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Docket Number

Docket No. 67523.

Attorney(S)

Van Benschoten, Hurlburt Van Benschoten, P.C. (by Lawrence A. Hurlburt), for plaintiffs. William E. Jungerheld, and Bruce E. Otto (of counsel), for defendant.

Judges

PER CURIAM.

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Smart Summary

Case Summary: VERDUSCO v MILLER, Docket No. 67523 (Mich. Ct. App. Nov. 6, 1984)

Factual and Procedural Background

On October 1, 1976, minor Steven Verdusco was with three friends. On at least three occasions that evening, 16-year-old Daniel Alcorta purchased beer from defendant Vean Miller (doing business as Shamrock Party Store) with money provided in part by Verdusco. Verdusco and his friend were later served additional drinks at a bar. On his way home Verdusco sat or lay down on railroad tracks and was severely injured by a passing train. It is apparently not contested that Verdusco's intoxicated condition caused him to put himself in the position to be injured.

Plaintiffs' amended complaint asserted two counts: (1) an action by Steven Verdusco for gross negligence and wilful and wanton misconduct in furnishing alcoholic beverages to him contrary to law; and (2) an action by the parents under the dramshop act, MCL 436.22; MSA 18.993. Defendant moved for summary judgment as to both counts under GCR 1963, 117.2(1). The trial court denied the motion as to both counts. Defendant appealed by leave granted. The Court of Appeals issued a per curiam opinion addressing the denials of summary judgment.

Legal Issues Presented

Whether a plaintiff may pursue a common-law cause of action for negligently furnishing alcoholic beverages to a minor (as an alternative to a dramshop action), or whether the dramshop statute is the exclusive remedy.
Whether the dramshop act may impose liability on a seller when the actual purchaser is an intervening person (here, Daniel Alcorta) acting as the agent of the intoxicated person (Steven Verdusco), i.e., whether plaintiffs' agency allegations are sufficient to state a dramshop claim against the seller.

Arguments of the Parties

Defendant's Arguments

Count I merely alleges a violation of the duty not to sell intoxicants to minors; the dramshop act is the exclusive remedy, so no separate common-law claim exists.
As to Count II (parents' dramshop claim), plaintiffs failed to state a claim because they did not allege that defendant sold intoxicants directly to Steven Verdusco; liability under the dramshop act does not reach beyond the immediate provider (the actual purchaser, Daniel Alcorta).

Plaintiffs' Arguments

The trial court and plaintiffs relied on Grasser v Fleming, as recognition of a common-law action for gross negligence or wilful, wanton, or intentional misconduct in furnishing alcohol under certain facts.
For the dramshop claim, plaintiffs alleged that Daniel Alcorta was acting as Steven Verdusco's agent, and that the repeated purchases and surrounding circumstances should have alerted the seller to that agency, thereby bringing the seller within the dramshop statute.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Browder v International Fidelity Ins Co, 413 Mich. 603; 321 N.W.2d 668 (1982)	Support for the proposition that the dramshop act is the exclusive remedy and that no independent common-law action exists for negligently selling alcohol to minors.	The court relied on this authority to conclude Count I (Steven's common-law claim) was an impermissible attempt to proceed outside the exclusive statutory remedy and thus summary judgment should have been granted as to that count.
Cornack v Sweeney, 127 Mich. App. 375; 339 N.W.2d 26 (1983)	Authority cited in support of the exclusivity of the dramshop remedy.	Used with other authorities to support reversal of the denial of summary judgment as to Steven's common-law claim.
Lucido v Apollo Lanes Bar, Inc, 123 Mich. App. 267; 333 N.W.2d 246 (1983), lv den 417 Mich. 1087 (1983)	Authority supporting the exclusivity of the dramshop remedy.	Cited along with other cases to establish that no common-law action exists for negligent furnishing to a minor; supported reversal as to Count I.
Grasser v Fleming, 74 Mich. App. 338; 253 N.W.2d 757 (1977)	Recognition of a common-law action for gross negligence or wilful, wanton, or intentional misconduct in a particular factual setting (sale to a known compulsive alcoholic despite a promise not to serve).	The court acknowledged Grasser but held the Grasser exception did not apply on the facts of this case; therefore Count I could not proceed as a common-law alternative.
Barrett v Campbell, 131 Mich. App. 552, 558; 345 N.W.2d 614 (1983)	Used both to limit the applicability of the Grasser exception and as authority describing the summary-judgment standard under GCR 1963, 117.2(1).	The court relied on Barrett to conclude the Grasser exception did not apply and to state the governing summary-judgment legal-sufficiency standard.
Romeo v Van Otterloo, 117 Mich. App. 333, 337; 323 N.W.2d 693 (1982)	Authority describing the summary-judgment test (GCR 1963, 117.2(1)): legal sufficiency of the pleadings, presumption of truth of allegations and reasonable inferences.	Applied to determine that plaintiffs' dramshop allegation of agency was sufficient to preclude summary judgment as to the parents' count.
Maldonado v Claud's Inc, 347 Mich. 395; 79 N.W.2d 847 (1956)	Holds that a seller cannot be held liable under the dramshop act where the purchaser did not act as an agent for others; but recognizes that an agency relationship could exist under proper circumstances.	The court cited Maldonado to explain that liability under the dramshop act does not automatically reach beyond the immediate purchaser, but that an agency relationship, if sufficiently alleged, could bring the seller within the statute.
Meyer v State Line Super Mart, Inc, 1 Mich. App. 562, 569; 137 N.W.2d 299 (1965)	Holds that a purchaser could be acting as an agent for another, and under proper circumstances such an agency could subject the seller to liability; supports refusal to dismiss where agency is plausibly alleged.	The court relied on Meyer to support the conclusion that plaintiffs' allegations that Alcorta acted as Verdusco's agent could, if proved, satisfy the dramshop statute and thus preclude summary judgment.
Ryerson v Phelps (1910), 163 Mich. 237	Authority cited within Meyer supporting the proposition that a purchaser may legally act as agent for another.	Referenced as supporting precedent for the agency theory relied upon to uphold plaintiffs' dramshop allegation against the seller.

