No. 85-84 IN THE SUPREME COURT OF THE STATE OF MONTANA 1986

BEATRICE T. NEHRING,widow and surviving heir of Harold W. Nehring,deceased.;DONALD D. NEHRING, PersonalRepresentative of the estate of Harold Nehring, deceased,and.TRISTATE INSURANCE COMPANY OF MINNESOTA, a Corp., Plaintiffsand Appellants,-vsEARL 3;. 1,aCOUNTEand JANICEC. LaCOUNTE, d/b/a LENNY'SBAR, Defendants,Third-Party Plaintiffs and Respondents, and MICHAEL J. BOTTENSEK, Defendant,-vsINSURANCE COMPANY OF NORTH AMERICA, a corp.; SF,ITZINSURANCEAGENCY, and RODNEY LEMIEUX, individually and as agent for Seitz Insurance Agency and Insurance Company ofNorth America, Third-Party Defendants.

APPEAL FROM: District Court of the Fifteenth JudicialDistrict, In and for the County of Roosevelt, The HonorableM. James Sorte,Judgepresiding. COUNSEL OF RECORD: ForAppellant: Jacque Rest; Habedenk,Cumming,Best & Maltese, Sidney,Montana Gene R. Jarussi argued; Keefer,Roybal,Hanson, Stacey & Jarussi, Billings,Montana For Respondent: Donald L. Harris argued; Crowley Law Firm,Billings, Montana FrancisJ. McCarvel,Glasgow,Montana Richard F. Cebull; Anderson,Brown Law Firm,Billings, Montana Thomas Monaghan; Lucas & Monaghan,Miles City,Montana ForAmicus Curiae: Rodney T. Hartman;Herndon,Ha.rper& Munro; (Robert Brust d/b/a Drifter's Tavern),Billings, Montana

Submitted: September 23, 1985 Decided: January 21, 1986

-- ClerkHonorable Frank I. Haswell, Retired Chief Justice,delivered the Opinion of the Court.

In a wrongful death and survival action against the operatorsof aMontana tavernwho allegedly wrongfully served alcoholic beverages to a driverwho later killed decedent in

an aut.omobile accident, the Roosevelt County District Court granted summary judgment to the tavern operators. We vacate and remand. The accident occurred during the early morning hours of September 20, 1980 inNorth Dakota,about threemiles west of Williston. Michael Bottensek drove the wrong way on a four-lane divided highway and struck head-on an oncoming west-bound vehicle driven by decedent Harold Nehring. Nehring and two passengers in the Bottensek vehicle, Patty Thoring and Jolene McGillis, were killed. Michael Bottensek and his brother, the other passenger in his vehicle, survived. The events leading to this accident began on September 19, 1980. Bottensek, his brother, Patty and Jolene decided to celebrateJolene's nineteenth birthday by going to Lenny's Bar inBainville,Montana, about 35miles from their homes in Williston, North Dakota. LaCountes are the owners and operators of this tavern. Bottensek had consumed four beers and smoked a joint of marijuana between 2:00 p.m. and 9:00 p.m., the time they left Williston. On theirway to Lenny's Bar, Bottensek drank two more beers. He drank four of these six beers within the three hours prior to arriving at the tavern at about 10:OO p.m.. At Lenny'sBar, Bottensek drank about eight more beers during the next two or three hours. He stated in his deposition that he was drunk when he ordered his last beer.He recalled that his speechwas slurred,that he spoke with a "thick" tongue, and that he staggered when he left the bar. He also stated that he ha-dno difficulty ordering or paying for drinks, he did not vomit or spit-up, and that he did not fall down, knock chairs over or bump into other people. According to the LaCountes and one of their employees, Bottensek did not appeardrunk,could pay fordrinks,did not slur or stagger and did not cause problems with other patrons. However, LaCountes also stated that Bottensek threatened to shoot Earl LaCounte and was ejected from the bar between 10:OO and 11:OO p.m. Bottensek denied this act and stated that he left the tavern at about 1:00 a.m. because he was drunk, that his brother left about the same time, that theywaited in the car until Patty and Jolene left at closing time an hour later, and that all fourwere drunk. Just before leaving,Patty and Jolene bought a fifth of lime vodka and a case of Budweiser beer. When they left the parking lot, Bottensek drove east toward Williston. He had blank spots in his memory, but remembered having trouble driving. Apparently he stopped on the highway at one point because he recalled Patty getting into the driver's seat and telling him if he hurt Jolene's baby he would be in trouble. Jolene was pregnant at this time. He also recalled Patty saying shedrove as badly ashe did. After stopping in a rest area, Bottensek again got behind the wheel. The accident occurred about an hour after they left the tavern when, in a thick fog, Bottensek's vehicle crossed over into a west-bound lane and collided head-on with the Nehring vehicle. At the time of the accident,Bottensek's blood alcohol levelwas .20.On February 19, 1982, the plaintiffs filed an action seeking damages (1) for the wrongful death of Harold Nehring and (2) for Nehring's damages which accrued prior to his death and survived in favor of his estate. Plaintiffs are his surviving widow and heir, the personal representative of his estate and his automobile insurer. Defendants are Michael Bottensek and the owners and operators of Lenny's Bar, the LaCountes. The amended complaint contains three claims for relief: (I) The tavern operators or their agents sold alcoholic beverages to Michael Bottensek when he was actually, apparently or obviously intoxicated inviolation of S 16-3-301,MCA; (2) the tavern operators or their agents violated North Dakota's dram shop act which applies to this action; (3) the tavern operators or their agents negligently sold alcoholic beverages to Michael Bottensek causing him to become intoxicated to such an extent that he was unable to operate or control his motor vehicle. Each of the three claims alleges proximate cause and resulting damages. On October 2, 1984, the District Court granted the tavern operators' motion for summary judgment on all three claims. The court held that under Montana law, the tavern operator was liable only if he served the customer while he

