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Matched Legal Cases: ['§ 340', '§ 340', '§ 1', '§ 2', '§ 340', '§ 1', '§ 7', '§ 340', '§ 645', '§ 340', '§ 340', '§ 7', '§ 340', '§ 1', '§ 7']

McGuire v. C & L RESTAURANT INC. :: 1984 :: Minnesota Supreme Court Decisions :: Minnesota Case Law :: Minnesota Law :: US Law :: Justia
Justia › US Law › Case Law › Minnesota Case Law › Minnesota Supreme Court Decisions › 1984 › McGuire v. C & L RESTAURANT INC.
McGuire v. C & L RESTAURANT INC.
346 N.W.2d 605 (1984)
John H. McGUIRE, Appellant, v. C & L RESTAURANT INC., etc., Respondent, LeAn's Inc., et al., Respondents.
*608 John M. Steele, Minneapolis, for appellant.
Peter E. Lind and Jeffrey M. Bauer, Minneapolis, for C & L Restaurant.
In an action against respondent C & L Restaurant, Inc., a Minnesota corporation doing business as Southfork Bar, for personal injury damages under Minn.Stat. § 340.95 (1980) (the Minnesota Civil Damage Act), appellant received a verdict against respondent C & L Restaurant in excess of $250,000.[1] Following post-trial motions, the trial court applied the "damage cap" provided in section 340.95 and limited C & L Restaurant's obligation to pay appellant's damages to $250,000. On appeal, appellant contends that the "damage cap" provision of the statute is unconstitutional because it deprives him of equal protection of the law guaranteed by the United States and Minnesota Constitutions. Respondent, by notice of review, challenges certain trial court rulings. Because we conclude the "damage cap" provision of section 340.95 as it existed in 1981 is unconstitutional, we reverse.
Respondent C & L Restaurant was a corporation owned by Stanley and Mary Lynn and Jerome and Bibiana Cassidy. Thirteen days before the incidents giving rise to this action, it had purchased a bar known now as the Southfork Bar located on Highway 3 in Eagan, Minnesota. Elmer Scott went to the Southfork Bar at approximately 4 p.m. on June 29, 1981. He was a frequent customer and, through a corporation partially owned by him, a former proprietor of the bar. On that afternoon he took his "usual" seat at the bar where he was joined by friends. Between 4 and 6 p.m., the Southfork Bar served two drinks for the price of one. Mary Lynn bartended until 6 p.m., during which time she served Scott at least four drinks. After 6 p.m., Kim Eddy served him two or three drinks. The exact number of drinks served to Scott cannot be determined, but it seems clear from the evidence he consumed at least 10 drinks containing intoxicating liquor. To one observer he appeared intoxicated by 7:15 p.m. Scott himself admitted that he had between 10 and 20 drinks that evening prior to the occurrence of the accident giving rise to this lawsuit.
Around 8 p.m., Scott drove a truck owned by LeAn's Inc. from the Southfork Bar parking lot and turned east onto Highway 3. He intended to make a left turn onto Highway 149. To do so, he slowed down and pulled into the left-turn lane so that the front of the truck protruded 2 or 3 feet into the on-coming traffic lane. Appellant McGuire and his fiancée, Cheryl Wilebski, were traveling west on Highway 3 on a motorcycle approaching the intersection. As the motorcycle, after slowing down, continued through the intersection, Scott turned into the path of the motorcycle and hit it broadside. Wilebski was thrown from the motorcycle to the cement median. *609 The motorcycle, with McGuire on it, was pinned in front of the truck. Scott continued driving approximately 300 feet and then appeared to slow down, after which he accelerated the truck and proceeded down Highway 149 for approximately .9 of a mile with the motorcycle and driver still pinned in front. He did this despite hearing a loud scraping noise and observing heavy smoke caused by the trapped motorcycle dragging on the pavement. A number of drivers attempted to stop Scott by honking horns or by flagging him down. Fearing that he would be charged with driving while under the influence, Scott continued to drive until he became stuck in gravel a short distance from his home. When he got out of the truck, he observed the front end and saw motorcycle and driver pinned beneath his truck. Thereafter, Scott walked to his house without rendering any aid to the motorcycle driver.
On the jury findings the trial court originally ordered a joint and several judgment against Scott and C & L Restaurant in the amount of $4,349,000 but provided that C & L Restaurant was "obligated" to pay only $338,000 toward the satisfaction of the judgment. Following a post-trial motion, the trial court, recognizing the statutory limitation of recovery contained in Minn. Stat. § 340.95 (1980),[2] ordered that C & L Restaurant "shall be obligated to [pay] $250,000 towards satisfying the * * * award."
