Opinion
Supreme Court No. S-12617.
November 4, 2009.
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Craig Stowers, Judge, Superior Court No. 3AN-04-08836 Civil.
Phillip J. Eide, Eide, Gingras Pate, P.C., Anchorage for Appellant. Michael J. Schneider, Law Offices of Michael J. Schneider, P.C., Anchorage for Appellees.
Before: Fabe, Chief Justice, Eastaugh, Carpeneti, and Winfree, Justices. [Matthews, Justice, not participating.]
MEMORANDUM OPINION AND JUDGMENT I. INTRODUCTION
Entered pursuant to Alaska Appellate Rule 214.
A drunk driver to whom a bar had negligently served alcohol caused a car accident. The injured occupants of the other vehicle brought an action against the bar. Following earlier precedent from this court, Loeb v. Rasmussen, the trial court held that Alaska's dram shop law made the bar fully liable for the injuries caused by the drunk patron that the bar served negligently. But, because the legislature had adopted a general rule of pure several liability after Loeb, and in order to prevent the necessity of a retrial should we reverse, the trial court instructed the parties to present their allocation evidence to the jury, and required the jury to allocate fault between the bar and the drunk driver. The jury found that the bar negligently served the driver and that the negligence was a legal cause of the accident, but also found the driver 100% and the bar 0% at fault. Because the jury found that the bar acted negligently, the trial court entered judgment against the bar for the plaintiffs' full damages.
822 P.2d 914 (Alaska 1991).
The bar appealed. While this appeal was pending, we decided Sowinski v. Walker, in which we overruled Loeb and held that Alaska's rule of pure several liability trumps Alaska's dram shop law. Thus, a bar that violates the dram shop law is liable only for its own percentage of fault as allocated to it by the jury. The plaintiffs concede, appropriately, that Sowinski governs this case, but argue that the jury verdict was inconsistent. We decline to reach this argument because the plaintiffs failed to object to the verdict before the jury was dismissed. We therefore reverse the judgment in favor of plaintiffs as well as the award of attorney's fees.
198 P.3d 1134 (Alaska 2008).
II. FACTS AND PROCEEDINGS
A. Facts
On the morning of July 21, 2002, Jack Harshfield purchased a six-pack of beer and two mini-bottles of whiskey. His cousin, Donald Ruhl, called and invited Harshfield over to his house. By that time, Harshfield had already had four sixteen-ounce beers and both mini-bottles.
At Ruhl's house, Harshfield drank more beer and took a few vodka shots. He then smoked rock cocaine, or "crack," with Ruhl and continued drinking. Harshfield estimates that while at Ruhl's house he drank six to ten beers, drank four to five mouthfuls of vodka, and smoked crack, all in addition to the alcohol he had before arriving.
Harshfield and Ruhl left Ruhl's house and, after driving around for a while, ended up at PJ's, a bar and "strip club," in Anchorage. At PJ's, Harshfield and Ruhl shared pitchers of beer. Harshfield testified that his memory at that point was hazy but he estimates they shared anywhere from one to three pitchers. PJ's did not question Harshfield's sobriety when serving him.
After thirty to forty-five minutes, Harshfield and Ruhl left PJ's. Harshfield drove, and while he was driving around, Ruhl "kept handing [Harshfield] Budweisers. . . . He kept opening them and putting them in between [Harshfield's] legs. [Harshfield] was driving around, drinking." At some point, Harshfield started to race another car. Harshfield sped up and, as he was pulling away from his racing opponent, he realized that cars were stopped at the next intersection. He braked hard, his car skidded, and it crashed into another car at the next intersection.
Harshfield immediately fled the scene. Harshfield and Ruhl separated, and Harshfield hid in a construction site. Several hours later, the police found Harshfield and arrested him for his role in the accident. Harshfield pled no contest to the criminal charges. The court sentenced Harshfield to a total of sixteen years with nine years suspended.
Aaron and Adrian Murfitt were passengers in the car hit by Harshfield. As a result of the collision, the Murfitts both suffered severe injuries.
B. Proceedings
The Murfitts sued PJ's under AS 04.16.030, Alaska's dram shop statute. They alleged that their injuries resulted from the negligent provision of alcohol by PJ's to Harshfield, a "drunken person," in violation of the statute. The Murfitts did not include Harshfield as a defendant in the suit.
PJ's brought a third-party complaint against Harshfield. The Murfitts moved to dismiss Harshfield so that PJ's would not be able to apportion any liability to Harshfield. On September 25, 2006, the superior court signed a written order granting the Murfitts' motion and held that an alcohol purveyor found liable under AS 04.16.030 may not apportion any fault. The court ordered that "[i]n the event that Plaintiffs are successful in their dram shop liability claim against PJ's, judgement will be entered against PJ's for 100% of any and all damages assessed by the jury. . . ." But the superior court did not circulate this order until October 5. On October 2 the court held a pre-trial conference with the parties, and informed them of its ruling on this matter. But the court instructed them, despite the ruling, to present their allocation evidence to the jury. The court said:
I think that . . . the Plaintiff is right on this one. But . . . I'm going to . . . not tell the jury that. And I want the parties to put your [allocation] evidence on. I want you to give them a special verdict that will allow them to make that finding, if they . . . get to that point. And then we'll preserve a completed record for the Supreme Court. . . . [I]f I'm wrong on that [ruling], the Supreme Court will know what the jury thought and we won't have to retry the case, at least not for that reason.
