Court Opinion

ID: 9715392
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:03:58.289044+00
Date Added: 2024-06-11T18:23:34.598910
License: Public Domain

*508R. L. Borsos, J.
(dissenting). I respectfully dissent. Plaintiff commenced this garnishment action against Stonewall Insurance Company seeking to recover insurance proceeds to satisfy a $2,500,000 default judgment entered against the principal defendants. At the time of the accident in 1977, defendant Back Seat Saloon was apparently bonded for the minimum amount required by MCL 436.22; MSA 18.993. Defendant Back Seat Saloon was also insured by Stonewall against dramshop liability. Under the policy, Stonewall agreed to pay all sums which Back Seat Saloon became legally obligated to pay as damages sustained by any person by reason of Back Seat Saloon’s selling, serving, or giving alcoholic beverages on the premises. The policy required Back Seat Saloon to give Stonewall notice of any lawsuit.
The majority holds that Stonewall may assert a lack-of-notice defense and that, since the policy issued by Stonewall was not filed in lieu of a bond, MCL 436.22a; MSA 18.993(1), the prohibition against limiting liability of MCL 436.22f; MSA 18.993(6) does not apply. Thus, despite the fact that at the time plaintiff filed his dramshop action there was no way for plaintiff to determine if Back Seat Saloon held insurance in addition to the statutorily required bonds, plaintiff cannot recover insurance proceeds under the policy in effect at the time of the accident.
The rule that a casualty-liability insurer may assert a lack-of-notice defense in a garnishment action should not be applied in a case where plaintiff seeks to recover insurance proceeds from a dramshop-liability insurer. The purpose of the dramshop act, a subpart of the Michigan Liquor Control Act, MCL 436.1 et seq.; MSA 18.971 et seq., is to discourage bars from selling intoxicating beverages to minors or visibly intoxicated persons *509and to provide for recovery by those injured as a result of the illegal sale of intoxicating liquor. Browder v International Fidelity Ins Co, 413 Mich 603, 611-612; 321 NW2d 668 (1982). The act is directed toward regulating bar owners and protecting members of the public. The purpose of the act is not served by placing the risk of nonrecovery on the victim. It would be far better to place that risk on the garnishee-defendant insurance company, which has the right to sue the principal defendant for breach of contract. This right provides the necessary incentive for the bar owner, the party required to notify the insurance company, to comply with the insurance contract. Cf. Coburn v Fox, 134 Mich App 190, 196; 350 NW2d 852 (1984).
While insurance in addition to the modest statutory bond was not mandatory in this case, the insurer was paid a premium for taking this risk, knowing full well that it was the insurer of a retail seller of alcohol. The dramshop act is an expression of a public policy that the public be protected financially from the catastrophic damages which might be suffered from an encounter with an intoxicated driver. Casualty-liability insurance, on the other hand, is primarily to protect the insured.
When considering the relative merits of an insurance company whose insured does not cooperate as compared with the merits of a seriously injured member of the public, there appears no question but that the member of the public who is injured by a person who is under the influence of alcohol should be preferred. I do not believe that the reasoning applied to a casualty-liability policy should be applied when insurance is furnished to a retail seller of alcohol. Since the circuit court’s order dismissing plaintiffs garnishment action against Stonewall places the risk of nonrecovery on plaintiff, I would reverse.