Negligence; Social Host; Alcoholic Beverages; Liquor Code
Klar v. Dairy Farmers of America, Inc., 268 A.3d 1115 (Pa. Super. 2021), allocatur granted June 27, 2022, appeal docket 29 WAP 2022
David Klar (Klar) appeals the decision of the Court of Common Pleas of Lawrence County (trial court) granting the Dairy Farmers of America, Inc.’s (DFA) motion for judgment on the pleadings and dismissing Klar’s claims against DFA. The factual and procedural history is as follows:
[Klar] filed a complaint against DFA and Roger J. Williams (“Williams”), wherein he alleged and averred the following. On August 17, 2014, DFA organized and sponsored a golf outing for its employees at Tanglewood Golf Course in Mercer County, Pennsylvania. . . . At the time, Williams was an employee of DFA and DFA “encouraged its employees, including Williams, to sign up for and participate” in the golf outing. . . . “As a prerequisite and condition for participation in the [golf outing, DFA] required [its] employees to make a monetary contribution to offset costs and expenses related to or associated with the [outing,] including . . . those for greens fees, food and alcohol. . . . DFA then purchased the greens fees, food, and alcohol for the outing. . . .
While participating in the golf outing, “Williams consumed alcohol furnished by [DFA] sufficient to render him visibly intoxicated.” “Despite his visible intoxication, [DFA] served Williams alcohol and continued to permit Williams to consume more alcohol[,] causing his blood alcohol level to . . . [reach] 0.23, almost three times the legal limit” in Pennsylvania. “Furthermore, prior to serving Williams with alcohol and encouraging and permitting Williams to consume alcohol, [DFA] knew or should have known that Williams was an alcoholic and habitual drunkard who had at least twice before been arrested or convicted of alcohol-related crimes and offenses, including  criminal offenses involving the unsafe operation of a motor vehicle.”
Williams left the golf outing at approximately 5:45 p.m. and drove his car north along Pennsylvania State Route 18. “At our about the same time, [Klar] was operating [his motorcycle] . . . in the southbound lane” of Route 18. As the vehicles approached one another, Williams “suddenly and without warning failed to control his motor vehicle and caused [his] vehicle to swerve left of the center line into the southbound lane of [Route] 18 into the path of [Klar’s motorcycle,] causing a collision between the” two vehicles and causing [Klar] to sustain multiple serious and permanent injuries.
[Klar] claimed that DFA and Williams were jointly and severally liable for his injuries. Further, as to DFA, [Klar] claimed that DFA was liable because it “furnish[ed], serv[ed,] and provid[ed] Williams alcohol when [DFA] knew or should have known Williams was visibly intoxicated and/or a habitual drunkard.
DFA answered the complaint and denied that it was liable for [Klar’s] injuries.
On June 16, 2017, DFA filed a motion for judgment on the pleadings. Within its motion, DFA argued that, as a matter of law, it could not be liable to [Klar] because: 1) it does not qualify as a “licensee” under Pennsylvania Liquor Code; 2) it “did not obtain ‘licensee status’ and cannot be treated as a licensee under the Liquor Code for purposes of Dram Shop liability”; and 3) it was a social host and “there can be no liability on the part of a social host who serves alcoholic beverages to [their] adults guests.”
On October 4, 2017, the trial court granted DFA’s motion for judgment on the pleadings and dismissed all claims against DFA with prejudice.
Slip op. at 1-4 (internal citations omitted) (footnote omitted). Klar timely filed a notice of appeal on November 24, 2020 raising the following issues:
Whether an unlicensed company-employer who provides an uncontrolled amount of alcohol to a visibly intoxicated employee in exchange for remuneration is liable to a third-party who sustains personal injuries as a result of the actions of the intoxicated employee?
Whether an unlicensed company-employer who provides an uncontrolled amount of alcohol to a visibly intoxicated employee, in exchange for remuneration, may be considered a “social host,” despite the fact that it does not sell alcohol as a going concern operating on commercial principles and the alcohol was presumably furnished without profit or other indicia of commercial sale?
Slip op. at 5.
Klar alleges that DFA is “liable for the harm done to him, as DFA furnished alcohol to Williams for consideration, while Williams was visibly intoxicated.” Slip op. at 10. However, Klar concedes that “DFA was not licensed under the Liquor Code and that DFA could not have obtained a license, under the Liquor Code, for the golf outing.” Slip op. at 10. Notwithstanding this, Klar claims that DFA is liable for his injuries because:
1) DFA is negligent per se, as it violated the standard set forth in 47 P.S. § 4-493(1) by furnishing alcohol to Williams while he was visibly intoxicated; 2) DFA illegally sold alcohol to Williams and thus has “licensee status,” where it “assumes the same liability exposure as those who are licensed and furnish alcohol to those it should not;” and, 3) DFA otherwise breached its common law duty when it provided alcohol to Williams when he was already intoxicated.
