Opinion ID: 891684
Heading Depth: 4
Heading Rank: 1

Heading: Respondents' Complaint States a Third-Party Claim

Text: {17} At the outset of our analysis, we examine the effect of Section 41-11-1, which codified, at least partially, dram shop liability in this state. As discussed below, the parties disagree whether Section 41-11-1 completely preempted common law dram shop liability. The common law scheme which operated prior to the enactment of Section 41-11-1 provides a backdrop to our statutory interpretation, so we begin our discussion there. {18} We first recognized a common law action in favor of a third party injured by the tavernkeeper's over service of alcohol to a patron in Lopez v. Maez, 98 N.M. 625, 631, 651 P.2d 1269, 1275 (1982). There, we examined the history of dram shop liability and concluded that traditionally the common law imposes no liability on the seller of intoxicating liquor for damages that resulted from the intoxication of a patron. Id. at 628, 651 P.2d at 1272. We noted that many states had adopted statutes in order to change the existing common law, such that it permitted an action against the tavernkeeper; however, no such statute existed in New Mexico. Id. Even though our Legislature had not acted to change the common law, we held that the traditional common law view that the tavernkeeper was not liable for a third party's injuries from an intoxicated patron was outmoded, and that it was within the province of the judiciary to change the common law. Id. at 629-30, 651 P.2d at 1273-74. Therefore, we validated a common law action premised upon breach of a statutory or regulatory duty not to serve alcohol to an intoxicated patron. See id. at 631, 651 P.2d at 1275. {19} In Lopez, we noted that the statute providing a duty not to serve alcohol, NMSA 1978, Section 60-10-27 (repealed 1981), [did] not define or qualify the type of person who sells, serves or gives any alcoholic liquor. Lopez, 98 N.M. at 631, 651 P.2d at 1275. Section 60-10-27 was repealed by NMSA 1978, Section 60-7A-16 (1981) (as amended through 1993), the version currently in force. Section 60-7A-16 delineates a duty not to serve alcohol to intoxicated individuals, and akin to its predecessor, it is a broadly applicable duty, which does not limit or qualify the person who serves the liquor. Specifically, Section 60-7A-16 provides: It is a violation of the Liquor Control Act . . . for a person to sell or serve alcoholic beverages to or to procure or aid in the procurement of alcoholic beverages for an intoxicated person if the person selling, serving, procuring or aiding in procurement, knows or has reason to know that he is selling, serving, procuring or aiding in procurement of alcoholic beverages for a person that is intoxicated. (Emphasis added.) Thus, the common law action was premised upon a broad duty, applicable to any person  who sold or served alcohol. {20} In 1983, however, the Legislature enacted Section 41-11-1, which provides a statutory cause of action applicable to a tavernkeeper who is licensed to serve liquor under New Mexico law. See 1983 N.M. Laws, ch. 328, § 1(A), (C); § 41-11-1(A), (D)(1) (version in force). The Legislature made Section 41-11-1 the exclusive remedy for breach of Section 60-7A-16 by a licensee which, as mentioned above, provides a broad duty not to serve alcohol to intoxicated persons. See § 41-11-1(H) (No person may seek relief in a civil claim against a licensee or a social host for injury or death or damage to property which was proximately caused by the sale, service or provision of alcoholic beverages except as provided in this section.). {21} We note that, in this case, Respondents cannot proceed under Section 41-11-1 because the Casino is not a licensee within the meaning of the section. Section 41-11-1(D)(1) defines a licensee as a person licensed under the provisions of the Liquor Control Act and the agents or servants of the licensee. The Casino does not fall within this definition because it is not licensed to sell liquor under New Mexico law; rather, it is licensed by the Pueblo. Thus, the Court of Appeals addressed whether the common law cause of action, originally recognized in Lopez, survived subsequent legislative enactments, namely Section 41-11-1. The Court concluded that there is a