Opinion
No. 0-432 / 99-1721.
Filed September 13, 2000.
Appeal from the Iowa District Court for Polk County, Jack D. LEVIN, Judge.
The plaintiffs appeal from a district court ruling granting summary judgment in favor of the defendant dram shop in their personal injury action. AFFIRMED.
John P. Dougherty of Lawyer, Dougherty, Palmer Flansburg, West Des Moines, for appellants.
Steven L. Serck of Ahlers, Cooney, Dorweiler, Haynie, Smith Allbee, Des Moines, for appellee.
Considered by VOGEL, P.J., and MILLER and HECHT, JJ.
Plaintiffs Brian K. Martin and Melissa A. Martin appeal from a district court ruling granting summary judgment in their personal injury action in favor of defendant Wanda's, Inc., a dramshop. The Martins contend the district court erred in dismissing the case based on its conclusion there were no genuine issues of material fact as to whether Wanda's "sold" intoxicating liquor to the business's owner within the meaning of the dramshop act, Iowa Code section 123.92 (1997). They also contend there were genuine factual issues as to whether the defendant "served" the owner or knew or should have known the owner would become intoxicated. We affirm.
I. Background Facts and Proceedings.
Wanda Chambers is the owner and president of a corporation known as Wanda's, Inc. The corporation owns "Wanda's," a bar located in Des Moines, Iowa. On November 5, 1997, Chambers arrived at the bar at about 10:00 a.m. She prepared food for a taco bar to be served to customers and was available to serve as "backup" to Marlene Forsberg, the bartender on duty that day.
Chambers testified she drank three or four drinks containing vodka and Seven-Up while working at Wanda's on the day in question. Chambers testified she either served herself or was served by Forsberg. Forsberg denied she served drinks to Chambers that day, and testified Chambers typically mixed her own drinks at the bar. It is undisputed Chambers did not put money in Wanda's cash register to pay for the drinks she consumed. Around 4:00 p.m., Chambers left Wanda's and drove to Prairie Meadows where she gambled and consumed additional alcoholic drinks. After leaving Prairie Meadows, and while driving en route to her home, Chambers attempted a left turn in front of the Martins' oncoming motorcycle. The vehicles collided causing injuries to the Martins. Chambers's blood alcohol was measured at .184 at 10:11 p.m.
The Martins sued Chambers, Wanda's, and the Racing Association of Central Iowa d/b/a Prairie Meadows for personal injuries and property damage resulting from the incident. The district court granted Wanda's motion for summary judgment on the dramshop claim against the bar.
II. Standard of Review.
Our standard of review is for errors at law. Bennett v. MC #619, Inc., 586 N.W.2d 512, 516 (Iowa 1998). Summary judgment may be entered if the record shows "no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Iowa R. Civ. P. 237(c). Thus, "we examine the record before the district court to decide whether a genuine issue of material fact exists and whether the court correctly applied the law." Benavides v. J.C. Penney Life Ins. Co., 539 N.W.2d 352, 354 (Iowa 1995). In doing so, we view the record in the light most favorable to the party opposing summary judgment. Anderson v. Miller, 559 N.W.2d 29, 31 (Iowa 1997).
III. The "Sale" Requirement.
Our dramshop statute provides, in relevant part:
Any person who is injured in person or property or means of support by an intoxicated person or resulting from the intoxication of a person, has a right of action for all damages actually sustained, severally or jointly, against any licensee or permittee, whether or not the license or permit was issued by the division or by the licensing authority of any other state, who sold and served any beer, wine, or intoxicating liquor to the intoxicated person when the licensee or permittee knew or should have known the person was intoxicated, or who sold to and served the person to a point where the licensee or permittee knew or should have known the person would become intoxicated.
Iowa Code § 123.92 (emphasis added). The district court concluded summary judgment should be entered because no fact question was generated in the record on the issue of whether Wanda's sold beverages containing alcohol to Chambers.
The Martins contend summary judgment was not proper because a fact question exists as to whether Wanda's "sold" the beverages to Chambers. They assert Chambers engaged in food preparation and tended to the taco bar as consideration for the drinks she consumed. The Martins claim Wanda's benefited from Chambers's work and provided alcoholic beverages to her in consideration for the benefit received. Moreover, the Martins posit Chambers gave consideration for the beverages when she paid for the liquor in the bar's inventory. Wanda's contends summary judgment was appropriate because there is no evidence in the record to support a finding money or other consideration was exchanged for the beverages.
