Joseph L. Koehnen, Appellant, vs. Daniel R. Dufour, et al, defendants, Rachel Sarah Paul, Respondent.

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C7-97-1820

Joseph L. Koehnen,

Appellant,

vs.

Daniel R. Dufour, et al,

defendants,

Rachel Sarah Paul,

Respondent.

Filed April 21, 1998

Affirmed

Peterson, Judge

Hennepin County District Court

File No. PI93019378

David R. Knodell, Knodell Law Office, 2450 Centre Village, 431 South Seventh Street, Minneapolis, MN 55415-1822 (for appellant)

Gregory A. Wohletz, David D. Alsop, Gislason, Dosland, Hunter & Malecki, P.L.L.P., 9900 Bren Road East, Suite 215 East, Minnetonka, MN 55343 (for respondent)

Considered and decided by Lansing, Presiding Judge, Peterson, Judge, and Mulally, Judge.**

Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.

U N P U B L I S H E D O P I N I O N

PETERSON, Judge

Appellant Joseph Koehnen brought an action under the Civil Damages Act against respondent Rachel Paul alleging that Paul illegally sold alcohol to underage individuals who later injured Koehnen. The district court granted Paul's motion for summary judgment, determining that as a social host, Paul is not liable under the Civil Damages Act. We affirm.

FACTS

When respondent Rachel Paul was 17 years old, she had a party at her father's home. Paul charged party attendees $2 to $4 for a cup to be used to drink beer from a keg. Three party attendees became intoxicated, left Paul's party, and confronted Koehnen outside his sister's home. One of the party attendees struck Koehnen, causing serious injuries.

D E C I S I O N

On appeal from summary judgment, this court must determine if any genuine issues of material fact exist and if the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).

Koehnen contends that the district court erred when it determined that he has no cause of action against Paul because Paul was a social host. Koehnen argues that the Civil Damages Act provides him a cause of action because Paul illegally sold alcohol to the person who injured him.

The Civil Damages Act states:

A * * * person injured * * * by an intoxicated person * * * has a right of action * * * against a person who caused the intoxication of that person by illegally selling alcoholic beverages.

Minn. Stat. § 340 A. 801, subd. 1 (1996).

Supreme court cases have interpreted subdivision 1 as allowing only actions against commercial vendors or persons in the business of providing liquor; no cause of action exists against social hosts. See, e.g., Holmquist v. Miller, 367 N.W.2d 468, 472 (Minn. 1985); Cady v. Coleman, 315 N.W.2d 593, 595-96 (Minn. 1982).

In Cady, the supreme court explained its holding as follows:

We hold in this case that the legislature intended to insulate social hosts from liability regardless of the terms under which they provide their guests with liquor. It is illogical to impose liability under the [Civil Damages] Act upon a social host who sells or barters liquor to a minor or an intoxicated person, but not upon one who gives it away. The argument that commercial vendors should be subject to liability because they profit by their sales and therefore should bear some of the risks created by their business does not apply with equal force to a social host, who is unlikely to make any profit even if he barters or sells liquor to guests. Moreover, it would be extremely difficult in a social setting to determine whether a barter or sale was either intended or consummated, and the results could be absurd in some cases. Would the Act apply, for example, if the host of a party accepted contributions from guests to pay for the liquor? Would a barter occur if guests were asked to bring food to a party where liquor was served.

The legislature's intent to restrict liability only to commercial vendors is sufficiently clear from its deletion from the Act of the word "giving." "Any person" who sells or barters liquor means a person in the business of providing liquor, and not a social host who happens to receive some consideration from his guests in return for drinks he provides.

Id. (emphasis added).

Applying the emphasized construction of the word "person" to the current statute leads to the conclusion that a person injured by an intoxicated person has a right of action against a person in the business of providing liquor who caused the intoxication of that person by illegally selling alcoholic beverages. The Civil Damages Act does not provide a cause of action against a person who is not in the business of providing liquor. Koehnen argues that Cady has no continuing vitality in light of Rambaum v. Swisher, 435 N.W.2d 19 (Minn. 1989) and legislative action since Cady. We disagree.

In Rambaum, the supreme court considered whether a fraternal club's sale of liquor to a person not a member or a guest of the club was an illegal sale under the Civil Damages Act and concluded that the sale was an illegal sale. In reaching this conclusion, the court determined that the sale violated Minn. Stat. § 340 A. 404, subd. 1 (1986), which made it a misdemeanor for a club license holder to sell liquor to anyone other than members and bona fide guests. But the court did not base its conclusion that the sale was an illegal sale under the Civil Damages Act solely on the fact that the sale violated Minn. Stat. § 340 A. 404, subd. 1. Instead, the court applied a four-step analysis to determine whether the sale imposed dramshop liability. The second step in this analysis was to determine whether the statutory violation substantially related to the purposes sought to be achieved by the Civil Damages Act. The court determined that the violation did relate to the purposes of the Civil Damages Act and concluded that the sale was an illegal sale for dramshop purposes.

