Law Life: Bid to attach dram shop liability to landlord fizzles

Pat Murphy, The Daily Record Newswire

Nice try, but no cigar. That sums up one Kentucky attorney’s attempt to make the landlord of a sports bar liable for a drunk patron’s automobile accident.

The attorney, David Oakes, represents Monica Carruthers. Carruthers claims she was injured by a driver who was over-served by Froggy’s Sports Bar in Paducah, Kentucky.

According to Carruthers, she was struck by a car driven by Lucas Watson in the bar’s parking lot. Before the accident, employees of Froggy’s allegedly continued to serve Watson alcohol after they knew or reasonably should have known that the man was intoxicated.

The complaint filed by Oakes on behalf of Carruthers included claims under Kentucky’s Dram Shop Act as well as claims for common law negligence. In addition to suing the owner of Froggy’s — Foolish Heart, Inc. — the attorney sued the bar owner’s landlord, Max and Lois Ann Edwards.

Yes, Max and Lois happen to own the property on which Froggy’s is located.

The attorney’s theory of liability with respect to the landlords was fairly straightforward.

Apparently, Max and Lois operate their own bar at a different location. According to Oakes, as bar owners themselves, Max and Lois were fully aware of the laws governing liquor establishments, in particular the state’s dram shop law. In addition, Max and Lois allegedly knew or should have known that Froggy’s “habitually” over-served its patrons.

Because Max and Lois knew that Froggy’s was a public nuisance, says the attorney, the landlords could foresee Carruthers’ injuries and therefore had a duty to prevent them.

Oakes makes a plausible argument, but would the Kentucky courts buy it? After all, imposing dram shop liability on the landlord of a liquor permit holder would be a significant breakthrough for the state’s personal injury attorneys.

To date, Oakes has been rebuffed in his efforts to extend the boundaries of dram shop liability. First, a Kentucky judge dismissed Carruthers’ claims against Max and Lois. And Friday, the Kentucky Court of Appeals upheld that dismissal, agreeing that Carruthers did not have a valid claim against the landlords under the state’s dram shop law.

The court pointed out that the statute only addresses two types of persons: a dram shop (and its servers) who serve alcohol to an intoxicated person, and the intoxicated person the dram shop serves.

As a consequence, there simply was no room under the statute to create liability for third parties like Max and Lois. The court explained:
“Although [Max and Lois] run their own dram shop, they served no alcohol to Watson. We conclude that no purpose intended by our Legislature’s passage of the Dram Shop Act would be served by imposing liability upon a lessor who simply holds title to property on which his properly licensed lessee engages in the regulated sale of intoxicating liquors.”

Oakes fared no better in trying to salvage his client’s common law negligence claim against the landlords. In upholding dismissal, the court said:
“We would have to strain beyond the breaking point the loose confines placed upon the complaint by notice pleading concepts in order to find that [Max and Lois] owed a duty to Carruthers to prevent the negligence of Watson by first preventing the negligence of Foolish Heart. That relational context between [the landlords] is too attenuated to be palatable in our jurisprudence. We find no duty owed by [Max and Lois] to Carruthers even under the most liberal reading of the complaint.”

Of course, the Kentucky Supreme Court has the final say on whether landlords will be exposed to dram shop liability, but right now those prospects look rather bleak.