Title: Lesnau v. Andate Enterprises, Inc.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Lesnau v. Andate Enterprises, Inc. , 93 Ohio St.3d 467, 
2001-Ohio-1591] 
 
 
LESNAU, ADMR., APPELLEE, v. ANDATE ENTERPRISES, INC. ET AL., 
APPELLANTS. 
[Cite as Lesnau v. Andate Enterprises, Inc. (2001), 93 Ohio St.3d 467.] 
Torts — Dram Shop Act — Liquor permit holder is liable for negligent actions 
of intoxicated person occurring off premises, when — Knowingly selling 
intoxicating beverage to underage person — “Knowingly” means “know 
or have reason to know” — R.C. 4301.69 and 4399.18(A)(3) read in pari 
materia. 
(No. 00-1422 — Submitted April 25, 2001 — Decided October 24, 2001.) 
APPEAL from the Court of Appeals for Montgomery County, No. 18135. 
__________________ 
SYLLABUS OF THE COURT 
1.  R.C. 4399.18(A)(3) imposes liability upon a liquor permit holder for the 
negligent actions of an intoxicated person occurring off premises if it can 
be shown by a preponderance of the evidence that the permit holder (or an 
employee) knowingly sold an intoxicating beverage to an underage 
person, an act that would constitute a violation of the criminal prohibition 
in R.C. 4301.69. 
2.  When read in pari materia with R.C. 4301.69, the word “knowingly” as 
applied in R.C. 4399.18(A)(3), the sale of an intoxicating beverage to an 
underage person, encompasses the standard “know or have reason to 
know.”  (Gressman v. McClain [1988], 40 Ohio St.3d 359, 533 N.E.2d 
732, distinguished.) 
__________________ 
 
LUNDBERG STRATTON, J.  We are asked to construe the standard of 
liability required under R.C. 4399.18(A)(3), Ohio’s Dram Shop Act.  The statute 
SUPREME COURT OF OHIO 
2 
codifies the longstanding rule limiting the liability of a liquor permit holder for 
injuries caused by an intoxicated person except under certain limited 
circumstances.  The central dispute before this court is whether the statute 
requires that the liquor permit holder have actual knowledge of the underage 
status of the purchaser before liability may be imposed for injuries to a third 
person. 
Factual Background 
 
Appellee Donald W. Lesnau, Administrator of the Estate of Janice Anne 
Lesnau, filed this wrongful death action against defendants-appellants Andate 
Enterprises, Inc., d.b.a. Superior Drive-Thru, and its individual owners 
(“Andate”).  The complaint alleged that agents of appellant Andate sold beer to 
Eric Amerson, age eighteen, on May 6, 1996, and that Amerson consumed it and 
later caused a motor vehicle accident that took the life of decedent, Janice Anne 
Lesnau.  Amerson allegedly told the Superior Drive-Thru employee that he was 
twenty-one years old, but he did not produce identification.  The complaint 
alleged that Andate violated R.C. 4301.69(A) and 4301.22(A), both of which 
prohibit, inter alia, the sale of beer or intoxicating liquor to anyone under the age 
of twenty-one.  Andate, however, denied that it sold the beer to Amerson. 
 
The trial court awarded summary judgment to the defendants on the basis 
that the plaintiff failed to sufficiently plead a cause of action under R.C. 4399.18.  
The court concluded that Lesnau failed to plead or prove that the liquor permit 
holder knowingly sold the alcohol to an underage person. 
 
The court of appeals did not agree with the standard applied by the trial 
court.  The appellate court construed the word “knowingly” in the statute to 
modify only the phrase “sold an intoxicating beverage.”   The court held that the 
statute did not require an element of knowledge as to the underage status of the 
purchaser because R.C. 4301.69 (prohibiting the sale of intoxicating beverages to 
anyone under age twenty-one) was a strict liability statute.  The court of appeals 
January Term, 2001 
3 
reversed on this issue and remanded the cause to the trial court for further 
proceedings. 
 
