16, 1984.

Syllabus by the Court

1. The "damage cap" contained in Minn.Stat. Sec. 340.95 (1980) unconstitutionally deprives those injured as the direct result of the illegal sale of intoxicating liquors equal protection of the law in violation of U.S. Const. amend. XIV, Sec. 1 and Minn. Const. art. I, Sec. 2 2. Alleged trial court errors, mostly discretionary rulings, did not deprive an intoxicating liquor vendor of a fair trial.

John M. Steele, Minneapolis, for appellant.

James Galman, St. Paul, for LeAn's Inc.

Peter E. Lind and Jeffrey M. Bauer, Minneapolis, for C & L Restaurant.

Considered and decided by the court en banc without oral argument.

KELLEY, Justice.

In an action against respondent C & L Restaurant, Inc., a Minnesota corporation doing business as Southfork Bar, for personal injury damages under Minn.Stat. Sec. 340.95 (1980) (the Minnesota Civil Damage Act), appellant received a verdict against respondent C & L Restaurant in excess of $250,000. ¹ Following post-trial motions, the trial court applied the "damage cap" provided in section 340.95 and limited C & L Restaurant's obligation to pay appellant's damages to $250,000. On appeal, appellant contends that the "damage cap" provision of the statute is unconstitutional because it deprives him of equal protection of the law guaranteed by the United States and Minnesota Constitutions. Respondent, by notice of review, challenges certain trial court rulings. Because we conclude the "damage cap" provision of section 340.95 as it existed in 1981 is unconstitutional, we reverse.

Respondent C & L Restaurant was a corporation owned by Stanley and Mary Lynn and Jerome and Bibiana Cassidy. Thirteen days before the incidents giving rise to this action, it had purchased a bar known now as the Southfork Bar located on Highway 3 in Eagan, Minnesota. Elmer Scott went to the Southfork Bar at approximately 4 p.m. on June 29, 1981. He was a frequent customer and, through a corporation partially owned by him, a former proprietor of the bar. On that afternoon he took his "usual" seat at the bar where he was joined by friends. Between 4 and 6 p.m., the Southfork Bar served two drinks for the price of one. Mary Lynn bartended until 6 p.m., during which time she served Scott at least four drinks. After 6 p.m., Kim Eddy served him two or three drinks. The exact number of drinks served to Scott cannot be determined, but it seems clear from the evidence he consumed at least 10 drinks containing intoxicating liquor. To one observer he appeared intoxicated by 7:15 p.m. Scott himself admitted that he had between 10 and 20 drinks that evening prior to the occurrence of the accident giving rise to this lawsuit.

Around 8 p.m., Scott drove a truck owned by LeAn's Inc. from the Southfork Bar parking lot and turned east onto Highway 3. He intended to make a left turn onto Highway 149. To do so, he slowed down and pulled into the left-turn lane so that the front of the truck protruded 2 or 3 feet into the on-coming traffic lane. Appellant McGuire and his fiancee, Cheryl Wilebski, were traveling west on Highway 3 on a motorcycle approaching the intersection. As the motorcycle, after slowing down, continued through the intersection, Scott turned into the path of the motorcycle and hit it broadside. Wilebski was thrown from the motorcycle to the cement median. The motorcycle, with McGuire on it, was pinned in front of the truck. Scott continued driving approximately 300 feet and then appeared to slow down, after which he accelerated the truck and proceeded down Highway 149 for approximately .9 of a mile with the motorcycle and driver still pinned in front. He did this despite hearing a loud scraping noise and observing heavy smoke caused by the trapped motorcycle dragging on the pavement. A number of drivers attempted to stop Scott by honking horns or by flagging him down. Fearing that he would be charged with driving while under the influence, Scott continued to drive until he became stuck in gravel a short distance from his home. When he got out of the truck, he observed the front end and saw motorcycle and driver pinned beneath his truck. Thereafter, Scott walked to his house without rendering any aid to the motorcycle driver.

In the accident McGuire sustained catastrophic injuries. He was hospitalized for 3 months in the burn unit at St. Paul-Ramsey Medical Center where he underwent multiple skin grafts designed to repair 40% of his body's surface tissue which had been scraped away. Besides this permanent scarring, McGuire suffers from permanent loss of normal range of motion in all extremities, below the knee amputation of his left leg, 100% loss of use of his right arm, and massive muscle and tendon injuries of his right foot. The jury's damage award of $4,349,000 reflected the severity of McGuire's injuries.