Rambaum did not address the issue of social host liability. The sale in Rambaum was a sale by a club in the business of providing liquor. The supreme court determined only that that sale was substantially related to the purposes sought to be achieved by the Civil Damages Act. We see no reason to conclude that the supreme court's determination regarding a liquor sale by a club in the business of providing liquor changes the court's earlier holding that the Civil Damages Act does not provide a cause of action against a person who is not in the business of providing liquor.

Koehnen also argues that the legislature rejected the Cady rationale when it enacted Minn. Stat. § 340 A. 701, subd. 1(4) (1996), which provides:

It is a felony:

(4) for a person other than a licensed retailer of alcoholic beverages, a bottle club permit holder, a municipal liquor store, or an employee or agent of these who is acting within the scope of employment, to violate the provisions of section 340 A. 503, subdivision 2, clause (1)[1], by selling alcoholic beverages if the underage purchaser of the alcoholic beverage becomes intoxicated and causes or suffers death or great bodily harm as a result of the intoxication.

Koehnen argues that by enacting this statute, the legislature singled out such sellers for more serious treatment by making their sales a felony and rejected the Cady rationale that liability under the Civil Damages Act for an illegal sale should be limited to those who regularly sell for profit. We disagree. While it is true that the statute singles out these sellers for more serious treatment, enacting the statute does not demonstrate that the legislature rejected the Cady rationale. The statute imposes more serious criminal consequences; it does not impose civil liability. Had the legislature intended to reject Cady by creating a cause of action against social hosts under the Civil Damages Act, it could have done so directly by amending the act, rather than indirectly by enacting Minn. Stat. § 340 A. 701, subd. 1(4). See Minn. Stat. § 645.16 (1996) (object of statutory interpretation is to ascertain and effectuate intention of legislature); id. § 645.17(4) (where court of last resort has construed statutory language, legislature intends same construction to be placed on subsequently enacted laws on same subject); State v. Theo. Hamm Brewing Co., 247 Minn. 486, 497, 78 N.W.2d 664, 670 (1956) (when statutory provisions couched in plain and simple language, court bound to follow clear statutory directions).

Koehnen argues that the district court incorrectly determined that 1990 Minn. Laws ch. 555, § 10 (codified at Minn. Stat. § 340 A. 801, subd. 6) precludes a Civil Damages Act claim against an illegal seller who is under 21 years old. Koehnen misconstrues the district court's memorandum. Minn. Stat. § 340 A. 801, subd. 6 provides:

Nothing in this chapter precludes common law tort claims against any person 21 years old or older who knowingly provides or furnishes alcoholic beverages to a person under the age of 21 years.

The district court did not say that this subdivision precludes a Civil Damages Act claim against an illegal seller who is under 21 years old. The district court said that this subdivision does not modify the ban on social host liability by extending liability to minor social hosts who supply liquor to other minors.

The district court's comment indicates only that there is no cause of action against a social host under the Civil Damages Act regardless of the social host's age. The claim before the district court did not involve a claim against an illegal seller under 21 years old who was not a social host, and the district court did not determine whether a Civil Damages Act claim is available under those circumstances.

Finally, Koehnen argues that even if Cady has not been modified by the legislature or by later supreme court decisions, the district court must be reversed because it resolved genuine issues of material fact when it decided that (1) the $4 charge for a cup to drink beer was nominal and, therefore, no sale occurred and (2) Paul was not hosting a for profit or money-making event. We disagree.

A material fact is one of such a nature as will affect the result or outcome of the case depending on its resolution.

Rathbun v. W.T. Grant Co., 300 Minn. 223, 229, 219 N.W.2d 641, 646 (1974). Under Cady, the Civil Damages Act provides a cause of action against a person in the business of providing liquor. Evidence that Paul charged others for beer on a single occasion and made a profit on the transaction does not demonstrate that she was in the business of providing liquor, rather than being a social host who happened to receive some consideration from guests in return for drinks. That Paul charged $4 for a glass to drink beer and made a profit from her party does not affect the outcome of this case.

Affirmed.

[1]Minn. Stat. § 340 A. 503, subdivision 2, clause (1) (1996) states, "It is unlawful for any person: (1) to sell, barter, furnish, or give alcoholic beverages to a person under 21 years of age."