Court's Reasoning and Analysis

The court analyzed each count separately.

Count I (Steven Verdusco's common-law claim): The court determined that Count I was an attempt to proceed on a common-law negligence/wilful-wanton theory as an alternative to the statutory dramshop remedy. Citing Browder, Cornack, and Lucido, the court concluded that no common-law action exists for negligently selling alcohol to a minor and that the dramshop statute is the exclusive remedy. The court considered plaintiffs' reliance on Grasser but held that the Grasser exception (recognition of a common-law action in a distinct factual situation) did not apply here, agreeing with the analysis in Barrett v Campbell. On that basis, the court found the trial court erred in denying summary judgment as to Steven's claim.

Count II (parents' dramshop claim): The parents alleged that the actual purchaser, Daniel Alcorta, was acting as Verdusco's agent and that repeated purchases and the surrounding circumstances should have alerted the seller to the agency. Defendant argued the dramshop liability does not reach beyond the immediate provider. The court examined controlling precedent (Maldonado and Meyer) and concluded that an agency relationship can exist such that the seller may be held liable under the dramshop act if agency is adequately alleged. Applying the summary-judgment standard under GCR 1963, 117.2(1) (as explained in Barrett and Romeo) — i.e., accepting the complaint's factual allegations and reasonable inferences as true — the court found plaintiffs' amended complaint sufficiently alleged facts and circumstances of agency to preclude summary judgment. Therefore, the denial of summary judgment as to the parents' dramshop claim was affirmed.

Holding and Implications

Holding: The Court of Appeals reversed the trial court's denial of summary judgment in part and affirmed it in part. Specifically, the court held that summary judgment should have been granted as to Steven Verdusco's common-law claim (Count I) because no common-law action exists for negligently selling alcohol to a minor and the dramshop statute is the exclusive remedy. The court affirmed the denial of summary judgment as to the parents' dramshop claim (Count II) because plaintiffs sufficiently alleged that the actual purchaser acted as the injured person's agent.

Implications: The direct effect is that Steven Verdusco's common-law claim is dismissed (summary judgment warranted), while the parents may proceed on their dramshop claim founded on an agency theory. The opinion did not announce a new legal rule beyond applying existing precedent and did not award costs to either party ("No costs, neither party having prevailed in full").

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VERDUSCO v MILLER

PER CURIAM.

Defendant Vean Miller, doing business as Shamrock Party Store, appeals by leave granted from a denial of his motion for summary judgment. GCR 1963, 117.2(1).

Plaintiffs alleged that on October 1, 1976, Steven Verdusco, a minor, was in the company of three friends. On at least three occasions that evening, Daniel Alcorta, a 16-year-old friend accompanying Verdusco, purchased beer from defendant with money provided in part by Verdusco. Verdusco and his friend were later dropped off at a bar where they were served more drinks. On his way home, Verdusco sat or lay down on some railroad tracks and was severely injured by a passing train. It is apparently not contested that Verdusco's intoxicated condition caused him to put himself in the position to suffer his injury.

Plaintiffs' complaint against defendant, as amended, asserts two causes of action: (1) an action in favor of Steven Verdusco for gross negligence and wilful and wanton misconduct in furnishing alcoholic beverages to him contrary to law, and (2) an action in favor of plaintiff-parents under the dramshop act, MCL 436.22; MSA 18.993.

Defendant sought summary judgment as to both counts in plaintiffs' amended complaint, arguing first that Count I alleged nothing more than a violation of defendant's duty not to sell intoxicants to minors, for which the dramshop act is the exclusive remedy. As to Count II, defendant argued that since plaintiffs did not allege that defendant sold intoxicants directly to Steven Verdusco, plaintiffs had failed to state a claim for which relief may be granted. The trial court denied defendant's motion as to both counts.

