Court Opinion

ID: 9851991
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:22:46.648857+00
Date Added: 2024-06-11T09:22:20.914576
License: Public Domain

CONNOR, Justice.
In this appeal, we consider whether a lessor of an establishment serving alcoholic beverages, who takes no part in the management or control of the establishment, may nevertheless be held liable in tort for conduct occurring therein.
*876William Barton was injured on December 16, 1972 during an altercation in the Bonfire Lounge in Anchorage. An inebriated patron, Melba J. Shinn, allegedly threw a bottle, which hit Barton in the eye.
Elsie Lund owned the building in which the Bonfire Lounge was located. She leased the premises to Edwin Fletcher, who operated the Lounge. The lease included an option to purchase, which Fletcher exercised on February 5,1973, after the incident in question. Mrs. Lund had no control over the management of the business.1
Pursuant to AS 04.10.180, which requires that all persons having a direct or indirect financial interest in an alcoholic beverage business must have their names listed on the establishment’s license,2 the license for the Bonfire Lounge was issued to Edwin Fletcher, Elsie Lund, and Herman Schultz, Lund’s brother. Schultz had no connection with the premises; he merely signed the application for a license as “a brotherly gesture for his sister.”
Barton brought this action against Melba Shinn and also against Lund, Fletcher, and Schultz, citing AS 04.15.020(a), which makes it unlawful to serve liquor to an intoxicated person.3 He alleged that the Bonfire’s bartender had served liquor to Melba Shinn while she was intoxicated, and that this had been the cause of his injuries. Lund and Schultz were granted summary judgment on the ground that they had no control over the premises, and hence were in no way responsible for Barton’s injuries. Barton has appealed.4
Were the common law principle of vicarious liability the only ground relied upon for recovery, we would have no difficulty in affirming the summary judgment. Since Schultz and Mrs. Lund had no control over, or right to control, the bartender who actually served the drinks to Melba Shinn, there is no basis for holding them vicariously liable for his conduct. Restatement (Second) of Agency §§ 219, 220 (1958); 2 F. Harper & F. James, The Law of Torts § 26.3 (1956); see DeVille v. Shell Oil Co., 366 F.2d 123 (9th Cir. 1966); Hobbs v. Mobil Oil Corp., 445 P.2d 933 (Alaska 1968). See also Luth v. Rogers & Babler Construction Co., 507 P.2d 761, 763-64 (Alaska 1973) (scope of employment); Fruit v. Schreiner, 502 P.2d 133, 140-41 (Alaska 1972) (same).
Barton, however, relies on AS 04.10.180, set out in footnote 2, supra. He asserts that this statute makes holders of alcoholic beverage licenses, no matter how remote from the management of the licensed premises they may be, liable in tort for violations of AS 04.15.020(a).
In Sabre Jet Room, Inc. v. K & L Distributors, Inc., 384 P.2d 952 (Alaska 1963), an attempt was made to hold a passive lessor of a liquor business liable for the debts of the business, based on AS 04.10.180. We declined to do so. We examined the rationale for this statute and concluded that it did not impose, in and of itself, any civil liability. “Civil liability, if any is claimed, must depend upon the general commercial law.” Id. at 955.
*877We reach the same conclusion here. He hold that the responsibility which AS 04.10.180 casts upon liquor licensees is the responsibility to answer to the criminal sanctions imposed by AS 04.15.100 and to the administrative sanctions of the Alcoholic Beverage Control Board. The purpose of AS 04.10.180 is to prevent evasion of the liquor control statutes and regulations through the creation of hidden financial interests in liquor businesses unknown to the regulatory authorities or to the public. It helps insure that all persons with any financial interest in such businesses are answerable to the Alcoholic Beverage Control Board.5
In Robinson v. Walker, 63 Ill.App.2d 204, 211 N.E.2d 488, 18 A.L.R.3d 1317 (1965), on facts similar to these an attempt was made to hold liable a trustee who held legal title to the land upon which the licensed premises stood, but had no other relation to the operation of the alcoholic beverage business within. Unlike the Alaska statutes, the Illinois statute was a “dram shop act” in the usual sense of that term, explicitly imposing civil liability upon “any person owning” licensed premises upon which liquor is served to a person who then in an intoxicated state injures person or property.6 The court construed the word “owning” in light of the purposes of the dram shop statute, and held that those purposes would not be furthered by imposing civil liability on a party who had no control over the liquor business.7
We are similarly persuaded that as a matter of policy civil liability should not be imposed vicariously on persons who do not have power to control the conduct alleged to be tortious. This is the general common law rule for vicarious liability, as we have noted. The Legislature’s desire to prevent the creation of hidden financial interests in alcoholic beverage businesses, reflected in the enactment of AS 04.10.180, does not persuade us that we should depart from the general rule concerning civil liability. Our decision leaves criminal and administrative sanctions available to enforce the policy embodied in AS 04.10.180, but also furthers the belief of the legal system that it is unfair to hold a person civilly liable for that over which he has no control, and which he therefore has no opportunity to prevent.
The situation here is distinguishable from that in Vance v. Estate of Myers, 494 P.2d 816 (Alaska 1972). There we held that the administrator of an estate who operated decedent’s bar business could be held liable, in his representative capacity, for torts committed by a bartender. The difference is that in Vance the administrator actively managed the business enterprise as an incident of which the tortious conduct occurred. In the case at bar appellees had no control *878over or interest in the beverage dispensary business which was the source of appellant’s injuries.
We hold that in the circumstances of the case at bar liability does not extend to persons in the position of appellees.
The superior court’s entry of summary •judgment in favor of Lund and Schultz is affirmed.