recognized common law cause of action for an injured, third-party passenger. Mendoza, 2010-NMCA-074, ¶ 19, 148 N.M. 534, 238 P.3d 903. {22} The Casino contests this conclusion, arguing that Section 41-11-1 provides an exclusive remedy against tavernkeepers, such that there can be no common law alternative. The Casino argues that if there is a common law alternative to Section 41-11-1, then Section 41-11-1's limitations on dram shop liability are rendered meaningless, and therefore urges that we reverse the Court of Appeals. {23} In response, Respondents maintain that when the Legislature codified dram shop liability it limited the scope of the legislation as to licensees; however, it did not abolish a cause of action. Baxter v. Noce, 107 N.M. 48, 50, 752 P.2d 240, 242 (1988). Respondents also point out that the original common law cause of action recognized in Lopez was based on the duty derived from the broadly worded Section 60-7A-16, which is applicable to persons, not just licensees. See § 60-7A-16 (prohibiting any person from serving alcohol to intoxicated individuals (emphasis added)). Thus, Respondents argue that Section 41-11-1 is the exclusive remedy against licensees; however, it is not the exclusive remedy against non-licensees, such as the Casino. Respondents claim that the Legislature could have chosen to make Section 41-11-1 applicable to any person, but it did not elect to do so. Accordingly, Respondents argue that this Court should affirm the judgment of the Court of Appeals, recognizing a common law cause of action for injured third-parties. {24} In order to determine whether Section 41-11-1 preempts common law third-party claims, we first examine the plain language of the statute. Oldham, 2011-NMSC-007, ¶ 10, 149 N.M. 215, 247 P.3d 736. Section 41-11-1 applies to licensees. See § 41-11-1(A), (H). As discussed above, a licensee is a person licensed under the provisions of the Liquor Control Act and the agents or servants of the licensee. Section 41-11-1(D)(1). Therefore, the plain language of Section 41-11-1 limits its reach to those individuals licensed pursuant to the Liquor Control Act; it is not applicable to all individuals. See § 41-11-1(A), (D), (H). Subsection H provides that no person may maintain a civil claim against a licensee . . . except as provided in this section. Section 41-11-1(H) (emphasis added). Similarly, Subsection A limits its reach to licensees; it provides that [n]o civil liability shall be predicated upon the breach of Section 60-7A-16. . . by a licensee, except in the case of the licensee  who serves alcohol to an intoxicated individual. Section 41-11-1(A)(1) (emphasis added). Because Section 41-11-1 explicitly limits its scope to licensees, we conclude that it only supplanted the common law cause of action against licensees. It did not change the common law's recognition of third-party claims against non-licensees. Because the Casino is not a licensee, Respondents may pursue a common law third-party claim. {25} Our interpretation is confirmed by our prior cases. As discussed above, in Lopez, we modified the common law so as to permit an injured third party to maintain an action against a tavernkeeper. 98 N.M. at 632, 651 P.2d at 1276. Following Lopez, the Legislature enacted Section 41-11-1 in 1983. See 1983 N.M. Laws, ch. 328, § 1 (enacting section later codified as Section 41-11-1). We had the opportunity to examine the 1983 version of Section 41-11-1 in Baxter, 107 N.M. at 50, 752 P.2d at 242. There, we concluded that Section 41-1-11 did not create or abolish a cause of action; instead it narrowed the liability of tavernkeepers . . . and set out the elements which would constitute a breach of the duty established in [ Lopez ]. Baxter, 107 N.M. at 50, 752 P.2d at 242. Therefore, according to Baxter, Section 41-11-1 did not supplant the common law cause of action originally recognized in Lopez. Our interpretation of Section 41-11-1 places it in harmony with Lopez and Baxter. {26} Because Section 41-11-1 does not preempt all common law claims, our common law permits a third-party claim against a tavernkeeper. Accordingly, we hold that the factual allegations in Respondents' complaint are sufficient to state a third-party common law claim with respect to the passenger of the vehicle.