We find that the trial court erred in refusing to grant defendant's motion for summary judgment as to the claim of Steven Verdusco. It is clear that this count was an attempt to proceed on a common-law theory as an alternative to the dramshop act. No common-law action exists for negligently selling alcohol to a minor. A dramshop action is the exclusive remedy in such a matter. Browder v International Fidelity Ins Co, 413 Mich. 603; 321 N.W.2d 668 (1982); Cornack v Sweeney, 127 Mich. App. 375; 339 N.W.2d 26 (1983); Lucido v Apollo Lanes Bar, Inc, 123 Mich. App. 267; 333 N.W.2d 246 (1983), lv den 417 Mich. 1087 (1983).

Plaintiffs argue, and the trial court found, that this Court recognized a common-law action for gross negligence or wilful, wanton, or intentional misconduct in Grasser v Fleming, 74 Mich. App. 338; 253 N.W.2d 757 (1977). In Grasser, the complaint alleged that a licensed liquor establishment sold alcohol to a known compulsive alcoholic contrary to a promise made by the tavern owner to refrain from serving that person. In the present case, the trial court improperly denied defendant's motion for summary judgment. The Grasser exception does not apply in this case. See Barrett v Campbell, 131 Mich. App. 552, 558; 345 N.W.2d 614 (1983).

As for the second issue, plaintiff-parents are proceeding on a theory, well developed in their amended complaint, that the actual purchaser, Daniel Alcorta, was acting as Steven Verdusco's agent, and that the facts surrounding the repeated purchases should have alerted the seller to this arrangement. Defendant argues, however, that any liability imposed by the dramshop act does not reach beyond the immediate provider of the intoxicants, which in the instant case was Daniel Alcorta. The trial court held that an agency theory was available to plaintiffs to satisfy the statutory requirements of the dramshop act. MCL 436.22; MSA 18.993. We agree.

A motion for summary judgment for failure to state a claim, GCR 1963, 117.2(1), tests the legal sufficiency of the pleadings alone. The factual allegations made in the complaint must be presumed true along with any inferences or conclusions which may be fairly drawn from them. Unless the claim is so unenforceable as a matter of law that no factual development could possibly justify recovery, the motion should not be granted. Barrett v Campbell, supra, p 558; Romeo v Van Otterloo, 117 Mich. App. 333, 337; 323 N.W.2d 693 (1982).

In Maldonado v Claud's Inc, 347 Mich. 395; 79 N.W.2d 847 (1956), the defendant liquor seller furnished a case of beer to a minor, who then shared the beer with two other persons. Plaintiff was subsequently injured by those two persons. The Supreme Court held that the defendant liquor seller could not be held liable for the plaintiff's injuries under the dramshop act. However, the Court stated:

"In the case at bar the purchase, which the jury found from the testimony was made, was by Mario. He did not act as the agent of his companions, or any of them. The latter had no interest, other than a possible expectant one, in the beer and no right to insist that Mario share it with them. His doing so was a mere act of hospitality on his part. No claim is made, and there is no proof tending to show, that he made any statement to any of defendant's agents or employees indicating that he was making the purchase for others, or that the circumstances known to defendant suggested that such was the fact. The record is silent in this respect. The only conclusion that may be drawn from the testimony is that Mario obtained the beer and that he was entitled to, and did, control its disposition. Under the facts and applicable principles of statutory construction defendant may not be held liable for the injuries sustained by plaintiff at the hands of David and Pena." Maldonado, supra, p 409.

Although no agency was found in Maldonado, the Supreme Court recognized that such a relationship could exist under the proper circumstances.

Similarly, in Meyer v State Line Super Mart, Inc, 1 Mich. App. 562, 569; 137 N.W.2d 299 (1965), this Court, addressing a similar issue, held:

"Braunsdorf, in purchasing the beer from defendant, could have been legally acting for Dombkowski, as agent, and under proper circumstances, could subject defendant to damages caused by Dombkowski. See Ryerson v Phelps (1910), 163 Mich. 237.

"Plaintiff did allege in her declaration that Braunsdorf was the agent of Dombkowski and others and set up allegations to show the nature of such agency. She further stated that there was an illegal sale to all four minors by reason of the agency claimed. She did not specifically connect the defendant with such agency by alleging that defendant's agents or employees were informed that Braunsdorf was purchasing for others or that the circumstances surrounding such purchases would indicate to defendant that such was the fact. These facts may very well have been more in the knowledge of defendant than plaintiff.

"We conclude under the circumstances that the case should not have been dismissed."

The trial court properly found that plaintiffs alleged facts and circumstances sufficient to preclude summary judgment under GCR 1963, 117.2(1). We, therefore, affirm the trial court's denial of summary judgment as to this count.

Reversed in part and affirmed in part. No costs, neither party having prevailed in full.

VERDUSCO v. MILLER