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Affirmed in Part and Reversed and Remanded in Part and
Opinion filed April 11, 2006.
In
The
Fourteenth
Court of Appeals
____________
NO. 14-05-00250-CV
____________
JOHN L.
PARKER,
Appellant
V.
20801,
INC.,
Appellee
On
Appeal from the 270th District Court
Harris County,
Texas
Trial
Court Cause No. 01-59134
O P I N I
O N
Appellant
John L. Parker appeals after the trial court granted summary judgment in
favor of appellee 20801, Inc. (A20801").[1] In two points of error, appellant
contends that the trial court=s grant of
summary judgment was improper because (1) Section 2.03 of the Texas
Alcoholic Beverage Code does not preempt the common law causes of action
asserted by appellant; and (2) appellee failed to establish the safe
harbor affirmative defense contained in Section 106.14(a)(3) of the Texas
Alcoholic Beverage Code. We
affirm in part and reverse and remand in part.
Background
On
November 19, 1999, appellant John L. Parker attended the grand opening of
Slick Willie=s Family
Pool Hall, where he consumed alcoholic beverages throughout the
evening. According to
appellant, the bartender told him to Adrink
up@ and the
manager and employees gave him a number of drinks. During the evening, appellant
encountered Anthony Griffin, the son of appellant=s
ex-girlfriend. Appellant and
Griffin eventually became intoxicated and began to argue inside the pool
hall. As a result, manager
Craig Watson told appellant to leave and escorted him to the door. Watson went back inside the pool
hall when he saw appellant walking toward a car.
A few
minutes later, Griffin, his mother, and his girlfriend followed appellant
outside. Watson observed
appellant and Griffin conversing in an apparently civil manner. Before long, however, the previous
argument recommenced. Griffin
suddenly punched appellant, causing him to fall and strike his head on the
pavement. The fall fractured
appellant=s skull
and caused permanent brain damage.
Appellant
sued 20801 under the Dram Shop Act.[2] See Tex. Alco. Bev. Code Ann.
'' 2.01,
2.03 (Vernon 2005); ' 2.02
(Vernon Supp. 2005); Smith v. Sewell, 858 S.W.2d 350, 359 n.1 (Tex.
1993) (Chapter 2 of the Texas Alcoholic Beverage Code is commonly known as
the ADram Shop
Act@). Appellant alleged that 20801, its
agents, servants, and employees were negligent in that Athey
provided, supplied, sponsored, encouraged, served and/or sold intoxicating
alcoholic beverages and liquor to [appellant] and Griffin when they knew
or should have known that they had become obviously intoxicated to such a
degree as to present a clear danger to themselves and others, and such
intoxication was a proximate cause of the damages suffered by
[appellant].@
Appellant
also pled a cause of action based on premises liability, alleging that the
breach of 20801=s duty to
exercise reasonable care to protect him from Griffin=s
intentional and criminal conduct was the proximate cause of his
injuries. Appellant alleged
four specific ways in which 20801 and its agents, servants, and employees
were negligent: (1) in telling appellant to leave the pool hall without
regard for his safety in the parking lot; (2) in failing to demand that
Griffin leave the premises before appellant was injured; (3) in failing to
timely notify the police; and (4) in failing to warn appellant that
Griffin was following him outside.
In its
motion for summary judgment, 20801 argued that Section 2.03 of the Code
preempts appellant=s common
law causes of action.
Additionally, 20801 argued that it had complied with the safe
harbor defense in Section 106.14 of the Code, which immunizes a commercial
provider of alcoholic beverages from liability for its
employees= provision
of alcohol to an intoxicated customer if: (1) the employer requires
employees to attend a commission-approved seller training program; (2) the
employee has actually attended such a training program; and (3) the
employer has not directly or indirectly encouraged the employee to violate
such law. See Tex. Alco. Bev. Code Ann.
'
106.14(a)(1)-(a)(3) (Vernon 2005).
The trial
court granted 20801=s motion
for summary judgment on February 1, 2005 without specifying the grounds
therefore. On appeal,
appellant specifically contends that (1) his premises liability claim is
not preempted and (2) 20801 failed to establish that it did not directly
or indirectly encourage its employees to violate the
law.
