The Dramshop Act can be found in The Michigan Liquor Control Code of 1998, MCL 436.1801(3)–(11), which permits a lawsuit against the organization that unlawfully served alcohol to an intoxicated person or a minor and injury, wrongful death or property damage occurred. The attorneys at Ford & Murphy PC have experience handling these matters and have seen far to many people killed or seriously injured due to the actions of bars and restaurants that have a Michigan liquor license.
These are very difficult cases to prove and require immediate investigation to determine what happened BEFORE the accident every occurred. The bar or restaurant must have provided alcohol to a visibly intoxicated person or minor before liability can attach. This has been defined as intoxication “apparent to an ordinary observer”. However, if it can be proven that a retailer furnished alcohol to a minor it is per se unlawful and visible intoxication does NOT need to be shown.
If your family member was killed after being unlawfully served by a bar or restaurant, unfortunately there is no dramshop remedy for them to recover under the Michigan statute. Only innocent third parties that are injured or killed by the allegedly intoxicated person (AIP) can recover damages in a lawsuit.
Be Careful – Notice Provisions and Statute of Limitations
Pursuant to MCL 436.1801 (4) a dramshop action MUST be filed within two years of the injury or death. A skilled Michigan wrongful death attorney will know this, but many times family members will not take action while they are in the grieving process. Written notice must also be provided within 120 days of hiring a lawyer as long as the facts demonstrate the possibility of a dramshop action.
Any wrongful death attorney retained on a dramshop action needs to pay special attention to the unique aspects of these cases. If there is a failure to comply with the specific provisions of the act, there could be a dismissal of your entire case. The statute of limitations is shortened for these cases which should always be a red flag for clients. In addition, the 120 day notice along with all of the defenses available to the liquor provider mean that families looking to retain an attorney should take extra care when choosing who will represent the interest of the deceased. ion
MCL 436.1801(3) gives us the elements of a dramshop case that must all be proven before the victim can recover:
- an individual suffers property damage or personal injury
- by a minor or visibly intoxicated person
- because of the unlawful selling, giving, or furnishing of alcoholic liquor to the minor or visibly intoxicated person, provided that
- the unlawful furnishing of alcoholic beverages is a proximate cause of the injury or damages.
Notice of Potential Claim
The Michigan dramshop act requires that a plaintiff attempting to recover damages give written notice to ALL potential defendants of the claim with 120 days after entering The dramshop act was amended in 1986 to require that a plaintiff seeking damages under the act give written notice to all potential defendants of the possibility of the claim within 120 days after entering into an attorney-client relationship. MCL 436.1801(4). The sanction for failure to give written notice is dismissal unless the potential plaintiff can show that sufficient information for determining that a retail licensee might be liable was not known and could not reasonably have been known within 120 days of entering into the attorney-client relationship. The written notice requirement does not require a showing of prejudice to the defendant to obtain a dismissal. Lautzenheiser v Jolly Bar & Grille, 206 Mich App 67, 520 NW2d 348 (1994); Brown v JoJo-Ab, Inc, 191 Mich App 208, 477 NW2d 121 (1991).
The court in Lautzenheiser held that it was irrelevant (1) whether plaintiff’s counsel was originally retained for the specific purpose of pursuing a dramshop claim and (2) that plaintiff may not have had all facts to prove a dramshop claim if plaintiff had sufficient information that would create the possibility of a dramshop action.
In Chambers v Midland Country Club, 215 Mich App 573, 546 NW2d 706 (1996), the court of appeals held that plaintiff’s dramshop claim was barred on the ground that she failed to provide timely notice because the police report indicated the AIP drank at defendant country club. Even if plaintiff had been aware of evidence to the contrary, she was required to provide the statutory notice because the AIP might have been liable. The court, citing Lautzenheiser, further held that information regarding the date on which the attorney-client relationship was entered was not protected by the attorney-client privilege and that, on proof that a plaintiff entered into an attorney-client relationship following an accident involving an AIP, the court would presume the attorney-client relationship was for purposes of pursuing a dramshop claim. Finally, the court reiterated the holding in Brown that a defendant need not show prejudice for a court to dismiss a claim for lack of timely notice.
In Langrill v Stingers Lounge, 261 Mich App 698, 683 NW2d 225, vacated and remanded, 471 Mich 926, 689 NW2d 228 (2004), the court of appeals found both Lautzenheiser and Chambers distinguishable, and held that plaintiff’s November 27, 2000, notice was timely because although she retained counsel on October 28, 1999, it was for purposes of pursuing an auto negligence claim, not a dramshop action. The court held that plaintiff’s knowledge that the driver had been drinking alcohol and that there was a potential dramshop action was irrelevant. Plaintiff submitted her own affidavit and those of her mother and her attorney that they made diligent efforts to obtain the police report concerning the accident and that the report was not released until October 6, 2000. On receiving the report, plaintiff’s counsel initiated a dramshop action. The court held that no evidence established that plaintiff entered into an attorney-client relationship for the purpose of pursuing her dramshop claim before receiving the report. However, the supreme court vacated and remanded to the circuit court, stating that “[b]ecause plaintiff did not present any evidence to the contrary, there is a presumption that the attorney-client relationship she entered into with her first attorney, who filed the original complaint in this matter, included the purpose of pursuing a claim under MCL 436.1801.” Langrill, 471 Mich at 926. The court instructed the circuit court to find whether sufficient information for determining that defendant might be liable under MCL 436.1801 was not known and could not reasonably have been known within 120 days of the beginning of that first attorney-client relationship. “The circuit court shall grant defendant’s motion for summary disposition under the 120-day notice rule if, and only if, the court finds that this information was known or could reasonably have been known during that 120-day period.” Id.
In Turnley v Rocky’s Teakwood Lounge, 215 Mich App 371, 547 NW2d 33 (1996), the court of appeals held that plaintiffs did not know and could not reasonably have known of defendant’s potential dramshop liability within the 120-day period because the police report did not indicate that the AIP had bought alcohol at a retail alcohol licensee and because the licensee was later uncooperative in providing information on where he had been drinking. The Turnley court also found that a notice without any specifications of the facts was sufficient to satisfy the requirements of the statute.
Although the statute is silent on what the notice must contain, it seems that a potential plaintiff should include in the written notice the date of the incident, the name of the plaintiff, the name of the AIP or minor (if known), and the nature and location of the incident (automobile accident, assault, suicide, etc.). See form 5.5 for a sample notice letter.
It should be noted that the period in which to provide notification is not 120 days from the date that the licensee’s involvement is discovered but 120 days from when the attorney-client relationship is entered into, if the information is discovered within the 120-day period. Thus, it is incumbent on an attorney representing a plaintiff to give immediate notice on discovery within the 120-day period. The statute is silent on what is required if the necessary information regarding a licensee is discovered after the 120-day period. However, it seems reasonable to conclude that, at a minimum, notice must then be given within 120 days of the date of discovery.
The best evidence of when the attorney-client relationship was entered into is the retainer agreement between the plaintiff and counsel. In an ordinary case, the retainer agreement should be discoverable because it does not normally contain privileged communications.
IV. Proper Parties
A. Plaintiffs
1. Persons Injured by a Minor or a Visibly Intoxicated Person and Close Family Members of the Injured Person
§5.16 The dramshop act provides that an individual who suffers damage or is personally injured by a minor or a visibly intoxicated person, or the spouse, child, parent, or guardian of that individual, has a right of action against the retail licensee. MCL 436.1801(3). Before 1986, the act was much more expansive in that it allowed recovery to a spouse, child, parent, guardian, or other person injured in person, property, means of support, or otherwise. It is clear from the present statutory language that the class of plaintiffs who may sue under the present act are limited to the person who is actually injured by the minor or visibly intoxicated person and the spouse, child, parent, or guardian of the individual. Such persons as siblings, grandparents, or grandchildren of the injured individual are not permitted to recover under the present act. The expansive language of the statute before 1986 arguably allowed them to recover.
