Chapter 17 DRAM SHOP ACT VIOLATIONS

• Jurisdiction: North Carolina

17 DRAM SHOP ACT VIOLATIONS¹

A. Definition

Chapter 18B of the North Carolina General Statutes is titled "Regulation of Alcoholic Beverages," and article 1A of that chapter addresses "compensation for injury caused by sales to underage persons." It is known as the Dram Shop Act.²

The claim for relief under the Dram Shop Act does not abrogate or abridge any claims for relief under the common law; therefore, a cause of action for violation of the Act was not intended to be the exclusive remedy for a third party who wants to assert a negligence suit against a seller of alcohol to an underage person.³

North Carolina recognizes a tort action under which a defendant may be held liable on a theory of common-law negligence for providing alcohol to an intoxicated person, regardless of that person's age.⁴ To prevail in such an action, a plaintiff must show the defendant (1) served alcohol to a person, (2) who the defendant knew or should have known was intoxicated,⁵ and (3) would be driving afterwards.⁶ The common-law negligence action based on furnishing alcohol to a third party may be brought against a defendant regardless of the capacity in which the defendant furnished the alcohol; the action is not limited to defendants who furnished alcohol in their capacities as social hosts or commercial vendors.⁷

There are statutes that might form the basis for alleging negligence per se. One statute makes it unlawful for a permittee or his or her employee, or for an ABC store employee, to knowingly sell or give alcoholic beverages to any person who is intoxicated.⁸ Violation of that statute constitutes negligence per se, but contributory negligence by the plaintiff is a defense to an action that charges the defendant with violation of a statute or negligence per se.⁹ Under another statute, it is illegal to drive any vehicle on a highway, any street, or any public vehicular area while under the influence of an impairing substance or after having consumed sufficient alcohol that, at any relevant time after the driving, there is a blood alcohol concentration of 0.08 percent or more.¹⁰ A violation of the statute is negligence per se,¹¹ and it follows that a party who aids and abets another in committing that violation is a principal in the commission of the crime and is also negligent per se.¹²

A third statute prohibits selling or giving malt beverages, unfortified wine, fortified wine, spirituous liquor, or mixed beverages to anyone less than 21 years old.¹³ A plaintiff, however, may not maintain a negligence per se action based on a violation of that statute.¹⁴ Thus, even though a defendant furnishes alcohol to a minor, the other elements of the common-law action must be met.¹⁵

Even if a person knows or should have known that another was intoxicated, there in no duty in North Carolina to prevent the intoxicated person from getting into a car and attempting to drive.¹⁶

B. Elements

The elements of an action under the Dram Shop Act are established by statute:

(1) The plaintiff is an "aggrieved party";
(2) The defendant is a "permittee" or local "Alcoholic Beverage Control Board" who negligently sold or furnished alcohol to an underage person;
(3) Consumption of the alcohol sold or furnished to an underage person caused or contributed to, in whole or in part, an underage person being subject to an impairing substance at the time of the injury; and
(4) The injury was proximately caused by the underage driver's negligent operation of a vehicle while so impaired.¹⁷

C. Elements Defined

1. Plaintiff is "Aggrieved Party"

The term "aggrieved party" is defined by statute to mean "a person who sustains an injury as a consequence of the actions of the underage person, but does not include the underage person or a person who aided or abetted in the sale or furnishing to the underage person."¹⁸ Since the underage person is expressly excluded from the definition of "aggrieved party," his or her personal representative is also excluded.¹⁹ As explicitly stated in the statute, anyone who "aided and abetted" in the sale and furnishing of alcohol to an underage person is not an aggrieved party. Thus, where the plaintiff's decedent did not contribute any money toward the purchase of alcohol by the underage person, but did drive that person to a convenience store in his own car, waited in his car while beer was purchased, and then permitted the purchaser to drive his car with the illegally purchased beer, he "irrefutably" assisted in the purchase of the beer. He, therefore, "aided and abetted" an underage person to purchase beer and was, under the "aided and abetted" exception to the definition, not an "aggrieved party," nor was his estate. The estate's claim under the Dram Shop Act was, therefore, barred as a matter of law.²⁰

