Wessel v. Carmi Elks Home, Inc.

• Decision Date: 27 July 1971
• Docket Number: Gen. No. 69--141
• Citation: 272 N.E.2d 416,133 Ill.App.2d 902
• Parties: Dorothy WESSEL, Administrator of the Estate of Larry Keith Wessel, et al., Plaintiffs, v. CARMI ELKS HOME, INC., et al., Defendants and Third-Party Plaintiffs-Appellants, v. Emily RICE and Jesse Cox, Third-Party Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 416

272 N.E.2d 416

133 Ill.App.2d 902

Dorothy WESSEL, Administrator of the Estate of Larry Keith

Wessel, et al., Plaintiffs, v. CARMI ELKS HOME, INC., et al., Defendants and Third-Party Plaintiffs-Appellants, v. Emily RICE and Jesse Cox, Third-Party Defendants-Appellees.

Gen. No. 69--141.

Appellate Court of Illinois, Fifth District.

July 27, 1971.

J. C. Mitchell and W. A. Armstrong, Marion, for appellants.

Gosnell, Benecki & Quindry, Lawrenceville, Kern & Pearce, Conger & Elliott, Carmi, Maurice Gosnell, Lawrenceville, Stewart A. Pearce and Ivan A. Elliott, Jr., Carmi, of counsel, for appellees.

JONES, Justice.

In this case the issue presented is whether the circuit court was correct, as a matter of law, in dismissing a third party complaint for indemnity in a dram shop case.

Appellants are third party plaintiffs; appellees third party defendants. Third party plaintiffs own and operate dram shops in Carmi, White County, Illinois. The case in question was originally commenced by the filing of a complaint against them in which the plaintiffs seek damages in accordance with the provisions of the Illinois Dram Shop Act. The third party defendants, alternatively, are alleged to be a person intoxicated at the time one of them drove an automobile from a parking lot into a residential dwelling resulting in the injuries and damages to the plaintiffs alleged in their complaint. Third party plaintiffs are alleged to have caused the intoxication of said third party defendants in whole or in part. By way of third party complaint, third party plaintiffs seek indemnity from third party defendants for all loss sustained by them with respect to the original complaint filed against them.

This court has previously held that indemnification will not be allowed a dram shop keeper or owner for liability imposed by the Dram Shop Act. Coffey v. ABC Liquor Stores (1957), 13 Ill.App.2d 510, 142 N.E.2d 705. The court there noted that the regulations of the Dram Shop Act are established for the purpose of protection of health, morals and safety of the people, that tavern operators do not have an inherent right to sell intoxicating liquors, and the liability under the Dram Shop Act is penal in nature. In denying the action for indemnity, the court stated:

'While the liability imposed upon liquor sellers by the Dram Shop Act is purely of statutory origin, it is nonetheless a liability which the liquor dealers agree to accept and be bound by upon entering the liquor business. In all the cases which were directed to our attention on appeal, permitting indemnification as against a tortious third party as an exception to the joint tort-feasor rule, the parties were all innocent parties who established the right of indemnification as against contractors, or servants, or others. It is difficult to reconcile the position of a tavern operator who is found guilty under the provisions of the Illinois Dram Shop Act with the innocent party position established by such precedents, since by the terms of the Act the tavern operator must necessarily be a tort-feasor and so penalized by statute. As a consequence, since the Illinois Dram Shop Act does not grant any rights of indemnity or subrogation or contribution and is penal in nature (Wanack v. Michels, 215 Ill. 87, 94--96, 74 N.E. 84), and since on principle, indemnity or contribution or subrogation is allowed only to innocent parties (Wanack v. Michels, supra; Geneva Construction Co. v. Martin Transfer & Storage Co., 4 Ill.2d 273, 282--283, 122 N.E.2d 540), we do not believe that it would be consistent with the general equitable principles which sanction the third-party action, nor consistent with the objectives of the Dram Shop Act to allow the third-party procedure attempted in the case before us (Economy Auto Ins. Co. v. Brown, 334 Ill.App. 579, 586--589, 79 N.E.2d 854; People v. Metropolitan Casualty Ins. Co. of New York, 339 Ill.App. 514, 518--519, 90 N.E.2d 565).'

