What F.F.P. Operating Partners v. Duenez (2007) Means to Determining Liability in Texas Dram Shop Cases
Our website's mission is to explain the law in clear, concise, standard English to make Texas injury law accessible to attorneys and non-attorneys alike. As such we don't often delve into particular legal cases that underpin how personal injury law works.
However, sometimes a case is so significant that we feel it is important to share the background of a landmark case in order to give everyone greater clarity in understanding how personal injury law in Texas works. One of those landmark cases is F.F.P. Operating Partners v. Duenez (2007), or simply the Duenez case. This case, decided by the Texas Supreme Court, clarifies how fault is divided between a drunk driver and an alcohol serving establishment in a third-party dram shop case. The ruling in the Duenez case still stands and is used in every Texas third-party dram shop case to this day.
In this article, one of Dallas' most experienced dram shop attorneys, Michael Grossman, explains what the Duenez case was all about and why it matters for dram shop cases today?
Questions answered on this page:
- What was F.F.P. Operating Partners v. Duenez all about?
- What were the issues before the Texas Supreme Court in Duenez?
- How does Duenez affect third-party dram shop cases in Texas today?
Issues in Texas Dram Shop Law
When the Texas Legislature passed the Texas Dram Shop Act in 1987, they provided the rules governing how those injured by a bar's unlawful alcohol service can seek compensation from alcohol establishments. It is obvious that when the legislature passed the Act, they intended for bars to share the financial burden when their actions contributed from injuries in a drunk driving accident.
To that end, the legislature set up three elements that everyone who brings a claim against a dram shop (a licensed alcohol retailer) must prove. They include:
- The establishment must have served an obviously intoxicated person who was a danger to themselves or others.
- That patrons intoxication must be the proximate (direct) cause of an accident.
- The accident must have resulted in the injuries that the victim is seeking compensation for.
The main issue the legislature did not address specifically was whether alcohol serving establishments' liability was to be measured using Texas' standard system of modified comparative fault or vicarious liability.
In most Texas personal injury cases, modified comparative fault carries the day. This means that a potential jury has to answer how much of the blame each person involved in an accident bears.
For instance, in most third-party dram shop cases you have the unlawful seller, usually a bar, a drunk driver, and the victim of the drunk driver. Most of the time the victim bears little to no responsibility for the accident, which means that under modified comparative fault, a jury would determine how much of an accident was the drunk driver's fault and how much was the bar's.
However, in certain instance, such as when an employee of a company injures someone, there exists what is known as vicarious liability. This legal doctrine holds that since the employee is furthering the interests of the employer, the employer's liability for the employee's actions when they are on the job is the same as if the employer had done the act themselves.
Initially, after the passage of the Texas Dram Shop Act, some courts would apply modified comparative fault, while other courts would use vicarious liability. For the first few years after the law's passage, vicarious liability was the norm. The thinking of trial courts was that the Texas Dram Shop Act was meant to provide victims with compensation and that the alcohol establishment usually was in the best position to provide that compensation.
The effect of this standard was that the drunk driver's liability and the bar's liability were considered one in the same and the bar was on the hook for the whole amount of damages. The problem with applying vicarious liability in these cases is that it treated customers the same way as it would treat the alcohol server establishment's employees, at least for the purposes of dram shop law.
Smith v. Sewell (1993)
This case arose from an incident in 1989 when Mr. Sewell was drinking at a bar that was owned by Mr. Smith. Smith's bar served four pitchers of beer to Mr. Sewell, who then proceeded to drive his car home from the bar. On the way home, Mr. Sewell was involved in a single-car accident. Mr. Sewell brought a first-party (where the drunk driver is seeking to recover compensation) dram shop case against Mr. Smith.
Initially, the court ruled in favor of Mr. Smith, because it was thought that a drunk driver could not sue for injuries caused by a bar's over-service. However, a close reading of the Texas Dram Shop Act shows that no distinction is made between injured drunk drivers (first parties) and people injured by drunk drivers (third parties). On appeal the case was sent back to the trial court.
Sewell also argued that the bar had vicarious liability for his actions and that modified comparative fault did not apply in his dram shop case.
The case made its way to the Texas Supreme Court ruled two things:
- First-party claims are valid under the Texas Dram Shop Act and Mr. Sewell had standing to bring his lawsuit.
- The court also held that liability in these cases should be determined using modified comparative fault, not vicarious liability.
The ruling in Sewell represents an accurate interpretation of Texas law. If the legislature had wanted to prevent first-party dram shop lawsuits, they would have said so explicitly in the Texas Dram Shop Act. Similarly, if they had meant for vicarious liability to exist in dram shop cases, they would also have explicitly said so. Since the legislature did not forbid first-party cases or authorize vicarious liability, the former were legitimate causes of action, while the latter standard was improper.
F.F.P. Operating Partners v. Duenez (2007)
In 2005, the Supreme Court of Texas heard a dram shop case based on events, which began with a drunk driving accident in 1997. A gentleman, Roberto Ruiz was cutting wood and drinking beer. During the time he had been cutting wood, Mr. Ruiz consumed 36 beers. He then went to a Mr. Cut Rate Liquor Store, owned by F.F.P. Operating Partners and was sold more beer. Mr. Ruiz then drove out of the parking lot and a short distance down the road struck a vehicle occupied by the Duenez family. The Duenez family suffered injuries in the accident and brought a dram shop case against F.F.P. Operating Partners, as well as a suit against Mr. Ruiz.
