Court Opinion

ID: 3141412
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:53:57.939297+00
Date Added: 2024-06-11T15:06:02.842614
License: Public Domain

No. 3--09--0718
_________________________________________________________________
Filed August 4, 2010
                              IN THE

                    APPELLATE COURT OF ILLINOIS

                          THIRD DISTRICT

                            A.D., 2010

HEATHER D. BANKS,               ) Appeal from the Circuit Court
                                ) of the 14th Judicial Circuit,
     Plaintiff-Appellee,        ) Rock Island County, Illinois,
                                )
                                )
     v.                         ) No. 08--L--081
                                )
RIBCO, INC., d/b/a Rock Island )
Brewing Company and 2nd Avenue, ) Honorable
                                ) Mark A. VandeWiele,
     Defendant-Appellant.       ) Judge, Presiding.
_________________________________________________________________

     PRESIDING JUSTICE HOLDRIDGE delivered the opinion of the
court:
_________________________________________________________________

     The plaintiff, Heather D. Banks, brought an action against

the defendant, RIBCO, Inc., d/b/a Rock Island Brewing Company and

2nd Avenue, under the Iowa Dramshop Act (Iowa Code §123.92 et

seq. (2005)), in Rock Island County, Illinois.    The plaintiff

asserted that Iowa substantive law applied to the action, and the

defendant filed a motion to dismiss, asserting that Illinois law

applied.   The circuit court denied the defendant's motion to

dismiss.   The defendant filed an interlocutory appeal, which was

allowed.   We reverse.

                               FACTS
     The action was ruled upon the pleadings, so the facts are

drawn from the allegations in those instruments.    The plaintiff

was a resident of Iowa.    During the early morning hours of June

17, 2007, the defendant's agents, representatives, or employees

sold intoxicating liquors or beer to Brett Housley at a tavern

known as Rock Island Brewing Company, located in Rock Island,

Illinois.    The defendant was the operator of the Rock Island

Brewing Company1 and an Illinois corporation doing business in

Rock Island, Illinois.    The defendant was also licensed by the

Illinois Liquor Control Commission.    Shortly after Housley's exit

from the tavern, while still in Illinois, he and his

acquaintances got into a disagreement with the group that was

accompanying the plaintiff.    The altercation continued into Iowa

and culminated in the parking lot of the Davenport Ground

Transportation Center in Davenport, Iowa.    Housley exited his

vehicle with a golf club and approached the vehicle in which the

plaintiff was a passenger.    Housley hit the vehicle's rear

windshield and injured the plaintiff.

     The defendant filed a motion to dismiss pursuant to sections

2--619 and 2--615 of the Code of Civil Procedure (735 ILCS 5/2--

619, 2--615 (West 2006)), arguing that Iowa substantive law did

not apply to the action and the petition was insufficient in law.

     1
         A portion of the leased premises may have been referred to

as 2nd Avenue.

                                  2
The defendant's motion to dismiss and its motion to reconsider

were denied.   This court allowed the defendant's application for

leave to appeal pursuant to Supreme Court Rule 308 (155 Ill. 2d

R. 308).

                             ANALYSIS

     The defendant raises two challenges on interlocutory appeal.

First, the defendant argues that the trial court erred in denying

its motions to dismiss and for reconsideration because Iowa law

should not apply under conflict-of-law principles.   Second, the

defendant argues that applying Iowa law violated the commerce

clause of the United States Constitution.   Since we find the

first issue dispositive, it is not necessary to reach the

commerce clause issue.

     Review of the trial court's choice-of-law determination,

which is based upon the parties' pleadings, is de novo.     Townsend

v. Sears, Roebuck & Co., 227 Ill. 2d 147, 879 N.E.2d 893 (2007).

When a conflict of law is identified, the forum court applies the

choice-of-law rules of its own state.   Townsend, 227 Ill. 2d 147,

879 N.E.2d 893.   However, a choice-of-law determination is only

necessary when "a difference in law will make a difference in the

outcome."   Townsend, 227 Ill. 2d at 155, 879 N.E.2d at 898.

     Since the case at bar involves an Iowa resident injured in

Iowa by an intoxicated patron, and an Illinois tavern keeper,

which served alcoholic beverages in Illinois under its Illinois

                                 3
liquor license, it is clear that both Illinois and Iowa have an

interest in the application of their respective laws.     We note

that these interests conflict.