Recently the Appellate Court for the Fourth District has held contrawise in two cases, Geocaris v. Bangs (written in the First District, 1968), 91 Ill.App.2d 81, 234 N.E.2d 17; and Walker v. Service Liquor Store, Inc. (1970), 120 Ill.App.2d 112, 255 N.E.2d 613. Both cases were decided on the pleadings. In the Geocaris case the action of the intoxicated person was characterized as 'intentional and malicious,' and in the Walker case as 'willful, intentional, deliberate and actively tortious.' The court rejected the holding of the Coffey case, finding that the evidence could show that the action of the dram shop operator and owner was passive while that of the intoxicated person was actively (even willfully, intentionally, and deliberately) tortious, and under the present posture of the Illinois law of indemnity as exemplified in Miller v. DeWitt, 37 Ill.2d 273, 226 N.E.2d 630, and Sargent v. Interstate Bakeries, Inc., 86 Ill.App.2d 187, 229 N.E.2d 769, such complaints stated a good cause of action and, as a matter of law the dram shop owner and keeper could seek indemnification from the intoxicated person.

We have carefully considered the issues presented and the rationale employed in the Coffey case on the one hand and the Geocaris and Walker cases on the other. With due regard to our colleagues of the Fourth District we have concluded that the earlier opinion of this court in the Coffey case should be adhered to as the correct expression of the law and the public policy of Illinois. We consider the Geocaris and Walker cases to be a judicial repudiation of the public policy of this state as expressed in the Dram Shop Act and decisional law (see the Coffey case, supra; Cunningham v. Brown, 22 Ill.2d 23, 174 N.E.2d 153; Illinois Law Forum, Volume 1958, No. 2, P. 175 et seq.) and that they improperly permit a possible evasion of the penal liability imposed upon operators and owners of dram shops by the Illinois Dram Shop Act.

By the very nature of the dram shop action, and in the sense of the 'active-passive' concept of indemnity law, the intoxicated person will always be 'active' and the dram shop operator or owner 'passive.' Even if the conduct of the intoxicated person be characterized as willful, reckless, or intentional, the parallel remains. It is in this context that we believe the law of indemnity is misplaced in dramshop cases. The proscribed act of causing intoxication is entirely separable from the injury causing act. The Act denominates as wrong-doers operators and owners of dramshops who cause in whole or part the intoxication of persons who subsequently cause injury or damage to others. The character of the liability is such that it is an ultimate liability fixed by public policy on an industry. We think it is the plain intent of the statute that such liability cannot be shifted but must reside where public policy decreed that it be placed. The underlying rationale is that the intoxicated person who negligently or willfully inflicts harm on another would not have done so but for his intoxication.

We recognize that the law pertaining to indemnity has undergone much consideration and development subsequent to the Coffey case, and that Illinois now recognizes a difference in the kind and quality of tortious conduct in continuing to prohibit contribution among joint tort-feasors but nevertheless allowing a passively negligent tort-feasor to obtain indemnification from an actively negligent tort-feasor. Miller v. DeWitt, supra; Sargent v. Interstate Bakeries, Inc., supra. But the development of the law of indemnity in tort cases has not served to change the public policy attending the enactment of the Dram Shop Act nor the penal nature of the liability it imposes. In the Walker case, supra, the court states: 'We find it difficult to suggest that the liquor store and Clem were concurring tort feasors.' We agree, and suggest that neither the Dram Shop Act nor decisional law are prefaced upon the concept that dram shop operators and owners are concurring or joint tort-feasors. The liability of the dram shop operator or owner on the one hand, and that of the intoxicated person on the other, stems from totally independent roots. One is the act of the dram shop operator in dispensing intoxicating liquor which causes in whole or part the intoxication of another; the other is the negligent (or even willful or intentional) conduct of the intoxicated person in causing injury or damage to a third party.

To justify the indemnity action by saying that the rights of the injured party are not diminished by allowing indemnity in this instance ignores the liability aspects of the Act. Its concern is not only with the rights of the injured party against the intoxicated person for he has always had his remedy against the perpetrator without recourse to the Dram Shop Act, but with the fixation of liability for injury or damage flowing from the conduct of the alcoholic liquor trade.

Throughout the case law runs the common thread that due to lack of financial responsibility of the intoxicated person the Dram Shop Act may be the only practical remedy. Why then should the liquor trade be able to transfer its liability by seeking indemnity based on fault? Our Supreme Court has already determined that a 'violation' of the Dram Shop Act is a willful act. See Wanack v. Michels, 215 Ill. 87, 74 N.E. 84, where it is stated:

'There could be no contribution as between C. L. Wanack and the appellee, Peter Michels, because they are both wrong-doers. It is a general rule that there is no right of contribution as between tort feasors (Nelson v. Cook, 17 Ill. 443; 3 Pomeroy's Eq.Jur. § 1418, note I) * * * And although this rule is only applied to cases of intentional and conscious wrongdoing, (Ibid.) yet it cannot be said that in the case at bar the wrongdoing of the owner of the premises, who leases them with permission to the occupant to sell intoxicating liquor thereon, and with knowledge that such liquor is sold thereon, is not...