Slager v. HWA Corp.

• Decision Date: 25 January 1989
• Docket Number: No. 87-1696,87-1696
• Citation: Slager v. HWA Corp., 435 N.W.2d 349 (Iowa 1989)
• Parties: Gary T. SLAGER and Marcia L. Slager, as Co-Conservators and Co-Guardians of John E. Slager, Appellees, v. HWA CORPORATION, d/b/a College Street Club, Appellant.
• Court: Iowa Supreme Court

Page 349

435 N.W.2d 349

Gary T. SLAGER and Marcia L. Slager, as Co-Conservators and Co-Guardians of John E. Slager, Appellees, v.HWA CORPORATION, d/b/a College Street Club, Appellant.

No. 87-1696.

Supreme Court of Iowa.

Jan. 25, 1989.

John M. Bickel, James D. Hodges, Jr., and Diane Kutzko of Shuttleworth & Ingersoll, Cedar Rapids, for appellant.

Thomas Diehl of Leff, Leff, Leff, Haupert & Traw, Iowa City, for appellees.

Considered en banc.

LAVORATO, Justice.

The sole issue here is whether comparative fault under Iowa Code chapter 668(1987) has any application as a defense to a dram shop action under Iowa Code section 123.92.The district court ruled it did not.We agree and affirm.

I.Background Facts and Proceedings.

The following facts, which gave rise to these proceedings, are gleaned from the petition.On August 3, 1986, the defendant, HWA Corporation, owned and operated the College St. Club, a liquor establishment in Iowa City.On that date Ramon Jose DeSantiago, a minor, was sold and served intoxicating beverages at the College St. Club while he was intoxicated or until he became intoxicated.DeSantiago left the club in an intoxicated condition and began tampering with a motorcycle belonging to John E. Slager.Slager confronted DeSantiago as DeSantiago was tampering with the motorcycle.At that point DeSantiago shot and seriously injured Slager.

Thereafter, Gary T. Slager and Marcia L. Slager, as co-conservators and co-guardians of John E. Slager, filed a dram shop action against HWA.In its answer, HWA denied the general allegations of the petition and alleged as an affirmative defense that the comparative fault of persons other than HWA had contributed to John's injuries.

The plaintiffs moved to strike the affirmative defense.They contended that, as a matter of law, the comparative fault defense is not available to a defendant in a dram shop action.Initially, the district court sustained the motion.Because HWA had filed a resistance to the plaintiffs' motion to strike and had requested a hearing, the court vacated its ruling.After the hearing, the court again sustained the motion to strike, holding that "[c]omparative fault does not apply in dram shop cases."

HWA filed an application for interlocutory appeal from this ruling, which we granted.It contends that dram shop liability falls within the definition of "fault" in Iowa Code section 668.1 and is therefore subject to the comparative fault provisions of Iowa Code chapter 668.The plaintiffs disagree, arguing that the legislature never intended such a result.

II.Comparative Negligence and Comparative Fault.

In 1983we abandoned the doctrine that contributory negligence completely bars recovery.In its place, we adopted the doctrine of comparative negligence.Under our holding in Goetzman v. Wichern, 327 N.W.2d 742, 744(Iowa1982), an injured party's recovery was diminished in proportion to that party's negligence, and recovery was not barred unless the injured party's negligence was the sole proximate cause of the damages.

In response to Goetzman, our legislature in 1984 enacted Iowa Code chapter 668, entitled "Liability in Tort--Comparative Fault."The statute establishes a modified form of comparative negligence patterned largely after the Uniform Comparative Fault Act (Uniform Act).SeeSpeck v. Unit Handling Div., 366 N.W.2d 543, 545-46(Iowa1985).Rather than being limited to comparative negligence, however, "fault" under both includes

one or more acts or omissions that are in any measure negligent or reckless toward the person or property of the actor or others, or that subject a person to strict tort liability.The term also includes breach of warranty, unreasonable assumption of risk not constituting an enforceable express consent, misuse of a product for which the defendant otherwise would be liable, and unreasonable failure to avoid an injury or to mitigate damages.

Iowa Code § 668.1(1);accordUnif. Comparative Fault Act§ 1(b), 12 U.L.A. 39 (Supp.1988).In addition, under both chapter 668 and the Uniform Act, the legal requirements of causation in fact and proximate cause apply both to fault as the basis for liability and to contributory fault.SeeIowa Code § 668.1(2);Unif. Comparative Fault Act§ 1(b), 12 U.L.A. 39 (Supp.1988).