In LaGuire v Kain, 440 Mich 367, 487 NW2d 389 (1992), the supreme court analyzed MCL 436.22(4) (now MCL 436.1801(3)) and held that this section, amended in 1986, significantly narrows the potential plaintiffs who have a cause of action under the act. Specifically, LaGuire held that subsection (4) of the dramshop act (now subsection (3)) precludes a cause of action on behalf of an imbibing minor and the family members of the imbibing minor.
2. Personal Representatives
§5.17 Under the present dramshop act, the personal representative of the estate of a decedent who would have been able to recover had he or she lived is the proper party to bring an action in the case of a wrongful death. In Herron v Biggies Wolf Den, 201 Mich App 599, 506 NW2d 906 (1993), the court held that the personal representative of the estate is a proper party to bring a dramshop action. However, the court may have created some confusion because it failed to address whether the personal representative of the estate is the only proper plaintiff.
Prior caselaw held that the estate of a decedent was not a proper party under the act and that only individuals could file a suit in their own names. Genesee Merchants Bank & Trust Co v Bourrie, 375 Mich 383, 134 NW2d 713 (1965); Brannstrom v Tippman, 141 Mich App 664, 367 NW2d 902 (1985). In 1986, however, subsection (12) (now subsection (11)) was added to the act to eliminate the inconsistency between the dramshop act and the wrongful death act, MCL 600.2922. MCL 436.1801(11) provides: “Except as otherwise provided for under this section and section 815, a civil action under subsection (3) against a retail licensee shall be subject to [MCL 600.101 to 600.9947].”
By incorporating the Revised Judicature Act, the dramshop act was made consistent with other acts providing for actions arising from the death of an individual. Under the wrongful death act, these actions may only be brought by the personal representative of the estate. MCL 600.2922(2). Because actions brought pursuant to the wrongful death act permit recoveries for the loss of society, companionship, and financial support, MCL 600.2922(6), there is no reason to have individually named plaintiffs.
See chapter 11 for a complete discussion of wrongful death actions.
3. Visibly Intoxicated Persons
§5.18 The class of plaintiffs who have a right of action against a licensee is limited to those injured “by a minor or visibly intoxicated person.” MCL 436.1801(3). This wording has been held to eliminate a cause of action by the minor or visibly intoxicated person for his or her own injuries and by the dependents or relatives of the minor or visibly intoxicated person because they were not injured by the minor or the visibly intoxicated person. Craig v Larson, 432 Mich 346, 439 NW2d 899 (1989); see also Jackson v PKM Corp, 430 Mich 262, 422 NW2d 657 (1988) (AIP may not recover against liquor licensee for his or her own injuries). MCL 436.22(10), added in 1986 (now MCL 436.1801(9)), specifically precludes an action by the alleged visibly intoxicated person and any other person for the loss of financial support, services, gifts, parental training, guidance, love, society, or companionship of the alleged visibly intoxicated person.
4. Minors
§5.19 Neither an imbibing minor nor the family members of the minor have a cause of action under the amended dramshop act. LaGuire v Kain, 440 Mich 367, 487 NW2d 389 (1992).
5. Corporations and Business Entities
§5.20 Under the current version of the act, only an “individual” may bring an action for injury or damages. This would eliminate any claim by a corporation or other business entity or association of any type from bringing an action for damages. If, for example, an AIP drives off a road and damages property owned by a corporation, LLC, or other entity that is not an individual, there is no right of recovery under the dramshop act.
B. Defendants
§5.21 The only persons or entities that may be liable under the dramshop act are holders of a liquor license issued pursuant to the Liquor Control Code or those persons or entities who are maintaining operations tantamount to a retailer of alcoholic beverages but who have failed to obtain or maintain the license required under the Liquor Control Code. Guitar v Bieniek, 402 Mich 152, 166, 167, 262 NW2d 9 (1978). Under the act, bartenders and servers are immune in their individual capacities.
In McGuire v Sanders, 268 Mich App 719, 708 NW2d 469 (2005), rev’d, 474 Mich 1098, 711 NW2d 77 (2006), Hamilton Placement, a liquor licensee, argued that it was not a proper defendant because it was merely a payroll service that paid various employees of several bars, including defendant lounge. The court of appeals held that Hamilton Placement could be subject to liability as a retail licensee whose agent or employee allegedly caused or contributed to the driver’s intoxication if further factual development showed that Hamilton Placement exerted some control over the situation at defendant lounge through shared managers or employees. However, in lieu of granting appeal, the supreme court reversed and remanded for entry of an order of summary disposition in favor of Hamilton Placement.
In Kuehn v Edward Rose & Sons, 189 Mich App 288, 472 NW2d 59 (1991), the court held that liability under the dramshop act does not extend to the owner of an apartment complex that organized weekly parties for tenants at the apartment clubhouse. These parties were financed by an admission fee that covered the cost of beer and snacks. Defendant did not supervise alcohol consumption. See §§5.44–5.47 for a discussion of the liability of a social host.
In Tennille v Action Distrib Co, 225 Mich App 66, 570 NW2d 130 (1997), the court of appeals held that the civil liability provisions of the dramshop act apply only to retail licensees and not to wholesale distributors of alcoholic beverages. However, a wholesaler could be held liable under other common-law or statutory theories of liability. The court also held that a wholesale distributor may not avail itself of the exclusive remedy provision of the act.
The court in Vander Bossche v Valley Pub, 203 Mich App 632, 513 NW2d 225 (1994), held that the naming of a licensee by its assumed name is sufficient to maintain an action against the licensee. In Vander Bossche, plaintiff had named defendant by its assumed name, not by its correct corporation name. The court recognized that only the actual liquor licensee may be liable under the dramshop act but held that because there was actual notice to the licensee and the licensee was using the assumed name, plaintiff would be permitted to amend the complaint to correctly name defendant.
V. Defenses
A. In General
§5.22 Dramshop actions are entirely statutory and are subject to a range of unique defenses that do not exist in common-law negligence actions. Defenses have also been added by amendment, particularly in 1972 and 1986, mandating caution in applying older caselaw interpretations.
B. Limitations Period
§5.23 A dramshop action must be “instituted within 2 years after the injury or death.” MCL 436.1801(4). The event that gives rise to the running of the limitations period is the injury or death and not the time of the unlawful sale. If, for example, an unlawful sale takes place before midnight but the accident giving rise to the injuries occurs after midnight on the following date, the limitations period begins to run from the later date. However, there are no reported cases determining when the limitations period begins to run if an initial injury results in death sometime later. This question becomes more complicated if the cause of the initial injury is different from the cause of the death, as in the case of suicide of the plaintiff caused by depression resulting from the original accident. See §5.12.
The general savings provisions of the Revised Judicature Act, MCL 600.5851(1) through MCL 600.5861, which extend the time to commence an action, do not apply to dramshop actions as a result of the 1986 revisions of the dramshop act because the dramshop act contains its own statute of limitations:
An action under [MCL 436.1801]shall be instituted within 2 years after the injury or death.
MCL 436.1801(4) (emphasis added).
Except as otherwise provided for under this section and [MCL 436.1815], a civil action under [MCL 436.1801(3)] against a retail licensee shall be subject to the revised judicature act.
MCL 436.1801(11) (emphasis added). The dramshop act specifically addresses the applicability of the Revised Judicature Act in subsection (11) and incorporates all of its provisions except those that might conflict with the specific provisions of the dramshop act. Miller v Ochampaugh, 191 Mich App 48, 477 NW2d 105 (1991). As a result, the savings provisions of the Revised Judicature Act no longer apply to dramshop actions because they conflict with MCL 436.1801(4). Before the 1986 revisions, the supreme court held that the general savings provisions of the Revised Judicature Act did apply to the dramshop act. Lambert v Calhoun, 394 Mich 179, 229 NW2d 332 (1975).
C. The “All Defenses” Provision
§5.24 In 1986, the act was amended to provide that “[a]ll defenses of the alleged visibly intoxicated person or the minor shall be available to the licensee.” MCL 436.1801(7). Before 1986, the act gave a licensee all of the factual defenses of the AIP or minor. The deletion of the word factual broadened the provision to include all legal defenses, such as those available under the no-fault act, MCL 500.3101 et seq.