. The lease contained covenants that the premises would not be used for any unlawful purpose and that Fletcher would hold Lund harmless for any violations of laws or regulations and for any tort claims arising out of the business, except for those resulting from Lund’s own negligence.

. AS 04.10.180 reads:
“No person other than the licensee shall have a direct or indirect financial interest in the business for which the license is issued. The licensee is solely responsible for the lawful conduct of the business licensed under this title except as provided in this title.”

. AS 04.15.020(a) reads in full:
“Sale to minors or intoxicated persons. It is unlawful to give, barter or sell any intoxicating liquors, including beer and wine, to a person under the age of 19 years or to an intoxicated person, and it is unlawful for a licensee to permit the giving, selling, bartering or drinking of any intoxicating liquor within the premises covered by a license to or by either of the forbidden classes, nor shall the licensee permit the drinking of hard or distilled liquors by any person upon the premises covered by his license, unless it is permitted under the classification of his license.”

.Shinn did not answer the complaint. Fletcher answered, but did not move for summary judgment and is not a party to this appeal.

. The dissenting opinion correctly points out, citing section 287 of the Restatement (Second) of Torts, that the statutory criminal and administrative penalty provisions have no effect on the decision whether to impose liability for negligence. Instead, we look to considerations of public policy.

. AS 04.15.020(a), set out in footnote 3, supra, unlike a “dram shop” act does not give a civil cause of action against a liquor-dispensing establishment to a person injured by an intoxicated person. AS 04.15.020(b) specifies suspension or revocation of the liquor license as an administrative sanction for furnishing liquor to an intoxicated person, and AS 04.15.100 makes it a misdemeanor punishable by find or imprisonment.
We note that the United States District Court for Alaska has held that under Alaska law, violation of AS 04.15.020(a) is negligence per se. Vance v. United States, 355 F.Supp. 756 (D. Alaska 1973); see Bachner v. Rich, 554 P.2d 430 (Alaska 1976); Ferrell v. Baxter, 484 P.2d 250 (Alaska 1971). The Supreme Court of California has found “dram shop” liability based on a criminal statute similar to AS 04.-15.020(a) (Vesely v. Sager, 5 Cal.3d 153, 95 Cal.Rptr. 623, 486 P.2d 151 (1971)), and based purely on the common law without reliance on the statute (Bernhard v. Harrah’s Club, 16 Cal.3d 313, 128 Cal.Rptr. 215, 546 P.2d 719, 726-27, cert, denied, 429 U.S. 859, 97 S.Ct. 159, 50 L.Ed.2d 136 (1976)). Contra, e. g., Cherbonnier v. Rafalovich, 88 F.Supp. 900, 12 Alaska 634 (1950) (Alaska law). See generally Annot., 75 A.L.R.2d 833 (1961 & Supp.1975).
In view of our disposition of this case, we express no opinion on this question.

.Annot., 18 A.L.R.3d 1323 (1968), discusses a number of cases involving various factual circumstances from which this “control” rule can be generalized.