Standard
of Review
In a
traditional motion for summary judgment, the movant has the burden to show
that no genuine issue of material fact exists and that the movant is
entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG
Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748
(Tex. 1999). In reviewing a
grant of summary judgment, we take as true all evidence favorable to the
nonmovant and make all reasonable inferences in the nonmovant=s
favor. Nixon v. Mr.
Property Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985). A defendant, as movant, is
entitled to summary judgment if it (1) disproves at least one element of
the plaintiff=s theory
of recovery; or (2) pleads and conclusively establishes each essential
element of an affirmative defense, thereby rebutting the
plaintiff=s cause of
action. Am. Tobacco Co.,
v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). An element is conclusively proved
if ordinary minds could not differ as to the conclusion to be drawn from
the evidence. Triton Oil
& Gas Corp. v. Marine Contractors & Supply Inc., 644 S.W.2d
443, 446 (Tex. 1982).
The
nonmovant does not have a burden to respond to a traditional motion for
summary judgment unless a movant establishes its right to judgment as a
matter of law. Casso v.
Brand, 776 S.W.2d 551, 556 (Tex. 1989). If the movant has met its burden,
it is incumbent upon the nonmovant to respond to the movant=s evidence
and to present contrary evidence sufficient to create a fact issue, or
else risk an adverse ruling.
Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903,
907 (Tex. 1982). When, as
here, a trial court=s order
granting summary judgment does not specify the grounds relied upon, we
must affirm summary judgment if any of the summary judgment grounds are
meritorious. Oliphint v.
Richards, 167 S.W.3d 513, 515-16 (Tex. App.CHouston
[14th Dist.] 2005, pet. denied).
Preemption
of Premises Liability Claim
In his
first point of error, appellant contends that because he can
simultaneously pursue both dram shop and premises liability causes of
action, the trial court=s grant of
summary judgment in favor of 20801 was erroneous. We
disagree.
Before the
enactment of the Dram Shop Act in 1987, no cause of action existed against
a provider of alcoholic beverages for injuries resulting from a
patron=s
intoxication. Smith,
858 S.W.2d at 352; Steak & Ale of Tex., Inc., v.
Borneman, 62 S.W.3d 898, 906 (Tex. App.CDallas
2002, no pet.); Holguin v. Ysleta Del Sur Pueblo, 954 S.W.2d 843,
852 (Tex. App.CEl Paso
1997, pet. denied). The Dram
Shop Act provides that commercial providers of alcohol may be liable for
the actions of their intoxicated customers if (1) it was apparent to the
provider that the individual being sold, served, or provided with alcohol
was obviously intoxicated to the extent that he presented a clear danger
to himself and others and (2) the patron=s
intoxication was the proximate cause of the damages suffered. Tex. Alco. Bev. Code Ann.
'' 2.01(1),
2.02(b) (Vernon 2005); Smith, 858 S.W.2d at 352.[3]
The Dram
Shop Act Aprovides
the exclusive cause of action for providing an alcoholic beverage to a
person 18 years of age or older.@[4] Tex. Alco. Bev. Code Ann.
' 2.03(c)
(Vernon 2005). The Act also
states that A[the]
liability of providers under this chapter for the actions of their
employees, customers, members, or guests who are or become intoxicated is
in lieu of common law or other statutory law warranties and duties of
providers of alcoholic beverages.@ Tex. Alco. Bev. Code Ann.
' 2.03(a)
(Vernon 2005).
While no
court has addressed preemption in the specific context of premises
liability, courts clearly have held that the Act=s
exclusive remedy provision bars other common law actions against a
statutorily liable provider.
For example, in Southland Corp. v. Lewis, 940 S.W.2d 83, 84
(Tex. 1997), plaintiff Dori Sue Lewis was injured in an automobile
collision with a truck driven by Reed Bulaich. Bulaich, twenty-one, had been
drinking at a party and then at a bar. Id. He then drove several friends to a
7-Eleven convenience store, where passenger Chris Ernemann bought more
beer. Id. Bulaich did not enter the
convenience store or consume any of the beer. Id. The accident occurred shortly
after Bulaich and his friends left the convenience store. Id.
Lewis sued
7-Eleven and the bar under the Dram Shop Act. She also alleged that the
defendants were negligent and negligent per se in providing alcohol to
both Bulaich and Ernemann.