On the jury findings the trial court originally ordered a joint and several judgment against Scott and C & L Restaurant in the amount of $4,349,000 but provided that C & L Restaurant was "obligated" to pay only $338,000 toward the satisfaction of the judgment. Following a post-trial motion, the trial court, recognizing the statutory limitation of recovery contained in Minn.Stat. Sec. 340.95 (1980), ² ordered that C & L Restaurant "shall be obligated to [pay] $250,000 towards satisfying the * * * award."

On appeal appellant asserts that the "damage cap" in the statute limiting his recovery against the bar to $250,000 violated the equal protection clauses of the United States and Minnesota Constitutions--U.S. Const. amend. XIV, Sec. 1; Minn. Const. art. I, Sec. 2. Appellant argues that had his injuries resulted from either an illegal sale of non-intoxicating beverages (3.2 beer) or an illegal sale of intoxicating liquor by a vendor not subject to section 340.95, he could have recovered his full damages; whereas, since his injuries resulted from an illegal sale of intoxicating liquor by a vendor covered by section 340.95, he remains undercompensated.

Before addressing this issue, we must first consider respondent's ³ contention that appellant may not properly challenge before this court the constitutionality of the "damage cap" of section 340.95. Respondent claims appellant at no time asked the trial court to rule on the constitutionality of the provision. We believe respondent's contention is meritless. Appellant notified the Minnesota Attorney General of his intention to challenge the statute's constitutionality both before trial and on appeal. ⁴ In each instance the Attorney General waived his right to intervene in the matter. See Automotive Merchandise, Inc. v Smith, 297 Minn. 475, 212 N.W.2d 678 (1973) (per curiam).

Proper notification notwithstanding, if the constitutionality of the "damage cap" were at no time challenged or litigated in the trial court, appellant would generally be barred from challenging it here. See Hampton v. Hampton, 303 Minn. 500, 501, 229 N.W.2d 139, 140 (1975); Automotive Merchandise, Inc., 297 Minn. at 477, 212 N.W.2d at 679-80. It seems clear that appellant did, in fact, challenge the statute's constitutionality in the trial court. He joined plaintiff Wilebski in moving that the trial judge disregard the damage cap because of its unconstitutionality. The trial court reserved a ruling until a later time but apparently never explicitly ruled on it. After respondent moved to limit its "responsibility" to $250,000 in a post-trial motion, appellant moved the trial court to declare the "damage cap" unconstitutional. In granting respondent's motion for limitation of "responsibility," the trial court did consider appellant's motion and stated the amended order, from which this appeal is now taken, "will give us a clear question, a clear point as to what is being done, and if the Supreme Court wants to go over the cap, is [sic] invalid, so be it." ⁵

From the foregoing, we conclude the constitutional issue and the trial judge's resolution were implied in the lower court. Moreover, the parties have had adequate time to brief constitutional issues and the interests of justice require consideration of such issues by this court. Under such circumstances, we will recognize an exception to the rule and consider constitutional issues raised, even if for the first time, on appeal. See, e.g., Tischendorf v. Tischendorf, 321 N.W.2d 405, 410 (Minn.1982), cert. denied, --- U.S. ----, 103 S.Ct. 1426, 75 L.Ed.2d 787 (1983).

1. In Minnesota the early common law did not permit an action against a liquor vendor for injuries resulting from the vendor's illegal sale of intoxicating liquor. See Strand v. Village of Watson, 245 Minn. 414, 419, 72 N.W.2d 609, 614 (1955); Beck v. Groe, 245 Minn. 28, 33-34, 70 N.W.2d 886, 891 (1955). In 1911, the legislature enacted the Civil Damage Act, also known as the Dram Shop Act. ⁶ This Act created a new cause of action against liquor vendors. The Civil Damage Act, now Minn.Stat. Sec. 340.95, preempted all other actions that might impose liability on liquor vendors for illegal sales and provided the exclusive remedy in such actions. See Fitzer v. Bloom, 253 N.W.2d 395, 403 (Minn.1977).

At the time of its enactment, the Civil Damage Act applied to the sale of all intoxicating liquors which included both 3.2 beer and stronger liquor. In 1933, the Minnesota legislature redefined "intoxicating liquors" so as to exclude 3.2 beer from the definition to permit vendors to sell 3.2 beer without violating prohibition laws. See Wegan v. Village of Lexington, 309 N.W.2d 273, 279 (Minn.1981). Thereafter, in Minnesota there existed two classes of liquor vendors: vendors of "non-intoxicating liquor" (3.2 beer) and vendors of "intoxicating liquor." Only the latter class remained subject to liability under the Civil Damage Act. Although prohibition was...