was in a helpless condition, of which there were no supporting facts, citing Runge 

### v. Watts (1979),180Mont. 91, 580 P.2d 145. The court held the North Dakota dram shop act inapplicable, citing a recent decision of North Dakota

### 's Supreme Court that this act had no extraterritorial effect, Thoring v. Bottensek (N.D. 1984), 350 N.W.2d 586. Finally,the court found no corrlmon law liability of a tavern operator and refused to "legislate" on the matter. Final judgment bras entered in favor of the LaCountes and against plaintiffs pursuant to a Rule 54(b)

## , M.R.Civ.P. certification. Plaintiffs appeal from the final judgment. We rephrase the issues:

(1) Can a person injured off-premisesby apatron of a licensee recover from the licensee who served the patron alcoholicbeverages? (2) Does a genuine issue of material fact preclude summary judgment? Traditionally, at common law, no right of action existed against a seller of alcoholic beverages in favor of those injured by the intoxication of the purchaser. The

reason usually given for this rule is that the consumption, rather than the furnishing, of the a-lcoholic beverages proximately caused the injury. This Court acknowledged a.nd followed this rule in Nevin v. Carla-sco (1961), 139 Mont. 512, 365 P.2d 637, which concerned a tavern operator's liability to protect patrons from other patrons. We stated there that:



# ...The rule followed by most courts is that when damage arises from voluntary intoxication, the seller of the intoxicant is not liable in tort for the reason that his act is not the efficient causeof the damage. Theproximate cause is the act ofhimwho imbibes the liquor. [Plaintiff]was obliged toprove a set of circumstances which created a duty to the injured patron and facts thatwould prove a breach of that duty. (Citation omitted.) 139 Mont. at 515, 365 P.2d at 639. In later cases, this Court acknowledged that Montana statutorily prohibits the sale of alcoholic beverages tominors and intoxicated persons. We declined to use the statutes as a basis for liability under the circumstances presented in those cases. In Folda v. City of Bozeman

