Post on 01-Jan-2016
Kirk Willis Kirk Willis
PartnerPartnerPRESENTSPRESENTS
Dram Shop Dram Shop Liability for Liability for AdjustersAdjusters
From From
A to ZA to Z
Kirk Willis Kirk Willis
PartnerPartnerPRESENTSPRESENTS
Dram Shop Dram Shop Liability for Liability for AdjustersAdjusters
From From
A to ZA to ZApril 28, 2005April 28, 2005
When it’s all on the lineWhen it’s all on the line
TEXAS PROPERTYTEXAS PROPERTYCASUALTY CASUALTY INSURANCE INSURANCE GUARANTY GUARANTY
ASSOCIATIONASSOCIATION
FOR THE PLEASURE OF
EL CHICO – Landmark Decision
Slows reaction
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Alcohol distorts perceptionImpairs motor skills
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
“An alcoholic beverage licensee owes a duty to the general public not to serve alcoholic beverages to a person when the licensee KNOWS OR SHOULD KNOW the patron is intoxicated.”
TEXAS’ MODERN DRAM TEXAS’ MODERN DRAM SHOP ACTSHOP ACT
Created June 11, 1987 under emergency provision
“Legislative purpose of DRAM shop – Protection, welfare, health, peace, and safety of the people in the state
Providing, selling, or serving an alcoholic beverage may be the basis for statutory cause of action under section 5.01.
TEXAS MODERN DRAM TEXAS MODERN DRAM SHOPSHOP
At the time of service of alcohol, it was obvious that the patron was intoxicated
The intoxication of the beverage
proximately caused the damages suffered
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
“Provider” means a person who sells or serves an alcoholic beverage under authority or license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual.
Providers
Does compensation always have to be
in dollars$$?
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Server providing alcohol should have known the person was a clear danger to himself or others; and
The intoxication of recipient was the cause of damage.
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Corporate concealment (wink, wink)
Single business enterprise and alter ego
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Single Business Enterprise “Test”
Common employees;Common officers; Centralized accounting;Payment of wages by one corporation for other employees; Common business;Employees rendering services for both corporations;Document;Transfer of funds; Unclear allocation of profits between corporations.
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Social Host Protected:
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Know how much consumer had prior
Too many people
Not skilled – may not be apparent
Social Host – Relative to minors??
Ability to marry; Ability to vote;Ability to contract; Penal violations; Capital punishment; and Service in military
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Lessor of real property was as a matter of lawNot a provider of alcoholic beverages
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Landlord/Lessors
HYPOTHETICAL QUESTIONKISS 106Leases PlaceRequires club activityLessor has to approve live entertainment
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Can a distributor be held liable under the Texas Dram Shop Act?
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Objective Standard of liability The standard under the Texas Dram Shop Act
requires proof that it was APPARENT TO THE PROVIDER that the individual being sold, served, or provided with an alcoholic beverage was OBVIOUSLY INTOXICATED to the extent that he presented a CLEAR DANGER.
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
B1: Apparent to the provider
B2: Obviously intoxicate
B3: Clear Danger
Know how much consumed priorToo Many PeopleNot Skilled
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Social Host
ApparentObviousClear Danger
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Liability Under Texas Dram Shop Act
Police Testimony at SceneExpert LinkCredit Card Recipient
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Evidence at Trial
Amount Woman DrankWoman Tried to Start Car with CoinAccident 20 minutes LaterExpert Link-up
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Bruce v. KKB
If the intoxication of the recipient was the cause
Rather than the conduct of the Provider
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Proximate Cause
Jury must be asked
Skipper CaseBottomless Pit CaseSouth Dallas Club Case
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Foreseeability
Protection of MinorsTreatment by the CourtClub Corp of America
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Sales to Minor
False Representation by MinorFake IdentificationApparent Valid Texas Drivers LicensePhysical Appearance
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Defenses to Claims by Minors
Employer requires its employees to attend a commission approved seller training program.
The employer has actually attended. Employer has not directly or indirectly
encouraged violation.
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Defenses to Dram Shop
Texas Servers Training Act – “Safe Harbor” Provision
Install Cameras Employee Report Repeaters Address the failure of non-
report.
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Encourage Discouragev Knowing employees are not
looking for good identification. Waitress check the
identification. Make sure person ordering,
indeed, drinks them. Have written guidelines. Meetings on guidelines. Owner not addressing problem.
No Punitive DamagesNo Criminal Acts
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Defenses Against Punitives
OtisLove v. Houston, Inc.
TEXAS DRAM SHOP ACTTEXAS DRAM SHOP ACT
Special Relationships
Employer/Employee
THANK YOU!