The “all defenses” provision should become a greater factor because of revisions to the no-fault act that took effect on July 26, 1996, although there is not yet caselaw on this issue. For example, MCL 500.3135 provides that (1) the question whether a plaintiff has injuries sufficient under the no-fault threshold will be determined by the trial court in most cases, (2) a plaintiff who is greater than 50 percent at fault may not recover noneconomic damages, and (3) an operator of an uninsured vehicle may not recover noneconomic damages. In addition, serious impairment of body function is defined as “an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.” MCL 500.3135(7). Economic damages for medical expenses and lost wages covered by the no-fault act may not be recovered from the AIP driver. If an action against an allegedly intoxicated driver is dismissed or limited for any of these reasons, the plaintiff will not be able to go forward with a dramshop action. See chapter 4 for a more complete discussion of the no-fault act.
D. False Identification
§5.25 Before 1986, a licensee was potentially liable for an unlawful sale to a minor even if the minor produced seemingly genuine identification showing the minor to be over the age of 21. This liability was eliminated by the addition of a provision in 1986 that states that it is a defense to a dramshop action if it is proved that the licensee or the licensee’s agents or employees were shown a Michigan driver’s license or state identification card appearing to be genuine and showing the minor was at least 21 years of age. MCL 436.1801(7). In such a case, however, factual issues remain, such as whether the false identification appeared to be genuine.
The combination of the provisions of MCL 436.1801(7) and the deletion of the words or indirectly from MCL 436.1801(2) (see §5.5) limits a licensee’s liability to situations in which a sale is made directly to the minor and in which the licensee either failed to ask for identification or ignored identification appearing to be false or showing the minor’s correct age.
E. Presumption of Nonliability
§5.26 MCL 436.1801(8) states:
There shall be a rebuttable presumption that a retail licensee, other than the retail licensee who last sold, gave, or furnished alcoholic liquor to the minor or the visibly intoxicated person, has not committed any act giving rise to a cause of action under [MCL 436.1801(3)].
Thus, all establishments but the last to serve the AIP or a minor have the benefit of a rebuttable presumption that no unlawful service occurred. The presumption imposes a heightened burden on plaintiffs, requiring them to establish visible intoxication by “positive, unequivocal, strong and credible evidence.” Reed v Breton, 475 Mich 531, 718 NW2d 770 (2006). In such a case, the plaintiff, in addition to making out a prima facie case proven by a preponderance of the evidence under MCL 436.1801(3), must also, when a defendant is not the last establishment to serve the allegedly intoxicated person, present clear and convincing evidence to rebut and thus overcome the presumption of MCL 436.1801(8). Id. In Reed, the supreme court held that the court of appeals erred by imposing the usual standard required to overcome a rebuttable presumption: competent and credible evidence. Further, plaintiffs’ evidence did not suffice to overcome the presumption because the proofs presented could not even meet the competent and credible standard for rebutting the presumption to show service to a visibly intoxicated person. Plaintiffs relied on suppositions drawn from blood alcohol tests, but four eyewitnesses saw no signs that the driver was visibly intoxicated. “Expert post hoc analysis may demonstrate that [the AIP] was actually intoxicated but does not establish that others witnessed his visible intoxication.” 475 Mich at 543.
F. Responsible Business Practices
§5.27 MCL 436.1815(1) states:
In defense of a civil action under [MCL 436.1801], a retail licensee may present evidence that, at the time of the selling, giving, or furnishing of the alcoholic liquor, the retail licensee was adhering to responsible business practices. Responsible business practices are those business policies, procedures, and actions which an ordinarily prudent person would follow in like circumstances. The compensating of an employee of an on-premises retail licensee on a commission basis constitutes an unreasonable business practice for purposes of this section.
Because an action under the dramshop act is statutory and not based on negligence, the business practices of the defendant would ordinarily not be relevant, regardless of which party sought to introduce the evidence. MCL 436.1815(1) permits a defendant, at its election, to present evidence of responsible business practices in defense of the action. The provision does not alter the elements of proof necessary to establish a claim under the act. Evidence of business practices, either good or bad, should only be admissible if the defendant raises the responsible business practices defense as an affirmative defense or otherwise opens the door to such a consideration. See Hilliker v Farr, 149 Mich 444, 449, 112 NW 1116 (1907) (evidence of poor business practices and prior unlawful dispensation of alcoholic beverages is irrelevant and inadmissible unless its admission is in response to responsible business practices defense).
MCL 436.1815(1) is also unclear regarding what the trier of fact is to make of responsible business practices because such evidence does not address the specific elements of the cause of action (see §§5.4–5.13). Presumably, serving alcoholic beverages to a visibly intoxicated person or to a minor would not be a responsible business practice. If a plaintiff can establish the elements of the cause of action, it is unclear what benefit would be obtained by introducing evidence of good business practices.
G. Comparative Negligence
§5.28 The court of appeals has recognized comparative negligence as a defense available to a liquor licensee in a dramshop action since its decision in Lyman v Bavar Co, 136 Mich App 407, 356 NW2d 28 (1984). See, e.g., Brown v Swartz Creek Mem’l Post 3720–Veterans of Foreign Wars, Inc, 214 Mich App 15, 542 NW2d 588 (1995). The trial court may not permit the jury to reduce an award against an alleged intoxicated driver by a percentage attributable to the plaintiff’s comparative negligence without also reducing the award against the liquor licensee. Heyler v Dixon, 160 Mich App 130, 154, 408 NW2d 121 (1987).
The supreme court has not addressed this question of the availability of a comparative negligence defense in a dramshop action, and a 1989 decision interpreting the pre-1986 version of the act suggests that this question is unresolved. See Craig v Larson, 432 Mich 346, 354 n10, 439 NW2d 899 (1989). However, in light of the change in 1986 to allow a liquor licensee all of the defenses of the AIP or minor (see §5.24), it is unlikely that the supreme court will reverse the decisions of the court of appeals allowing comparative negligence as a defense to a liquor licensee.
A plaintiff whose percentage of fault is greater than the aggregate fault of other entities, whether or not they are parties to the action, is not entitled to an award of noneconomic damages. Economic damages will be reduced by the percentage of fault attributable to the plaintiff. MCL 600.2959.
MCL 600.2955a(1) provides an absolute defense if the injured person had an impaired ability to function due to the influence of alcohol or a controlled substance and, as a result of that impaired ability, was 50 percent or more the cause of the accident. If the person was less than 50 percent the cause of the accident, his or her damages will be reduced by that percentage. No published case has yet addressed this defense in a dramshop case. However, the court of appeals has addressed its availability in a social host case. See §5.46.
H. The Noninnocent Party Doctrine
§5.29 It has long been held that one who contributes to or is active in bringing about the intoxication of the AIP or minor is precluded from recovery under the dramshop act (the noninnocent party doctrine). Kangas v Suchorski, 372 Mich 396, 126 NW2d 803 (1964), overruled in part on other grounds byMillross v Plum Hollow Golf Club, 429 Mich 178, 413 NW2d 17 (1987). The supreme court has held that this noninnocent party doctrine applies equally to minor plaintiffs who contribute to the intoxication of an AIP or a minor and precludes their recovery. Craig v Larson, 432 Mich 346, 349, 439 NW2d 899 (1989). The doctrine applies only to cases brought under the dramshop act. Poch v Anderson, 229 Mich App 40, 580 NW2d 456 (1998).
The licensee should raise the noninnocent party doctrine as an affirmative defense. The burden of proof is on the licensee and is set forth in M Civ JI 75.12: “The defendant has the burden of proving the defense(s) that … plaintiff actively contributed to the intoxication of [the AIP].”