     The parties have identified a few critical differences

between the Illinois and the Iowa dramshop laws.    First, the

Illinois statute only confers a right of action on persons

injured in Illinois (235 ILCS 5/6--21 (West 2006)), while the

Iowa dramshop statute does not appear to have such a limitation.

See Iowa Code §123.92 (2005); Bankord v. DeRock, 423 F. Supp. 602

(N.D. Iowa 1976).    Both, however, apply to injuries in their

respective states even when an out-of-state liquor licensee is

involved.    See Dunaway v. Fellous, 155 Ill. 2d 93, 610 N.E.2d
1245 (1993); Iowa Code §123.92 (2005).    Second, the Illinois

statute expressly caps damages, while the Iowa statute does not.

Third, the Iowa statute imposes liability upon a liquor licensee

only when he "knew or should have known" that the patron was or

would become intoxicated.    Iowa Code §123.92 (2005).   The

Illinois statute does not require that element of proof.       Charles

v. Seigfried, 165 Ill. 2d 482, 651 N.E.2d 154 (1995).     Thus, the

plaintiff has no cause of action in the Illinois courts if

Illinois law is applied and her injury is found to have occurred

in Iowa.    If Iowa law is applied, the plaintiff has a cause of

action under the statute, if she can prove the knowledge element.

     Since a real conflict has been identified, it is necessary

                                  4
to apply Illinois choice-of-law rules to determine whether

Illinois or Iowa law applies to this action.      Traditionally, the

rule was simple--the law of the place of the wrong (lex loci

delicti) was the law to be applied to tort actions.       Townsend,

227 Ill. 2d 147, 879 N.E.2d 893.       Many courts, however, including

Illinois, have abandoned that approach because it ignores the

interest that other jurisdictions may have in the resolution of

an issue.   Ingersoll v. Klein, 46 Ill. 2d 42, 262 N.E.2d 593

(1970).   Thus, Illinois courts have adopted the approach of the

Second Restatement of Conflict of Laws (Restatement (Second) of

Conflict of Laws §146 (1971)) (hereinafter Second Restatement) in

making a choice-of-law determination.      Under the Second

Restatement approach, the objective is to apply the law of the

state with the most significant relationship to the dispute and

the parties, as defined by the issues raised.       Barbara's Sales,

Inc. v. Intel Corp., 227 Ill. 2d 45, 879 N.E.2d 910 (2007).      In

determining the state with the most significant relationship, the

Second Restatement identifies a two-step process whereby the

court first chooses the presumptively applicable law and then

tests that presumption against general choice-of-law principles.

Townsend, 227 Ill. 2d 147, 879 N.E.2d 893.

                 I. Presumptively Applicable Law

     A determination of the presumptively applicable law begins

with an examination of the type of action, in this case, a

                                   5
dramshop action.     Dramshop actions in Illinois are sui generis

and exclusive.     Seigfried, 165 Ill. 2d 482, 651 N.E.2d 154.

Under the common law, there was no liability for injuries arising

out of the sale or gift of alcoholic beverages.     Seigfried, 165
Ill. 2d 482, 651 N.E.2d 154.     Under section 6--21 of the Illinois

Liquor Control Act of 1934, commonly known as the Dramshop Act,

though, liability can be established by an injured party against

a seller or giver of alcoholic beverages.     235 ILCS 5/6--21 (West

2006).     Similarly, the Iowa Dramshop Act created liability where

none existed at common law.     Horak v. Argosy Gaming Co., 648
N.W.2d 137 (Iowa 2002); Iowa Code §123.92 (2005).     While a

dramshop action is not a tort action (see Hopkins v. Powers, 113
Ill. 2d 206, 497 N.E.2d 757 (1986)), a personal injury is

involved and the tort provisions of the Second Restatement are

the most analogous.     Thus, the presumption is that the place of

the injury has the more significant relationship to the

occurrence and the parties.     Townsend, 227 Ill. 2d 147, 879
N.E.2d 893; Restatement (Second) of Conflict of Laws §146

(1971)2.