In evaluating the Martins' claim Chambers's labor was adequate consideration, we begin our analysis with Summerhays v. Clark, 509 N.W.2d 748 (Iowa 1993). In Summerhays, a dramshop held a holiday party for employees at which beverages containing alcohol were served to employees. Attendance at the party was not mandatory. A bartender consumed several drinks at the party and was involved in a motor vehicle accident that resulted in the death of his stepson later in the evening. In the subsequent dramshop action, plaintiff contended the employee goodwill fostered by the party constituted sufficient quid pro quo to qualify as consideration. Id. at 750. Our supreme court rejected this contention, noting "it is difficult, if not impossible, to quantify the goodwill generated by gratuitous entertainment at employee parties and elsewhere." Id. at 751. The court further explained it rejected the "goodwill as consideration" argument because it "would hopelessly blur commonly understood distinctions between a gift, a wage, and a sale." Id.
The Martins emphasize Wanda's had a policy of providing up to two free drinks per shift to its bartenders and some free drinks to the kitchen staff. They contend this proves Wanda's considers the beverages to be "an employee benefit in addition to the regular pay." The Martins argue the employees' labor is consideration for the beverages. However, our reading of Summerhays causes us to reject the assertion the free drinks are tantamount to compensation paid for the labor of the bar's employees. "Consideration requires the voluntary assumption of an obligation by one party on the condition of an act or forbearance by the other." Id. (quoting Cady v. Coleman, 315 N.W.2d 593, 596 (Minn. 1982)). There is no indication in the record Wanda's provided the beverages as bargained-for consideration. Nor does the record suggest Chambers or any other employee would have refused to work had the free drinks not been provided by Wanda's. In short, we find no evidence in the record suggesting the free drinks amounted to anything more than a gratuitous undertaking for company employees.
The scope of the policy is not perfectly clear in the record. Bartenders were prohibited from drinking alcohol until the last two hours of their shift when they were permitted up to two drinks "on the house." Kitchen staff apparently were permitted to drink anytime during the shift, but the record is unclear whether they were limited to two drinks. On the day of the accident, Chambers was in charge of food preparation, but was also available to back up the bartender if necessary.
The Martins contend a fact issue is generated on the consideration issue by Chambers's testimony she paid for the bar's liquor before it was placed in inventory. This evidence is of no aid to Martins at this juncture. Wanda's, a corporation, owned the bar and paid for the liquor inventory. The issue before us is not whether there is evidence in the record tending to prove the corporation gave consideration for the alcohol served in its bar. Instead, the issue is whether there is evidence in the record tending to prove the corporation sold alcohol from its inventory to Chambers. Thus, we reject the Martins' suggestion evidence of consideration paid by the corporation for the alcohol is sufficient to generate a fact question here.
The Martins cite State v. Fountain, 183 Iowa 1159, 168 N.W. 285 (1918) for the proposition a fact question is generated on the issue of whether an employer sells liquor to his employees when the beverage is made available to them without charge as an inducement to perform labor. In Fountain, the defendant in a prohibition era case denied he had committed the crime of selling liquor, and testified he made the spirits available to his employees without charge because "[i]t is hard to get a fellow to work in the scavenger business unless you give them a little drink. . . ." Fountain, 183 Iowa at 1160, 168 N.W. at 286. The Summerhays court did not find Fountain persuasive on the issue before it. Summerhays, 509 N.W.2d at 751. Nor do we find it persuasive on the question before us. The record is without support for any claim Chambers's salary was reduced by the cost of the alcohol she consumed. Similarly, there is no evidence in the record from which it could be inferred Chambers would not have worked at the bar on the day in question had the drinks not been provided. Although the Martins aptly observe Wanda's profit was likely diminished by Chambers's consumption of the beverages, this fact does not tend to prove Chambers gave consideration for them. Indeed, the effect of Chambers's consumption on the corporation's profit (or loss) is the same if the liquor was given to her as a gratuity.
The corporation's financial statement is not part of the record. It is, of course, possible Chambers's consumption of alcohol increased the corporation's loss.
Our decision in this case is consistent with our supreme court's interpretation of Iowa Code section 123.92. The legislature's choice of the words "sold and served" in the 1986 amendment of the statute reflects an intent to narrow the conduct for which a dramshop may be held liable. Summerhays, 509 N.W.2d at 751 (citing Paul v. Ron Moore Oil Co., 487 N.W.2d 337, 338 (Iowa 1992)). "Reading the term `sold' to include a licensee's purely gratuitous undertakings would contradict [the legislature's] intent as well as the plain meaning of the statutory term." Summerhays, 509 N.W.2d at 751. The facts in this record do not generate a fact question on the issue of whether Wanda's sold the beverages in question to Chambers.
IV. Remaining Issues.
Having determined Wanda's did not sell the liquor to Chambers, it is unnecessary for us to reach the appellants' other assignments of error in this case.
AFFIRMED.