Liability for the “Poor Decisions” of Obviously Intoxicated Individuals
It is important for Arizona bar and restaurant owners, as well as those who insure them, to understand the risks associated with intoxicated patrons and what is known as “dram shop liability.” The majority of dram shop cases involve bar patrons becoming involved in motor vehicle accidents after being served liquor past the point of intoxication. Since “it is well known that highly intoxicated people make poor decisions,” bar and restaurant owners have a duty to not serve obviously intoxicated individuals. See Patterson v. Thunder Pass, Inc., 214 Ariz. 435, 153 P.3d 1064 (App. 2007). However, as set forth below, bar owners are not subject to unlimited liability, and Arizona courts recognize that bar owners should not be liable for the unforeseeable and extraordinary actions of their intoxicated patrons.
In 1983, the Arizona Supreme Court held in Ontiveros v. Borak that a tavern owner is under a duty, imposed both by common law principles and statute, to exercise affirmative, reasonable care in serving intoxicants to patrons who might later injure themselves or an innocent third party, whether on or off the premises. If a tavern owner breaches that duty of reasonable care, the owner may be held liable for injuries or damages caused by his or her negligence. The legislature in Arizona later codified the Ontiveros ruling with A.R.S. § 4-311(a) which provides that a licensee is liable for property damage and personal injuries if a trier of fact finds that: (1) the licensee sold spirituous liquor to a purchaser who was obviously intoxicated; (2) the purchaser consumed the spirituous liquor sold by the licensee; and (3) the consumption of the spirituous liquor was a proximate cause of the injury or property damage.
In very limited circumstances, it is possible for a bar or restaurant owner to escape liability if it can prove that there was a superseding, intervening cause of the injury. To constitute such a relieving cause, the intervening event must have been unforeseeable by a reasonable person in the position of the bar or restaurant owner and, when looking back after the event, the intervening event must appear extraordinary. Therefore, if an injury is produced by a cause which is both intervening and superseding, even though the original negligence may have been a substantial factor in bringing about the injury, the bar or restaurant owner is not legally responsible for the injury.
For example, in the 2007 case Patterson v. Thunder Pass Inc., an obviously intoxicated bar patron was observed by employees backing her vehicle into a parked Jeep and then driving forward over a parking block. A bar employee confiscated her keys and called a taxicab to transport her home. When the taxicab did not show, another employee drove her home and returned her keys. Less than an hour later the intoxicated patron returned to bar, retrieved her vehicle, and drove the wrong way at a high rate of speed before colliding head-on with another vehicle. The driver and passenger in the other vehicle brought a dram shop case against the bar owner arguing that the bar had a duty to not serve an obviously intoxicated patron, and it did not extinguish its liability merely by driving the customer home. The Court held that the bar was entitled to summary judgment on the basis that the patron’s decision to return that night to retrieve her vehicle while she was still intoxicated was unforeseeable and extraordinary, and thus constituted a superseding, intervening event of independent origin that negated any negligence on the part of the bar or its employees.
If a bar or restaurant that you insure is faced with a dram shop liability suit, the potential for liability is high based on Arizona statutes. However, with a proper defense strategy involving early identification of possible intervening superseding causes, you may be able to significantly limit, or possibly eliminate, your insured’s liability.
Thomas Rubin & Kelly has significant experience in evaluating and defending dram shop liability cases. Please feel free to contact us if you need assistance with any of your Arizona claims.