In Faust v. J.P. MacGrady’s, a Northampton County Court of Common Pleas judge overruled Defendant Tavern’s preliminary objections to a claim for punitive damages in the Plaintiff’s Complaint arising from a fatal motor vehicle accident. 58 Northampton 331 (Nov. 19, 2013). In doing so, the Court found that the Complaint alleged facts sufficient to support a finding that the Defendant engaged in outrageous conduct by disregarding a known or obvious risk of probable harm when its employees continued to serve a visibly intoxicated patron despite having knowledge that said patron would drive from the premises. The alleged intoxicated patron was subsequently involved in a fatal motor vehicle accident.*
Section 4-497 of the Pennsylvania Liquor Code (the “Dram Shop Act”) shields liquor licensees, such as bars and taverns, from liability to a third party unless the person causing the injury was served alcohol while exhibiting visible signs of intoxication. The majority of courts in Pennsylvania have held that the Dram Shop Act is the exclusive remedy to third party injuries resulting from a violation of the Act. Accordingly, courts will not grant relief for claims involving the service of alcohol based on common law negligence such as failure to properly train servers or other staff, violation of policies or procedures and failure to warn/prevent an intoxicated patron from driving, to name a few. However, all establishments serving alcohol should be aware that conduct such as that alleged in Faust could expose their establishment to punitive damages, which are generally not covered under a policy of insurance.
The most effective way for an establishment serving liquor to prevent unwanted violations of the Dram Shop Act is to ensure that all servers regularly receive responsible alcohol service training and are educated on recognizing the signs of visible intoxication. In addition, establishments should have strict policies and procedures in place prohibiting the service of alcohol to visibly intoxicated patrons. Unfortunately, not even the most stringent of policies and procedures can prevent the occurrence of all claims brought by injured third parties. Therefore, it is paramount that sufficient liquor liability insurance is obtained with the proper coverages and limits.
* Source: Pennsylvania Bar News, Court Summaries
The attorneys at Timmerman, Beaulieu, Hinkle & Esworthy, LLC are well versed in defending restaurants, bars, taverns, nightclubs and other entertainment venues in Dram Shop and liquor liability litigation throughout the Mid-Atlantic region. Mike Hinkle is a founding partner of Timmerman, Beaulieu, Hinkle & Esworthy, LLC. Mike’s practice focuses on complex insurance defense and business litigation in the federal and state courts of Maryland, New Jersey and Pennsylvania. He can be contacted at (410) 649-4440 in Maryland, (717) 698-1428 in Pennsylvania or via email at firstname.lastname@example.org.