Case Name: NUNNALLY v. INTERNATIONAL FIDELITY INSURANCE COMPANY
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1979-11-07
Citations: 94 Mich. App. 291
Docket Number: Docket No. 77-4356
Parties: NUNNALLY v INTERNATIONAL FIDELITY INSURANCE COMPANY
Judges: Before: J. H. Gillis, P.J., and R. B. Burns and N. J. Kaufman, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 94
Pages: 291–299

Head Matter:
NUNNALLY v INTERNATIONAL FIDELITY INSURANCE COMPANY
Docket No. 77-4356.
Submitted August 27, 1979, at Detroit.
Decided November 7, 1979.
Plaintiff, Roosevelt Nunnally, was injured when his automobile was struck by a truck driven by Captain John Smith. Within two years of the accident plaintiff filed suit against Lillian G. Daniels and Louis H. Cheff, doing business as Mr. Kelley’s Lounge, under the dramshop act. Plaintiff obtained a consent judgment over three years later. Plaintiff then filed the present action against defendant, International Fidelity Insurance Company (International), the surety on the Mr. Kelley’s Lounge liquor bond in force at the time of the accident, alleging an unlawful sale of intoxicants to Smith, the accident and the consent judgment. Defendant filed a third-party complaint against Lillian Daniels and Louis Cheff, alleging that, in the event International was held liable on the bond, Daniels and Cheff would become liable to International. The Wayne Circuit Court, Theodore R. Bohn, J., granted summary judgment for plaintiff. Defendant International appeals. Held:
The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants. It creates a statutory cause of action of trespass on the case, not debt on a bond, against the dramshop’s liquor bond surety. The action accrues immediately upon the unlawful furnishing of intoxicants by the principal and the statute of limitations, two years, begins to run from that point. The action by plaintiff against the surety is barred by the statute of limitations.
Reversed and remanded.
N. J. Kaufman, J., dissented. He would hold that the dram-shop act’s statute of limitations only requires that a suit to determine the liability of the tavern owner be commenced within two years and does not bar a later action against the surety where the tavern owner was sued within two years and a judgment against him was obtained. He would affirm.
References for Points in Headnotes
45 Am Jur 2d, Intoxicating Liquors §§ 579, 589.
What statute of limitations applies to action under dramshop or civil damage act. 55 ALR2d 1286.
45 Am Jur 2d, Intoxicating Liquors § 561.
Opinion of the Court
1. Intoxicating Liquors — Dramshop Act — Limitation of Actions.
The dramshop act creates a statutory cause of action of trespass on the case, not debt on a bond, against the dramshop’s liquor bond surety; the action accrues immediately upon the unlawful furnishing of intoxicants by the principal and the statute of limitations, two years, begins to run from that point (MCL ' 436.22; MSA 18.993).
2. Intoxicating Liquors — Dramshop Act — Remedies.
The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants (MCL 436.22; MSA 18.993).
Dissent by N. J. Kaufman, J.
3. Intoxicating Liquors — Dramshop Act — Limitation of Actions.
The two-year limitation period embodied in the dramshop act requires that a suit to establish the liability of the tavern owner be brought within two years of the date on which the cause of action arose; it does not operate to bar a claim against a tavern owner’s surety where the tavern owner was sued within two years of the accident and the plaintiff subsequently sues the surety on the judgment obtained against the tavern owner (MCL 436.22; MSA 18.993).
Lopatin, Miller, Bindes, Freedman & Bluestone (by Michael Gagleard), for plaintiff.
Norman L. Zemke, for defendant.
Before: J. H. Gillis, P.J., and R. B. Burns and N. J. Kaufman, JJ.

Opinion:
Per Curiam.
On January 11, 1970, plaintiff suffered injuries when his automobile was struck by a truck driven by John Smith. On December 22, 1971, plaintiff commenced suit against the third-party defendants under the dramshop act, MCL 436.22; MSA 18.993. The defendant herein, the surety upon the third-party defendants' liquor bond, was not a party to that action.
On April 2, 1975, a consent judgment was entered against the third-party defendants. On June 14, 1976, plaintiff instituted the present action against the defendant in reliance on the consent judgment and the defendants' surety bond, which was in full force and effect on the date of the accident.
Defendant moved for accelerated judgment asserting that plaintiff's claim was barred by the two-year period of limitations contained in the dramshop act. The motion was denied. Plaintiff thereafter moved for summary judgment alleging the existence of the unlawful sale, the surety bond and the consent judgment and asserting that, based thereon, there existed no question of fact to be .resolved. Defendant brings this appeal as a matter of right from the order granting plaintiff's motion. GCR 1963, 806.1.
MCL 436.22; MSA 18.993 provides in relevant part:
"Every [person] who shall be injured by a visibly intoxicated person by reason of the unlawful selling, giving or furnishing any intoxicating liquor, and the sale is proven to be a proximate cause of the injury or death, shall have a right of action against the person who shall by such selling have caused or contributed to the intoxication or who shall have caused or contributed to any such injury, and the principal and sureties to any bond given under this law shall be liable, severally and jointly, with the person or persons selling, giving or furnishing any intoxicating liquors . Any action shall he instituted within 2 years after the happening of the event and all factual defenses open to the alleged intoxicated person shall be open and available to the principal and surety . Such damages together with the costs of suit shall be recovered in an action of trespass on the case before any court of competent jurisdiction," (Emphasis supplied.)
The question before us is whether the two-year limitations period applies to an injured party's cause of action against a liquor bond surety when the plaintiff has timely commenced suit against the principal. To answer this question we must ascertain the nature of the action against the surety.
The dramshop act creates a statutory cause of action unknown to the common law. Koehler v DRT Sportservice, Inc, 55 Mich App 567; 223 NW2d 461 (1974). Under the statute, there exists a direct cause of action against the liquor bond surety, Scahill v Aetna Indemnity Co, 157 Mich 310; 122 NW 78 (1909), which is an action of trespass on the case, not an action in debt on the bond. The bond is not the foundation of the action. Squires v Miller, 173 Mich 304, 312; 138 NW 1062 (1912). The action against the surety accrues at once upon the unlawful furnishing of intoxicants by the principal. Anthony v Krey, 70 Mich 629, 632; 38 NW 603 (1888). The period of limitations begins to run at that time.
In the present case, the unlawful sale of intoxicants and the resulting accident occurred on January 11, 197Ó. The two-year limitations period began to run as of that date. Plaintiff did not commence his action against the defendant until June 14, 1976, approximately 6-1/2 years after the date of the injury and approximately 4-1/2 years after the expiration of the two-year period. Having failed to commence the action against the defendant timely, plaintiff's claim is barred. The denial of defendant's motion for accelerated judgment was reversibly erroneous.
Notwithstanding the foregoing, plaintiff contends that he has a remedy against the surety on the bond independent of the provisions of the dramshop act. We do not agree. The dramshop act affords the exclusive remedy for injuries arising out of the unlawful furnishing of intoxicants. Manuel v Weitzman, 386 Mich 157, 164-165; 191 NW2d 474 (1971).
Reversed and remanded. Costs to appellant.