On appeal appellant asserts that the "damage cap" in the statute limiting his recovery against the bar to $250,000 violated the equal protection clauses of the United States and Minnesota Constitutions U.S. Const. amend. XIV, § 1; Minn. Const. art. I, § 2. Appellant argues that had his injuries resulted from either an illegal sale of non-intoxicating beverages (3.2 beer) or an illegal sale of intoxicating liquor by a vendor not subject to section 340.95, he could have recovered his full damages; whereas, since his injuries resulted from an illegal sale of intoxicating liquor by a vendor covered by section 340.95, he remains undercompensated.
Before addressing this issue, we must first consider respondent's[3] contention that appellant may not properly challenge before this court the constitutionality of the "damage cap" of section 340.95. Respondent claims appellant at no time asked the trial court to rule on the constitutionality of the provision. We believe respondent's contention is meritless. Appellant notified the Minnesota Attorney General of his intention to challenge the statute's constitutionality both before trial and on appeal.[4] In each instance the Attorney General waived his right to intervene in the matter. See Automotive Merchandise, Inc. v. *610 Smith, 297 Minn. 475, 212 N.W.2d 678 (1973) (per curiam).
Proper notification notwithstanding, if the constitutionality of the "damage cap" were at no time challenged or litigated in the trial court, appellant would generally be barred from challenging it here. See Hampton v. Hampton, 303 Minn. 500, 501, 229 N.W.2d 139, 140 (1975); Automotive Merchandise, Inc., 297 Minn. at 477, 212 N.W.2d at 679-80. It seems clear that appellant did, in fact, challenge the statute's constitutionality in the trial court. He joined plaintiff Wilebski in moving that the trial judge disregard the damage cap because of its unconstitutionality. The trial court reserved a ruling until a later time but apparently never explicitly ruled on it. After respondent moved to limit its "responsibility" to $250,000 in a post-trial motion, appellant moved the trial court to declare the "damage cap" unconstitutional. In granting respondent's motion for limitation of "responsibility," the trial court did consider appellant's motion and stated the amended order, from which this appeal is now taken, "will give us a clear question, a clear point as to what is being done, and if the Supreme Court wants to go over the cap, is [sic] invalid, so be it."[5]
From the foregoing, we conclude the constitutional issue and the trial judge's resolution were implied in the lower court. Moreover, the parties have had adequate time to brief constitutional issues and the interests of justice require consideration of such issues by this court. Under such circumstances, we will recognize an exception to the rule and consider constitutional issues raised, even if for the first time, on appeal. See, e.g., Tischendorf v. Tischendorf, 321 N.W.2d 405, 410 (Minn. 1982), cert. denied, ___ U.S. ___, 103 S. Ct. 1426, 75 L. Ed. 2d 787 (1983).
1. In Minnesota the early common law did not permit an action against a liquor vendor for injuries resulting from the vendor's illegal sale of intoxicating liquor. See Strand v. Village of Watson, 245 Minn. 414, 419, 72 N.W.2d 609, 614 (1955); Beck v. Groe, 245 Minn. 28, 33-34, 70 N.W.2d 886, 891 (1955). In 1911, the legislature enacted the Civil Damage Act, also known as the Dram Shop Act.[6] This Act created a new cause of action against liquor vendors. The Civil Damage Act, now Minn.Stat. § 340.95, preempted all other actions that might impose liability on liquor vendors for illegal sales and provided the exclusive remedy in such actions. See Fitzer v. Bloom, 253 N.W.2d 395, 403 (Minn.1977).
At the time of its enactment, the Civil Damage Act applied to the sale of all intoxicating liquors which included both 3.2 beer and stronger liquor. In 1933, the Minnesota legislature redefined "intoxicating liquors" so as to exclude 3.2 beer from the definition to permit vendors to sell 3.2 beer without violating prohibition laws. See Wegan v. Village of Lexington, 309 N.W.2d 273, 279 (Minn.1981). Thereafter, in Minnesota there existed two classes of liquor vendors: vendors of "non-intoxicating liquor" (3.2 beer) and vendors of "intoxicating liquor." Only the latter class remained subject to liability under the Civil Damage Act. Although prohibition was repealed in December 1933, U.S. Const. amend. XXI, § 1, these legislative classifications remained until 1982, at which time the legislature again amended the Civil Damage Act to govern liability of vendors of both "intoxicating" and "non-intoxicating" liquor. Act of March 22, 1982, ch. 528, § 7, 1982 Minn.Laws 978.
