Picadilly, Inc. v. Colvin, 32S01-8803-CV-287

• Decision Date: 02 March 1988
• Docket Number: No. 32S01-8803-CV-287,32S01-8803-CV-287
• Parties: PICADILLY, INC., Appellant (Defendant Below), v. Charles H. COLVIN, Appellee (Plaintiff Below).
• Court: Indiana Supreme Court

Page 1217

519 N.E.2d 1217

PICADILLY, INC., Appellant (Defendant Below), v. Charles H. COLVIN, Appellee (Plaintiff Below).

No. 32S01-8803-CV-287.

Supreme Court of Indiana.

March 2, 1988.

James R. Fisher, Robert B. Clemens, Michael J. Lewinski, Ice Miller Donadio & Ryan, Indianapolis, for appellant.

Frank E. Spencer, W.F. Conour, Office of William F. Conour, Indianapolis, for appellee.

Indiana Trial Lawyers Ass'n by P. Gregory Cross and Steven C. Brown, Cross, Marshall, Schuck, Deweese, Cross & Feick, P.C., Muncie, for amicus curiae.

ON CIVIL PETITION TO TRANSFER

DICKSON, Justice.

Following a jury trial, plaintiff-appellee Charles H. Colvin (Colvin) received a judgment of $75,000.00 in compensatory damages and $150,000.00 in punitive damages against defendant-appellant Picadilly, Inc. (Picadilly). The Court of Appeals reversed and remanded with instructions to enter judgment for Picadilly, finding that there was no common law cause of action for dram shop liability in Indiana, and that the evidence was insufficient to prove Picadilly's knowledge of its customer's intoxication. Picadilly, Inc. v. Colvin (1987), Ind.App., 503 N.E.2d 421. We disagree and grant transfer accordingly.

The Court of Appeals provided the following summary of facts. Deborah Brewer along with Joyce Carrico joined a group of six other women sometime between 7:30 and 9:30 p.m. at Picadilly. Picadilly is a bar licensed to sell beer, wine, and liquor. It is located in a building which formerly housed a department store and covers in excess of 40,000 square feet. The method used in selling alcoholic beverages to the patrons is similar to checkout counters at a supermarket. There are eight lanes for customer use. Each lane begins with a cashier where the drinks are ordered and paid for. The drink order is conveyed by computer to a bartender who prepares the drinks. The drinks are then given to a passer who places the completed order on a counter for the customer to pick up. Brewer drove Carrico home at about 1:30 a.m. and started toward her own home in Hope, Indiana. Brewer became lost and entered an interstate highway going in the wrong direction. She collided with Colvin at about 3:30 a.m. Two separate blood tests were taken after 6:00 a.m. which showed Brewer's blood alcohol content to be .114 and .1205. Colvin filed suit against Brewer and Picadilly with a settlement being reached with Brewer prior to trial.

We will regroup and discuss the issues presented by Picadilly on appeal as follows:

1. refusal of instructions limiting dram shop liability to statutory violation;

2. sufficiency of evidence of Picadilly's knowledge of customer's intoxication;

3. punitive damages.

1. Dram Shop Liability

Picadilly's tendered instructions no. 7, 8, 9, and 10 each related to its contention that absent a violation of the statute prohibiting the furnishing of alcoholic beverages to intoxicated persons, there could be no independent common law liability for injuries caused by a customer's intoxication. The trial court refused the instructions, observing that Picadilly's contention was an incorrect statement of law.

In considering whether any error results from refusal of the tendered instruction, the reviewing court considers: 1) whether the tendered instruction correctly states the law, 2) whether there is evidence in the record to support the giving of the instruction, and 3) whether the substance of the instruction is covered by other instructions which are given. Dahlberg v. Ogle (1978), 268 Ind. 30, 373 N.E.2d 159. Failure of a tendered instruction to meet any one of these criteria will support its refusal by the trial court.

The general common law duty of persons selling alcoholic beverages to exercise due care was recognized in Elder v. Fisher (1966), 247 Ind. 598, 217 N.E.2d 847. In Elder, plaintiff brought a damage action for personal injuries from a collision allegedly caused by an intoxicated 17-year-old who purchased liquor from the defendant. Two questions were identified and discussed: (1) whether violation of the statute prohibiting sale of alcohol to underage persons would constitute negligence per se, and (2) whether, even without such statute, there could be a common law cause of action for negligence based upon the sale of intoxicating liquor. Discussing each question independently, Elder expressly answered each in the affirmative. The common law liability applies when a negligent act or omission is a proximate cause of an injury, which injury "need be only a natural and probable result thereof; and the consequence be one which in the light of circumstances should reasonably have been foreseen or anticipated." Elder, 247 Ind. at 605, 217 N.E.2d at 852.

Picadilly contends that the sole basis for liability should derive from violation of Ind. Code Sec. 7.1-5-10-15: ¹

It is unlawful for a person to sell, barter, deliver, or give away an alcoholic beverage to another person who is in a state of intoxication if the person knows that the other person is intoxicated.

Violation of this criminal statute is a class B misdemeanor. Ind. Code Sec. 7.1-5-1-8. The provision quoted above does not represent a legislative attempt to modify the common law with respect to liability of persons negligently furnishing alcoholic beverages. The statute merely designates certain specific conduct, the violation of which is punishable criminal conduct. Case law recognizes that proof of such proscribed conduct may provide evidence of negligence in a civil damage action. Elder, supra. The role of this statute in the scheme of common law dram shop liability is analogous to the relation of motor vehicle driving offense statutes to the common law duty of drivers to exercise reasonable care for the safety of others. Rather than preempting the common law, such statutes designate certain minimal duties but do not thereby relieve persons from otherwise exercising reasonable care.

In Whisman v. Fawcett (1984), Ind., 470 N.E.2d 73, 80, this Court recognized that Elder established "that there is a common law action against those unlawfully selling or furnishing intoxicating liquor in favor of third persons subsequently injured by the acts of the purchasers as a result of their intoxicated condition." However, Whisman misinterpreted Elder as establishing that general principles of common law negligence "apply only in the absence of a special statutory provision." Whisman, supra. This view was not within the holding of Elder and resulted from the unnecessary engrafting of the word "only" to the actual language of Elder:

In the absence of special statutory provision, the general principles of common-law negligence should be applied to cases involving intoxicating liquor.

Elder, 247 Ind. at 607, 217 N.E.2d at 853. We conclude that Elder did not intend to limit common law dram shop liability to the absence of statute, but rather to recognize the common law liability notwithstanding the existence of such statute.

Under the common law of this State, persons engaged in the business of furnishing alcoholic beverages are not granted special exemption or privilege. They are under the same duty to exercise ordinary and reasonable care in the conduct of their operations as are those involved in businesses which are not alcohol related. Such ordinary and reasonable care must be exercised for the safety of others whose injuries should reasonably have been foreseen or anticipated. The foreseeable risk of harm is indisputable. During the years 1981 to 1986, alcohol-related vehicle accidents in Indiana resulted in 53,429 persons injured and 1,554 deaths. Governor's Task Force to Reduce Drunk Driving, 1987 Progress Report 12 (summation from graphs). Indiana State Police statistics for 1986 disclosed that drinking drivers contributed to 12,263 (7.6%) of all Indiana accidents and 245 (26%) of all fatal accidents. Indiana State Police, 1986 Summary of Motor Vehicle Traffic Accidents 2.

The trial court was correct in rejecting the defendant's tendered instructions at issue. They each involved or were predicated upon the incorrect premise that common law dram shop liability did not exist apart from, or was limited to, statutory violation.

2. Sufficiency of Evidence of Statutory Violation

Picadilly argues that the trial court erred in refusing to grant its motion for judgment on the evidence because of the lack of sufficient evidence to permit the jury to conclude that Picadilly's employees knowingly served alcohol to an intoxicated person in violation of statute. Colvin argues that a challenge to the sufficiency of the evidence must demonstrate inadequate evidence under every theory of liability, not merely one of many, before prejudice is established. We agree. A general verdict will be sustained if the evidence is sufficient to sustain any theory of liability. In re Estate of Fanning (1975), 263 Ind. 414, 417, 333 N.E.2d 80, 82; City of Indianapolis v. Pollard (1960), 241 Ind. 66, 72, 169 N.E.2d 405, 408.

Because the statutory violation was not the exclusive basis for liability, and because the sufficiency of evidence upon the alternative general negligence theory is not questioned in this appeal, we find no error on this issue.

3. Punitive Damages

With respect to punitive damages, Picadilly first contends that the judgment awarding punitive damages is improper as a matter of law, and alleges that the complaint failed to state a proper claim for the relief sought. We disagree. The case proceeded to trial on plaintiff's amended complaint which clearly notified the trial court and Picadilly of Colvin's claim for punitive damages. The amended complaint satisfied the notice pleading requirements of Trial Rule 8(A). We find no error upon this claim.

Picadilly next contends that the trial court erred in failing to give any instruction concerning the standard of conduct necessary for punitive damages. However, Picadilly's trial counsel failed to object to the court's...