Summerhays v. Clark

• Decision Date: 22 December 1993
• Docket Number: No. 92-1361,92-1361
• Citation: 509 N.W.2d 748
• Parties: Paul Thomas SUMMERHAYS, as Administrator of the Estate of Thomas Paul Summerhays, Deceased, and Paul Thomas Summerhays, Individually, Appellants, v. James CLARK, Defendant, and Steven R. Kayser and Steven R. Kayser, Inc. d/b/a 4th Street Station, Appellees.
• Court: Iowa Supreme Court

Page 748

509 N.W.2d 748

Paul Thomas SUMMERHAYS, as Administrator of the Estate of Thomas Paul Summerhays, Deceased, and Paul Thomas Summerhays, Individually, Appellants, v. James CLARK, Defendant and Steven R. Kayser and Steven R. Kayser, Inc. d/b/a 4th Street Station, Appellees.

No. 92-1361.

Supreme Court of Iowa.

Dec. 22, 1993.

Rehearing Denied Jan. 20, 1994.

As Corrected Jan. 21, 1994.

Frederick G. White, Waterloo, for appellants.

Gerry M. Rinden and Andrew M. Johnson of Wintroub, Rinden & Sens, Des Moines, for appellees.

Considered en banc.

NEUMAN, Justice.

This interlocutory appeal tests the liability of a restaurant and its owner for the tragic aftermath of a holiday party given for the establishment's employees. The district court found as a matter of law that the restaurant did not meet the "sold and served" requirement triggering liability under our dramshop statute, Iowa Code § 123.92 (1991), and that the owner, individually, was immune from liability as a social host under Iowa Code section 123.49(1)(a). We affirm.

Because the case reaches us on appeal from an order granting summary judgment, our task is to determine whether a genuine issue of fact exists and whether the law was applied correctly. Brown v. Monticello State Bank, 360 N.W.2d 81, 84 (Iowa 1984). "[I]f the conflict consists only of the legal consequences flowing from undisputed facts, or from the facts viewed most favorably toward the resisting party, summary judgment is proper." Paul v. Ron Moore Oil Co., 487 N.W.2d 337, 337-38 (Iowa 1992). With these principles in mind, we relate the following undisputed facts from the record.

Defendant Steven R. Kayser, Inc. is an Iowa liquor licensee authorized to operate a Waterloo restaurant and bar known as 4th Street Station. Its owner and corporate president is defendant Steven R. Kayser. On the evening of January 8, 1990, Kayser hosted a belated holiday party at 4th Street Station for the establishment's employees and their guests. All food and beverages were supplied and paid for by the corporation, and employee attendance was voluntary. The restaurant was closed to the public for the event.

Defendant James Clark was employed by 4th Street Station as manager and bartender. He arrived at the party around 6 p.m. with his wife, Kathleen. Clark and two of Kayser's friends served drinks behind the open bar. Clark served himself six or seven beers; he served his wife approximately ten. Around 10 p.m., the Clarks left the party to pick up Kathleen's son, Thomas, who was staying at her parents' home in Waterloo. Because Kathleen was visibly intoxicated, Clark decided to drive. Clark, as it turns out, was also legally intoxicated.

The Clarks picked up Thomas and then proceeded to their home near Parkersburg. During the ride, Thomas slept in the back seat of the vehicle. After traveling approximately twenty minutes, Clark suddenly lost control of the vehicle and drove into a ditch. Thomas was thrown from the vehicle and died from his injuries shortly after the accident.

Thomas's father, plaintiff Paul Summerhays, brought this wrongful death action against the defendants. The suit alleged the liability of Kayser, Inc. and Steven Kayser under the dramshop statute and the common-law doctrine of respondeat superior. ¹ After answering, these defendants moved for summary judgment. They asserted that Kayser, Inc. could not be found liable, as a matter of law, because it did not sell and serve intoxicating beverages to Clark as required to prove liability under section 123.92; that no cause of action could be maintained under Iowa Code section 123.92 against Kayser, individually, because he is neither a liquor licensee nor permittee; and that Iowa Code section 123.49(1)(a) immunizes Kayser from liability as a social host. The district court entered judgment for defendants on these grounds. This appeal followed.

