Sanford v. Fillenwarth

Decision Date08 May 2015
Docket NumberNo. 14–0411.,14–0411.
Citation863 N.W.2d 286
PartiesJoseph H. SANFORD and Suzanna L. Sanford, Appellants, v. Lynn FILLENWARTH and Julie Fillenwarth, as Executors of the Estate of Kenneth Fillenwarth, and James Lawler, Appellees. Kenneth Fillenwarth d/b/a Fillenwarth Beach and Kenneth Fillenwarth, Third–Party Plaintiffs, v. Cari Lawler, John Lawler, Matt Lawler, Michael Lawler, and Terry Lawler, Third–Party Defendants.
CourtIowa Supreme Court

Erik A. Luthens of Luthens Law Offices, P.C., West Des Moines, for appellants.

Christopher L. Bruns (until withdrawal), Keith J. Larson, and Nicholas J. Kilburg of Elderkin & Pirnie, P.L.C., Cedar Rapids, and Michael J. Chozen of Chozen & Saunders, Spirit Lake, for appellees.

Opinion

CADY, Chief Justice.

In this interlocutory appeal involving dramshop liability of a liquor license holder, we must primarily determine the meaning of the word “sold” within the Iowa Dramshop Law, Iowa Code section 123.92 (2011). The district court held that a beach resort that served alcoholic beverages without separate charge to resort guests during boat cruises provided as an advertised amenity of the hotel stay did not, as a matter of law, sell alcoholic beverages under the dramshop statute. It granted summary judgment to the resort licensee. On our review, we conclude the statute can encompass indirect sales under the facts alleged in this case. Accordingly, we reverse the district court and remand for further proceedings.

I. Background Facts and Proceedings.

Fillenwarth Beach is a resort in Arnold's Park, Iowa, on Lake Okoboji. It is open every year during the summer season. Kenneth Fillenwarth owned the resort as a sole proprietorship until his death in 2014.1 Fillenwarth Beach provides a number of amenities to its guests. The resort has indoor and outdoor pools, basketball and tennis courts, and a playground. It offers paddleboats and canoes for use on the lake, maintains a beach, and offers a variety of lessons to its guests. Other amenities included in a stay at Fillenwarth Beach for guests of the resort are complimentary cruises on Lake Okoboji in Fillenwarth-owned boats where free soft drinks, alcoholic beverages, and other beverages are served. The cruises are limited to resort guests. Kenneth, doing business as Fillenwarth Beach,2 holds two liquor licenses that authorize it to sell and serve alcoholic beverages. It offers wine and beer tastings and occasional social hours under a class “B” license and serves alcoholic beverages to guests on boat cruises around West Okoboji Lake under a class “D” license.

On July 31, 2011, Michael and Tonya Lawler checked into Fillenwarth Beach for a week stay, with their children Cari, James, and Kyle.3 Michael assumed responsibility for the cost of the family stay at the resort. Vacations at Fillenwarth Beach with the extended family were a yearly event for the Lawlers. On the day the family arrived at the resort, several of them, including James, signed up for an adults-only lake cruise that served alcoholic beverages. While waiting for the cruise to start, James and other family members relaxed with alcoholic beverages they had brought to the resort.

Joseph and Suzanna Sanford were also guests at the resort on July 31, 2011. As with the Lawlers, the Sanfords and their family vacationed at Fillenwarth Beach each summer. The Sanfords had made friends among the yearly guests, and their sons enjoyed the resort activities. As with the Lawlers, the Sanfords signed up for the evening lake cruise on July 31, along with several friends who were staying at the resort, including Dr. Bill Weeks.

During the cruise, James consumed a number of alcoholic beverages. The bartender served James two mixed drinks, and he drank some beers from a self-serve keg near the bar. Towards the end of the cruise, while waiting for drinks near the bar on the boat, James and Michael exchanged heated words and threats with Dr. Weeks. Approximately half an hour after the end of the cruise, the Sanfords and their friends encountered some members of the Lawler family. The encounter soon escalated into physical violence when James assaulted Joseph Sanford.4

The Sanfords filed a lawsuit against Fillenwarth, Fillenwarth Beach (collectively Fillenwarth Beach), and James for damages resulting from the injury. The legal theories of recovery included dramshop liability against Fillenwarth Beach, loss of consortium based on the dramshop liability, assault and battery against James with related loss-of-consortium claims, and premises liability and related loss-of-consortium claims against Fillenwarth Beach.