This cause is presently before the court upon the allowance of a 
discretionary appeal. 
Common-Law Liability of Liquor Permit Holders 
 
Historically, common law in Ohio prohibited a cause of action against a 
liquor permit holder for injury caused by an intoxicated person.  See Mason v. 
Roberts (1973), 33 Ohio St.2d 29, 33, 62 O.O.2d 346, 348, 294 N.E.2d 884, 887.  
The General Assembly subsequently codified this general, common-law rule in 
1986.  See 141 Ohio Laws, Part III, 5711.  In accordance with preexisting public 
policy considerations, the statute provided for limited exceptions under certain 
circumstances.  Klever v. Canton Sachsenheim, Inc. (1999), 86 Ohio St.3d 419, 
421, 715 N.E.2d 536, 538.  The Dram Shop Act intended to continue the 
longstanding rule of limiting the liability of liquor permit holders, not expanding 
their liability.  Any exception to the general rule was explicit and narrow.  Id. 
 
For causes of action against liquor permit holders that arose prior to the 
enactment of R.C. 4399.18, this court has imposed an “actual knowledge” 
standard for liability to attach.  Flandermeyer v. Cooper (1912), 85 Ohio St. 327, 
98 N.E. 102; Mason, 33 Ohio St.2d at 33, 62 O.O.2d at 348, 294 N.E.2d at 887;  
Settlemyer v. Wilmington Veterans Post No. 49 (1984), 11 Ohio St.3d 123, 11 
OBR 421, 464 N.E.2d 521.  In Settlemyer, the court contrasted the liability of a 
commercial proprietor to that of a social host.  The court held that a social host is 
not held to the same duty of care as a commercial proprietor who is in the 
business of selling and serving alcoholic beverages and, therefore, motivated by a 
proprietary interest and profit motive.  The court reasoned that a commercial 
proprietor is expected to exercise more supervision than the social host and is 
better able to do so.  Id., 11 Ohio St.3d at 127, 11 OBR at 424-425, 464 N.E.2d at 
524. 
SUPREME COURT OF OHIO 
4 
 
In Gressman v. McClain (1988), 40 Ohio St.3d 359, 533 N.E.2d 732, the 
court applied an actual-knowledge standard of conduct to a liquor permit holder 
who allegedly violated R.C. 4301.22(B) by selling liquor to an intoxicated patron 
who subsequently left the premises and caused an accident that resulted in injuries 
and death to a third person.  In Gressman, the patron who caused the accident had 
had some drinks at a golf course snack bar.  The plaintiff asked this court to apply 
a lesser standard of liability, one requiring that the golf course employees knew or 
should have known that the patron was intoxicated.  Id., 40 Ohio St.3d at 362, 533 
N.E.2d at 736.  However, we rejected the lesser standard, holding that actual 
knowledge was required.  The court reasoned that a liquor permit holder has a 
statutory duty under R.C. 4301.22(B) to observe and know when a patron is 
intoxicated.  The court reasoned that the commercial proprietor, in the business of 
selling intoxicating beverages, is in a position to know and recognize when its 
customers are intoxicated. Id. at 363, 533 N.E.2d at 736.  However, because the 
state of intoxication is a subjective determination, the court required actual 
knowledge of a patron’s intoxication in order to impose liability on the 
commercial proprietor.  The Gressman court found that the enactment of R.C. 
4399.18 in 1986 codified the previous holdings of the court; the court found no 
persuasive reason to alter that codification of public policy.  Id. 
 
Thus, the Gressman court held that a liquor permit holder may be liable to 
a third party for violating R.C. 4301.22(B); however, in order to recover in an 
action based upon R.C. 4301.22, the applicable standard of conduct is actual 
knowledge.  “[A] plaintiff must prove that the liquor permit holder * * * 
knowingly sold an intoxicating beverage to a noticeably intoxicated person whose 
intoxication proximately caused the damages sought.”  Gressman at paragraph 
two of the syllabus. 
 
Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 526 N.E.2d 798, also 
involved violation of a statutory duty when a social host furnished beer to an 
January Term, 2001 
5 
underage person, a violation of R.C. 4301.69.  In Mitseff, a twenty-three-year-old 
adult had a party and served liquor to a guest who the adult knew was underage.  
The guest later left the party and caused an accident that took the life of another 
person.  The Mitseff court held that the social host may be civilly liable to third 
persons because the adult violated a statute, R.C. 4301.69.  However, because the 
social host knew that the guest was underage, knowledge of age was not an issue 
and the Mitseff court did not discuss the extent of the social host’s duty to 
determine a guest’s age before supplying alcoholic beverages.  The Mitseff court, 
thus, remanded the cause to the trial court to determine whether the underage 
guest was actually intoxicated in order to establish proximate cause. 
Civil Liability Under R.C. 4399.18 
 
R.C. 4399.18, in effect when this cause of action arose, provided: 
 
“[N]o person, and no executor or administrator of the person, who suffers 
personal injury, death, or property damage as a result of the actions of an 
intoxicated person has a cause of action against any liquor permit holder or his 
employee who sold beer or intoxicating liquor to the intoxicated person unless the 
injury, death, or property damage occurred on the permit holder’s premises or in a 
parking lot under his control and was proximately caused by the negligence of the 
permit holder or his employees.  A person has a cause of action against a permit 
holder or his employee for personal injury, death, or property damage caused by 
the negligent actions of an intoxicated person occurring off the premises or away 
from a parking lot under the permit holder’s control only when both of the 
following can be shown by a preponderance of the evidence: 
 
“(A) The permit holder or his employee knowingly sold an intoxicating 
beverage to at least one of the following: 
 
“* * * 
SUPREME COURT OF OHIO 
6 
 
“(3) A person in violation of section 4301.69 of the Revised Code 
[prohibiting the sale of beer or intoxicating liquor to any person under age twenty-
one]; 
 
“(B)  The person’s intoxication proximately caused the personal injury, 
death, or property damage.”1 
 
Here, Lesnau alleges that Amerson was underage, yet he was able to 
purchase liquor from the defendants’ establishment.  According to Amerson, he 
misrepresented his age to the defendants’ employee and was not asked for proof.  
However, Andate claims that Amerson did not make any liquor purchase at its 
establishment. 
 
Andate contends that the appellate court improperly applied a strict 
liability standard adopted from R.C. 4301.69, a criminal statute that prohibits the 
sale of intoxicating liquor to an underage person.  Relying on Gressman, Andate 
argues that R.C. 4399.18(A)(3) requires an element of actual knowledge, that the 
permit holder “knowingly sold” to an underage purchaser for liability to attach. 
 
Lesnau argues that if a purchaser is underage and the permit holder or its 
employee makes no effort to determine the age of the purchaser, there is a 
violation of R.C. 4301.69 (prohibiting the sale of alcoholic beverages to anyone 
under age twenty-one).  Therefore, Lesnau contends that R.C. 4399.18(A)(3) 
imposes a duty upon the liquor permit holder to make reasonable efforts to 
determine the age of its patrons.  Failure to do so may result in the imposition of 
liability under R.C. 4399.18(A)(3) for the actions of intoxicated patrons who 
injure third persons. 
                                                          
 
1. 
In 1997, R.C. 4399.18 was amended as part of Am.Sub.H.B. No. 350, which this court 
subsequently declared unconstitutional in toto in State ex rel. Ohio Academy of Trial Lawyers v. 
Sheward (1999), 86 Ohio St.3d 451, 715 N.E.2d 1062.  Hence, our opinion addresses the version 
of R.C. 4399.18 in effect prior to Sheward, i.e., the version as originally enacted.  See 141 Ohio 
Laws, Part III, 5711, effective July 21, 1986. 
January Term, 2001 
7 
 