Slip op. at 11. Klar argued that while Section 4-493(1) is a penal statute, “it establishes a standard of conduct for entities such as DFA, as DFA falls within Section 4-493(1)’ stated category of ‘any other person.’” Slip op. at 12. To support his position, Klar cited to Superior Court’s decision in Commonwealth v. Randall, 133 A.2d 276 (Pa. Super. 1957), which held that a non-licensee falls into Section 4-493(1)’s category of “any other person.” However, Superior Court explained that the Pennsylvania Supreme Court, in the civil context, failed to follow Randall in its opinion in Manning v. Andy, 310 A.2d 75 (Pa. 1973). There, the Supreme Court concluded that the phrase “any other person” did not encompass non-licensees.
In Randall, “a party was held in defendant Randall’s home, in the course of which some of the six minor children, whose ages ranged from 12 to 17 years, were served beer, whiskey and vodka.” Slip op. at 14 (internal quotations and citations omitted). The defendant was charged and convicted of violating Section 4-493(1). On appeal to Superior Court, the defendant argued that the words “any other person” referred to the same class as those enumerated in the statute, i.e., licensees or board or any employee, servant or agent of licensee of the board. Thus, according to the defendant, because he was not a licensee and did not fit within any of the enumerated classes, he could not be convicted of violating Section 4-493(1). Superior Court disagreed holding:
We think that the legislature in using the words “or any other person” deliberately selected these words in order to prohibit minors, visibly intoxicated persons, insane persons, habitual drunkards, and persons of known intemperate habits, from obtaining liquor, malt or brewed beverages, whether by purchase or gift, from licensees or any other persons. The intention of the legislature to protect the classes of persons named is the underlying consideration. If we were to restrict this section of the Act to “licensees” or their “servants, agents or employees,” we would nullify the very purpose of the Act.
Slip op. at 15 (quoting Randall, 133 A.2d at 282). In contrast to the Randall case, Manning was a civil case. There, the plaintiff filed a complaint sounding in negligence against his defendant-employer. The plaintiff alleged that he and another employee were at a company party where the defendant-employer furnished alcoholic beverages to the other employee and continued to serve him alcohol despite him being visibly intoxicated. The plaintiff alleged that, after he and the employee left the party, he sustained injuries in a motor vehicle accident caused by the employee who was under the influence of alcohol. Defendant-employer filed preliminary objections to the complaint, which the trial court granted. In sustaining the preliminary objections, the trial court refused to extend the holding in Randall to a civil case. The plaintiff appealed to the Supreme Court which held:
In dismissing the complaint, the trial court held that no cause of action was stated under any theory and specifically held that [Section] 493(1) of the Liquor Code . . . which defines certain unlawful conduct, does not impose civil liability upon [the defendant-employers].
We find no error in the trial court’s dismissal of [plaintiff’s] complaint. Only licensed persons engaged in the [s]ale of intoxicants have been held to be civilly liable to injured parties. [Plaintiff] asks us to impose civil liability on nonlicensed persons like [the defendant-employers], who furnish intoxicants for no remuneration. We decline to do so. While [Plaintiff’s] proposal may have merit, we feel that a decision of this monumental nature is best left to the legislature.
Slip op. at 17 (quoting Manning, 310 A.2d at 75) (internal citations omitted). Relying on Manning, Superior Court concluded that Manning “offers compelling support for the conclusion that DFA, as a non-licensee, is not subject to the standard applicable to licensees under Section 4-493(1).” Slip op. at 18. Superior Court further concluded that the absence or presence of renumeration “is neither relevant nor dispositive under the plain terms of Section 4-493(1): the statute clearly prohibits the selling, furnishing, or giving of liquor or beer ‘to any person visibly intoxicated.’” Slip op. at 18 (emphasis omitted). Because the Supreme Court in Manning concluded that the phrase “any other person” did not encompass non-licensees, Superior Court concluded that “any other person” excludes non-licensees and that DFA cannot be civilly liable for violating the standard found in Section 4-493(1).
Klar next argued that DFA should be viewed as attaining licensee status under Section 4-493(1) because DFA “sold, provided and gave Williams beer without first obtaining a license.” Slip op. at 20 (internal quotations omitted). According to Klar, because DFA engaged in the same conduct as a licensee without obtaining a license, DFA “should be attributed with licensee status and assume the same responsibility and liability of a licensee.” Slip op. at 20. Klar relies on Hinebaugh v. Pennsylvanoa Snowseekers Snowmobile Club, 63 Pa. D. & C.4th 140 (Ct. Com. Pl. 2003), to support his argument.