Fillenwarth Beach moved for summary judgment on the dramshop-liability claims. It claimed the dramshop statute only applies to the sale and service of alcoholic beverages and does not apply to impose liability in this case because the alcoholic beverages were not sold but only served as an amenity of the resort. It also claimed no sale could have been made to James because he was not a paying guest. The district court granted summary judgment. It found no sale took place because James did not provide any consideration for the alcoholic beverages served to him. The Sanfords sought, and we granted, interlocutory review.

II. Standard of Review.

Summary judgment is appropriate only if there is no genuine issue of material fact entitling the moving party to judgment as a matter of law. Thomas v. Gavin, 838 N.W.2d 518, 521 (Iowa 2013). We consider the evidence in the record in the light most favorable to the nonmoving party. Cox v. Rolling Acres Golf Course Corp., 532 N.W.2d 761, 763 (Iowa 1995). Review is limited to determining if a genuine issue of material fact is in question or if the law was correctly applied. See Huck v. Wyeth, Inc., 850 N.W.2d 353, 362 (Iowa 2014).

We review a district court's statutory interpretation for correction of errors at law.” Godfrey v. State, 847 N.W.2d 578, 582 (Iowa 2014). When interpreting a statute, we look to the express language of the statute and, if it is ambiguous, to the legislative intent behind the statute. Kay–Decker v. Iowa State Bd. of Tax Review, 857 N.W.2d 216, 223 (Iowa 2014). When a word is not defined in the statute, we look to precedent, similar statutes, dictionaries, and common usage to define the term. Id.

III. Analysis.

The starting point of our analysis is the language of the statute governing dramshop liability. The relevant portion of the statute provides:

Any person who is injured ... by an intoxicated person ... has a right of action for all damages actually sustained, severally or jointly, against any licensee or permittee ... who sold and served any beer, wine, or intoxicating liquor to the intoxicated person when the licensee or permittee knew or should have known the person was intoxicated....

Iowa Code § 123.92(1)(a ) (2011).5

Essentially, the parties disagree over the meaning of the word “sold” in the statute. The Sanfords claim the statute is broad enough to include alcoholic beverages served by a resort as an amenity while Fillenwarth Beach claims the statute is restricted to those common transactions in which a direct exchange of money for the alcoholic beverage occurs. Thus, the Sanfords assert the statute applies to impose liability if the other elements are satisfied while Fillenwarth Beach asserts the statute does not apply to impose liability as a matter of law. Ultimately, the disagreement is resolved by interpreting the language of the statute.

In order to discover the meaning of a statute rendered ambiguous by a particular set of circumstances, it is often helpful to consider the proposition sought to be addressed by the legislature. See IBP, Inc. v. Harker, 633 N.W.2d 322, 325 (Iowa 2001). This is a key inquiry in this case because the language of the statute and the accompanying definitions provide little insight into the meaning of a sale.

The dramshop statute exists within the chapter of the Code identified as the Iowa Alcoholic Beverage Control Act.” Iowa Code § 123.1. It was enacted “for the protection of the welfare, health, peace, morals, and safety of the people of the state.” Id. Its provisions are to be “liberally construed” to effectuate this purpose. Id. The Act is predicated on a policy that “traffic in alcoholic liquors” should be strictly regulated in the public interest. Id. Thus, many provisions of the Act prohibit the sale of alcoholic liquor, wine, or beer except under specific terms and conditions. See, e.g., id. § 123.2. Accordingly, the Act only defines the “sale” of alcoholic beverages in the context of a “prohibited sale. Id. § 123.3(32). A prohibited “sale” under the Act “includes soliciting for sales, taking orders for sales, keeping or exposing for sale, delivery or other trafficking for a valuable consideration promised or obtained, and procuring or allowing procurement for any other person.” Id. This definition does not fully illuminate the meaning of a “sale” in the context of the dramshop statute. Accordingly, we proceed to consider further the background of the statute to identify the problem sought to be addressed by the statute.

The dramshop statute was enacted to provide a remedy to innocent victims harmed by persons who are served excess liquor by licensees and permittees. Hayward v. P.D.A., Inc., 573 N.W.2d 29, 34 (Iowa 1997). Its name refers to a place, or shop, where alcoholic beverages are sold by the dram, or the drink, to be drunk on the premises. Malkan v. City of Chicago, 217 Ill. 471, 75 N.E. 548, 551 (1905) ; 48 C.J.S. Intoxicating Liquors § 36, at 203 (2014). The statute was a response to the absence of liability at common law for furnishing excessive amounts of alcoholic beverages to people who subsequently caused harm to others. Haafke v. Mitchell, 347 N.W.2d 381, 384 (Iowa 1984), overruled in part on other grounds by Gail v. Clark, 410 N.W.2d 662, 669–70 (Iowa 1987). At common law, the proximate-cause element of a tort claim was viewed to insulate a saloonkeeper from liability for...

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