Id. 7-Eleven
moved for summary judgment on grounds that it had not proximately caused
Lewis=s damages
and that the Act=s
exclusive remedy provision precluded Lewis=s
negligence and negligence per se claims. Id. The trial court granted summary
judgment in favor of 7-Eleven on all claims without stating grounds
therefore. Id. The court of appeals reversed and
remanded, but the supreme court reversed and rendered judgment in favor of
7-Eleven. Id.
On the
preemption issue, the supreme court held that ALewis=s
negligence and negligence per se claims [were] clearly barred by the
exclusive remedy provision of chapter 2 of the Texas Alcoholic Beverage
Code.@ Quoting the statutory language,
the court stated that Asection
2.03 expressly precludes a negligence or negligence per se cause of action
against a provider of alcohol when the purchaser is at least eighteen
years of age.@ The court reasoned that summary
judgment in favor of 7-Eleven was proper because both Ernemann and Bulaich
were over eighteen years of age.
Id.[5]
Similarly,
in Boyd v. Fuel Distrib. Inc., 795 S.W.2d 266, 268 (Tex.
App.CAustin
1990, writ denied), eighteen-year-olds Neal Boyd and Robert Kruse were
involved in a car accident after Kruse had bought beer from a convenience
store operated by the defendant.
Boyd, the driver, was killed, and Kruse, the passenger, was
seriously injured.
Id. Boyd
and Kruse had been drinking before stopping at the convenience store, and
they were both intoxicated at the time of the accident. Id. The plaintiffs brought a cause
of action under the Dram Shop Act; they also alleged a violation of
Section 106.03(a) of the Code, which makes it an offense to sell an
alcoholic beverage to a minor if the sale is committed with criminal
negligence. Tex. Alco. Bev. Code Ann.
' 106.03(a)
(Vernon 2005); Boyd, 795 S.W.2d at 268. The plaintiffs argued that
they were entitled to recover on their claim under Section 106.03 because
that section overlaps with the Dram Shop Act. Boyd, 795 S.W.2d at
273. The Third Court of
Appeals rejected both that argument and the notion that the legislature
did not intend to eliminate common law causes of action by enacting the
Dram Shop Act.
Id. In doing
so, the court stated:
We may not
ignore the Legislature=s express
statement that chapter 2 is the exclusive cause of action for providing
alcoholic beverages to a person eighteen years of age or older and that
it is in lieu of any other statutory or common law duty of
providers. Thus, we hold
that chapter 2 means what it says and that it sets forth the exclusive
cause of action for providing alcohol to a person eighteen years of age
and older.
Id. (emphasis
added).
Two years
later, the Tenth Court of Appeals applied the holding and rationale of
Boyd to a similar case.
See Fuller v. Maxus Energy Corp., 841 S.W.2d 881, 884 (Tex.
App.CWaco 1992,
no writ.). In Fuller,
eighteen-year-old Terry Nishimuta, a soldier at Fort Hood, purchased beer
at a gas station without being required to show his identification to the
clerk. Id. at
883. Several hours later,
Nishimuta was involved in a car accident that killed two other
soldiers. Id. The deceased soldiers= parents
brought wrongful death suits against the store manager and several
corporate entities, alleging causes of action for common law negligence
and negligence per se under Section 106.03(a) of the Code. Id. The trial court granted
the defendants= motion
for summary judgment based on the exclusive remedy provision of the Dram
Shop Act. Id. On appeal, the
soldiers= parents
argued that the trial court=s
interpretation of the exclusive remedy provision improperly denied them
their common law cause of action.
Id. The court
of appeals disagreed, reiterating that Asection
2.03 sets out the legislature=s clear
intent that the dram shop act be the exclusive remedy for the sale of
alcohol to persons eighteen years or older, in lieu of any other statutory
or common law duty@ and
asserting that AChapter 2
of the Code is the exclusive remedy for damages for providing alcohol to a
person eighteen years of age or older.@ Id. at 883-84.
Appellant contends that this line
of case law is not controlling because appellant=s premises
liability claim is not based on over-service of alcohol. Specifically, appellant asserts
that A[t]he
nexis [sic] of a dram shop act case is overservice by the alcohol provider
which results in injury to either the customer or to an innocent
party,@ whereas
Athe nexis
[sic] of a premises liability case is the negligent failure to protect a
customer from the intentional and criminal conduct of a third
party.@ Thus, appellant concludes, a claim
under the Dram Shop Act and a premises liability claim are not mutually
exclusive.[6]
We
recognize that a defendant has a general common law duty to prevent the
criminal acts of a third party when the criminal conduct is foreseeable as
a result of the defendant=s
negligence. Nixon, 690
S.W.2d at 550. However, the
plain language of Section 2.03 clearly states that providers= liability
under the Dram Shop Act Afor the
actions of their employees, customers, members, or guests who are or
become intoxicated is in lieu of common law or other statutory law
warranties and duties.@ Tex. Alco. Bev. Code Ann.