     2
         Section 146 of the Second Restatement provides:

             "In an action for a personal injury, the local law of

     the state where the injury occurred determines the rights

     and liabilities of the parties, unless, with respect to the

     particular issue, some other state has a more significant

                                   6
     The parties disagree as to the place of the injury.    The

plaintiff contends that the injury occurred when she was hit with

the golf club in Iowa.    The defendant contends that the injury

occurred when it served the alcoholic beverages to Housley in

Illinois.   We find that the personal injury occurred in Iowa, and

Iowa law presumptively applies.    That said, due to the unique

character of the dramshop action, we also find that the

presumption is rather weak.    The defendant's conduct occurred

where it is located, in Illinois.     Housley and the plaintiff were

the mobile parties, and Housley's intentional act that injured

the plaintiff easily could have occurred closer to the

defendant's immobile tavern in Illinois.

                     II. Testing the Presumption

     We test the presumption in favor of Iowa law against the

guiding principles of section 6 of the Second Restatement

(Restatement (Second) of Conflict of Laws §6 (1971)) to determine

if Illinois has a more significant relationship to the occurrence

or the parties.    The principles of section 6(2) of the Second

Restatement are:

     relationship under the principles stated in §6 [(Restatement

     (Second) of Conflict of Laws §6 (1971))] to the occurrence

     and the parties, in which event the local law of the other

     state will be applied."    Restatement (Second) of Conflict of

     Laws §146, at 430 (1971).

                                  7
               "(a) the needs of the interstate and international

          systems,

               (b) the relevant policies of the forum,

               (c) the relevant policies of other interested

          states and the relative interests of those states in

          the determination of the particular issue,

               (d) the protection of justified expectations,

               (e) the basic policies underlying the particular

          field of law,

               (f) certainty, predictability and uniformity of

          result, and

               (g) ease in the determination and application of

          the law to be applied."   Restatement (Second) of

          Conflict of Laws §6(2) (1971).

     These principles identify the various concerns that courts

should consider and are not listed in any order of priority.

Townsend, 227 Ill. 2d 147, 879 N.E.2d 893.   When determining the

state with the most significant relationship, courts consider

these principles in light of the specific factual contacts or

connecting factors as suggested in the general provision of

section 145(2) of the Second Restatement:

               "(a) the place where the injury occurred,

               (b) the place where the conduct causing the injury

          occurred,

                                8
                 (c) the domicil, residence, nationality, place of

            incorporation and place of business of the parties, and

                 (d) the place where the relationship, if any,

            between the parties is centered."   Restatement (Second)

            of Conflict of Laws §145(2), at 414 (1971).

                         A. Factual Contacts

     The first contact is the place where the injury occurred,

and we have already found that the personal injury occurred in

Iowa.   However, we give little weight to this contact because it

seems to be little more than happenstance that the injury

occurred in the parking lot in Iowa rather than a parking lot in

Illinois.    See Schulze v. Illinois Highway Transportation Co., 97
Ill. App. 3d 508, 423 N.E.2d 278 (1981).

     The second contact is where the conduct causing the injury

occurred.    "A court's consideration of injury-causing conduct in

a section 145 [(Restatement (Second) of Conflict of Laws §145

(1971))] analysis includes all conduct from any source

contributing to the injury."    Townsend, 227 Ill. 2d at 169, 879

N.E.2d at 906.    Housley swung the golf club that injured the

plaintiff in Iowa.    However, the alleged conduct by the defendant

occurred in Illinois.    The defendant's tavern was located in

Illinois, and Housley was served and drank alcohol in Illinois.

Also, the attorneys for both parties were in agreement at oral

argument that the altercation started while Housley and the

                                  9
plaintiff were still in Illinois.     We find that this contact

favors Illinois.

     The third contact is the domicile, residence, place of

incorporation or place of business of the parties.     Here, the

plaintiff was a resident of Iowa, and the defendant was

incorporated in Illinois.   The defendant also had its principal

place of business in Illinois.   We find this contact to be fairly

well balanced between the two states.

     The fourth contact is the place where the relationship, if

any, between the parties was centered.     It is not clear whether

there was any relationship between the plaintiff and the

defendant.   To the extent there was one, it would have been

centered in the defendant's tavern in Illinois.

     In sum, the contacts in section 145 (Restatement (Second) of

Conflict of Laws §145 (1971)) appear to slightly favor Illinois.

However, they are not to be tallied and considered in a vacuum.