In two respects, chapter 668 and the Uniform Act differ substantially.The first difference relates to the effect of contributory fault on recovery.Under Iowa Code section 668.3(1), recovery is diminished in proportion to the amount of fault attributable to the claimant.Recovery, however, is barred if the claimant bears a greater percentage of fault than that attributed to defendants, third-party defendants, and released persons.In contrast, under the Uniform Act any contributory fault attributable to the claimant simply diminishes, but does not bar, recovery.SeeUnif. Comparative Fault Act§ 1(a), 12 U.L.A. 38-39 (Supp.1988).

The second difference relates to the common-law rule of joint and several liability.Under the Uniform Act the common-law rule continues, meaning that regardless of contributory fault, the claimant may recover the total judgment against any defendant who is liable.SeeUnif. Comparative Fault Act § 2 comment, 12 U.L.A. 44 (Supp.1988).Under Iowa Code section 668.4, however, the rule is substantially modified.According to this provision, the rule does not apply to defendants who are found to bear less than fifty percent of the total fault assigned to all parties.

III.Dram Shop Liability.

At common law, courts refused to recognize a cause of action arising out of the sale or furnishing of intoxicating beverages.The rationale underlying this refusal was that, as a matter of law, the proximate cause of the injury is the act of the purchaser who drinks the intoxicating beverages and not the act of the vendor who sells them.48A C.J.S.Intoxicating Liquors§ 428, at 133-34(1981).But seeRinden, Judicial Prohibition? Erosion of the Common Law Rule of Non-Liability for Those Who Dispense Alcohol, 34 DrakeL.Rev. 937, 946-56(1985-1986)(strong trend among state courts to recognize common-law action and to reject common-law rationale as to proximate cause).

A number of states have passed legislation known as dram shop acts.These statutes give innocent parties who are injured by the intoxication of other persons a right of action against the persons from whom the intoxicants were procured.48A C.J.S.Intoxicating Liquors§ 429, at 136.In Iowa such an action is afforded by Iowa Code section 123.92, which provides in part:

Any person who is injured ... by an intoxicated person or resulting from the intoxication of a 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, or who sold to and served the person to a point where the licensee or permittee knew or should have known the person would become intoxicated.If the injury was caused by an intoxicated person, a permittee or licensee may establish as an affirmative defense that the intoxication did not contribute to the injurious action of the person.

Besides awarding a mode of relief to such injured persons, who had no recourse under the common law, legislation of this type was enacted to

protect the public, and the rights and interests of innocent persons who come within their scope and to discipline or restrain those engaged in the traffic of liquor.

48A C.J.S.Intoxicating Liquors§ 429, at 136-37.Protection of the innocent is central to our dram shop statute.For that reason we have refused to allow recovery to those who have participated in the intoxicated person's intoxication by their complicity or assumption of the risk.Gremmel v. Junnie's Lounge, Ltd., 397 N.W.2d 717 720(Iowa1986).Only those who are innocent are protected by the statute.Id.

Several other unique features characterize our dram shop statute.For example, Iowa Code section 123.92 provides the exclusive remedy against a licensee or permittee for selling intoxicating beverages to an intoxicated person.Snyder v. Davenport, 323 N.W.2d 225, 227(Iowa1982).Thus, no common-law cause of action against a licensee or permittee for selling intoxicating beverages to an intoxicated person exists in Iowa.Id.In addition, contributory negligence is not a defense to an Iowa dram shop action.Williams v. Klemesrud, 197 N.W.2d 614, 617(Iowa1972).Nor do the ordinary concepts of proximate cause strictly apply.Id.Under Walton v. Stokes, 270 N.W.2d 627, 628-29(Iowa1978), an injured party seeking recovery under section 123.92 does not have to show a causal relationship between the intoxication and the injuries.In response to Walton, the legislature made proximate cause an affirmative defense.SeeIowa Code § 123.92(1987).Finally, our dram shop law incorporates by express language the common-law rule of joint and several liability.Seeid.

IV.Indicia of Legislative Intent Against Comparative Fault as a Defense to a Dram Shop Action.

Our dram shop statute in one form or another has been in existence since 1862.See1862 Iowa Actsch. 47, § 2.Our comparative fault chapter is of recent origin.The question whether comparative fault is a defense to a dram shop action boils down to whether the legislature intended such a result.Because there is no clear indication in either statute as to this question, we resolve it by the application of familiar principles of statutory construction.SeeIowa Code § 4.6.

In determining the legislature's intent, we consider the language of the statute, the objects sought to be accomplished, and the evils sought to be remedied.State v. Akers, 435 N.W.2d 332, 334(Iowa1989).We also consider the consequences of a particular construction.Iowa Code § 4.6(5).In...