F.F.P. also brought a counter-claim against Mr. Ruiz in an attempt to hold Mr. Ruiz liable for his portion of the accident. That claim was severed from the Duenez claim and set to be tried separately. The end result of the legal maneuvering was that F.F.P. stood trial for all of the injuries sustained by the Duenez family, a situation that amounted to vicarious liability, since F.F.P. was potentially on the hook for Mr. Ruiz' portion of the accident. The jury ruled in favor the Duenezes and awarded them $35 million. F.F.P. appealed on the grounds that they should not be held liable for Mr. Ruiz' portion of the liability.
F.F.P. initially lost on appeal, before the case made its way to the Texas Supreme Court. The court had clearly established in Sewell that first-party dram shop cases were governed by modified comparative fault. That is juries had to assign blame between the alcohol establishment and the drunk driver. However, they said nothing about third-party cases, like the one involving the Duenezes.
The court ruled that the trial court's decision to sever F.F.P's claim against Mr. Ruiz had been incorrect, as had the decision to not allow the jury to consider Mr. Ruiz' responsibility for the accident. Further, they clearly stated that in third-party dram shop cases, vicarious liability does not apply. To support their judgement the opinion of the court cited numerous instances where the legislature had revisited vicarious liability after the passage of the Texas Dram Shop Act was passed and declined to incorporate vicarious liability into dram shop law.
The question in the Duenez case was whether or not an alcohol provider should be held vicariously liable for the acts committed by an intoxicated patron that they over-served, or whether the bar and the intoxicated patron as seen as co-defendants. In other words, is the bar responsible for its negligence while the drunken driver is responsible for his own negligence (as in the car accident example above), or is the bar on the hook for the entire amount since they control the intoxicated driver?
The Texas Supreme Court answered this question clearly on the side each party is responsible for their own negligence and as a result, in all Texas dram shop cases, comparative fault is the standard, which a jury is bound to use.
How Comparative Fault Works
To understand the significance of the Duenez case, you need to have a good working knowledge of how comparative fault laws work in Texas. A good way to approach the subject is with an analogy. Whenever people get in serious fights, there's usually plenty of blame to go around. We like to remind our feuding loved ones and family members that they have probably said or done something wrong or impolite as well and that they should apologize for their own contributions to the scuffle. In other words, it's rare that someone is wholly to blame or wholly innocent in an argument. Usually, multiple contributions from multiple sources make up the entirety of the argument.
As you might imagine, the law works this way as well. But as you can also likely imagine, it's not quite as simple. In Texas, many causes of action (in plain English, "lawsuits") require a jury to assign "proportional responsibility" to defendants. After juries decide that someone is to be held liable for damages, they must determine whom and by how much. Let's say that a car ran a red light and you tried to stop to avoid hitting that car, but your car's brakes were manufactured defectively and you can't stop in time. You incurred $10,000 in damages. The jury would in that case would later have to determine who bore more of the responsibility for the accident, and by how much on a percentage basis. Therefore, if the jury found the driver 75% responsible and the brake company 25%, then the driver would owe $7,500 and brake company $2,500 respectively.
But sometimes liability is divided by taking into consideration other factors. For instance, a jury may apportion liability in a work injury case by saying that the injured worker is 0% at fault for his own injuries, a co-worker who ran over him with a forklift is 80% at fault for driving recklessly, and that the employer is 20% at fault for entrusting the forklift to the co-worker. However, what is not typically understood by non-attorneys is that when it comes time to pay the injured party, the employer would not be on the hook for 20%, rather, they would be responsible for their 20% of liability and they would be vicariously liable for the acts of their employee. So in reality, they would be responsible for paying 100% of the award to the plaintiff. The reason for this is that the employer exercises control over the employee and they are responsible for the employee's negligence as well as their own. Most people are not held vicariously liable for the actions of someone else, unless their relationship to that party is one where they exercise authority or control over them.
What does Duenez mean for your Texas dram shop lawsuit?
The Texas Supreme Court decided in Duenez that proportionate responsibility must be examined in dram shop cases, thus the bar is only liable for their own negligence. This matters because in virtually every drunk driving case, the drunk driver will be held be at least somewhat responsible. This makes sense: drunk drivers are de facto negligent drivers and therefore bear some of the weight of responsibility. Prior to Duenez, however, some courts had made bars that oversold alcohol liable for the complete sum of the damages, no matter what. In other words, prior to the case, a 10% responsibly negligent bar could have been on the hook for all your damages. No more.
Here is another wrinkle that makes this significant to dram shop victims. If, however, the bar is found to be more than 50%, it is "jointly and severally" liable. This means that it is liable for the entirety of the damages you have endured.
In other words, if the bar has sufficient assets to cover your losses, you want to prove to a jury that the bar is at least 51% liable. This is no easy task, considering that the jury will be understandably biased already against the drunk driver. You need a mountain of evidence that the bar wasn't just slightly negligent, but was as flagrantly negligent as possible to get over this hump.
Why an Experienced Dram Shop Attorney Matters
For over 25 years, the attorneys at Grossman Law Offices have been helping the victims of unlawful alcohol service recover compensation when an alcohol establishment has chosen to ignore the law. In that time we have successfully pursued over 100 Texas dram shop cases. Very few firms in the state can rival our experience in this area of the law. That experience, coupled with first-rate investigative skill and a client-focused approach means that few firms are as prepared to handle these cases as Grossman Law Offices is.
If you have been injured by a bar, restaurant, or liquor store's unlawful alcohol service we're here to help. For answers to your questions or a free consultation, call us at (855) 326-0000. We answer the phone anytime, day or night.
If you've have been injured by a bar's unlawful alcohol service, you may be interested in these related articles: