Rambaum v. Swisher

• Decision Date: 26 April 1988
• Docket Number: No. C0-87-2192,C0-87-2192
• Citation: 423 N.W.2d 68
• Parties: Anthony RAMBAUM, Respondent, v. Susan Lynn SWISHER, Respondent, Hrvatski Dom, an association, Appellant.
• Court: Minnesota Court of Appeals

Page 68

423 N.W.2d 68

Anthony RAMBAUM, Respondent, v. Susan Lynn SWISHER, Respondent Hrvatski Dom, an association, Appellant.

No. C0-87-2192.

Court of Appeals of Minnesota.

April 26, 1988.

Review Granted June 29, 1988.

Syllabus by the Court

1. Alcoholic beverage sales to sober, adult non-guests in violation of a club's liquor license constitute "illegally selling" within the meaning of the Dramshop Act.

2. Illegal sale of alcoholic beverage to non-guest proximately caused plaintiff's injuries.

3. Appellant has no standing to challenge constitutionality of joint and several liability statute, Minn.Stat. § 604.02, subd. 1 (1986), on equal protection grounds.

4. Statute requiring reduction of future damages to present value, Minn.Stat. § 604.07, subd. 2 (1986), does not violate Minnesota's constitution.

5. Minn.Stat. § 604.01, subd. 5 (1986), did not permit trial court to credit entire amount of Pierringer release against jury award.

Edward Lynch, Thuet, Lynch, Pugh & Rogosheske, S. St. Paul, for Anthony Rambaum, respondent.

Bradley Cosgriff, Lee L. La Bore & Assoc., Ltd., Hopkins, for Susan Lynn Swisher, respondent.

Rolf E. Sonnesyn, Foster, Waldeck & Lind, Ltd., Minneapolis, for Hrvatski Dom, an ass'n appellant.

Heard, considered and decided by HUSPENI, P.J., and PARKER and MULALLY, ^* JJ.

OPINION

PARKER, Judge.

Anthony Rambaum was seriously injured when he was struck by a car driven by Susan Swisher, who was intoxicated at the time. He sued Swisher on a theory of negligence; O'Neill's Bar on the grounds that its sale of alcohol to Swisher was to an obviously intoxicated person and thus in violation of the Dramshop Act; and Hrvatski Dom on the theory that its sale of alcohol to Swisher, a non-club member or non-guest, violated its club liquor license and was thus an "illegal sale" within the meaning of the Dramshop Act. Hrvatski Dom appeals, challenging the jury's implicit finding that alcoholic beverage sales to non-club members or non-guests by a club license-holder are illegal for purposes of dramshop liability. It also contends the joint and several liability statute, Minn.Stat. § 604.02, subd. 1 (1986), violates constitutional rights of equal protection. Rambaum challenges the trial court's reduction of the jury award by $200,000, the amount for which he settled with O'Neill's Bar in a Pierringer release, and the constitutionality of the statute requiring that future damage awards be reduced to present value, Minn.Stat. § 604.07, subd. 2 (1986). We affirm in part, reverse in part and remand.

FACTS

Anthony Rambaum was seriously injured as a result of being struck by a car driven by Susan Swisher shortly after midnight on September 15, 1985. Rambaum sued Swisher on a theory of negligence and sued Hrvatski Dom and O'Neill's Bar on a dramshop theory.

Swisher and Susan Canard, her friend, arrived at the Croation Hall in South St. Paul at about 6:00 p.m. on September 14, 1985. The Croation Hall is a club operated by Hrvatski Dom, a fraternal organization possessing a club liquor license. That license restricts its alcoholic beverage sales to club members and their guests.

Swisher had nothing alcoholic to drink before arriving at the Croation Hall. While she was there with Canard, she drank three or four mixed drinks. There is no evidence that Swisher was served alcoholic beverages at the Croation Hall while obviously intoxicated, or that she was a minor.

Canard testified that she had been a member of the Croation Hall since 1983 and was a member on the night of September 14, 1985. She was not a member of Hrvatski Dom.

Around 8:30 p.m., Swisher and Canard drove separately to O'Neill's Bar. Swisher drank seven or eight mixed drinks at O'Neill's Bar and left about midnight. On her way home, Swisher careened into Rambaum as he was alighting from his car. Swisher's car kept going until it crashed into a telephone pole.

Before impaneling the jury, O'Neill's Bar entered into a Pierringer release with Rambaum for $200,000. Swisher and Hrvatski Dom remained in the case. At trial Rambaum argued that Canard was not a legitimate member of Hrvatski Dom in September 1985 and thus Swisher could not be her bona fide guest and the sale was illegal under the Dramshop Act. Accepting that argument, the jury found that Hrvatski Dom illegally sold alcoholic beverages to Swisher, the illegal sale caused or contributed to Swisher's intoxication, and Swisher's intoxication resulting from the illegal sale was a direct cause of Rambaum's injuries.

The court submitted the fault of all original parties in the action, including O'Neill's Bar, to the jury. The jury found Swisher 80 percent at fault; O'Neill's Bar ten percent at fault, under the theory that the bar sold alcoholic beverages to an obviously intoxicated person; and Hrvatski Dom ten percent at fault. The jury awarded damages totaling $432,035.52, $227,035.52 representing past damages and $205,000 representing future damages.

The trial court reduced the award of future damages according to the annuity method to $97,968.45 and set off collateral sources of $65,825.40. Upon Hrvatski Dom's post-trial motions, it also credited the entire $200,000 Pierringer release settlement with O'Neill's Bar against the judgment, resulting in a net judgment of $59,178.57, excluding costs and prejudgment interest of $16,120.95.

ISSUES

1. Do alcoholic beverage sales to non-club members or non-guests in violation of Minn.Stat. § 340A.404, subd. 1(3) (Supp.1985), constitute "illegally selling" within the meaning of the Dramshop Act?

2. Need the violation of Minn.Stat. § 340A.404, subd. 1(3) (Supp.1985), proximately cause Rambaum's injuries?

3. Does Hrvatski Dom have standing to challenge Minn.Stat. § 604.02, subd. 1 (1986), on equal protection grounds?

4. Does Minn.Stat. § 604.07, subd. 2 (1986), requiring the reduction of future damages to present value, violate the Minnesota Constitution?

5. Did the trial court err in crediting the entire amount of the Pierringer release against the judgment?

DISCUSSION

I

Under the Dramshop Act,

[a] * * * person injured in person, property, or means of support by an intoxicated person or by the intoxication of another person, has a right of action in the person's own name for all damages sustained against a person who caused the intoxication of that person by illegally selling alcoholic beverages.

Minn.Stat. § 340A.801, subd. 1 (Supp.1985) (emphasis added).

The initial question in this case is whether the sale to Swisher was illegal within the meaning of the statute. The City of South St. Paul issued Hrvatski Dom a club license. A club license restricts sales of alcohol to persons who are members or bona fide guests of club members. Minn.Stat. § 340A.404, subd. 1(3) (Supp.1985). It is a criminal offense to violate this section. See Minn.Stat. § 340A.703 (Supp.1985).

The jury found that (1) Hrvatski Dom made an illegal sale of an alcoholic beverage to Swisher; (2) the illegal sale caused or contributed to her intoxication; (3) the intoxication resulting from the illegal sale was a direct cause of Rambaum's injuries; and (4) Hrvatski Dom was ten percent at fault.

Canard testified that she was a member of Croation Hall but was not a member of Hrvatski Dom. The jury did not explicitly find that Canard was not a club member or that Hrvatski Dom's sale to Swisher was to a non-guest. Implicit in the jury's finding of an illegal sale, however, is a finding that Swisher was not a guest: Rambaum argued no other theory of liability against Hrvatski Dom.

Hrvatski Dom argues that though its sale to Swisher may have violated its liquor license, "such sale is not illegal for the purposes of the Dramshop Act." We disagree for two reasons.

The Dramshop Act itself does not define what constitutes an illegal sale. The statute imposes liability for "illegally selling" alcoholic beverages when the other statutory requirements of intoxication, causation and injury are met. The statute contains no exceptions.

There was a sale, and that sale was a crime, see Minn.Stat. § 340A.703 (Supp.1985). Because Hrvatski Dom's sale to Swisher was contrary to law, it was "illegal" within the plain meaning of that word. See Black's Law Dictionary 673 (5th ed. 1979); Minn.Stat. § 645.08(1) (1986) (words shall be construed according to their common usage).

Before 1983, when the supreme court decided Hollerich v. City of Good Thunder, 340 N.W.2d 665 (Minn.1983), the supreme court applied the Dramshop Act (or Civil Damages Act) almost mechanically, holding sales in violation of liquor laws to be illegal under the Act. See, e.g., Murphy v. Hennen, 264 Minn. 457, 461-62, 119 N.W.2d 489, 492 (1963) (sales to minors); Strand v. Village of Watson, 245 Minn. 414, 422, 72 N.W.2d 609, 615 (1955) (sales to obviously intoxicated persons); Fest v. Olson, 138 Minn. 31, 33, 163 N.W. 798, 798 (1917) (sales on Sunday).

In Hollerich the supreme court examined the purposes of the Dramshop Act to determine whether an "after hours" sale in violation of Minn.Stat. § 340.14, subd. 1 (1982), constituted "illegally selling" within the meaning of the Act. A municipal liquor store had sold a 12-pack of strong beer to an ostensibly sober adult "after hours." Examining the purposes of the Dramshop Act to ascertain legislative intent, the supreme court stated:

Civil damage acts "although penal in nature, are also remedial in character and, according to the prevailing view, are to be liberally construed so as to suppress the mischief and advance the remedy." The mischief, of course, consists of the social ills resulting from intoxication. Through strict liability sanctions and by placing the burden of economic loss on the vendors, the Act "provides an extremely effective incentive for liquor vendors to do everything in their power to avoid making illegal sales." At the same time, the remedy advanced by the Act is "to compensate members of the public who are injured as a result of illegal...