Liquor Liability and Subrogation An alternate recovery source By: Elizabeth Trendowski Tel: (800) 813-6736 Email Robson Forensic Website: www.robsonforensic.com Listing on Experts.com

The vast majority of automobile subrogation claims focus on other drivers. As there is no recovery against the first party (the insured), claims are invariably made against other drivers in the hope of finding an insurance policy. In most cases, however, the law firm or recovery company only receives the claim after an insurer's in-house subrogation department has given up on it. Easy recoveries against an at-fault driver's carrier are, there, only referred by 'mistake.'

Why Liquor Liability?
Despite the national sentiment against drunk driving, it is regrettably still quite prevalent. Like automobile drivers, many liquor establishments are uninsured. Also, like automobile drivers, many establishments are insured. Further, when a liquor establishment is insured, the limits tend to be in multiples of $100,000, often up to $ 1 million or more. Recovery is not limited to commercial liquor sellers. "Social Host" liability is a cause of action against individuals who over-serve guests (in many states) and is generally covered by homeowner and renters policies. Finally, liquor liability claims are by statute in most, if not all states, and the proof of the claim only requires the establishment of several elements regardless of negligence, defenses are either severely restricted or non-existent. In short, liquor liability is an often overlooked, yet viable avenue for recovery.

Liquor laws vary from state to state. I live in Connecticut, but work around the country, so for ease of discussion, we will use Connecticut law an example for investigation and prosecution of the claim. You must check your own state laws to determine the particular aspects of your own causes of action.

The Claim
There are two basic ways alcohol establishments get into trouble and basically two types of liquor liability claims: sales to intoxicated persons and sales to minors. While both claims arise from the sale of alcohol, they differ substantially in the elements and proof. Note also that the establishment of each type of claim may vary depending on whether it's brought against a homeowner or a commercial establishment. With provision of alcohol to a minor, the general elements are the provision of alcohol to a person under the legal drinking age and that the consumption of alcohol was a substantial factor in the collision. Many times, the minor need not be intoxicated at the time of sale. If the purchaser is under age, even by a day, it is a sale to a minor. Interestingly, the minor needn't consume the alcohol at the time of sale. A minor can buy a fifth of vodka, hide it in the woods, drink it a week later, and the liability still goes back to the original seller. With sale to intoxicated persons, the standard is often "visible intoxication", which is independent of blood alcohol level as different people have different tolerances to alcohol. Visible intoxication for the seller of alcohol means the person consuming the alcohol was seen or heard by others (and possibly the seller) to have slurred speech, loss of train of thought, loss of coordination among other physical and visible signs.

In Connecticut, as in many states, the liability is established via a "Dram Shop Act." Connecticut's Act has three basic elements:

1. The sale of intoxicating liquor
2. To an intoxicated person
3. Who thereafter causes injury or damage to the person or property of another by reason of said intoxication.

Note that the statute expressly includes "property" (i.e. subrogation). The statute also has a notice requirement where the seller must be notified of the claim in writing within 120 days of the accident. Your state may or may not have a dram shop act and, if so, it many not have a notice requirement. Given that subrogation claims generally aren't received by outside firms or collection companies until after an inhouse subrogation unit has given up on it, the Dram notice period will often be expired long before you see the file. Don't give up hope. Aside from the statutory claims, many states have common law negligence or recklessness claims that have no notice requirement and which can be viable for years after an incident.

Investigating the Claim
Although we know that police reports are exceptionally detailed, they sometimes overlook the element of alcohol. This is less and less common nowadays as police have many sting operations involving drinking and driving and arresting the drunk driver. The first step is to review the police report, which may include a mention that a driver was intoxicated. Check the "Action Taken" section to see if any driver was charged for DUI. Check with birth dates of the drivers to see if anyone was a minor.

If you are able to find evidence of intoxication, look for follow up reports. In Connecticut, a separate document known as an "A-44" form is filled out with the results of Breathalyzer tests and roadside testing. Run the 'at-fault' driver's name on your judicial website if you have one to see if any criminal or civil proceedings resulted from the collision. If your insured has a personal injury action going, check with their personal counsel to see if there is an element of alcohol in the collision. The state liquor authority can be a wealth of information if the police referred the offending establishment for disciplinary action. Their file often contains the police report, supplemental reports, witness statements, and the authority's own investigation results. Best of all, the entire file can generally be obtained at minimal cost through the Freedom of Information Act. Not only are these reports inexpensive, the state laws often require a liquor seller to cooperate with the state's investigation. You can therefore get copies of statements that couldn't be bought at any price from your own sources.

Proving the Case
Criminal charges for driving while intoxicated are proven by blood alcohol levels. A driver's appearance may be relevant for probable case purposes, but the actual charge is proven by blood alcohol alone. The proof of a civil case is very different as it often relies on appearance, NOT only blood alcohol. In many cases, a driver may be criminally liable, but exhibit no outward signs of intoxication to support a civil claim at a blood level of .08, which is the standard in all states and a level at which many people will appear normal. Without eyewitnesses, the civil claim may often be difficult to prove.

This is the point where an expert toxicologist or dram shop/service standards expert can bridge the evidentiary gaps. A toxicologist can extrapolate blood alcohol levels to appearance, testifying that a person would most likely have exhibited particular signs of intoxication at particular levels. A toxicologist can also extrapolate blood alcohol levels over time, allowing an expert opinion as to what a driver's blood alcohol level and appearance were at the time of the collision itself. The dram shop/liquor liability expert (bar standards) expert can testify as to what types of preventive measures were available and appropriate for avoiding sales to intoxicated persons or minors. For example: A bar standards expert might testify as to what should be checked on an identification, what types of identification were appropriate training programs available, what they cover and what course of action is proper to avoid over service (intervention and standard of care techniques).

Finally, the easiest way to prove a liquor liability claim is to let someone else do it. If you are able to piggyback on the insured's personal injury case you can ride the coattails of the insured's personal counsel all the way to verdict. Take care, however, to disclose all of the plaintiff's expert witnesses as your own, which is often as simple as re-typing existing disclosures. If the personal counsel settles out you want to be able to continue on your own claim with the same experts.

The Next Step
There is no substitute for your own research, but when looking into a particular state's laws, I suggest start with 43 AM Jur Trials 527 and check the references. On more complex cases, expert witness organizations, such as Robson Forensic (1-800-813-6736) will often provide free preliminary consults with their experts in particular areas to determine whether an expert would be helpful. With over 30,000 cases handled, the experience they provide is unmatched.

Elizabeth Trendowski was the founder and past president of SMART Programs (Servers & Managers Alcohol Responsibility Training). She is currently an adjunct professor at the University of New Haven in the hospitality department, national speaker on liquor liability and dram shop issues and works for Robson Forensic as a liquor liability / dram shop expert.

See Robson Forensic's Listing on Experts.com.

©Copyright - All Rights Reserved

DO NOT REPRODUCE WITHOUT WRITTEN PERMISSION BY AUTHOR.