Grayson Fraternal Order of Eagles, Aerie No. 3738, Inc. v. Claywell

In Grayson Fraternal Order of Eagles, Aerie No. 3738, Inc. v. Claywell, Ky., 736 S.W.2d 328 (1987) the plaintiff alleged that the club sold alcohol in a dry option territory to an already intoxicated club member. The club's bartender testified at his deposition that he had to literally force two patrons out of the bar so he could close. He also physically forced them into their car and made them leave the parking lot so he could close the parking lot gate. After leaving the club's premises, the two intoxicated patrons carelessly, negligently, and recklessly ran into a police car which resulted in the death of one officer and substantial injuries to another. In discussing Kentucky's law related to dram shop liability, the Supreme Court stated: The rule is that every person owes a duty to every other person to exercise ordinary care in his activities to prevent foreseeable injury . This is an old rule, and a good one. There is no reason to create a privilege against, or an immunity from, its application to dram shop liability. (736 S.W.2d at 332.) The Court went on to interpret Pike v. George Ky., 434 S.W.2d 626 (1968) as follows: Both sides argue that Pike v. George, supra, is precedent for their position in this case. The argument hinges on whether the factual difference between Pike and this case makes a legal difference. Pike recognized common law dram shop liability premised upon selling liquor to a minor. The present case premises liability on selling liquor to an intoxicated person. The appellants argue that minors are "special" and the theory of liability is not transferable. The flaw in this argument is that there is nothing "special" about the negligence premise underlying liability in both instances, i.e., the intoxicated person and the minor are high risk drinkers, with substantial likelihood that selling them liquor will cause such person to have an accident. (Id. at 332-33.) The Court continued with the following discussion concerning KRS 244.080: This is a criminal statute and not a dram shop act. The statute does not per se impose liability in tort for violation of its terms. But this statute identifies a standard of care imposed upon commercial vendors for the protection of the public, which includes both the consumer and third parties, when the factual circumstances are such that the vendor should reasonably foresee what might result. (Id. at 333.) The Court in Grayson made it clear that the key issue to consider is whether the injury suffered was a foreseeable result that was caused by the violation of the statute. The Court stated: Civil liability is predicated on the duty of reasonable care which is owed by each of us to everyone else, the negligence principle. . . . The question of proximate cause is a factual one, not a legal one, depending upon whether the evidence shows that the results of misconduct are reasonably foreseeable. The question whether the appellees will be able to present proof of circumstances sufficient to infer that the defendant knew, or should have known, of the likely results of his conduct, or whether the results were beyond the foreseeable risk, remains to be decided after the evidence has been presented. We hold simply that the standard expressed in the statute, the violation of which could result in a criminal sanction against a licensee, is misconduct of a nature which will result in civil liability under the negligence principle, as a failure to exercise reasonable care, when the evidence establishes circumstances from which a jury could reasonably infer that the subsequent accident was within the scope of the foreseeable risk. Except in such cases where reasonable minds could not differ, where the court would conclude as a matter of law that it was clearly unreasonable to foresee the potential harm from the misconduct involved, the question of foreseeable risk is covered by the usual instruction relating to proximate cause which is an issue framed for the jury in terms of whether the misconduct was a "substantial factor". (736 S.W.2d at 333-34.)