Court Opinion

ID: 9670849
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:27:10.286712+00
Date Added: 2024-06-11T18:16:06.842790
License: Public Domain

LAVORATO, Justice
(dissenting).
The majority rejects Summerhays’ action against the licensee under Iowa Code section 123.92 because it believes that as a matter of law the furnishing of beer and liquor in this case did not constitute a sale. In doing so, the majority relies heavily on Cady v. Coleman, 315 N.W.2d 593 (Minn.1982). Cady is distinguishable because it involved a social host that was not a commercial vendor of alcohol. Like Iowa, Minnesota does not recognize common law actions against social hosts under its dramshop statute. See Cole v. City of Spring Lake Park, 314 N.W.2d 836 (Minn.1982).
The majority cites a passage from Cady in support of its conclusion that the furnishing of alcohol to employees and their guests by the licensee in this ease did not constitute a sale for purposes of section 123.92. However, the following passage is found in an earlier part of the opinion in Cady:
We hold in this case that the legislature intended to insulate social hosts from liability regardless of the terms under which they provide their guests with liquor. It is illogical to impose liability under the [Dram Shop] Act upon a social host who sells or barters liquor to a minor or an intoxicated person, but not upon one who gives it away. The argument that commercial vendors should be subject to liability because they profit by their sales and therefore should bear some of the risks created by their business does not apply with equal force to a social host, who is unlikely to make any profit even if he barters or sells liquor to guests....
The legislature’s intent to restrict liability only to commercial vendors is sufficient*753ly clear from its deletion from the [Dram Shop] Act of the word “giving.” “Any person” [in the Dram Shop Act] who sells or barters liquor means a person in the business of providing liquor, and not a social host who happens to receive some consideration from his guests in return for drinks he provides.
Cady, 315 N.W.2d at 595-96.
My point is that the italicized language in the above passage could logically be extended to cover a licensee who uses its business premises and employees1 for an employee Christmas party during which beer and liquor is served. During oral argument, the licensee’s attorney candidly admitted that the result here might be different if the licensee furnished drinks “on the house” to its customers after business hours. I see no meaningful distinction between the two scenarios.
Under either of these scenarios, the licensee is still in the business of selling liquor and beer. The licensee does not change hats from a licensee to a social host merely because the establishment is closed. A fact finder could reasonably infer under either scenario that the licensee makes no immediate profit but hopes to profit from its “generosity” in the future because of employee or customer goodwill. In either case, the licensee expects a benefit in the form of such goodwill from furnishing the liquor and beer “gratuitously.” I submit such an expectation is sufficient to constitute consideration for the beer and liquor and thereby brand the transactions under either scenario as a “sale” for purposes of section 123.92.
There are other facts to support this conclusion. The licensee in this ease paid for the liquor and beer consumed on the establishment premises during the Christmas party. The licensee reported the amount of beer and liquor dispensed as sales of liquor and beer for sales tax purposes. All expenses for the party were treated as business expenses. Because the two employees who worked on the day of the party were on salary, their wages were likewise treated as business expenses.
These facts support the Summerhays’ argument that the idea of a benevolent employer is contrary to economic principles. Benefits that employers may furnish employees are, economically speaking, not provided “free.” Such benefits are a cost of doing business and so recognized and treated by employers. More specifically, employers and employees generally consider such benefits as wages. For example, any management and union negotiations regarding employee benefits like health insurance recognize this economic reality because they traditionally treat such benefits as part of the wage package.
Iowa Code section 123.1 sets out the following public policy with regard to the trafficking of liquor in Iowa:
This chapter shall be cited as the “Iowa Alcoholic Beverage Control Act,” and shall be deemed an exercise of the police power of the state, for the protection of the welfare, health, peace, morals, and safety of the people of the state, and all its provisions shall be liberally construed for the accomplishment of that purpose. It is declared to be public policy that the traffic in alcoholic liquors is so affected with a public interest that it should be regulated to the extent of prohibiting all traffic in them, except as provided in this chapter.
The majority’s restrictive interpretation given to the word “sale” in section 123.92 flies in the face of the statutory mandate that the provisions of Chapter 123 should be liberally construed to protect the safety of Iowa citizens. Such an interpretation does nothing to prevent a recurrence of the tragedy in this case — the death of an innocent child.
For all these reasons, I would hold that there is a material fact question on whether the furnishing of liquor and beer was a sale under section 123.92. I would therefore reverse and remand for further proceedings on this issue.
I also take issue with the majority’s conclusion that Iowa Code section 123.49(l)(a) immunized the licensee in this case from *754liability as a social host. Section 123.49(l)(a) and (b) provide:
1(a) A person other than a person required, to hold a license or permit under this chapter who dispenses or gives an alcoholic beverage, wine, or beer in violation of this subsection is not civilly liable to an injured person or the estate of a person for injuries inflicted on that person as a result of intoxication by the consumer of the alcoholic beverage, wine or beer.
(b) The general assembly declares that this subsection shall be interpreted so that the holding of Clark v. Mincks, ... is abrogated in favor of prior judicial interpretation finding the consumption of alcoholic beverages, wine, or beer rather than the serving of alcoholic beverages, wine, or beer as the proximate cause of injury inflicted upon another by an intoxicated person.
The italicized language excludes all persons other than those required to hold a license or permit under Chapter 123. Clearly, by not including licensees in the exclusion, the intent of the statute is to provide for liability against licensees.
The majority is taking the position that the licensee here was — as a matter of law — a social host. I question this conclusion.
As I said earlier the licensee here is a commercial vendor of liquor and beer. The licensee was using its liquor establishment and two of its employees to put on the party. The licensee reported the amount of beer and liquor dispensed as sales for sales tax purposes. All expenses for the party were treated as business expenses. I think these undisputed facts raise a material fact question on whether the licensee was acting as a social host at the time and place in question. I would not hold as a matter of law that the licensee was a social host.
I would therefore also reverse and remand on this issue for further proceedings.
LARSON, J., joins this dissent.

. Steven R. Kayser and James Clark are employees of the licensee corporation. Kayser is also owner and president of the corporation. On the day of the party, both worked preparing for it. At the party, Clark was the principal bartender.