The Model Civil Jury Instruction leaves the determination of what constitutes active contribution to the trier of fact. One panel of the court of appeals has held that summary disposition in favor of a defendant is inappropriate if the plaintiff purchased drinks for the AIP before the AIP became visibly intoxicated. Arciero v Wicks, 150 Mich App 522, 389 NW2d 116 (1986). The court in Arciero limited its holding to whether summary disposition was proper and determined that buying drinks before visible intoxication could, in some circumstances, invoke the noninnocent party doctrine:
We do not mean to imply that the act of buying drinks prior to visible intoxication cannot constitute active participation. The act of buying drinks prior to visible intoxication may constitute active participation in some cases, but, absent other undisputed allegations of participation, this issue should be submitted to the finder of fact, not determined as a matter of law.
Id. at 531–532. Compare Dhuy v Rude, 186 Mich App 360, 465 NW2d 32 (1990), in which the court of appeals upheld summary disposition when plaintiff had provided alcohol to a minor who was not visibly intoxicated on the basis that any providing of alcohol to a minor is unlawful.
The noninnocent party doctrine has been invoked to preclude an action brought by a person who contributes to the intoxication of the AIP and an action brought by the AIP for his or her own injuries. Jackson v PKM Corp, 430 Mich 262, 422 NW2d 657 (1988).
In Larrow v Miller, 216 Mich App 317, 548 NW2d 704 (1996), the court held that the noninnocent party doctrine applies to preclude a plaintiff from recovering when plaintiff has provided illicit substances, other than alcohol, to the AIP. The court held that the public policy precluding an action by an individual who actively participates in the intoxication of the AIP applies equally to alcohol and other intoxicating substances. The court also rejected plaintiff’s argument that there was no evidence that the small amount of marijuana defendant ingested had any relation to his intoxication, noting that “[e]ven a slight amount of participation will bar recovery, as long as the participation is ‘active.’” Id. at 327 (quoting Barrett v Campbell, 131 Mich App 552, 557, 345 NW2d 614 (1983)).
I. Failure to Give Notice of the Claim
§5.30 If the plaintiff fails to give notice of the claim to all potential defendants within 120 days of entering into the attorney-client relationship, the case may be dismissed. MCL 436.1801(4). See §5.15.
J. Violation of the Name and Retain Provision
§5.31 If the plaintiff dismisses the case against the minor or AIP or settles with that person before the action against the licensee is concluded, the case may be dismissed. MCL 436.1801(5). See §5.14.
VI. Evidentiary Considerations
A. In General
§5.32 In dramshop actions, one should evaluate all potential evidence in light of the fact that dramshop actions are strict liability actions not requiring proof of negligence. In the ordinary case, evidence normally associated with proving or disproving negligence should not be admissible unless it also directly relates to one of the elements of the cause of action or a defense raised by the licensee.
B. Proof of Visible Intoxication
1. In General
§5.33 The outcome of most dramshop cases depends on one principal issue: Was the AIP served while visibly intoxicated? In preparing a dramshop case for trial, this issue should be the principal consideration. Visible intoxication may be proved by circumstantial evidence. Heyler v Dixon, 160 Mich App 130, 408 NW2d 121 (1987); see also Miller v Ochampaugh, 191 Mich App 48, 58, 477 NW2d 105 (1991); Dines v Henning, 184 Mich App 534, 539, 540, 459 NW2d 305 (1990), rev’d, 437 Mich 920, 466 NW2d 284 (1991) (for reasons stated in dissent in court of appeals).
The court in Miller also held that it was within the trial court’s discretion to restrict the testimony of an expert toxicologist regarding the likely blood alcohol content of the AIP. The use of an expert toxicologist to circumstantially prove or disprove visible intoxication is common in dramshop actions. The toxicologist may be used to educate the jury on the effects of alcohol and the condition of an individual after consuming a certain fixed amount of alcohol. In addition, the toxicologist may be used to estimate blood alcohol content if a test is not available or to interpret a blood alcohol test result if one is available. See the discussion in §5.34.
In Reed v Breton, 475 Mich 531, 718 NW2d 770 (2006), the supreme court limited the use of expert testimony alone to establish visible intoxication. See discussion in §5.7.
2. Alcohol Tests
§5.34 The most likely source of evidence of an AIP’s condition is an alcohol test. This evidence may be in the form of an actual testing of blood or a DataMaster or portable breath test taken by the police and others. A blood alcohol test might be from one of three different sources: (1) a hospital, (2) the state police crime laboratory, or (3) a medical examiner’s office.
After a serious motor vehicle accident, hospitals typically test the blood of injured parties for the purpose of medical treatment. In most institutions this testing is routinely done so the treating physicians know whether certain symptoms are caused by injuries (such as closed head injuries) or inebriation and so the physicians will know whether to use medications that can be dangerous in combination with alcohol.
However, most hospitals do not run alcohol tests on whole blood. Instead, they employ a method that separates serum from the whole blood and test only the serum. Because serum has a different density than whole blood, serum alcohol blood tests overstate the results that would be obtained by testing whole blood. For example, an individual who is tested at a hospital and shows a serum alcohol level of 0.20 percent might actually have a blood alcohol level of 0.17 percent. A party who wishes to use a blood alcohol test (particularly from a hospital) must determine whether the hospital tested serum or whole blood. If serum was tested, divide the serum alcohol level by 1.15 to determine the whole blood alcohol level. It is important to determine the whole blood alcohol level as opposed to the serum blood alcohol level because most of the studies and most expert testimony are based on whole blood alcohol levels.
Another source of blood test results is the state police crime laboratory. Investigating police officers in many cases ask hospital personnel to draw blood for testing at the state police crime laboratory. These results may be subpoenaed from the laboratory. The equipment that the state police use tests whole blood.
If one or both of the parties dies as a result of the accident, a third source of blood alcohol test results is the medical examiner’s office where the accident occurred. Medical examiners are required to test blood alcohol as part of their investigations. MCL 257.625a(6)(g). These tests should be conducted whether or not an autopsy is performed. If blood is tested when no autopsy is performed, the manner and method of withdrawal and storage of the blood should be carefully examined because there is an increased risk of obtaining a contaminated sample, which would give an inaccurate reading of blood alcohol content. Withdrawing a blood sample from a closed chest cavity, for example, presents a high risk of contamination because of the possibility of internal injuries and the presence of stomach contents in the chest cavity.
Results of chemical tests can be obtained from the police records and reports. There are serious questions about the admissibility of portable breath tests because of the margin of error in their results. The results of portable breath tests are generally used to aid the officer in determining whether an individual should be arrested and given the more accurate DataMaster test at the police station. The authorized uses of preliminary breath tests do not include use as evidence in a civil case. MCL 257.625a(2)(b).
The admissibility of the results of any particular blood or breath test depends on a proper foundation establishing the manner and method of conducting the test and the reason for conducting the test. Gard v Michigan Produce Haulers, 20 Mich App 402, 174 NW2d 73 (1969). Under the current statutory scheme, the amount of alcohol in a driver’s blood or urine is admissible into evidence in any civil or criminal proceeding subject to establishing the proper foundation for admission. MCL 257.625a(6)(a). This includes tests administered by or at the request of the police (typically DataMaster tests), MCL 257.625a(6)(d), tests administered by hospital personnel, MCL 257.625a(6)(e), and tests administered by a medical examiner’s office, MCL 257.625a(6)(f). Note that these provisions related to admissibility obviate and supersede MCL 600.2157, which, in other circumstances, would limit admissibility because of the medical privilege.
The provisions of MCL 257.625a(6) regarding the admissibility of alcohol tests give rise to several questions. MCL 257.625a(6)(c) provides that a sample for testing may be taken only by a licensed physician or any individual operating under the delegation of the licensed physician qualified to withdraw blood acting in a medical environment. This author has encountered situations where the police obtain a blood sample from a funeral home. In this situation, there is no licensed physician or otherwise qualified person acting in any medical environment. In addition, MCL 257.625a(6)(f) requires samples of decedents’ blood to be withdrawn in a manner directed by the medical examiner to determine the amount of alcohol “in the decedent’s blood.” This provision would also seem to disqualify the sample taken by a mortician.