(1978), 177 Mont. 537, 582 P.2d 767, we held that the victim's voluntary intoxicationprevented her from recovering because it was the proximate cause of her death and she had disregarded her duty to use due care. Swartzenberger v. Billings Labor Temple Assn. (1978), 179 Mont. 145, 586 P.2d 712, discusses both the lack of a Montana dram shop act and the cases mentioned above. We denied recovery to the plaintiff because ofhis contributory negligence in violating statutory law and drinking. We distinguishedDeedsv. United States (D. Mont. 1969), 306 F.Supp. 348, as presenting a claim of an injured third party rather than a claim by the imbiber. The most recent Montana case, Runge v. Watts (1979), 180 Mont. 91, 589 P.2d 145, concerned the liability of a socialhost furnishing liquor to aminor who then caused

an accident injuring a third party. We held that the proximate cause of plaintiff's injuries was the driver s drinking, rather than d.efendantlsserving of alcohol. Of these cases,only Deeds,supra,addressesa tavern operator's liability for off-premises injuries to a third party injured by apatron of the tavern. Section 16-3-301(2), MCA,originally enacted aspart of the Montana BeerAct in 1933,provides: It shall be unlawful for any licensee, his or her employee or employees,or any other persons to sell, deliver, or give away or cause or permit to be sold, delivered, or given away any alcoholic beverage to:

(a) any person under 19 years of age;(b) any intoxicated person or any person actually, apparently, or obviously intoxicated. Section 16-6-304, MCA, originally enacted as part of the State Liquor ControlAct ofMontana in 1933,provides: (I) No store manager, retail licensee, or any employee of a store manager or retail licensee may sell any alcoholic beverage orpermit any alcoholic beverage to be sold to anyperson apparentlyunder the influence of an alcoholic beverage.

(2) No person may give an alcoholic beverage to a person apparently under the influence of alcohol. Both sections remained in the Code when the Legislature edited and amended portions of Title 16 and then re-enacted it in 1975. As we noted in Fletcher v. ~aige(1950)~ 124 Mont. 114, 220 P.2d 484, the Montana Beer Act and the State Liquor Control Actwere companionbills. "These statutes are inparimateria andmust be construed together

# .. . [as]one homogenousand consistentbody of law." (Citationsomitted.)

(Emphasis in original.) 124 Mont. at 116-117, 220 P.2d at 485. This Court has a duty to reconcile such statutes, consistent with legislative intent, where possible. Fletcher, 124 Mont. at 119, 220 P.2d at 487. Thus, we consider both sections in this appeal. We recognize that the Legislature did not enact these alcoholic beverage control statutesto provide a civil remedy to persons injured as the result of a violation of those laws. Theviolation of statutes is negligence as a matter of lawwhen the purpose of the statute is to protect a class of persons, the plaintiff is a member of that class, and the defendant is a person against whom a duty is imposed. Azure

v. City of Billings (1979), 182Mont. 234, 240-241, 596 ~.2d 460, 464. The purpose 

### of the statute also must

### he to protectagainst the kind of injury received by the plaintiff. Rauh

v. Jensen (19731, 161 Mont. 443, 507 P.2d 520. Here, the stated purposes of the statutes are "the protection of the welfare, health, peace, morals, and safety of the people of the state." Section 16-1-101, MCA; see also 5 16-1-103,MCA. The Supreme Court of Arizona characterized a similar enactment as having the legislative purpose "to regulate the business [of selling alcoholic beverages] rather than enlarge civil remedies." (Bracketed phrase added.) (Emphasis in original.) Collier v. Stamatis (Ariz

# . 1945), 162 P.2d 125, 127, cited in Ontiverosv. Borak (Ariz. 1.983)

## , 667P.2d 200, 210. Sections 16-3-301(2)a.nd16-6-304, MCA, are part of two acts enacted to regulate thebusiness of selling liquor and beer. Nonetheless, they were intended to protect the people of the state generally and the interests of the state rather than to protect against any particular kind of injury or provide a civil remedy. Accordingly, we will not hold a violation of the alcoholic beverage control statutesto be negligence as amatter of law. Theviolation of a statute, although not negligenceper se, nevertheless may be relevant in determining whether a defendant's conduct was negligent, i.e. in fixing a standard against which negligence can be measured. Where the statute does not provide for civil liability, the decision to adopt the statute as defining a standard is a judicial one. Restatement (Second) of Torts 5286 comment d, cited in Onti.veros, 667 P.2d at 210; also McClellan v. Tottenhoff