Thus, we must construe the standard of knowledge intended in the limited 
exception to nonliability in R.C. 4399.18(A)(3), i.e., when a permit holder or its 
employee knowingly sells an intoxicating beverage to a person in violation of 
R.C. 4301.69.  When called upon to construe a statute, we rely upon well-
established rules of statutory construction to determine the legislative intent.  
State ex rel. Francis v. Sours (1944), 143 Ohio St. 120, 124, 28 O.O. 53, 55, 53 
N.E.2d 1021, 1023.  To do so, we first look to the language of the statute and its 
purpose.  Christe v. GMS Mgt. Co., Inc. (2000), 88 Ohio St.3d 376, 377, 726 
N.E.2d 497, 498.  We must give effect to the words used in the statute, not delete 
any words or insert words not used.  State v. Jordan (2000), 89 Ohio St.3d 488, 
492, 733 N.E.2d 601, 605.  In addition, R.C. 1.49 sets forth factors for statutory 
construction that include the object sought to be attained, the circumstances under 
which the statute was enacted, the common law, and the consequences of a 
particular construction.  Finally, because this is a statutory exception that creates a 
cause of action, it must be narrowly construed.  Klever v. Canton Sachsenheim, 
Inc., 86 Ohio St.3d at 421, 715 N.E.2d at 538. 
 
The use of the word “knowingly” in R.C. 4399.18(A) indicates that the 
General Assembly intended for the presence of an element of knowledge.  The 
word is not defined in the statute.  However, if strict liability were intended, there 
would be no need for the word “knowingly” in the statute.  The presence of the 
element of knowledge was placed in the statute, and we must give meaning to it.  
A contrary interpretation of R.C. 4399.18(A)(3) would, in essence, render the 
word meaningless.  Furthermore, had the General Assembly intended for the 
element of knowledge to apply only to the act of selling, and for strict liability to 
apply to a violation of R.C. 4301.69, the General Assembly could have written the 
statute using the conjunction “and” to connect the requirement of a knowing sale 
and a violation of R.C. 4301.69.  We must construe the language of the statute as 
SUPREME COURT OF OHIO 
8 
written and not insert words not used.  State ex rel. Purdy v. Clermont Cty. Bd. of 
Elections (1997), 77 Ohio St.3d 338, 340, 673 N.E.2d 1351, 1353. 
 
To read the word “knowingly” to describe only the sale of beer or 
intoxicating liquor is an absurd interpretation that defies common sense.  Of 
course a commercial liquor establishment knows that it is selling liquor.  It does 
not accidentally do so.  Therefore, it is apparent that the General Assembly did 
not intend the word “knowingly” to describe only the sale of liquor.  
Consequently, we find that the word “knowingly” in R.C. 4399.18(A) describes 
the object of the sale: (1) a noticeably intoxicated person, (2) a person described 
in R.C. 4301.22(C) as an “habitual drunk,” or (3) an underage person. 
 
With respect to the sale of liquor to a “noticeably intoxicated” person in 
R.C. 4399.18(A)(1), this court has applied an actual-knowledge standard.  
Gressman.  Andate argues that the same standard should apply here.  For the 
reasons that follow, we do not agree.  Gressman analyzed a cause of action under 
R.C. 4301.22(B) and the permit holder’s sale of intoxicating beverages to an 
intoxicated person.  Although the Gressman court indicated that the newly 
enacted R.C. 4399.18 likewise incorporated an actual-knowledge standard, the 
court was addressing R.C. 4399.18(A)(1), i.e., when the permit holder knowingly 
sells an intoxicating beverage to a noticeably intoxicated person in violation of 
R.C. 4301.22(B). 
 
The circumstances surrounding the sale of liquor to one who is noticeably 
intoxicated differ from those where the permit holder or its employee sells to an 
underage person.  A determination of whether a person is intoxicated requires the 
use of judgment and subjectivity.  As the Gressman court noted, this involves a 
number of factors that may be derived from various sources, such as the 
employee’s experience, or his or her knowledge of and/or familiarity with the 
patron’s habits and capacities.  However, whether a patron is of legal age to 
purchase beer or alcohol is an easily verifiable fact that may be determined in 
January Term, 2001 
9 
many instances from a driver’s license or photo identification card.  In addition, 
we note that R.C. 4399.18(A)(1) includes the additional requirement that the sale 
be made to a “noticeably” intoxicated person, whereas subsection (A)(3) merely 
requires that the sale be in violation of R.C. 4301.69.  Consequently, we find that 
the actual-knowledge standard in Gressman is distinguishable. 
 