For 40 years these classifications remained unquestioned by this court until Trail v. Christian, 298 Minn. 101, 213 *611 N.W.2d 618 (1973). In that case the court examined the issue whether a liquor vendor could be held liable for an illegal sale of 3.2 beer. After concluding that the illegal sale of 3.2 beer did not permit the assertion of a claim for damages under the Civil Damage Act, the court reassessed the common law rule of non-liability and, for the first time, recognized a common law negligence action against a vendor of 3.2 beer. Trail, 298 Minn. at 111, 213 N.W.2d at 624.[7]
The "damage cap" provision of section 340.95 was first inserted in the Act in 1977[8] in connection with a number of other changes urged by the liquor industry in an attempt to attract more dram shop insurers to offer insurance coverage to liquor vendors and to reduce dram shop liability insurance costs. Hearing on H.F. 676 (S.F. 162) Before the Senate Judiciary Committee (May 6, 1977). Its existence, however, was short-lived. In 1982, the legislature amended the Civil Damage Act in response to this court's decision in Wegan[9] to remove the notice of claim and limitation provisions. In addition, apparently in response to expressed concerns that the damage cap was likewise unconstitutional, the legislature removed the cap. Hearing on S.F. 358 Before the Commerce & Economic Development Committee (March 2, 1982).
The 1977 statute, of course, bears a presumption in favor of constitutionality. Guilliams v. Commissioner of Revenue, 299 N.W.2d 138, 142 (Minn.1980). We proceed with extreme caution before declaring a statute unconstitutional and do so only when absolutely necessary. Schwartz v. Talmo, 295 Minn. 356, 363, 205 N.W.2d 318, 323 (1973), appeal dismissed, 414 U.S. 803, 94 S. Ct. 130, 38 L. Ed. 2d 39 (1973). A party challenging a statute on constitutional grounds has the onus of demonstrating beyond a reasonable doubt that the statute violates a provision of the constitution. Contos v. Herbst, 278 N.W.2d 732, 736 *612 (Minn.1979), appeal dismissed sub nom., Prest v. Herbst, 444 U.S. 804, 100 S. Ct. 24, 62 L. Ed. 2d 17 (1979).
Guilliams, 299 N.W.2d at 142 (quoting Miller Brewing Co. v. State, 284 N.W.2d 353, 356 (Minn.1979)). We noted in Wegan that with respect to the notice of claim and limitation provisions the Civil Damage Act was "fatally defective" because it did not satisfy the first and second Guilliams factors. Wegan, 309 N.W.2d at 280. Compelled by the same principles of constitutional construction in Jones v. Fisher, 309 N.W.2d 726, 728 (Minn.1981), we held a spouse of one who becomes intoxicated by drinking 3.2 beer has a common law negligence action against the vendor, thus placing liability of 3.2 beer vendors on the same footing as vendors covered by the Civil Damage Act. Likewise, in Johnson v. Moberg, 334 N.W.2d 411 (Minn.1983), we applied the statutory "obviously intoxicated" standard to both common law actions against 3.2 beer vendors and actions brought under the Civil Damage Act.
As to respondent's first argument, even if we assume that the legislature may legitimately limit damages from claims brought against a municipal liquor store, the classification in the statute is over-broad in achieving its purpose. The legislature did not draw its line between municipal and non-municipal liquor vendors. Yet, if the legislature had seriously intended only to limit municipal liability, that is where it would have drawn the line. The inclusion of non-municipal vendors in the class for the reason asserted here by respondent would cause the class to fail constitutionally as being overbroad. Moreover, *613 we note the present case does not involve a municipal liquor vendor. The disparity in this case is between liability of private commercial intoxicating and non-intoxicating liquor vendors.
Respondent's second argument addresses the difference between 3.2 beer vendors and strong liquor vendors. We acknowledge that we do not have the data before us to substantiate respondent's claim that strong liquor vendors are exposed to greater liability and higher insurance premiums than 3.2 beer vendors so as to justify limited liability; nor could we independently evaluate this data and substitute our judgment for that of the legislature. Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 470, 101 S. Ct. 715, 727, 66 L. Ed. 2d 659 (1981). However, it seems significant to us that this court has heard a number of cases involving 3.2 beer vendors in the past 10 years. See, e.g., Johnson v. Moberg, 334 N.W.2d 411 (Minn.1983); Jones v. Fisher, 309 N.W.2d 726 (Minn. 1981); Trail v. Christian, 298 Minn. 101, 213 N.W.2d 618 (1973). See also Beck v. Groe, 245 Minn. 28, 70 N.W.2d 886 (1955). This suggests to us that 3.2 beer vendors are not exempt from litigation. Moreover, this court has long recognized that, in fact, one can become intoxicated by drinking 3.2 beer. Trail v. Village of Elk River, 286 Minn. 380, 388, 175 N.W.2d 916, 921 (1970). The damage resulting from abuse of 3.2 beer can be as devastating as damage resulting from abuse of stronger liquor. Thus, 3.2 beer vendors are exposed to the same potential liability as strong liquor vendors. It seems incongruous to us to limit the liability of one class while imposing unlimited liability on the other class when potential liability is equal. Keeping in mind the remedial purpose of the Civil Damage Act, it seems even more incongruous to us to limit the liability of the class who, according to respondent's own assessment, is subject to greater alcohol abuse and should therefore be provided with a greater incentive to curb that abuse.