(Wyo. 1983), 666 P.2d 408, 413. In the seminal case allowing recovery by an injured third party from a tavern keeper, Rappaport v. Nichols (N.J. 1959), 156A.2d 1,the New Jersey Supreme Court held that a violation of an enactment similarto §§ 16-3-301 and 16-6-304,MCA,was evidence ofnegligence. That court noted the restrictions were intended for the protection ofmembers of the general public, not just for the protection of the minors and intoxicated persons listed in the enactments. Rappaport, 156A.2d at 8. In Rappaport, the court stated: The negligence may consist in the creation of a situation which involves unreasonable risk because of the expectable action ofanother

# . .. Where a tavernkeeper sells alcoholic beverages to a personwho isvisibly intoxicated or to a person he knows or should know from the circumstancestobe aminor,he ought to recognize and foresee the unreasonable risk of harm to others through action of the intoxicated person or the minor.

(Citationsomitted.) Rappaport, 156A.2d at 8. Such is the casehere. An unreasonable risk of harm is more likely under present day conditions than in the past, when the common law bar to recovery was a majority position. 

### "

# .

# . . [TI his j-s particularly evident in current times when traveling by car to and from the tavern is so commonplace and accidents resulting fromdrinking are so frequent" Rappaport, 156A.2d at 8-9, cited in Deeds, 306 F.Supp. 348, 355. Current conditions in Montana are such that the literal application of the common law rule has become unjust. "When the reasons of a rule ceases, so should the rule itself." Section 1-3-201, MCA. Therefore we judicially adopt the alcoholic beverage control statutes as furnishing a standard against which negligence or due care canbe measured. A.ccordingly,a violation thereof is evidence ofnegligence. In any negligence case, the plaintiff must establish certain elements:

(1) that the defendant owed a duty recognized in law to the plaintiff,

(2) that she breached the duty, (3) that thebreachwas the cause of theplaintiff's injury, and 14) that the plaintiff was damaged. 46 Mont.I,.Rev. 381, 382 (1985), Bender, Tort Liability tor ServingAlcohol: An ExpandingDoctrine. Both Deeds, 306 F.Supp. 348, and Johnson v. United States (D. Mont. 1980), 496 F.Supp. 597, considered Montana law on negligence and held the seller of alcoholic beverages liable to third parties injuredby an intoxicatedpatron. After establishing the seller's duty to the injured party, Deeds discussed the element of causation and held that the operatorswho served alcoholic beverages



# . .

# .could reasonably foresee or anticipate some accident or injury as a reasonable and natural consequence of their illegal and negligent acts, particularly in view of the ever increasing incidence of serious automobile accidents resulting from drunkendriving. 306 E'.Supp. at 361. Deeds applied the common law negligence rule that if an intervening cause is one which might be reasonably foreseen asprobable or is onewhich the defendant might reasonably anticipate under the circumstances, that

cause will not cut off the defendant's liability. We discussed this rule of foreseeability in Reino v. Montana Mineral Land DevelopmentCo. (1909),38M0n.t. 291, 296, 99 P. 853, 855,and stated that: It is sufficient if the facts and circumstances are such that the consequencesattributable to the wrongful conduct charged are within the field of reasonable anticipation; that such consequences might be the natural and probable results thereof,though theymay not have been specifical-lycontemplated or anticipated by the person so causing them. (Citationsomitted.) WE! adopt this approach in the case at bar and hold tha.t consumption 

### of the alcoholic beverages served, subsequentdriving, and the likelihood of an injury-producing accident are foreseeable intervening acts wh,ichdo not relieve the tavern operatorof liability fornegligence. The earlier Montana cases, Folda, 177 Mont. 537, 582 P.2d 767, and Swartzenberqer, 179 Mont. 145, 586 P.2d 712,

are not controlling authority for the case at bar. Those

cases both concerned injury to the imbiber rather than a third person and found no liability on the basis of the imbiber's contributory negligence. Runge, 180Mont. 91, 589 P.2d 145, also is distinguishableas it concerns the absence of liability of a social host who furnished alcoholic beverages to aminor. F.espondents argue that if this Court overrules Runge, 180 Mont. 91, 589 P.2d 145, any new law should be applied prospectively only. They rely on the statement in Runge that

no cause of action existed unless the imbiberwas furnished alcoholic beverages while "in such a state of helplessness