As a further consideration, there are circumstances following auto accidents in which the driver is killed and the damage to the body is so great that no uncontaminated blood sample can be taken. On occasion, other body fluids are withdrawn for testing. The most common of these is vitreous fluid from the eye. Because the statute providing for admissibility relates only to blood and urine tests, there is an open question whether test results from other body fluids would be admissible.
A practitioner should also be cautious with regard to the use of urine tests. The scientific literature would suggest that these tests are inaccurate, particularly if used to calculate a blood alcohol content at a certain point in time. Urine tests can be helpful on a quantitative as opposed to qualitative analysis, however, and can be used, for example, to prove that the blood-alcohol level was at least as high as the urine-alcohol level at some time.
One method to establish the authenticity, accuracy, and admissibility of a particular test result is to submit requests to admit to the opposing party pursuant to MCR 2.312.
An attorney considering the use of a blood-alcohol test in a dramshop case should review Reed v Breton, 475 Mich 531, 718 NW2d 770 (2006). See discussion in §5.7.
3. Opinions of Lay Witnesses
§5.35 The best evidence of visible intoxication in a dramshop case is direct eye witness testimony. Observations of the actual conduct and appearance of the AIP are relevant and admissible. However, it is unclear whether opinions of lay witnesses regarding an individual’s state of intoxication should be admitted. MRE 701 limits the opinion testimony of lay witnesses to opinions that are rationally based on the perception of the witness and helpful to a clear understanding of the testimony or the determination of a fact or an issue. Under Miller v Ochampaugh, 191 Mich App 48, 477 NW2d 105 (1991) and M Civ JI 75.02, a person is visibly intoxicated when his or her intoxication would be apparent to an ordinary observer. A defendant would argue that because the standard to be applied is an objective one, it does not add anything to allow into evidence the subjective opinions of lay witnesses on this question. A plaintiff would argue that the opinion testimony should be admitted because the opinion is rationally based on the perception of the witness and is a question of weight and not admissibility. The only court that has addressed this question allowed the opinion testimony. Heyler v Dixon, 160 Mich App 130, 149, 408 NW2d 121 (1987).
C. Proof of Business Practices and Prior Unlawful Sales
§5.36 Evidence of specific prior occurrences of the unlawful provision of alcoholic beverages is not admissible to prove that the licensee violated the act. Hilliker v Farr, 149 Mich 444, 449, 112 NW 1116 (1907). However, evidence of responsible business practices may be admissible. See §5.27.
VII. Special Considerations
A. The Indemnification Provision
§5.37 MCL 436.1801(6) provides, “Any licensee subject to the provisions of [MCL 436.1801(3)] regarding the unlawful selling, furnishing, or giving of alcoholic liquor to a visibly intoxicated person shall have the right to full indemnification from the alleged visibly intoxicated person for all damages awarded against the licensee.”
The court of appeals in Hoover Corners v Conklin, 230 Mich App 567, 584 NW2d 385 (1998), held that the indemnification provision does not apply in the case of a settlement by the liquor licensee or in the case of an acceptance of a mediation award. Hoover held that the language of the indemnification provision that limited indemnity to “damages awarded” meant that there must be a meritorious determination of liability. See also Johnson v Heite, 243 Mich App 578, 624 NW2d 738 (2000). In both decisions, the case was remanded to the trial court for a hearing on whether the settlement and/or the mediation acceptance was based on the actual liability of dramshop defendant. The court in Hoover Corners held that dramshop defendant could obtain indemnification if it was determined that the settlement was made because of the dramshop’s liability. The panel in Johnson reluctantly followed this holding and also remanded for a hearing on dramshop defendant’s liability.
An unanswered question is whether the indemnification provision also applies to actions arising out of unlawful sales to minors. On its face, the provision does not include imbibing minors as those subject to claims for indemnification. The supreme court has suggested in dicta that minors and AIPs are to be treated the same under the dramshop act. Craig v Larson, 432 Mich 346, 357, 439 NW2d 899 (1989).
B. The Exclusive Remedy Provision
§5.38 It had long been held that the dramshop act, which derogates the common law, provided the exclusive remedy against a licensee for actions arising out of the unlawful provision of alcoholic beverages. Manuel v Weitzman, 386 Mich 157, 164, 191 NW2d 474 (1971); see also Department of Agric v Appletree Mktg, LLC, 485 Mich 1, 10 n17, 779 NW2d 237 (2010).
However, several panels of the court of appeals held that under certain circumstances, a plaintiff could sue a liquor licensee outside the dramshop act if the complaint alleged gross negligence and willful, wanton, and intentional misconduct. Morris v Markley, 143 Mich App 12, 371 NW2d 464 (1985), overruled byJackson v PKM Corp, 430 Mich 262, 422 NW2d 657 (1988); Grasser v Fleming, 74 Mich App 338, 253 NW2d 757 (1977), overruled by Jackson. In response to the court of appeals decisions in Morris and Grasser, the 1986 amendments to the act added the following provision: “This section provides the exclusive remedy for money damages against a licensee arising out of the selling, giving, or furnishing of alcoholic liquor.” MCL 436.1801(10).
The Jackson decision overruling Morris and Grasser, issued after the amendments, reaffirmed the proposition that an action for the unlawful furnishing of intoxicating beverages must be brought within the confines of the dramshop act.
Given the Jackson decision and the codification of the exclusive remedy provision in the dramshop act, no actions for negligence or gross negligence may be brought against the licensee arising out of the selling, giving, or furnishing of alcohol.
In Madejski v Kotmar Ltd, 246 Mich App 441, 633 NW2d 429 (2001), the court of appeals reversed and remanded to the trial court to consider whether alleged causes of action that were independent of the dramshop claim could be maintained. Plaintiff’s decedent, a minor, was killed in a one-vehicle accident. Plaintiff alleged that defendant tavern provided the alcohol. The trial court granted summary disposition on the basis that the dramshop act was the exclusive remedy and that there was no viable claim under the dramshop act in these circumstances. Without ruling on the viability of any particular claim, the court of appeals remanded for consideration of the causes of action alleged by plaintiff that did not fall under dramshop act liability. The decision does not make clear what causes of action would be viable under these facts. See also Cooper v Auto Club Ins Ass’n, 481 Mich 399, 410, 411, 751 NW2d 443 (2008).
In Mann v Shusteric Enters, Inc, 470 Mich 320, 683 NW2d 573 (2004), the supreme court held that while the plaintiff may bring a cause of action under a premises liability theory against a liquor licensee, the fact of the plaintiff’s intoxication is not relevant to and may not be considered by the trier of fact to determine the licensee’s duty of care to the plaintiff. The court held that such a use would circumvent the dramshop act’s prohibition against a visibly intoxicated person’s collecting money from the licensee as result of the furnishing of alcohol.
C. Incorporation of the Revised Judicature Act into the Dramshop Act
§5.39 MCL 436.1801(11), added in 1986, incorporates the provisions of the Revised Judicature Act into the dramshop act. The most obvious result is the coordination of the wrongful death act with the dramshop act (see the discussion in §5.17). In addition, this provision makes clear that all procedures contained in the Revised Judicature Act that are not contrary to any provision of the dramshop act apply to dramshop cases. These procedures include, but are not limited to, interest provisions, collateral source rules, and joint and several rules.
In Miller v Ochampaugh, 191 Mich App 48, 477 NW2d 105 (1991), the court took note of the incorporation of the Revised Judicature Act into the dramshop act. The court in Miller held that a dramshop action is subject to the provisions of the Revised Judicature Act, including other tort reforms enacted in 1986, unless the provisions of the Revised Judicature Act cannot be read in a manner consistent with the provisions of the dramshop act. See also the discussion in §5.23.
D. Exemplary Damages
§5.40 Before 1972, the dramshop act specifically provided for compensatory and exemplary damages. The exemplary damages portion of the act was removed in 1972, and only compensatory damages are now allowed.