I. The scope and intent of our state's dramshop law has been a source of much debate in our opinions on the topic. Most often the court has divided over the extent to which the statute preempts common-law claims. See, e.g., Eddy v. Casey's Gen. Store, 485 N.W.2d 633, 639 (Iowa 1992) (dissent asserts preemption argument "specious") (Larson, J., dissenting); Kelly v. Sinclair Oil Co., 476 N.W.2d 341, 356 (Iowa 1991) ("[T]his court has erred in applying preemption principles so broadly.") (Larson, J., dissenting); Connolly v. Conlan, 371 N.W.2d 832, 833 (Iowa 1985) (applying preemption doctrine to section 123.92 "does not square with the stated policy of the legislature") (Schultz, J., dissenting). This court has consistently decided, however, that Iowa Code section 123.92 provides the exclusive remedy against liquor licensees and permittees for losses related to the furnishing of alcohol to an intoxicated adult. Eddy, 485 N.W.2d at 636; Slager v. HWA Corp., 435 N.W.2d 349, 352 (Iowa 1989); Fuhrman v. Total Petroleum, Inc., 398 N.W.2d 807, 809 (Iowa 1987); Connolly, 371 N.W.2d at 833; Snyder v. Davenport, 323 N.W.2d 225, 226 (Iowa 1982). Thus the district court correctly granted summary judgment for Kayser, Inc. on all claims not premised on section 123.92.

II. Summerhays' principal argument on appeal is that Kayser, Inc.'s action under this record brings it within the purview of section 123.92. The statute pertinently states:

Any person who is injured in person or property or means of support 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.

Iowa Code § 123.92 (emphasis added). While conceding that Clark did not pay Kayser, Inc. for the alcohol that intoxicated him, Summerhays asserts that the record would support a factual argument that a "sale" nevertheless occurred. Thus, he argues, summary judgment for the defendant was improvidently granted and should be reversed. We cannot agree.

Summerhays' argument rests on the notion that the employee goodwill fostered by a holiday party constitutes a sufficient quid pro quo to qualify as consideration--and hence a "sale"--under the statute. He cites State v. Fountain, 183 Iowa 1159, 168 N.W. 285 (1918), to support his claim. Fountain is a prohibition era case in which this court held that a jury question was raised concerning the criminal culpability of an employer who kept alcohol on hand for his workers in the scavenger trade. Id. at 1164, 168 N.W. at 287. The law at the time criminalized the sale of liquor, but not "giving it away, without any consideration whatever." Id. at 1161-62, 168 N.W. at 286. Rejecting the criminal defendant's claim of philanthropy this court held that adequate consideration could be established by proof that the employer paid his employees a wage that reflected the cost of the whiskey furnished. Id. at 1164, 168 N.W. at 287.

We do not find Fountain persuasive on the question before us. The record is without support for any claim that Clark's (or any other employee-guest's) wages were reduced by the cost of alcohol consumed at the party. Nor does the record suggest that Clark would not have attended the party had free drinks and food not been provided.

Other courts have rejected the contention asserted by Summerhays and, we think, correctly so. In Cady v. Coleman, 315 N.W.2d 593 (Minn.1982), the Minnesota Supreme Court considered a "sold or bartered" argument made in a case involving attorneys who bought drinks at a golf outing for an insurance company representative with whom they had done substantial business. When the inebriated agent was later involved in an automobile accident, plaintiffs sued the lawyers, among others, under a Minnesota law that stated a cause of action against any person who caused intoxication by "illegally selling or bartering intoxicating liquors." Id. at 595 (emphasis added). Rejecting the plaintiffs' argument that the alcohol was not given, but bartered in consideration for past and future insurance defense business, the court stated:

We hold, however, that no barter took place because no consideration was given in exchange for appellant's liquor. While an obvious purpose of appellant's providing insurance company personnel with liquor and entertainment was to remain in the company's good graces in the hope that the company would continue to send appellant its insurance defense business, a bargained-for exchange, in the sense that appellant and Coleman were trading drinks for business, surely was never intended.

Consideration requires the voluntary assumption of an obligation by one party on the condition of an act or forbearance by the other. If appellant's purchase of liquor for Coleman was not on the condition that Coleman send appellant more defense cases, and if Coleman's referring of his company's business to appellant was not on the condition that appellant entertain him, there was no bargained-for consideration and hence no sale or barter. Obviously, appellant wished to encourage a continuing relationship with the Home Insurance Company. It is difficult to see how appellant's providing liquor for the insurance company's representative could constitute consideration, however, since no claim was made that their business relationship was dependent upon appellant's entertaining Coleman, or vice versa.

Id. at 596 (citations omitted). Likewise, in DeLoach v. Mayer Electric Supply Co., 378 So.2d 733 (Ala.1979), the court concluded that the mere willingness of an employee to be on hand to assist at an office party did not render the employee's subsequent overindulgence at the party sufficient consideration for his services to bring...