# ... as to be deprived of his willpower or responsibility for his behavior." (Citation omitted.) 180 Mont. at 93, 589 P.2d at 146-147. The term "helplessness" implies a far stricter requirement than the language of the alcoholic beverage control statutes. As discussed above, the language in the statutes defines the standard of care to be used. In addition, the language from Runge, quoted above,

was dicta. In Runge we declined to impose liability on a social host who furnished alcoholic beverages to a minor in favor of those injured as a consequence of the minor's intoxication. The reasoningbehind this holdingwas that the minor's drinking rather than the social host's serving of beer proximately caused plaintiff's injuries. The mention of "helplessness"was unnecessary to this holding. We are notrequired to give precedential value to dicta. Montana Human Rights Division v. City of Billings (Mont. 1982)

## , 649 P.2d 1283, 1287, 39 St.Rep. 1504, 1508. This judicial language was not intended to change the meaning of the statutory language and does not refer to or change Montana law regarding the principles of causation or duty owed in negligence. Nonetheless,Runge isbottomed on a statement of law that must be addressed, viz. that the drinking of the intoxicating beverage, not the furnishing thereof, is the proximate cause of any subsequent injury (subject to the "helplessness" exception). This Neanderthal approach to causation exempts the purveyor of alcoholic beverages from liability without regard to his own negligence or fault. To the extent Runge may be read to so hold, we expressly overrule it. This Court set forth three factors to consider before adopting a rule of nonretroactive application in XaRoque v. State (1978),178 Mont. 315, 583 P.2d 1059. First, the decision to be applied nonretroactively must establish a new principle of law either by overruling established precedent on which litigants have relied or by deciding an issue of first impression whose resolutionwas not clearly foreshadowed. Second,the merits of each case must be weighed by looking to the history,purpose and effect of the rule in uuestion and whether retroactive applicati^onwill further or retard its operation. Finally, the inequity of retroactive application must be considered, for where substantial inequitywill resultby such application, a ruling of nonretroactivity is proper. LaRoque, 178 Mont. at 319, 583 P.2d at 1061, citing Chevron Oil v. Huson (1971), 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296. We applied this three part test in Jensen v. State Dept. of Labor and Industry (Mont. 1984), 689 P.2d 1231, 41St.Rep. 1971, and Sorum v. Rieder and Co. (Mont. 1983), 666 P.2d 1221, 40 St.Rep. 1120. With respect to the first factor, respondents argue that they relied on the statement in Runge, 180Mont. 91, 589 P.2d 145, that a bar owner is liable only if the patron was served while helplessly intoxicated. However, respondents had an obligation to complywith the stricter requirements of the alcoholic beverage control statutes as well. Thus, the reliance argument isnotpersuasive. In the second factor,a prospective a.pplicationwould condone disregard for these alcoholicbeverage control statutes rather than further their purpose or operation. Jensen, 689 P.2d at 1233, 41 St.Rep. at 1974. Finally, respondents carry the burden of showing the substantial inequity of retroactive application. LaRoque, 178Mont. at 320, 583 P.2d at 1061. This case only permits certain unlawful conductby respondents to be used as evidence of their negligence. This is not the kind of significant hardship that supports a ruling of nonretroactivity. Accordingly,wewill not limit the holding of this case to a prospective application as urged by the respondents on appeal. The second issue concerns whether genuine issues of material fact exist precluding summary judgment. Generally, issues of negligence are not susceptible to summary judgment and are better determined at trial. Brown

### v. Merrill Lynch, Pierce, Fenner and Smith, Inc. (1982), 197 Mont. 1, 10, 640 P. 2d 453, 458. In this case there are a number ofquestions ofmaterial fact that remain unanswered, for example, Michael Bottensek's degree of actual, apparent or obvious intoxication, when and howmuch alcoholic beverages LaCountesserved to Michael Bottensek, and the time that Michael Eottensek leftthebar, toname a few. We therefore vacate the summary judgment and the final judgment entered thereonby theDistrictCourt. Weremand to theDistrict Court for furtherproceedings. 

# =3~~4,. 

# &A&M Honorable Frank I. Haswell, Retired Chief Justice, SittinginPlaceof Mr. Justice L. C. Gulbrandson We concur:

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