A parent of an underage driver injured or killed as a result of his or her negligent operation of a motor vehicle because of impairment from the consumption of alcohol may, however, be an "aggrieved party" within the meaning of the Dram Shop Act.²¹

2. Defendant Negligently Sold or Furnished Alcohol to Underage Person

The only possible defendants under the Dram Shop Act are "permittees"²² or local Alcoholic Beverage Control Boards.²³ The defendant must have sold or furnished an alcoholic beverage²⁴ to an underage person. "Sale" means any transfer, trade, exchange or barter, in any manner or by any means, for consideration²⁵ An "underage person" is "a person who is less than the age legally required for purchase of the alcoholic beverage in question,"²⁶ which is 21.²⁷

The plaintiff has the burden of proving the sale or furnishing of alcohol was negligent. Proof of sale or furnishing of alcohol without request for identification is admissible as evidence of negligence. On the other hand, proof of good practices, including instruction of employees about the law on sale of alcohol, training of employees, enforcement techniques, admonishment to patrons about the laws on purchasing or furnishing alcohol, or detention of a person's identification documents and inquiry about the age or degree of intoxication of a person, is evidence that an underage person misrepresented his or her age. That the sale or furnishing of alcohol was made under duress is admissible as evidence that the defendant was not negligent.²⁸

3. Consumption of Alcoholic Beverage Sold or Furnished to Underage Person Caused or Contributed to, in Whole or in Part, Underage Person Being Subject to Impairing Substance at Time of Injury

Under the language of the statute, the underage person who becomes subject to an impairing substance need not be the same one as the underage person to whom the alcohol was sold or furnished. Consumption of the alcohol sold or furnished to an underage person only needs to be a contributing cause of the impairment, but it does not need to be the sole cause. "Being subject to" an impairing substance means being under its influence²⁹ or having a blood alcohol concentration of 0.08 percent or more.³⁰ Under the chapter addressing motor vehicles to which the Dram Shop Act refers, the definition of "subject to" impairing substance means alcohol, a controlled substance under chapter 90 of the General Statutes,³¹ any other drug or psychoactive substance capable of impairing a person's physical or mental faculties, or any combination of these substances.³² Thus, it would appear that if an underage person obtains an impairing substance from a source other than the defendant and it, together with the alcohol sold or furnished by the defendant, combines to cause the underage person to be under the influence of an impairing substance, part of the third element is met.

The underage person must have been subject to the impairing substance at the time of the injury. "Injury" is broadly defined by statute. It includes, but is not limited to, personal injury, property loss, loss of means of support, or death.³³ Damages for death are determined under the provisions of the statute on wrongful death actions.³⁴

4. Injury was Proximately Caused by Underage Driver's Negligent Operation of a Vehicle While so Impaired

The injury claimed by the plaintiff must have been proximately caused by the underage driver's negligent operation of a vehicle while impaired. Generally, negligence is failure to use ordinary care.³⁵

Proximate cause is a cause which in natural and continuous sequence produces a plaintiff's injuries and one from which a person of ordinary prudence could have reasonably foreseen that such a result or some similar injurious result was probable.³⁶

Kane v. Crowley's at Stonehenge, Inc.,³⁷ demonstrates application of the principle of proximate cause to an action under the Dram Shop Act. A minor drove a car after consuming alcohol at the defendant's restaurant. His blood alcohol content was found to have exceeded the legal limit. While driving, the minor chose to chase after a speeding vehicle that passed him. In the process, he lost control of his own vehicle, struck a tree, and his passenger was killed. The restaurant contended the proximate cause of the fatal injuries was the intentional conduct of the minor driver, resulting in his conscious decision to unlawfully engage in a chase or speed competition with another motor vehicle, which resulted in his losing control of his car, causing it to strike a tree and fatally injuring his passenger. The court instructed the jury that this was the defendant's contention and that the plaintiff disagreed. The jury found the passenger was not fatally injured as a result of a negligent sale of alcohol by the defendant to an underage person and the trial court refused to grant a new trial to the plaintiff. The appellate court affirmed.³⁸

There is only a Dram Shop Act violation if an underage driver was negligent in operating³⁹ a vehicle while impaired. "Vehicle" is broadly defined to include:

Every device in, upon, or by which any person or property is or may be transported or drawn upon a highway, excepting devices

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