Thus, we conclude that the legislative classification providing a "damage cap" on recoveries against an "intoxicating liquor" vendor and not on recovery against a 3.2 beer vendor are neither genuine nor relevant to the purpose of the law. Further, from the standpoint of the victims it is arbitrary and fanciful. Thus, the first two factors of Guilliams have not been satisfied. Therefore, we hold the "damage cap" in Minn.Stat. § 340.95 (1980) unconstitutionally deprives victims of equal protection of the laws.[10]
*614 A. Respondent urges us, if we find the "damage cap" unconstitutional, to apply the statutory limitation to 3.2 beer vendors rather than strike the cap from the Civil Damage Act. While this court can strike a severable statutory provision if found to be unconstitutional and void, Minn.Stat. § 645.20 (1982), we cannot add language to a statute in order to render it constitutionally permissible. Thompson v. Estate of Petroff, 319 N.W.2d 400, 407 (Minn.1982). To grant respondent's request to sustain the statutory "damage cap," we would have to add language to the Civil Damage Act to make it applicable to non-intoxicating liquor vendors. This we decline to do.
2. By notice of review, respondent assigns six alleged errors of law during proceedings before the trial court.[11]
A. Respondent moved for a bifurcated trial on liability and damage issues claiming that failure to bifurcate would prejudice respondent as to the dram shop liability issue. After carefully considering the matter, the trial court denied the motion. The trial court had wide discretion in deciding whether or not to grant separate trials, and its ruling will not be disturbed absent a clear showing of abuse of discretion. Chicago, Rock Island & Pacific Railroad Co. v. Williams, 245 F.2d 397 (8th Cir.1957), cert. denied, 355 U.S. 855, 78 S. Ct. 83, 2 L. Ed. 2d 63 (1957). See also Fitzer v. Bloom, 253 N.W.2d 395 (Minn.1977). We find no abuse of discretion here. Even had there been separate *615 trials, the jury could not have been insulated from the horrible details of the accident. The jury would have seen appellant in the courtroom. His injuries were obvious.
B. After hearing about the accident, Stan Lynn, one of the owners of C & L Restaurant, Inc., drove to the scene where he learned that Scott's truck had been involved. After he returned to the bar, Scott's personal attorney came into the bar and told Lynn that neither Lynn nor his employees should talk about the events surrounding the accident unless they knew what they were talking about. Thereafter, Lynn held a meeting to convey this message to his employees. The trial judge admitted testimony concerning these events. Ordinarily, evidentiary rulings are within the sound discretion of the trial judge. Lines v. Ryan, 272 N.W.2d 896, 902 (Minn.1978); Weiby v. Wente, 264 N.W.2d 624, 627 (Minn.1978). The rationale advanced by appellant for admission of this testimony was that it implied to Lynn knowledge of Scott's intoxication before the accident. While we entertain doubts about the admissibility of this testimony and while generally such testimony would be inadmissible, in this case in light of the overwhelming evidence of Scott's intoxication at the bar, we conclude it was not prejudicial error to admit this evidence.
D. Prior to trial Wilebski and McGuire executed a Pierringer release. The trial judge refused to admit evidence of the release and refused to allow any questions regarding Wilebski's claim against appellant. The extent to which a settlement between some, but not all, parties to litigation should be disclosed to the jury rests in the sound discretion of the trial court. Frey v. Snelgrove, 269 N.W.2d 918, 922 (Minn.1978). In this case there was no abuse of discretion. McGuire's negligence was submitted to the jury; at least one of the attorneys representing a party adverse to McGuire admitted McGuire was not negligent; and independent evidence by an impartial witness indicated no negligence on the part of McGuire. In short, there was more than sufficient evidence to establish that McGuire did not negligently operate the motorcycle as the jury so found. The only purpose for admission of evidence concerning the settlement in this case is that it might have tended to establish McGuire's negligence. Offered solely for this purpose, this evidence would have been inadmissible. Minn.R.Evid. 408.
