Berg v. Zummo: Sellers of Alcohol Can Be Liable For Compensatory, but Not Exemplary, Damages Caused by Underage Drinkers

In Berg v. Zummo, 2000-1699 (La.4/25/01),786 So.2d 708, the Louisiana Supreme Court in a 4-3 decision held that the liability of a vendor of alcoholic beverages who sells or serves alcohol to a person under the legal drinking age is determined under La.Civ.Code arts. 2315 and 2316 using the traditional duty/risk analysis rather than under La.R.S. 9:2800.1. Under this analysis, the vendor owes a duty to refrain from selling or serving alcohol to a person under the legal drinking age, and if the other requirements of breach, causation and damages are proven, then the vendor will be liable even if the vendor does not commit an additional affirmative act, such as unreasonable ejectment from the premises, that increases the peril of the intoxicated patron.

The Supreme Court further held that punitive damages under La.Civ.Code art. 2315.4 cannot be assessed against a vendor of alcoholic beverages for selling or serving alcohol to an intoxicated person whose intoxication while operating a motor vehicle causes injury.

The plaintiff, Berg, was injured during an altercation with Zummo and his companions and was then struck by Zummo’s truck as Zummo left the scene. Berg filed suit against Zummo and his insurer, Zummo’s companions, and a bar that sold Zummo alcohol immediately before the altercation (The Boot). All defendants except The Boot settled.

After a four day jury trial, the jury rendered a verdict in favor of the plaintiff. In response to Special Jury Interrogatories, the jury found that the actions of the bar “in serving alcoholic beverages to [the minor] was a cause in fact although it may not be the only cause in fact of the damages suffered by [plaintiff] as a result of the incident of June 5, 1994.” The jury awarded general damages and medical expenses and attributed fault in the following percentages: 40% to The Boot; 25% to the plaintiff; 30% to Zummo, 2% to another bar that furnished Zummo alcohol before he went to the Boot, and 1.5% each to two of Zummo’s companions who participated in the altercation.

Next, the jury found that Zummo exhibited a wanton or reckless disregard for the rights and safety of the plaintiff and that he was intoxicated when he drove away from the scene of the incident. Further, the jury found that Zummo’s intoxication and his wanton or reckless disregard for the rights and safety of the plaintiff was a proximate cause of the damages suffered by the plaintiff. The jury found that The Boot was 45% responsible for Zummo’s intoxication, the other bar was 15% responsible, and that Zummo was 40% responsible, and fixed punitive damages.

The court of appeal, 763 So.2d 57, reversed, finding as a matter of law (1) that liability cannot be imposed against a bar owner who serves alcohol to a minor who becomes intoxicated and causes injuries to others unless the bar commits some affirmative act which increases the risk of peril, and (2) that punitive damages cannot be assessed against a bar owner under La.Civ.Code art. 2315.4 for contributing to a driver’s intoxication.

The Supreme Court granted plaintiff’s writ to consider these two legal issues and reversed the appellate court’s ruling that merely serving alcohol to a minor can never result in liability, but affirmed the appellate court’s ruling that the punitive damages statute does not allow the imposition of punitive damages against those who have contributed to the driver’s intoxication.

The court of appeal relied on the pre-R.S. 9:2800.1 decision of Thrasher v. Leggett, 373 So.2d 494 (La.1979), for the proposition that an affirmative act is required to impose liability on an alcohol vendor. However, the Supreme Court held that this prior opinion was only applicable to liability for serving alcohol to adults. The Supreme Court held that when a bar sells or serves alcohol to a minor and that minor causes damage to another because of his intoxication, La.R.S. 9:2800.1(A) does not provide an across the board immunity from liability because the immunity contained in 9:2800.1(B) only applies “to a person over the age for the lawful purpose thereof.” Therefore, sections A and B must be read together to only provide vendors with immunity from liability caused by intoxicated persons over the legal drinking age.

The Louisiana Supreme Court would not however, go so far as to impose absolute liability on vendors who sell or serve alcohol to minors who then cause damage to another. Instead, general negligence principles and the application of the traditional duty/risk analysis apply.

The Louisiana Supreme Court held that under the duty/risk analysis, a vendor of alcoholic beverages owes a duty to refrain from selling or serving alcohol to minors. And, the jury’s finding that the actions of the bar in serving alcoholic beverages to the minor was a cause-in-fact of the damages suffered by the plaintiff was not manifestly erroneous because the risk that a minor who is served alcohol might become intoxicated and get into a fight and injure someone with his car is clearly within the scope of the duty of a bar not to serve alcohol to a minor. Accordingly, the Supreme Court reinstated the jury verdict in this regard.

The Supreme Court further reasoned that since the legislative history of La.Civ.Code art. 2315.4 clearly indicates that the law was “targeted” only at punishing the intoxicated drivers of motor vehicles and because of the narrow construction given to penal statutes, Article 2315.4 does not allow the imposition of punitive damages against persons who have allegedly contributed to the driver’s intoxication.

The Supreme Court carefully limited its holding to the two enumerated legal issues that were before the Court. The Court expressed no view on whether punitive damages can be imposed against a party who is vicariously liable for general damages resulting from the conduct of an intoxicated person, such as an employer, and did not address whether a bar owner can be liable in spite of the immunity contained in La.R.S. 9:2800.1 for taking an affirmative act which increases the peril to an intoxicated adult under the pre-R.S. 9:2800.1 reasoning of Thrasher v. Leggett, 373 So.2d 494 (La.1979), and its application in Mayo v. Hyatt Corp., 898 F.2d 47 (5th Cir.1990), wherein the United States Fifth Circuit Court of Appeals held that under La.R.S. 9:2800.1, “the sole duty of a seller of alcoholic beverages is to avoid taking ‘affirmative acts which increase the peril to an intoxicated person.'” 898 F.2d at 49 (citing Thrasher v. Leggett, supra).

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