1. Kirk Willis PartnerPRESENTS Dram Shop Liability for Adjusters From A to Z Kirk Willis Partner PRESENTS Dram Shop Liability for Adjusters From A to Z April 28, 2005 April 28, 2005 When it’s all on the line

2. TEXAS PROPERTY CASUALTYINSURANCEGUARANTYASSOCIATION FOR THE PLEASURE OF

3. EL CHICO – Landmark Decision  Slows reaction TEXAS DRAM SHOP ACT  Alcohol distorts perception  Impairs motor skills

4. TEXAS DRAM SHOP ACT “An alcoholic beverage licensee owes a duty to the general public not to serve alcoholic beverages to a person when the licensee KNOWS OR SHOULD KNOW the patron is intoxicated.”

5. TEXAS’ MODERN DRAM SHOP ACT  Created June 11, 1987 under emergency provision  “Legislative purpose of DRAM shop – Protection, welfare, health, peace, and safety of the people in the state

6.  Providing, selling, or serving an alcoholic beverage may be the basis for statutory cause of action under section 5.01. TEXAS MODERN DRAM SHOP

7.  At the time of service of alcohol, it was obvious that the patron was intoxicated  The intoxication of the beverage proximately caused the damages suffered TEXAS DRAM SHOP ACT

8. “Provider” means a person who sells or serves an alcoholic beverage under authority or license or permit issued under the terms of this code or who otherwise sells an alcoholic beverage to an individual. Providers

9. Does compensation always have to be in dollars$$? TEXAS DRAM SHOP ACT

10.  Server providing alcohol should have known the person was a clear danger to himself or others; and  The intoxication of recipient was the cause of damage. TEXAS DRAM SHOP ACT

11. Corporate concealment (wink, wink)  Single business enterprise and alter ego TEXAS DRAM SHOP ACT

12. Single Business Enterprise “Test”  Common employees;  Common officers;  Centralized accounting;  Payment of wages by one corporation for other employees;  Common business;  Employees rendering services for both corporations;  Document;  Transfer of funds;  Unclear allocation of profits between corporations. TEXAS DRAM SHOP ACT

13. Social Host Protected: TEXAS DRAM SHOP ACT  Know how much consumer had prior  Too many people  Not skilled – may not be apparent

14. Social Host – Relative to minors??  Ability to marry;  Ability to vote;  Ability to contract;  Penal violations;  Capital punishment; and  Service in military TEXAS DRAM SHOP ACT

15. Lessor of real property was as a matter of law Not a provider of alcoholic beverages TEXAS DRAM SHOP ACT Landlord/Lessors

16.  HYPOTHETICAL QUESTION  KISS 106  Leases Place  Requires club activity  Lessor has to approve live entertainment TEXAS DRAM SHOP ACT

17. Can a distributor be held liable under the Texas Dram Shop Act? TEXAS DRAM SHOP ACT

18.  Objective Standard of liability  The standard under the Texas Dram Shop Act requires proof that it was APPARENT TO THE PROVIDER that the individual being sold, served, or provided with an alcoholic beverage was OBVIOUSLY INTOXICATED to the extent that he presented a CLEAR DANGER. TEXAS DRAM SHOP ACT  B1: Apparent to the provider  B2: Obviously intoxicate  B3: Clear Danger

19.  Know how much consumed prior  Too Many People  Not Skilled TEXAS DRAM SHOP ACT Social Host

20.  Apparent  Obvious  Clear Danger TEXAS DRAM SHOP ACT Liability Under Texas Dram Shop Act

21.  Police Testimony at Scene  Expert Link  Credit Card Recipient TEXAS DRAM SHOP ACT Evidence at Trial

22.  Amount Woman Drank  Woman Tried to Start Car with Coin  Accident 20 minutes Later  Expert Link-up TEXAS DRAM SHOP ACT Bruce v. KKB

23.  If the intoxication of the recipient was the cause  Rather than the conduct of the Provider TEXAS DRAM SHOP ACT Proximate Cause Jury must be asked

24.  Skipper Case  Bottomless Pit Case  South Dallas Club Case TEXAS DRAM SHOP ACT Foreseeability

25.  Protection of Minors  Treatment by the Court  Club Corp of America TEXAS DRAM SHOP ACT Sales to Minor

26.  False Representation by Minor  Fake Identification  Apparent Valid Texas Drivers License  Physical Appearance TEXAS DRAM SHOP ACT Defenses to Claims by Minors

27.  Employer requires its employees to attend a commission approved seller training program.  The employer has actually attended.  Employer has not directly or indirectly encouraged violation. TEXAS DRAM SHOP ACT Defenses to Dram Shop Texas Servers Training Act – “Safe Harbor” Provision

28.  Install Cameras  Employee Report Repeaters  Address the failure of non- report. TEXAS DRAM SHOP ACT EncourageDiscouragev  Knowing employees are not looking for good identification.  Waitress check the identification.  Make sure person ordering, indeed, drinks them.  Have written guidelines.  Meetings on guidelines.  Owner not addressing problem.

29.  No Punitive Damages  No Criminal Acts TEXAS DRAM SHOP ACT Defenses Against Punitives

30.  Otis  Love v. Houston, Inc. TEXAS DRAM SHOP ACT Special Relationships Employer/Employee

31. THANK YOU!