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California Appellate Court Rules for Defendants in Alcohol-Related Car Accident Case

March 27, 2017


In a decision published at the end of last month, E.M. v. Lounge, Cal. Ct. App. (2017), a California appeals court clarified the reach of the liability of venues for serving alcohol to patrons who later become injured as a result of intoxication. The clarification, however, was not based solely upon the claim that the furnishing of the alcohol was responsible for the resultant accident. Instead, the claim was based on a respondeat superior theory of law. Respondeat superior is a legal concept whereby an employer can be held accountable for the negligent acts of its employee, if the conduct occurred within the scope of the employment.

In the case, a woman had reportedly consumed alcohol that was furnished by the defendant “Lounge.” She was then involved in a car accident and died. Her family brought the wrongful death lawsuit on her behalf. The initial complaint and second amended complaint pursued negligence theories, but the third amended complaint included a respondeat superior claim against the Lounge, asserting that the decedent was an employee at the Lounge and that it was during the course of her attendance as an employee that she had consumed excessive amounts of alcohol. The defendant moved for a demurrer, claiming that the argument should not be allowed, since the claimants should have known when they originally filed the lawsuit whether or not the decedent was an employee, and further disputing that she was at all.

Generally speaking, California law provides extensive protection against civil liability for injuries that occur due to a person who has consumed alcohol. State law explicitly states that “the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather the consumption of alcoholic beverages is the proximate cause of injuries.” (Civ. Code, § 1714, subd. (b).) Therefore, by law, the Lounge could not be held liable for serving the decedent alcohol because the serving of the alcohol was not the cause of the accident.

The plaintiffs had argued that the Lounge was liable on the basis of another California appeals court decision that held that a business could potentially be held liable for serving alcohol to its employees (resulting in a car accident) if the furnishing (and thus consumption) of the alcohol was for the benefit of the business itself. In that case, Purton v. Marriott Internat., Inc. (2013), 218 Cal.App.4th 499 at 511, the court outlined three requirements in order to establish liability:

(1) there was an employer-employee relationship between the defendant and the driver; (2) the employee’s consumption of alcohol must have been for the benefit of the enterprise; and (3) the employee’s action caused an injury to a third party.

In regard to this case, the court assumed arguendo that the decedent was an employee in order to analyze the remaining two components. It found that the plaintiffs failed to allege that the decedent’s consumption of alcohol on the day of the car accident was for the benefit of the Lounge. Additionally, contrary to the typical vicarious liability argument for the benefit of a third party, in this case the decedent’s actions resulted in a single car accident in which she was the only injured party.

In summary, the court held that if the decedent were a customer of the Lounge, her claims would be barred by California statutory law, and if she were an employee, the plaintiffs failed to make a viable argument under the narrow exception to the statutory bar under the Purton theory of liability. The court thus found a sufficient basis for the trial court’s decision to grant the defendant’s motion to demur in regard to the third amended complaint, without leave to amend.

In regard to the appellants’ additional claim that the trial court had exceeded its authority by setting aside the default judgment, the appellate court first discussed the broad ability to vacate a default judgment for reasons of fairness if the decision was due to “his or her mistake, inadvertence, surprise, or excusable neglect.”

The court found that the defendants had remitted the notice of suit to their insurance company in a timely manner, and they had relied on the insurer to render a timely answer. It was after that point that the default judgment was entered, and then less than 30 days later, the company hired defense counsel to seek a vacation of the judgment.

In consideration of this procedural history, the court found that there was no prejudice to the appellants (the decedent’s family), and therefore it sustained the respondents’ (the defendants’) motion to set aside the default judgment and the granting of the demurrer as to the third amended complaint without leave to amend.

If you were injured in a car accident caused by the negligence of another driver, contact us today to schedule a free consultation with The Rubinstein Law Group. Mr. Rubinstein is an experienced injury lawyer for clients in and around Escondido.

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