The overriding purpose of the choice-of-law process is to apply

the law of the state with the most significant relationship to

the issue.   To that end, we must consider the contacts in light

of the policy considerations delineated by section 6 of the

Second Restatement (Restatement (Second) of Conflict of Laws §6

(1971)).   Townsend, 227 Ill. 2d 147, 879 N.E.2d 893.

                     B. Policy Considerations

                                 10
     The first relevant policy consideration is the needs of the

interstate system.    In determining those, it is important to note

that this principle is concerned with commercial interactions and

making interstate and international systems work together.

Barbara's Sales, Inc., 227 Ill. 2d 45, 879 N.E.2d 910.     This

factor "is only minimally implicated in personal injury actions."

Townsend, 227 Ill. 2d at 170, 879 N.E.2d at 906.    Although this

action also involves the sale of alcohol that preceded the

personal injury, we fail to see how it has any impact on

commercial interactions between Illinois and Iowa.

     The second consideration is the relevant policies of the

forums.    As for these policies, both legislatures have created

dramshop laws.    Both have legislated that their respective acts

apply to out-of-state sellers.    The Illinois statute is more

penal in nature; it places a limited responsibility for damages

caused by intoxication on those who profit from the sale of

alcohol.    Walter v. Carriage House Hotels, Ltd., 164 Ill. 2d 80,

646 N.E.2d 599 (1995).    The Iowa statute, on the other hand, is

remedial and compensatory.     Slager v. HWA Corp., 435 N.W.2d 349

(Iowa 1989).    Both states, obviously, have an interest in

providing compensation for its citizens for personal injuries.

However, "'tort rules which limit liability are entitled to the

same consideration when determining choice-of-law issues as rules

that impose liability.'"     Townsend, 227 Ill. 2d at 171, 879
11
N.E.2d at 907, quoting Malena v. Marriott International, Inc.,

264 Neb. 759, 769, 651 N.W.2d 850, 858 (2002).    Thus, Illinois

has a strong policy interest in the application of Illinois law,

with its liability limitations and territorial application, to

its own licensed liquor sellers.

     At common law in Illinois and Iowa, there was no cause of

action against a provider of alcoholic beverages for injuries

arising from the sale of those beverages.     Seigfried, 165 Ill. 2d
482, 651 N.E.2d 154; Horak, 648 N.W.2d 137.    So, when considering

the basic policies underlying this field of law, it must be

remembered that both states' dramshop statutes are in derogation

of common law.   Each legislature crafted a cause of action that

balanced the evils of alcohol consumption against the liability

of those who provide the alcohol.

     The next relevant consideration is the protection of

justified expectations.   Keeping the two statutory schemes in

mind, the defendant is an Illinois corporation, licensed to sell

liquor under Illinois law.   It is justified in relying on the

Illinois Dramshop Act, which limits its liability and specifies

that it only applies to injuries that occur in Illinois.

Applying the Iowa Dramshop Act to the defendant would expose it

to unexpected liability, both in terms of monetary liability and

potential injured parties.   To allow the application of the Iowa

Dramshop Act in this case to the sale of alcohol by an Illinois

                                12
corporation in its Illinois tavern would contravene the purpose

of the Illinois Dramshop Act and allow extraterritorial dramshop

liability.

     The last relevant consideration is the ease of application

of the law to be applied.    In this regard, it is axiomatic that

the use by a forum of its own laws would not be more difficult

than applying another forum's laws.

     The critical element in this case is the sale of alcohol,

which is the defendant's alleged wrongful conduct potentially

leading to liability.   Considering all of the above, we have come

to the conclusion that the state where the conduct occurred,

rather than the state where the injury occurred, is the state

with the most significant relationship.   Although the plaintiff's

personal injury occurred in Iowa, the wrongdoing upon which

liability is premised against the defendant took place in

Illinois.    Due to the unique nature of dramshop actions, and the

Illinois legislature's specific instructions in the area, we

conclude that the presumption in favor of Iowa law has been

rebutted and that, under choice-of-law rules, Illinois law is

applicable to this action.   Thus, we reverse the trial court's

denial of the defendant's motion to dismiss and dismiss the

complaint.

                             CONCLUSION

                                 13
    The decision of the circuit court of Rock Island County is

reversed.   The complaint is dismissed.

    Reversed.

    SCHMIDT and O’BRIEN, JJ., concur.

                                14