Court Opinion

ID: 9850116
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:52:21.384426+00
Date Added: 2024-06-11T09:20:31.932982
License: Public Domain

ROBERT H. SCHUMACHER, Judge
(dissenting).
I respectfully dissent. I believe (1) Minnesota’s Civil Damages Act (the Act) provides for a cause of action against National or Department, (2) appellants raised genuine issues of material fact on the issue of vicarious liability, and (3) appellants complied with the Act’s notice requirement.
1. The district court concluded, as does the majority opinion, that the Act does not provide for a cause of action against National or Department because neither is in the business of selling liquor. But the cases cited in support of this position, including Koehnen v. Dufuor, 590 N.W.2d 107, 109 (Minn.1999), are clearly distinguishable as those eases deal with the issue of social hosts, not the issue of vicarious liability.
Vicarious liability describes a relationship wherein liability is imputed to a principal for the tortious conduct of its agent. See Nadeau v. Melin, 260 Minn. 369, 376-77, 110 N.W.2d 29, 34-35 (1961) (describing imputed liability as arising from relationship between master and servant or principal and agent). In the context of the Act, vicarious liability directs attention to all parties that “caused the intoxication,” including the agent and the principal to whom liability is imputed. See Minn.Stat. § 340A.801, subd. 1 (2004) (providing cause of action “against a person who caused the intoxication ... by illegally selling alcoholic beverages”). A party who is not “directly” in the business of providing liquor, but whose agent is in such a business on the principal’s behalf, falls within the Act’s meaning. See In re Estate of Kroyer, 385 N.W.2d 31, 33 (Minn.App. 1986) (explaining courts presume consistency with common law; a statute is not to be construed in derogation of well-established principles of common-law unless expressly required) (citing Swogger v. Taylor, 243 Minn. 458, 465, 68 N.W.2d 376, 382 (1955)).
Additionally, as much as the Act is an abrogation of common law, it is also a remedial statute and should be given liberal construction to accomplish its purpose. Beck v. Groe, 245 Minn. 28, 34, 70 N.W.2d 886, 891 (1955). The purpose of the Act is to suppress social ills that result from intoxication by providing incentive for those that profit from providing liquor to do everything in their power to avoid making illegal sales. Hollerich v. City of Good Thunder, 340 N.W.2d 665, 668 (Minn.1983); Carlson v. Thompson, 615 N.W.2d 387, 389 (Minn.App.2000), review denied (Minn. Oct. 17, 2000). This purpose is clearly defeated by allowing an organization to proceed with carefree liquor sales by holding significant assets in a separately incorporated entity, one that is not “directly” providing liquor but nevertheless profits from such provisions.
The district court’s order should be reversed since it misconstrues the Act’s meaning and fails to suppress its intended mischief. I note that under a similar act, Michigan’s courts have arrived at the same conclusion. See Kerry v. Turnage, 154 Mich.App. 275, 397 N.W.2d 543, 545, (1986) (holding school district could be held vicar*164iously liable for actions of athletic booster organization, which was district’s agent and illegally sold liquor), review denied (Mich. Jan. 27, 2987).
2. The existence of an agency relationship is a question of fact, PMH Props, v. Nichols, 263 N.W.2d 799, 802 (Minn.1978), and should be decided by the jury unless the evidence is conclusive. Duluth Superior Erection, Inc. v. Concrete Restorers, Inc., 665 N.W.2d 528, 534 (Minn.App.2003). Two elements must be satisfied to support a finding of an agency relationship, including a manifestation by the principal that an agent act for the principal and the right of control by the principal over the agent. Teeman v. Jurek, 312 Minn. 292, 299, 251 N.W.2d 698, 702 (1977). The majority concluded that appellants failed to raise a genuine issue of material fact on the second element. I disagree.
The record reveals that National has the power to cancel a post’s charter for misconduct. In at least one instance, a charter was cancelled in part due to a post’s illegal sale of liquor. National also promulgates rules regulating posts’ management of bar operations. According to the Post Operations Manual, “If the post’s activity center includes a bar, it should always be closed during post meetings. There is no exception to this flat rule.” As for Department, the record shows the Department Adjutant is “responsible for the daily business operation of the elements of the organization in the state.”
Taken in the light most favorable to appellants, this record demonstrates that both National and Department have the right to control the daily operation of Post 184’s private club and liquor sales. Such a right gives rise to the vicarious liability of National and Department for the tortious acts of Post 184. See Frankie v. Twedt, 234 Minn. 42, 45-47, 47 N.W.2d 482, 486-87 (Minn.1951) (stating right to control gives rise to vicarious liability). The district court erred in determining that appellants failed to raise a genuine issue of material fact on the issue of vicarious liability.
3. Minn.Stat. § 340A.802, subds. 1, 2 (2004), requires that persons claiming damages “from a licensed retailer of alcoholic beverages or municipal liquor store ... give written notice to the licensee or municipality” within 240 days of the date of entering an attorney-client relationship. The district court concluded a claim under the Act against National or Department was precluded by appellants’ failure to give the required notice to these parties. The majority opinion does not reach this issue.
It is undisputed that appellants did not notify either National or Department of their claim within the 240-day time period, although notice was given to Post 184. But it is also undisputed that neither National nor Department is a licensed retailer or municipal liquor store. The statute’s plain language only requires that licensed retailers and municipal liquor stores receive the required notice; the Act does not require that notice be given to all potential defendants. See Olson v. Blaeser, 458 N.W.2d 113, 119 (Minn.App.1990) (recognizing Act does not require notice be given to all potential defendants).
Summary judgment in this matter was premature. Appellants should be allowed to proceed with their claims against National and Department.