' 2.03(a)
(Vernon 2005) (emphasis added).
A plain reading of this section obtains only one meaning: 20801=s common
law duty as a premises owner is preempted by the Code. Borneman, 62 S.W.3d at 908
(the legislature Aexpressly
pronounced the Dram Shop Act to be the exclusive remedy against providers
of alcoholic beverages to individuals age eighteen or older@; language
that action under the Act is in lieu of common law or other
statutory law warranties and duties Aclearly
expresses legislative intent to exclude all common-law rights and bar all
claims except those specifically authorized by statute@);
Holguin, 954 S.W.2d at 853 (because the Act was created by statute
in derogation of common law principles to regulate commercial providers of
alcohol, Acourts
should defer to the plain meaning of the text of the law rather than using
the dram shop law to fashion judicially created remedies@);
Gonzalez, 951 S.W.2d at 76 (A[Dram Shop
Act] provides the exclusive basis for the civil liability of commercial
providers of alcohol who provide, sell, or serve an alcoholic beverage to
an adult who is obviously intoxicated.@). We hold that because
appellant=s premises
liability claim is preempted by the Code, the trial court did not err to
the extent that it granted summary judgment against appellant=s premises
liability claim. We overrule appellant=s first
point of error.
Safe
Harbor Affirmative Defense
In his
second point of error, appellant contends that 20801 did not establish the
third element of its affirmative defense to appellant=s dram
shop cause of action. We
agree.
Section
106.14 of the Code, otherwise known as the safe harbor defense, provides
that the actions of an employee regarding the sale, service, dispensing,
or delivery of alcohol shall not be attributable to the employer if: (1)
the employer requires its employees to attend a commission-approved seller
training program; (2) the employee has actually attended such a training
program; and (3) the employer has not directly or indirectly encouraged
the employee to violate such law. Tex. Alco. Bev. Code Ann.
'
106.14(a)-(c) (Vernon 2005); Perseus, Inc. v. Canody, 995 S.W.2d
202, 207 (Tex. App.CSan
Antonio 1999, no pet.).
Cases
interpreting direct or indirect encouragement of Code violations are
highly fact-intensive, and summary judgment evidence must clearly and
specifically deny direct or indirect encouragement as a matter of
law. See Tex. R. Civ. P. 166a(c); Pena
v. Neal, Inc., 901 S.W.2d 663, 667 (Tex. App.CSan
Antonio 1995, writ denied).
In Pena, for example, the Fourth Court of Appeals held that
the defendant company had not established the third element of the safe
harbor defense when the only summary judgment evidence it submitted was
conclusory affidavits. 901
S.W.2d at 667-68. In that
case, defendant Neal, Inc., (ANeal@) operated
an all-night convenience store where customers could buy alcoholic
beverages after regular business hours. Id. at 666. One night, Margaret Sturm visited
the store and drove away intoxicated. Id. Ten minutes later,
Sturm=s car
crossed the center lane and crashed head-on into a car driven by Gloria
Arriola. Id. Sturm, Arriola, and
Arriola=s
passenger were killed.
Id.
