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Is There an Exception to the Dram Shop Rule ?

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Loss of Support and Loss of Services Claims Under the Dram Shop Act !

    By Carmen A. Nicolaou

At common law, one who provided intoxicating liquor to an intoxicated person was not liable for injuries caused by that person, who was solely responsible.

Certain jurisdictions, however, including New York, have carved out an exception to the common law rule and imposed liability on the provider of alcoholic beverages in certain instances. New York’s Dram Shop Act, General Obligations Law §§ 11-100 and 11-101, imposes liability on a defendant who “unlawfully” sells alcohol to another person for injuries caused by reason of that person being intoxicated (§ 11-101) or underage (§ 11-100).1

At common law, one who provided intoxicating liquor to an intoxicated person was not liable for injuries caused by that person, who was solely responsible.

Certain jurisdictions, however, including New York, have carved out an exception to the common law rule and imposed liability on the provider of alcoholic beverages in certain instances. New York’s Dram Shop Act, General Obligations Law §§ 11-100 and 11-101, imposes liability on a defendant who “unlawfully” sells alcohol to another person for injuries caused by reason of that person being intoxicated (§ 11-101) or underage (§ 11-100).1

At common law, one who provided intoxicating liquor to an intoxicated person was not liable for injuries caused by that person, who was solely responsible.

Certain jurisdictions, however, including New York, have carved out an exception to the common law rule and imposed liability on the provider of alcoholic beverages in certain instances. New York’s Dram Shop Act, General Obligations Law §§ 11-100 and 11-101, imposes liability on a defendant who “unlawfully” sells alcohol to another person for injuries caused by reason of that person being intoxicated (§ 11-101) or underage (§ 11-100).1

First-Party Recovery Under the Dram Shop Act ?

Fundamental to the imposition of Dram Shop liability in New York is that the statute protects only third parties and does not create a cause of action in favor of the individual whose intoxication resulted in his or her own injuries, to wit, firstparty liability. See Sheehy v. Big Flats Community Day, Inc., 73 N.Y.2d 629, 541 N.Y.S.2d 18 (1989), which found that the plaintiff, whose injuries emanated from her own intoxication, had no cause of action under the Dram Shop Act and held that “the courts of this State have consistently refused to recognize a common-law cause of action against providers of alcoholic beverages in favor of persons injured as a result of their own voluntary intoxication.” Further, even if the intoxicated person causing his or her own injury was underage at the time of service, there would be no Dram Shop liability.

Although an individual who is injured because of his or own intoxication cannot recover for those injuries under Dram Shop, both GOL §§ 11-101 and 11-100 allow for claims by parents for loss of economic support arising from injuries sustained to their child as a result of his or her own intoxication. Each provision reads that “Any person who shall be injured in person, property, means of support or otherwise . . . as a result of a reasonable connection between someone’s consumption of alcohol and the accident, is entitled to pursue a claim under provision.” Subsection (4) of each provision specifically gives a parent that right of recovery.

It is often argued by plaintiffs’ attorneys that a parent’s right to recover should not be limited to loss of support and expenses but, in fact, should be expanded to include loss of consortium, which would include loss of services. This last point is usually the most contentious.

Loss of Support and Loss of Services ?

So, what exactly is a parent’s right of recovery under GOL §§ 11-100 and 11-101? Is a parent entitled to recover not only for documented loss of economic support, but also for the more vague and less-defined loss of services? Our answer is that recovery is limited to loss of support and expenses; and that is what this article will discuss.

It is without question that a parent’s right to recovery includes loss of support and expenses (related to medical care and funeral expenses) incurred in connection with the injuries and/or death of their child. This right of recovery is not automatic and relies on whether the plaintiff is able to submit evidence to establish actual loss of economic support. Although this question can be the subject of dispute, it is more common to see litigation over whether there will be Dram Shop liability  for loss of services, which is the economic part of a loss of consortium claim. Specifically, it is argued that although neither §§ 11-100 and 11-101 specifically allow recovery for loss of services, the phrase “or otherwise” is expansive enough to allow the courts to sustain this claim. The courts in New York have repeatedly rejected this argument. To understand the reasoning behind the rejection of this argument, one must start from the beginning.

The Development and Evolution of Dram Shop Liability in New York !

The Dram Shop Act was originally entitled “Civil Damage Act” (L 1873, ch 646) and, in an 1878 Court of Appeals decision entitled Volans v. Owen, 74 N.Y. 526 (1878), the Court, looking at the legislative purpose, construed the statute narrowly.

In Volans, the plaintiff, a 20-year-old male, was injured when he became intoxicated and fell. As a result of his injuries, he was unable to work on the farm owned by his father, the plaintiff. In addition, the father paid medical and other expenses to care for his son. It was argued that this rendered the father’s means of support inadequate.

The Court of Appeals narrowly construed the statute and held that the “diminution of income, or loss of property, does not constitute an injury to means of support, within the fair intendment of the statute, if the plaintiff, notwithstanding, has adequate means of maintenance, from accumulated capital or property, or his remaining income is sufficient for his support.”

Essentially, the Court of Appeals refused to consider the services that the son provided on the farm prior to the injuries he sustained as a result of his intoxication. In addition, the Court of Appeals established a higher burden of proof to sustain a claim under loss of support. That is, a plaintiff had to show that not only did he lose support, but was also reduced to a state of dependency from that loss.

