Dram Shop Law In Use


Dram shop law changes now favor business interests Lynn J. Cook Houston Business Journal In a typical year, 24,000 Americans lose their lives in traffic accidents involving alcohol and 70 percent of wrecks involving 20- to 24-year-olds are alcohol-related, according to the National Restaurant Association. While purchasing liquor liability insurance seems to be more popular in this decade than the last, several Houston-area attorneys say fewer victims of drunk drivers and their families are actually filing suit against alcohol-serving establishments and winning.

DRAM SHOP LAW

The diminishing number of lawsuits can be attributed to the changes the 1995 Texas legislature passed regarding dram shop law, says attorney Hartley Hampton, a partner with Hampton and Young and past president of the Houston Trial Lawyers Association.

One of the most recent changes to dram shop law is the alteration of joint and several liability, which makes any party named in a lawsuit liable for the entire judgement. Under the new law, in order for the plaintiff to collect the entire amount from a bar or restaurant, a jury must find the the bar or restaurant at least 51 percent responsible for the accident. Hampton says that this is virtually impossible because the drunk driver is the one who actually got behind the wheel and injured or killed another person. He calls the tort changes the biggest blow to safety that Texas has ever seen.

"Victims are now relegated to looking only to the drunk driver for the lion's share of medical bills or lost income, while the bar is able to say `Hey, it wasn't our fault,'" he says.

But Texans for Lawsuit Reform, which lobbied for the tort reforms along with Houston lawyer and liquor store owner Richard Trabulsi, argues that until joint and several liability was reformed, deep-pocket defendants were unfairly held liable when they were only marginally responsible for the accident.

Trabulsi points out that if a jury finds that the owner or server is 30 percent or 40 percent responsible for the accident, the bar or server can be ordered to pay 30 percent to 40 percent of the damages. The difference now is that bars, restaurants and liquor stores are protected from having to pay 100 percent of the judgment if the jury finds that they are less than half responsible for the accident. In the past, Trabulsi says, businesses would have to pay out solely because they had the money to do so.

Sederick Susberry, a Houston insurance agency owner, also says that the 1995 reforms are fair because negligent servers and owners can still be found responsible. If it can be proved than a bar repeatedly engages in negligent practices, such as serving minors or intoxicated people, he says that is sufficient evidence to make them liable to some degree.

"Plaintiffs cannot get as much now," he says. "But if it's a case where there were clearly several incidents of negligence in the past on the owner's or server's part, then yes, they can be liable. But, generally, it is more difficult now unless you prove that type of negligence."

INSURANCE

Even though the law has shifted to favor the business interests, proprietors are still buying liquor liability insurance to protect themselves in the event of a lawsuit. Businesses are paying dearly for the specialty coverage, but insurance companies pocket the money because victims cannot win anymore, Jack McGehee, an attorney with McGehee & Pianelli LLP, says. He equates selling liquor liability insurance in Texas to selling avalanche insurance.

"It is totally unproductive and a waste of resources for victims to try to get justice because the law requires actual knowledge on the part of the owner," he says. "It encourages owners to pinch their eyes shut to the truth."

Spencer Markle, the managing partner and dram shop law specialist with Livingston, Markle, Miller, Ramos & Zito, disagrees. He represented Bronco's, a Fort Worth sports bar, in a Tarant County wrongful-death suit. In this case, Bronco's customer Jimmy Lewis White drove drunk, hitting and killing off-duty Fort Worth police officer John "Bo" Marcellus.

"Dram shop law provides for a remedy against a restaurant or bar that negligently serves an intoxicated person, but places the blame where the jury wants to," he says. According to an article in the Texas Lawyer printed last November, White's blood-alcohol content was more than twice the legal limit, which means Bronco's had to have served him between 25 and 30 beers during his six-hour stay. The plaintiffs' attorney, John Howie, argued that Bronco's patrons saw White tip over his table, spilling beer on the floor; but the bartender, waitress and owner all said they saw nothing that would lead them to believe White was intoxicated.

The jury returned with a $12 million judgment against White, but no judgment against Bronco's. The jury also wrote a letter to the judge and Marcellus's family saying that they were frustrated. They did not feel they could prove that the waitstaff knowingly served an intoxicated person, but felt that their hands were tied by the letter of the law.

During the trail, Markle worked with an attorney of the insurance company that covered Bronco's to hammer out a high/low settlement agreement. According to the Texas Lawyer article, since Markle's client won the case, the "low" $300,000 sum agreed upon was paid to the plaintiff. While these types of lawsuits have been reduced, Markle says they have not stopped entirely, which gives bars and restaurants some incentive to buy liquor liability insurance.

"I think they should because not only does insurance provide policy limits to pay a judgment if it occurs, but money to pay for a settlement and a defense lawyer, which can be expensive," he says. "I don't believe any responsible server wants to send dangerously intoxicated people out in the world, but, as a matter of practice, it is very difficult to always be able to tell if someone is intoxicated."

Hampton disagrees, saying that proprietors' fears of losing a business over a lawsuit is an industry myth.

"I don't think that they have any particular reason to be scared. The deck is stacked against victims of drunk drivers," Hampton says. "It's gotten to the point where family safety and health have been sacrificed on the altar of big business."

The theme of the Texans for Lawsuit Reform is that everyone pays for frivolous lawsuits, which is true, says McGehee, but everyone also pays when a defendant is immune from lawsuits.

Both Hampton and McGehee say Texas desperately needs tort reforms to counteract the 1995 changes. And even Markle says he would not be surprised to see future changes in the law to relax the standard by which an establishment's liability is judged.

"I think if it changes at all, it will change in favor of the victims," Markle says.