Arriola=s
relatives sued Neal under the Dram Shop Act. Id. at 665. Neal contended, inter alia,
that the Code=s safe
harbor provision shielded it from liability. Id. at 666. The trial court granted summary
judgment in favor of Neal without stating its grounds. Id. The Fourth Court of Appeals
reversed, holding that summary judgment based on the safe harbor provision
was improper because the evidence offered by Neal failed to conclusively
establish the third element of the defense. Id. at 668-69. Neal=s summary
judgment evidence consisted of the affidavit of its president, who stated:
ANeither I
nor anyone else at Neal, Inc., has directly or indirectly encouraged
[employee] Margarito de la Cruz to violate the Texas Alcoholic Beverage
Code or to sell alcoholic beverages to an intoxicated person.@ Id. at 667. The court of appeals reasoned that
the affidavit was conclusory and therefore was incompetent as summary
judgment evidence because its language Amerely
repeated the allegations in the motion and the words of the
statute.@ Id. at 668.[7]
Similarly,
in Gonzalez, the only summary judgment evidence that the defendant
night club did not directly or indirectly encourage an employee to violate
the law was an employee=s
statement in an affidavit that the management Aheld
weekly staff meetings in which conformance with [Code] regulations
regarding serving alcoholic beverages was discussed.@ 951 S.W.2d at 77. In reversing summary judgment in
favor of the club, the Thirteenth Court of Appeals reasoned that although
the employee=s
affidavit did not simply track the statutory language, it provided the
court Awith no
more information than would such a conclusory statement@ and gave
no insight into Aappellee=s policy
regarding compliance with the code.@ Id.
In the
instant case, Watson=s
affidavit is the only summary judgment evidence offered by 20801 regarding
enforcement of its alcohol policies.
Watson states in his affidavit that Aeach month
[the management] meet[s] with all the employees and discuss[es] safety
issues . . . and emphasize[s] strict compilance with Slick
Willie=s
Responsible Alcohol Service policy and [the management=s] strict
policy of disciplining employees who violate this policy.@ More specifically, Watson asserts
that only bartenders are allowed to fill drink orders, and that both the
server and the bartender mark the tab. Watson also states that the
manager reviews the number of customers on each ticket and the amount of
alcohol being served to individual customers and also talks to customers
to assess their levels of intoxication. According to Watson, if a customer
appears intoxicated, he or she must not be served any more alcohol;
instead, servers should offer the customer free food and non-alcoholic
beverages. Watson also avers
that all employees are encouraged to report suspected over-service of
alcohol.
We agree
with 20801 that Watson=s
affidavit is specific in establishing that it had a policy prohibiting the
employer=s
encouragement of direct or indirect violations of the Code. Nevertheless, we believe that a
fact issue exists whether 20801 was actually enforcing its policies on the
night in question. 20801
argues that the appropriate focus under the safe harbor provision is
whether a provider has established the existence of policies and
procedures to ensure compliance with the Code. We disagree that establishment of
compliance procedures alone suffices to trigger the protection of the safe
harbor provision. We agree
with Parker that a provider also must prove enforcement of its alcohol
policies on a particular occasion to satisfy the third element of the safe
harbor defense.
As
mentioned above, the Gonzalez court held that summary judgment
based on the safe harbor defense was improper because a conclusory
affidavit did not provide sufficient evidence of the defendant=s
Apolicy
regarding
compliance with the code.@ 951 S.W.2d at 77 (emphasis
added). 20801 cites the
court=s use of
the word Apolicy@ to
support its contention that the existence and nature of a
provider=s alcohol
policy is the sole relevant inquiry under Section 106.14. We disagree with this
interpretation in light of other language in Gonzalez recognizing
that enforcement of a provider=s policy
is a coequally relevant concern.
Remarking that Aencouragement
to violate the liquor laws in question, i.e., to serve alcohol to an
obviously intoxicated patron, may take many subtle forms,@ the court
of appeals stated that Anegation
of any direct or indirect encouragement would require a more detailed
factual analysis of the circumstances under which alcoholic beverages were
being sold and served.@ Id. (emphasis added). This language suggests that in
addition to proving the existence of an alcohol policy and procedures for
its enforcement, a provider must present specific facts demonstrating its
compliance with that policy.
Similarly, when discussing the
requirements of affidavits offered as summary judgment proof under the
safe harbor provision, the Pena court stated that Athe facts of each case
involving employees who are providers of alcoholic beverages will
differ regarding the affirmative actions taken by an employer to
avoid either directly or indirectly encouraging the employee to violate
the alcoholic beverage code.@ 901 S.W.2d at 667 (emphasis
added). Despite
20801=s insistence that this language
refers to the existence of a provider=s policies and procedures, we
believe that a more reasonable interpretation of Aaffirmative actions@ encompasses specific instances
of the policies= enforcement, especially in
light of the following language:
While we agree with [defendant=s] argument that the legislature has provided a safe harbor for the employer who requires his employees to attend the commission-approved seller training programs, the statute=s words plainly demonstrate the employer must do more than simply require attendance at the training programs. It cannot then turn its back on all actions of the