Over the next 100 years, the provision was amended and eventually retitled Dram Shop Act, and the language of the statute changed to what we now know it to be today. While the issue of entitlement to loss of support was on occasion litigated, Valicenti v. Valenze, 108 A.D.2d 300 (3d Dep’t 1985) 108 A.D.2d 300, 304 (3d Dept. 1985) aff’d as modified, 68 N.Y.2d 826, 507 N.Y.S.2d 616, 499 N.E.2d 870 (1986), would become the case that not only changed the interpretation of the “Dram Shop Act” but also tested the waters for a loss of services claim.

In Valicenti, the plaintiffs, a father and child, commenced an action under General Obligations Law §11-101(1)(4) seeking  recovery for loss of services and loss of support. The case involved the death of the plaintiffs’ wife and mother caused by her own intoxication. Discovery showed that the mother had left her family approximately 10 months prior to her death, was not contributing to the household and was actually being partially supported by the plaintiff husband. Defendants moved for summary judgment, relying principally on Volans, supra, arguing that the plaintiffs had failed to demonstrate that they were accustomed to receiving support from the mother and, because of her death, were reduced to a state of dependency. Further, defendants argued for the dismissal of the loss of services claim because the Dram Shop Act did not allow for such a recovery.

The Appellate Division, Third Department refused to adhere to the 107-year holding of Volans and apply a restrictive interpretation of the Dram Shop Act. The court reasoned that the law had evolved over the years, and the legislative purpose had also changed. Thus, relying on a more modern interpretation of legislative purpose and recent case law, the court held that, although the mother had not provided any support to the family for 10 months, since she was “directly chargeable by statute for both spousal and child support,” the issue of loss support must go to the jury for determination. Id at302.

Importantly, the Appellate Division took it one step further and held that the 1921 legislation which extended liability under the Dram Shop Act allowed “the Valicenti children . . . the opportunity to recover damages representing the economic worth of the loss of their deceased mother’s parental services, such as care, guidance, education and training.” Id at 305. Notably, Justice Kane, dissenting in part, did not agree that the legislature, by using the words “or otherwise,” “intended to overrule the well-established common-law rule that would not allow recovery for loss of consortium” between a parent and a child.

On further appeal, the Court of Appeals modified the Appellate Division order and dismissed the plaintiffs’ claim seeking economic loss of consortium. 68 N.Y.2d 826, 507 N.Y.S.2d 616, 499 N.E.2d 870 (1986). The Court noted that while the legislature may have created a new cause of action through the Dram Shop Act, it did not alter the rules of damages.

Thus, although the Court agreed with the Appellate Division that “loss of support” should not be so narrowly construed and, ultimately, a jury could consider “both the evidence of the support of the decedent provided to the plaintiffs before her death and evidence of support the plaintiffs could reasonably have expected but for her death”; it also held that “or otherwise” did not include claims for loss of consortium,  economic or noneconomic loss. Since such a recovery is not specified in the statute, any change would need to come from the legislature and not the courts. Id at 618.

The Current Picture

Valicenti remains the law in New York with respect to the recovery of loss of services under a Dram Shop claim. A plaintiff, whether a parent or a child, cannot recover for loss of services arising from the death of a parent or child caused by anyone’s intoxication — that of the decedent or a third party. The only first party recovery permitted under a Dram Shop claim remains loss of support and expenses, and such claims are often difficult to establish. A common example of such a difficult claim is where the plaintiff is a parent seeking loss of support for the death of a child who had no legal duty to support the parent and did not support the parent during his or her lifetime. See McNeill v. Rugby Joe’s Inc., 272A.D.2d 384, 707 N.Y.S.2d 483 (2d Dep’t 2000)(parents’ claim for loss of future support dismissed finding that the decedent, the plaintiffs’ 20-year-old son, had no legal obligation to support his parents nor had he undertaken a duty to provide such a support); Gigliotti v. Byrne Dairy, Inc., 249 A.D.2d 973, 672 N.Y.S.2d 172 (4th Dep’t 1998) (holding that there was no evidence that the decedent, a 17-year-old boy, supported the plaintiff or that the plaintiff anticipated her son’s support in the future).

Although a parent is no longer required to demonstrate that he or she was reduced to a state of dependency because of the loss of his or her child, it remains difficult for a parent to establish a claim for loss of support, particularly where the child was dependant on the parent at the time of his or her death or injury. The evidence of support or future support is often nonexistent, and, even if such claims survive dispositive motions, it is difficult to determine their value. While a bill is pending in the New York Senate to amend the GOL§ 11-100 (which establishes liability for the sale of alcohol to minors)2 to hold liable those who provide false identification to individuals so that they may procure alcohol, there is no indication that the legislature is considering amending the Dram Shop Act to allow recovery for loss of services. As the Court of Appeals stated in Valicenti, without such legislation,there will be no change in the status quo.

Source:   HRRV, Law / www.hrrvlaw.com

Contact:  

Carmen A. Nicolaou: 914-290-6341 or carmen.nicolaou@hrrvlaw.com

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  • James Bergman says:

    I do think that dram shop laws are important. However, I am struggling with how an establishment is to know when to cut a patron off to avoid complications arising from dram laws. You mentioned that shops are only liable if they provide alcohol “unlawfully.” This leaves a lot of room for interpretation.

    January 4, 2017 at 7:55 pm

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