E. Dramshop Causes of Action Combined with Other Causes of Action
§5.41 Because alcohol plays a role in many different types of incidents involving personal injuries or death, a dramshop action may be included with other types of causes of action against a variety of defendants. Michigan law permits recoveries against multiple defendants on different theories if different factors together caused an injury or a death. Plaintiffs who are considering initiating a dramshop action with other types of actions should carefully consider the practical effect of the allegations in a dramshop complaint.
Consider, for illustration, the example of combining a dramshop action with a highway defect case. The plaintiff is injured while riding as a passenger in a vehicle driven by the AIP. The AIP fails to negotiate a curve in a highway and strikes a tree off the road. If the attorney representing the plaintiff sues both the road commission and the tavern where the AIP and the plaintiff were drinking, he or she will run into significant practical problems with the road commission case. The road commission will undoubtedly defend on the basis of the plaintiff’s own allegations in the complaint that the AIP was intoxicated and the intoxication made him or her unable to properly handle the vehicle on the road. The road commission will assert that this is the proximate cause of the accident. In such a case, the plaintiff will be assisting the defense by alleging the dramshop claim.
The attorney’s decision whether to pursue either or both of the defendants depends on a variety of factors, including the viability of each respective claim and the ability to recover on a judgment on each respective claim. For example, should the plaintiff’s attorney in the foregoing illustration proceed with a dramshop action if his or her client is a quadriplegic as a result of the accident, the tavern where the plaintiff and the AIP were drinking only has $50,000 in insurance coverage, and the plaintiff contributed to the intoxication of the AIP (see §5.29)? Under such circumstances, when the benefit of proceeding with a dramshop action is limited and the other cause of action might be materially damaged by allegations in the complaint and proofs presented at the trial regarding intoxication, the better course might be to pursue only the highway defect case. On the other hand, if the highway defect case is weak and there is a viable recovery against the dramshop defendant, the inclusion of the highway defect case can help to bolster the claim of visible intoxication because the attorney representing the road commission will also be presenting proof of the intoxication of the AIP.
These competing considerations can arise when any type of cause of action is brought with a dramshop claim. The plaintiff’s attorney should therefore know the implications of the allegations in a dramshop action.
F. Dramshop’s Failure to Notify Insurer of Claim
§5.42 In Helder v Sruba, 462 Mich 92, 611 NW2d 309 (2000), the supreme court held that a provision of the Michigan Liquor Control Act, MCL 436.22f (now MCL 436.1811 under the renumbered Michigan Liquor Control Code of 1998), prevents an insurance company that provides liquor liability coverage from denying coverage on the basis of lack of notice from the insured. In Helder, plaintiff took a default judgment against the liquor licensee. Plaintiff then filed a garnishment action against the insurer. The insurer defended based on a provision in the insurance policy requiring notice to the insurer of the pendency of the action. (The court assumed that the insurer had no notice of the lawsuit before entry of the default judgment.) The court held that the relevant provision of the Liquor Control Code precludes an insurer from denying coverage based on any “‘condition, provision, stipulation or limitation contained in the policy.’” 462 Mich at 96. The court did hold, however, that the insurer could defend the garnishment action on the basis that the insured liquor licensee was not liable for a violation of the dramshop act. Because the insurer in Helder did not defend on the basis of lack of liability under the dramshop act, it was liable under its policy, notwithstanding the lack of notice and opportunity to defend.
G. Firefighter’s Rule
§5.43 In Tull v WTF, Inc, 268 Mich App 24, 706 NW2d 439 (2005), a panel of the court of appeals held that the statutory firefighter’s rule, MCL 600.2967, does not prohibit an action under the dramshop act. When a safety officer seeks relief for ordinary negligence, the statute imposes an independent negligence requirement, i.e., either the negligent person was not someone whose act or omission resulted in the safety officer’s presence at the scene of the injury, or the person was someone whose act or omission resulted in the firefighter’s or police officer’s presence at the place where the injury occurred and the action was based on an act by that person that occurred after the firefighter or police officer arrived at the place where the injury occurred. The Tull court held that the independent negligence requirement applies only when a safety officer is seeking relief for ordinary negligence. A safety officer who brings an action under the dramshop act is not required to satisfy the independent negligence requirement because a dramshop action is a statutory action and not a common-law negligence action.
D. Proximate Cause
1. Analysis
§5.10 Because a liquor licensee’s liability depends on the conduct of another individual (the AIP or minor), there are two proximate causation factors that must be considered in dramshop cases. First, was the AIP or minor’s conduct a proximate cause of the plaintiff’s injuries? Second, was the furnishing of alcoholic beverages a proximate cause of the injury? If the answer to either of these questions is no, a dramshop case is not established.
Examples in which the conduct of the AIP was held not to be a proximate cause of the injury are cases in which an AIP or a minor acts in justifiable self-defense, Archer v Burton, 91 Mich App 57, 282 NW2d 833 (1979), or in which injury was actually inflicted by a nonintoxicated person even though an intoxicated person provoked a fight, Watson v Ristow, 42 Mich App 318, 201 NW2d 289 (1972).
An example of the second proximate cause analysis can be seen in Wyatt v Chosay, 330 Mich 661, 48 NW2d 195 (1951), in which the court held that the evidence was insufficient to show that the consumption of alcohol affected the driving of the minor to the extent that it was a proximate cause of the accident.
In Rogalski v Tavernier, 208 Mich App 302, 527 NW2d 73 (1995), the court held that social hosts are not liable for the criminal or violent acts of minors to whom they have illegally provided alcohol. The court held that these types of acts are not the foreseeable result of serving alcohol to a minor. See §5.45. In Nichols v Dobler, 253 Mich App 530, 655 NW2d 787 (2002), however, where an underage drinker at a party attacked an innocent adult victim, the court found that it was properly left to the jury to determine whether the social host’s service of alcohol to the minor was a proximate cause of the victim’s injuries. The court declined to read Rogalski as announcing a broad holding applicable to all cases involving social host liability where the minor’s action causing injury is violent or criminal:
In contrast with Rogalski and the cases relied on in Rogalski, the criminal or violent act in the instant case occurred on the premises where the alcohol was being served, after a dispute that developed on the premises. Further, unlike in Rogalski …, the instant case does not involve an attempt by the intoxicated minor to recover respecting the consequences of his own criminal or violent actions. Rather, here the plaintiff is the victim of the minor’s attack. Thus, on its facts the causal connection is not attenuated, as in Rogalski.
Id. at 534.
The court of appeals in Weiss v Hodge, 223 Mich App 620, 567 NW2d 468 (1997), held that the rationale of Rogalski does not apply to an action brought under the dramshop act. The court specifically held that intentional criminal acts of the AIP can form the basis for a dramshop claim if the elements of the claim are otherwise established.
Note that the court of appeals in Weiss held only that the dramshop defendant was not entitled to judgment as a matter of law in the circumstance of an intentional or a criminal act by the AIP. The court did not preclude dramshop defendant from asserting at trial that the intentional or criminal act of the AIP was not proximately caused by an unlawful sale of alcoholic beverages by defendant.
For further discussion of causation, see §§1.21–1.30.
2. Proof
§5.11 The theory of causation propounded by the plaintiff that relates the providing of alcoholic beverages to the injury must be more likely than other theories. Bryant v Athans, 362 Mich 17, 18, 19, 106 NW2d 389 (1960). In Bryant, the supreme court upheld a directed verdict in favor of defendant where an unlawful sale to plaintiff’s decedent had taken place but the actual manner and cause of the decedent’s death were unknown. The court held that without competent evidence regarding the actual manner of death and whether the intoxication of the decedent continued until the time of his death, plaintiff’s theory of causation was no better than “equiponderant” with other theories of how the decedent met his demise. Under such circumstances, the court held that the death was not shown to have been related to the unlawful sale.