In Hinebaugh, the plaintiff was a member of the snowmobile club and purchased alcohol while in the defendant’s clubhouse. The plaintiff purchased the alcohol using a punch-out card where the amount equal to the cost of the drink was punched out when a drink was purchased from the bar. After drinking alcohol, the plaintiff went for a snowmobile ride, crashed into a tree, and suffered serious injuries. The plaintiff sued the club and claimed it was negligent per se for selling him alcohol while visibly intoxicated. The club filed a motion for summary judgment arguing that it because it was not a licensed entity, it could not be liable for violating the standard in Section 4-493(1). The trial court denied the motion concluding that the club acquired licensee status because the prepaid punch-card system created by the club constituted a sale requiring the club to have procured a license from the Liquor Control Board to operate the bar.
Klar argued that Superior Court should look to Hinebaugh and conclude that DFA stepped “into the shoes of a licensee and assume[d] the duty to protect third parties like [Klar] and is subject to liability for its breach.” Slip op. at 21 (internal quotations omitted). Superior Court declined to apply Hinebaugh to the present matter. First, Superior Court explained that it is not bound by the decisions of the courts of common pleas, even if directly on point. Additionally, Superior Court explained that the trial court in Hinebaugh relied on the Randall court’s expansive definition of “any other person” to deny the club’s motion for summary judgment. Superior Court continued explaining that the expansive definition of “any other person” cannot survive the Supreme Court’s decision in Manning in the civil context. Accordingly, based on Manning, Superior Court declined to expand Section 4-493(1) civil reach.
In his final argument, Klar argued that DFA “breached its common law duty by providing alcohol to Williams when he was already intoxicated.” Slip op. at 22. Klar argued that the common law rule expressed in Klein v. Raysinger, 470 A.2d 507 (Pa. 1983), where the Supreme Court held a social host is not liable for serving alcoholic beverages to a guest, does not apply to this case because DFA received renumeration for the alcohol it provided to Williams. Klar contended that under the definition of the social host doctrine as explained by the Supreme Court in Karpes v. Heller, 640 A.2d 888 (pa. 1994), DFA cannot be a social host due to it receiving renumeration in exchange for furnishing alcohol.
Superior Court disagreed, noting that Klar’s complaint averred that “[a]s a prerequisite and condition for participation in the [golf outing, DFA] required [its] employees to make a monetary contribution to offset costs and expenses related to or associated with the [outing,] including . . . those for greens fees, food and alcohol.” Slip op. at 23 (internal quotations omitted) (emphasis omitted). Superior Court agreed with the trial court, explaining that Klar’s averments in his complaint render this case analogous to Brandjord v. Hopper, 688 A.2d 721 (Pa. Super 1997), which dealt with the collective purchase of alcohol by a group. There, the defendant James Punch and his three friends collectively purchased and drank alcohol together. When Punch was driving home, he struck the plaintiff with his van and caused the plaintiff to suffer serious injuries. The plaintiff sued Punch’s three friends for negligence. The trial court granted the defendants’ motion for summary judgment to which the plaintiff appealed to Superior Court. The plaintiff argued that they were not social hosts because they shared in the collective purchase of alcohol. In rejecting this claim, Superior Court concluded:
[T]he principle enunciated in Klein . . . is not limited merely to protect hosts of parties. Our [S]upreme [C]ourt stated in Klein, “in the case of an ordinary able bodied man it is the consumption of alcohol, rather than the furnishing of the alcohol, which is the proximate cause of any subsequent occurrence.” Klein, 470 A.2d at 510. Here, Punch chose to drink and chose to drive. These actions caused [plaintiff’s] injuries.
Slip op. at 24. Superior Court explained:
Under the concept of a collective purchase, as applied in Brandjord and [Commonwealth v.] Peters [, 2 Pa.Super. 1 (Pa. Super. 1898)], the presence of remuneration will not defeat the rule adopted by our Supreme Court in Klein, which holds that the conduct of a social host who furnishes alcohol to an adult is not the proximate cause of a subsequent occurrence. Here, [Klar] specifically averred that Williams paid DFA “to offset costs and expenses related to or associated with the [outing,] including . . . those for greens fees, food and alcohol.”
Slip op. at 25 (internal quotations omitted). Accordingly, Superior Court concluded that DAF was a social host and, therefore, not liable.
The Supreme Court granted allocatur to consider the following issue:
Whether the Superior Court of Pennsylvania, by extending the holdings in controlling authority, erred in holding that a non-licensed host who invites guests to an event for purposes that are not purely social, and requires those who wish to attend to pay a fee in exchange for alcohol that will be provided on a self-serve-drink all you want basis, is not liable to an innocent third party who is injured as the result of a guest who left the event and was provided alcohol while visibly intoxicated during the event?