The particular subsection at issue here, R.C. 4399.18(A)(3), refers to R.C. 
4301.69, a statute that identifies various criminal offenses involving underage 
persons and intoxicating beverages.  A violation of R.C. 4301.69 may result in 
administrative and criminal penalties.  R.C. 4301.99.  Contrary to the appellate 
court’s analysis, the criminal standard of liability in R.C. 4301.69 does not 
automatically transfer to R.C. 4399.18(A)(3), a statute that sets out the standard 
for civil liability. 
 
However, since R.C. 4301.69 is referenced in the particular subsection at 
issue, we look to it for guidance on the interpretation of the word “knowingly” as 
it is applied in R.C. 4399.18(A)(3).  Although R.C. 4301.69(A) imposes strict 
liability for a criminal violation of that section, the remainder of the statute 
requires a mens rea of “knowledge.”2  In subsections (B), (C), (D), (E), and (F) of 
R.C. 4301.69, which also involve an underage person possessing or consuming 
beer or intoxicating liquor, the words “knowingly” and “knows or has reason to 
know” are used interchangeably.  Therefore, reading R.C. 4399.18(A)(3) in pari 
materia with R.C. 4301.69, we believe that, as to the sale of beer or intoxicating 
beverages to an underage person in violation of R.C. 4301.69, the General 
Assembly intended the word “knowingly” to encompass the concept of “has 
reason to know,” as those terms are used interchangeably in R.C. 4301.69.  This 
                                                          
 
2. 
We note that a liquor permit holder may avoid liability under R.C. 4301.69 if, at the time 
of the sale, (a) the purchaser presented some form of identification to the permit holder or its 
employee that showed that the purchaser was of legal age to make the purchase, (b) a bona fide 
effort was made to match the identification to the presenter, and (c) the person making the sale had 
reason to believe that the purchaser was of legal age to make the purchase.  R.C. 4301.639(A). 
SUPREME COURT OF OHIO 
10 
interpretation supports the public policy behind R.C. 4301.69 and 4399.18: to 
refrain from selling to, buying for, or otherwise furnishing beer or intoxicating 
beverages to an underage person.  A liquor permit holder may not avoid liability 
under R.C. 4399.18(A)(3) simply by failing to ask a patron for identification or 
proof of legal age or failing to establish other safeguards to avoid selling alcoholic 
beverages to underage persons. 
 
Consequently, we hold that R.C. 4399.18(A)(3) imposes liability upon a 
liquor permit holder for the negligent actions of an intoxicated person occurring 
off premises if it can be shown by a preponderance of the evidence that the permit 
holder (or an employee) knowingly sold an intoxicating beverage to an underage 
person, an act that would constitute a violation of the criminal prohibition in R.C. 
4301.69.  When read in pari materia with R.C. 4301.69, the word “knowingly” as 
applied in R.C. 4399.18(A)(3), the sale of an intoxicating beverage to an underage 
person, encompasses the standard “know or have reason to know.”  In addition, 
the intoxication must have proximately caused the damages sought. 
 
Regarding the sufficiency of the plaintiff’s complaint herein, the plaintiff 
alleged that Andate acting through agents sold intoxicating beverages to a person 
under the age of twenty-one in violation of R.C. 4301.69(A) and 4301.22(A), both 
of which prohibit the sale of beer or intoxicating liquor to an underage person.  In 
accordance with Civ.R. 8(A), the plaintiff’s third amended complaint sufficiently 
stated a cause of action under R.C. 4399.18(A)(3).  Consequently, we affirm that 
portion of the judgment of the court of appeals that reversed the granting of 
summary judgment to the defendants, albeit for different reasons, and remand the 
case for further proceedings consistent with this opinion. 
Judgment accordingly. 
 
MOYER, C.J., F.E. SWEENEY and PFEIFER, JJ., concur. 
 
DOUGLAS, J., concurs in paragraph two of the syllabus and in the 
judgment. 
January Term, 2001 
11 
 
RESNICK and COOK, JJ., concur in judgment. 
__________________ 
 
Terry L. Lewis, for appellee. 
 
Squire, Sanders & Dempsey, L.L.P., David J. Young and Greg R. Wehrer; 
and Stephen M. Pfarrer, for appellants. 
__________________