In Hashem v Les Stanford Oldsmobile, Inc, 266 Mich App 61, 697 NW2d 558 (2005), defendant party store argued that there was no evidence to contradict the driver’s testimony that although he had purchased two bottles of beer at the store on the night of the accident, he had consumed the contents of only one of those bottles. Given the testimony of a toxicologist that the highest resulting blood alcohol level of .022 following consumption of that single beer would not have affected the driver’s ability to drive, the store argued that the evidence was insufficient to establish that the sale was a proximate cause of the accident in which the decedent was killed. The court of appeals rejected this argument, holding that the evidence was sufficient to permit a jury to conclude that the unlawful sale of alcoholic liquor by the party store “caused or contributed” to the driver’s intoxication at the time of the accident and that the intoxication was a proximate cause of the accident. Mason v Lovins, 24 Mich App 101, 114, 180 NW2d 73 (1970).
In this author’s experience, the issue of proximate causation rarely comes into play in automobile accident cases because the effects of alcohol ingestion on driving skills are well known. The plaintiff must, of course, present proof of causation, but it is usually a simple matter to relate the ingestion of alcoholic beverages to the defendant’s causation of or failure to avoid an automobile accident.
The issue of proximate causation arises with greater frequency in other types of cases such as assaults, homicides, suicides, and sexual assaults. In such cases, persuasive evidence, provided by experts or otherwise, must be presented to establish that the occurrence was caused, at least in part, by the alleged intoxication. Because such activities take place in many circumstances without any involvement of alcohol, it is incumbent on a plaintiff to present competent proof that, in the particular case, alcohol was a significant factor in the event.
3. Special Cases
a. Suicide
§5.12 Although this writer has encountered three cases of suicide in which it was alleged that the suicides were caused by mental depression related to injuries sustained in automobile accidents caused by intoxicated drivers many months before the actual suicides, there are no reported cases involving such a situation. A plaintiff would argue in support of such a cause of action that depression, despair, and potential suicide are all reasonably foreseeable consequences of physical injuries sustained in an automobile accident and that a liquor licensee should be responsible for all damages and injuries that naturally flow from the consequences of the unlawful sale. In defense, a licensee would argue that the act requires an injury caused “by a minor or visibly intoxicated person” and that the intentional and voluntary act of suicide by a nonintoxicated person may not form the basis of a cause of action under the act. The causal chain is either interrupted entirely or too attenuated to permit such a cause of action to proceed. See Rogalski v Tavernier, 208 Mich App 302, 527 NW2d 73 (1995), discussed in §5.10, regarding unforeseeability. The reasoning of Rogalski may be employed to defeat a claim that suicide was the foreseeable result of an unlawful sale under the dramshop act.
b. Other Substances
§5.13 There are also proximate causation questions raised when alcohol consumption is combined with the ingestion of other illegal mind-altering substances. In such a case, the plaintiff would need to show that the alcohol was a substantial factor in the conduct giving rise to the injuries. In defending, a liquor licensee would attempt to show either the conduct in question was caused solely by the ingestion of other illegal substances or that the alcohol consumption was not a substantial factor in bringing about the injury. See also §5.8.
Notice of Potential Claim
§5.15 The dramshop act was amended in 1986 to require that a plaintiff seeking damages under the act give written notice to all potential defendants of the possibility of the claim within 120 days after entering into an attorney-client relationship. MCL 436.1801(4). The sanction for failure to give written notice is dismissal unless the potential plaintiff can show that sufficient information for determining that a retail licensee might be liable was not known and could not reasonably have been known within 120 days of entering into the attorney-client relationship. The written notice requirement does not require a showing of prejudice to the defendant to obtain a dismissal. Lautzenheiser v Jolly Bar & Grille, 206 Mich App 67, 520 NW2d 348 (1994); Brown v JoJo-Ab, Inc, 191 Mich App 208, 477 NW2d 121 (1991).
The court in Lautzenheiser held that it was irrelevant (1) whether plaintiff’s counsel was originally retained for the specific purpose of pursuing a dramshop claim and (2) that plaintiff may not have had all facts to prove a dramshop claim if plaintiff had sufficient information that would create the possibility of a dramshop action.
In Chambers v Midland Country Club, 215 Mich App 573, 546 NW2d 706 (1996), the court of appeals held that plaintiff’s dramshop claim was barred on the ground that she failed to provide timely notice because the police report indicated the AIP drank at defendant country club. Even if plaintiff had been aware of evidence to the contrary, she was required to provide the statutory notice because the AIP might have been liable. The court, citing Lautzenheiser, further held that information regarding the date on which the attorney-client relationship was entered was not protected by the attorney-client privilege and that, on proof that a plaintiff entered into an attorney-client relationship following an accident involving an AIP, the court would presume the attorney-client relationship was for purposes of pursuing a dramshop claim. Finally, the court reiterated the holding in Brown that a defendant need not show prejudice for a court to dismiss a claim for lack of timely notice.
In Langrill v Stingers Lounge, 261 Mich App 698, 683 NW2d 225, vacated and remanded, 471 Mich 926, 689 NW2d 228 (2004), the court of appeals found both Lautzenheiser and Chambers distinguishable, and held that plaintiff’s November 27, 2000, notice was timely because although she retained counsel on October 28, 1999, it was for purposes of pursuing an auto negligence claim, not a dramshop action. The court held that plaintiff’s knowledge that the driver had been drinking alcohol and that there was a potential dramshop action was irrelevant. Plaintiff submitted her own affidavit and those of her mother and her attorney that they made diligent efforts to obtain the police report concerning the accident and that the report was not released until October 6, 2000. On receiving the report, plaintiff’s counsel initiated a dramshop action. The court held that no evidence established that plaintiff entered into an attorney-client relationship for the purpose of pursuing her dramshop claim before receiving the report. However, the supreme court vacated and remanded to the circuit court, stating that “[b]ecause plaintiff did not present any evidence to the contrary, there is a presumption that the attorney-client relationship she entered into with her first attorney, who filed the original complaint in this matter, included the purpose of pursuing a claim under MCL 436.1801.” Langrill, 471 Mich at 926. The court instructed the circuit court to find whether sufficient information for determining that defendant might be liable under MCL 436.1801 was not known and could not reasonably have been known within 120 days of the beginning of that first attorney-client relationship. “The circuit court shall grant defendant’s motion for summary disposition under the 120-day notice rule if, and only if, the court finds that this information was known or could reasonably have been known during that 120-day period.” Id.
In Turnley v Rocky’s Teakwood Lounge, 215 Mich App 371, 547 NW2d 33 (1996), the court of appeals held that plaintiffs did not know and could not reasonably have known of defendant’s potential dramshop liability within the 120-day period because the police report did not indicate that the AIP had bought alcohol at a retail alcohol licensee and because the licensee was later uncooperative in providing information on where he had been drinking. The Turnley court also found that a notice without any specifications of the facts was sufficient to satisfy the requirements of the statute.
Although the statute is silent on what the notice must contain, it seems that a potential plaintiff should include in the written notice the date of the incident, the name of the plaintiff, the name of the AIP or minor (if known), and the nature and location of the incident (automobile accident, assault, suicide, etc.). See form 5.5 for a sample notice letter.
It should be noted that the period in which to provide notification is not 120 days from the date that the licensee’s involvement is discovered but 120 days from when the attorney-client relationship is entered into, if the information is discovered within the 120-day period. Thus, it is incumbent on an attorney representing a plaintiff to give immediate notice on discovery within the 120-day period. The statute is silent on what is required if the necessary information regarding a licensee is discovered after the 120-day period. However, it seems reasonable to conclude that, at a minimum, notice must then be given within 120 days of the date of discovery.
The best evidence of when the attorney-client relationship was entered into is the retainer agreement between the plaintiff and counsel. In an ordinary case, the retainer agreement should be discoverable because it does not normally contain privileged communications.
C. Visible Intoxication
1. Definition
§5.6 A sale is unlawful under the dramshop act if it is made to a visibly intoxicated person. The requirement that the intoxication be visible was added in 1972 to address the difficulty in requiring a licensee or an employee of a licensee to refrain from providing alcohol to a person who exhibited no outward manifestations of intoxication.