Accordingly, we hold that the "damage cap" provision found in Minn.Stat. § 340.95 (1980), as it existed in 1981, was unconstitutional. We further hold that respondent's assignment of errors do not justify the granting of a new trial. We remand to the trial court for entry of judgment based *616 upon the answers the jury gave to interrogatories on the special verdict.
[1] Appellant McGuire and Cheryl Wilebski brought separate actions against respondent C & L Restaurant for damages resulting from illegal sale of intoxicating liquor to Elmer Scott. They likewise commenced separate actions in negligence against Elmer Scott and LeAn's Inc., which owned the vehicle Scott was driving at the time of the accident giving rise to these suits. In the Wilebski dram shop action, C & L Restaurant commenced a third-party action against appellant McGuire seeking contribution or indemnity. The trial court consolidated these actions for trial on all issues. Wilebski also brought an action in negligence against McGuire which was settled prior to trial by execution of a Pierringer release. At trial Scott and LeAn's Inc. admitted negligence and intoxication. The jury found both Scott and C & L Restaurant causally at fault, awarded damages of $4,349,000 to McGuire, and apportioned fault 55% to Scott and 45% to C & L Restaurant. (It likewise awarded damages of $360,000 to Wilebski. Though C & L Restaurant's obligation to pay its share of those damages was limited to $250,000 by post-trial order, Wilebski does not appeal.)
[2] Minn.Stat. § 340.95 (1980) insofar as applicable read: "No recovery shall be had in any action or actions pursuant to this section in excess of $250,000 for all damages to one person * * * arising out of a single instance of the illegal sale or barter of intoxicating liquor." This provision was deleted from the statute by Act of March 22, 1982, ch. 528, § 7, 1982 Minn. Laws 978.
[3] We will refer to C & L Restaurant, Inc. as "respondent" throughout. Although Elmer Scott and LeAn's, Inc. are also respondents to this appeal, they support appellant in urging us to hold unconstitutional the "damage cap" of Minn.Stat. § 340.95 (1980).
[4] Notice must be served upon the attorney general pursuant to Minn.R.Civ.P. 24.04 and Minn. R.Civ.App.P. 144 when the constitutionality of an act of the legislature is questioned in any action to which the state is not a party.
[5] As indicated, at that point it seems clear the trial judge intended to uphold the constitutionality of the damage cap. However, he continued by noting that appellant might want to challenge the amended order, bring in the attorney general, and argue the constitutional issue, in which case, the trial judge clearly indicated he would affirm the amended order, following which an appeal could be taken to this court. Instead, appellant chose to bring this appeal without taking further action before the trial court.
[6] Act of April 18, 1911, ch. 175, 1911 Minn.Laws 221.
[7] In later cases we expanded this modern common law rule to include actions against other liquor vendors not subject to the Civil Damage Act. In Blamey v. Brown, 270 N.W.2d 884 (Minn.1978), cert. denied, 444 U.S. 1070, 100 S. Ct. 1013, 62 L. Ed. 2d 751 (1980), overruled on jurisdictional grounds, West American Insurance Co. v. Westin, Inc., 337 N.W.2d 676 (Minn.1983), we held common law actions in negligence could be brought against non-resident liquor vendors. Generally, a common law negligence action can be brought if the Civil Damage Act is inapplicable. See Fitzer v. Bloom, 253 N.W.2d 395, 403 (Minn.1977).
[8] Act of June 2, 1977, ch. 390 § 1, 1977 Minn. Laws 887. See supra note 2.
[9] Act of March 22, 1982, ch. 528, § 7, 1982 Minn.Laws 978. The claim in the instant case arose in 1981. Thus, the statute containing the "damage cap" is applicable.
[10] We conclude that even if the classifications would not have violated the United States Constitution, the classifications still would violate the equal protection guarantee of our state Constitution.
[11] Appellant claims the assignment of errors of law are not within the scope of review provided in Minn.R.Civ.App.P. 106. We reject that claim. See Jangula v. Klocek, 284 Minn. 477, 488, 170 N.W.2d 587, 594 (1969). Respondent was willing to accept a capped judgment rather than move for a new trial below and undergo the risk, expense, and delay incident to that trial. By taking this appeal, appellant forced respondent to participate in these appellate proceedings. In the interests of judicial efficiency, we believe it advisable to resolve all controversies between these parties at this time.