The correct definition of visible intoxication is included in M Civ JI 75.02: “A person is ‘visibly intoxicated’ when his or her intoxication would be apparent to an ordinary observer.” See Miller v Ochampaugh, 191 Mich App 48, 477 NW2d 105 (1991). Visible intoxication is a question of fact to be measured by an objective standard. The court of appeals in Miller held that if it is established that the individual is visibly intoxicated, it is not necessary to prove that the persons who served the alcohol had subjective knowledge of that fact. The supreme court’s previous definition of intoxication in Lafler v Fisher, 121 Mich 60, 62, 79 NW 934 (1899), is no longer accurate and should not be used.
2. Proof
§5.7 Visible intoxication may be proven by circumstantial evidence and reasonable inferences drawn from such evidence. Miller v Ochampaugh, 191 Mich App 48, 59, 477 NW2d 105 (1991); Heyler v Dixon, 160 Mich App 130, 408 NW2d 121 (1987).
In Reed v Breton, 475 Mich 531, 718 NW2d 770 (2006), plaintiffs presented the reports of two expert witness toxicologists who found, based on the deceased driver’s weight, metabolism, and blood alcohol level, that he had consumed 24 or 25 beers in a nine-hour period and still had 12 or 13 drinks in his system at the time of the accident. The experts testified that this concentration of alcohol would have affected the driver’s central nervous system, leading to such visible signs of intoxication as excitement, confusion, and stupor. Based on this concentration, the toxicologists also determined that the driver would have been visibly intoxicated when he was served at defendant’s bar. The court of appeals held that plaintiffs presented competent and credible evidence that the deceased driver was visibly intoxicated when he was served at defendant’s bar. However, the supreme court reversed on the grounds that the court of appeals applied the wrong burden of proof, and that plaintiffs’ evidence did not establish service to a visibly intoxicated person. Plaintiffs relied on suppositions drawn from blood alcohol tests, but four eyewitnesses saw no signs that the driver was visibly intoxicated. “Expert post hoc analysis may demonstrate that [the AIP] was actually intoxicated but does not establish that others witnessed his visible intoxication.” 475Mich at 543.
The consumption of alcoholic beverages in a licensee’s establishment and a subsequent accident are not sufficient to create a material question of fact on the issue of visible intoxication. McKnight v Carter, 144 Mich App 623, 631, 376 NW2d 170 (1985).
For an interesting discussion on the minimum threshold of proof necessary for a dramshop claim, see the supreme court’s order in Salt v Gillespie, 485 Mich 1090, 777 NW2d 431 (2010).
3. Other Substances
§5.8 An issue not addressed by any published case is whether a liquor licensee may be liable for providing alcohol to a person whose visible intoxication is caused by substances other than alcohol. Rational argument can be made for both sides of this question. On the one hand, it can be asserted that regardless of the source of the initial intoxication, it is still the dramshop licensee’s furnishing of intoxicants that exposes it to liability. Under this view, the harm that results is the same if a person obtains a level of intoxication from a combination of alcohol and illegal substances as it is from alcohol alone and that, therefore, a responsible licensee should refuse to serve any person who is visibly intoxicated from any source.
Further, the requirement that the intoxication be visible protects the licensee, and in providing penalties for furnishing alcohol to one who is “visibly intoxicated,” the statute does not limit the visible intoxication to that by alcohol. Additionally, the plaintiff would still have to establish that the furnishing of the alcohol was a proximate cause of the injury-producing event. See §5.13.
From the licensee’s standpoint, it can be asserted that the dramshop act is part of the Liquor Control Code, is meant to govern only the dispensation of alcoholic beverages, and does not contemplate situations in which intoxication was initially caused by other illegal substances. Under this argument, although dramshop licensees can be expected to be familiar with the signs of alcohol intoxication, they should not be burdened with the obligation to recognize all forms of intoxication.
4. Minors
§5.9 For a minor, there is no requirement of visible intoxication to establish the liability of the licensee. A sale to a minor is per se unlawful. However, it is still necessary to establish the other elements of the cause of action.
It should be noted that the term minor as used for purposes of dramshop actions and under the Liquor Control Code is different from the age of majority for other purposes. An individual may be a minor under the Liquor Control Code (younger than age 21, MCL 436.1109(4)) but may be an adult for all other purposes under the law (age 18 or older). This distinction was noted in Rodriguez v Solar of Michigan, Inc, 191 Mich App 483, 496, 497, 478 NW2d 914 (1991) (decided under pre-1986 dramshop act).
E. Name and Retain Requirements
§5.14 The dramshop act requires that the imbibing minor or the AIP be named as a defendant in any action against a retail licensee and that the minor or AIP be retained in the action until the litigation is concluded by either trial or settlement. MCL 436.1801(5). The supreme court has held that this provision is mandatory and that a plaintiff may not settle with an AIP with an agreement to nominally retain him or her as a defendant in the action. Putney v Haskins, 414 Mich 181, 324 NW2d 729 (1982). In addition, the supreme court has held that any agreement to limit the liability or potential exposure of the AIP violates the “name and retain” provision and requires the dismissal of the dramshop claim. Riley v Richards, 428 Mich 198, 404 NW2d 618 (1987).
The Michigan Supreme Court addressed the situation in which the AIP was dismissed pursuant to the plaintiff’s and AIP’s mutual acceptance of the evaluation resulting from court-ordered mediation (now case evaluation). Shay v JohnKAL, Inc, 437 Mich 394, 471 NW2d 551 (1991). In Shay, the supreme court reversed a court of appeals decision that upheld a dismissal of plaintiff’s claim against the liquor licensee because both plaintiff and the AIP had accepted the mediation award. In doing so, however, the supreme court also adopted an amendment to the court rule on mediation, MCR 2.403(O), that allows a trial judge to waive the costs and attorney fee provisions of the mediation rules against a plaintiff who can show that he or she rejected a mediation award against an AIP solely because of the need to comply with the name and retain provision.
What is clear from the Shay decision is that the supreme court is not creating an exception to the name and retain provision because of a perceived conflict with the mediation rules. Rather, the court modified the mediation rules to allow a plaintiff to ask the trial court to waive costs and attorney fees for a rejection of the mediation award against an AIP.
In Hensley v Siegrist, 228 Mich App 701, 580 NW2d 5 (1998), the court of appeals held that the decision in Shay does not permit a plaintiff to proceed against a dramshop defendant when the plaintiff and the AIP have accepted a mediation award. The court held that the supreme court, by modifying MCR 2.403(O), eliminated the risk to plaintiff of rejecting a mediation award against the AIP. The court in Hensley made clear that the Hensley plaintiffs had the option of filing a conditional acceptance of the mediation award conditioned on all defendants accepting the award. If such an acceptance had been filed, plaintiffs would not have been subject to mediation sanctions and would have been able to continue with the dramshop claim. Because plaintiffs did not avail themselves of this option, the trial court properly dismissed the dramshop action for failure to retain the AIP.
In Spalo v A&G Enters, Inc, 437 Mich 406, 471 NW2d 546 (1991), the supreme court, Justice Mallett not participating, considered the question whether the dismissal of the AIP from the action because plaintiff’s injuries failed to meet the no-fault threshold for recovery mandated the dismissal of the suit against the dramshop. In a split decision, three justices stated that the name and retain provision should be strictly construed, thus barring the suit against the dramshop; the other three justices said that the court’s dismissal of the AIP because plaintiff failed to meet the no-fault threshold should not bar a suit against the dramshop because the failure to retain the AIP was due to circumstances entirely beyond plaintiff’s control. Because the court was evenly divided on this issue, the unpublished decision of the court of appeals dismissing the suit was affirmed.
In Green v Wilson, 455 Mich 342, 565 NW2d 813 (1997), a majority of the supreme court held that where plaintiff could not name and retain the AIP because he was a foreign national and the court could not exercise jurisdiction over him, plaintiff could still proceed with the dramshop action. The court, by its ruling, created a new exception to the name and retain requirement in the limited circumstance when the AIP is not subject to the jurisdiction of the court.