Prior to the trial, PJ's presented offers of judgment to the Murfitts. PJ's offered $90,000 to Aaron and $10,000 to Adrian. The Murfitts rejected both offers of judgment and the case proceeded to trial later in October.
Following the trial, the jury found that PJ's had served Harshfield in violation of AS 04.16.030 and that Harshfield's intoxication was a legal cause of the accident. The jury awarded $78,000 to Aaron Murfitt and $ 14,858.58 to Adrian Murfitt. In addition, the jury apportioned percentages of fault to Harshfield and PJ's. The jury found that PJ's was 0% at fault and that Harshfield was 100% at fault. Neither party objected to this unusual verdict.
Following the trial, the Murfitts moved for attorney's fees, which PJ's opposed, arguing rather that it should be awarded attorney's fees. PJ's claimed to be the prevailing party because the jury awarded the Murfitts damages lower than PJ's offers of judgment and because the jury found that PJ's was zero percent at fault for the accident. The Murfitts countered that they prevailed by establishing that PJ's violated AS 04.16.030. The court awarded fees and costs to the Murfitts.
PJ's appeals the court's determination that Alaska's dram shop laws preclude alcohol sellers from apportioning fault, a ruling that resulted in the dismissal of PJ's claim against Harshfield and the court's entry of judgment against PJ's for the entirety of the Murfitts' damages. PJ's also appeals the court's award of attorney's fees and costs to the Murfitts.
III. STANDARD OF REVIEW
"When a question of statutory interpretation is involved, we will independently evaluate" the superior court's decision. We review for "abuse of discretion a trial court's fact-based decisions as to whether attorney's fees are reasonable and should be awarded. Under this standard, we will only reverse an award of attorney's fees and costs if the award is "manifestly unreasonable."
Young v. Embley, 143 P.3d 946 (Alaska 2006).
Marron v. Stromstad, 123 P.3d 992, 998 (Alaska 2005).
DeNardo v. Cutler, 167 P.3d 674, 678 (Alaska 2007).
IV. DISCUSSION
A. The Court's Ruling that PJ's Could Not Apportion Fault Is Inconsistent with Sowinski v. Walker.
Alaska Statute 04.21.020(a) governs liability in dram shop actions. It provides in relevant part that
a person who provides alcoholic beverages to another person may not be held civilly liable for injuries resulting from the intoxication of that person unless the person who provides the alcoholic beverages holds a license [to sell alcohol] or is an agent or employee of such a licensee and (1) the alcoholic beverages are provided to a person under the age of 21 years . . . or (2) the alcoholic beverages are provided to a drunken person. . . .
In Loeb v. Rasmussen, decided under a different liability scheme than now exists in Alaska, we held that this statute did not permit allocation of fault to a minor or drunken person: "[A] licensee who violates [a dram shop law] is not entitled to assert the comparative fault of the minor/consumer, in an action for damages resulting from the unlawful sale of intoxicating liquor."
822 P.2d 914, 919-20 (Alaska 1991) (holding that dram shop could not apportion liability to contributorily negligent minor to whom it had sold alcohol).
Id.
Following Loeb, Alaska voters and the legislature passed several tort reform acts that resulted in our current system of pure several liability. Under pure several liability, a defendant pays only that percentage of damages corresponding to its percentage of fault as allocated to it by the jury. Alaska Statute 09.17.080 now provides, in relevant part:
For a discussion of Alaska's transition to pure several liability, see Sowinski v. Walker, 198 P.3d 1134, 1149-50 (Alaska 2008).
(a) In all actions involving fault of more than one person . . . the court . . . shall instruct the jury to answer special interrogatories . . . indicating . . . (2) the percentage of the total fault that is allocated to each claimant, defendant, third-party defendant, person who has been released from liability, or other person responsible for the damages. . . .
The question decided by the trial court, and appealed here, is whether AS 09.17.080, requiring several liability, takes precedence over AS 04.21.020, the dram shop act. While this appeal was pending, we decided this question in Sowinski v. Walker, holding that AS 09.17.080 takes precedence over AS 04.21.020, leaving dram shops liable only for their own actions and not the actions of minors or incapacitated persons to whom they sold alcohol.
198 P.3d 1134 (Alaska 2008).
Id. at 1148-56 (holding that dram shop was not liable for actions of contributorily negligent minor plaintiffs to whom shop had sold alcohol).
The Murfitts correctly concede that Sowinski governs this case, and that PJ's will be liable only for its own negligence as allocated to it by the jury. But the Murfitts argue that this court should remand for a new trial because the verdict was inconsistent. The jury verdict allocated PJ's zero percent of the liability, despite finding that PJ's negligently served an intoxicated Harshfield alcohol, and that Harshfield's intoxication caused the accident. The Murfitts argue this result is inconsistent because, if PJ's is liable for only its own fault as allocated by the jury, it will not be liable for any damages, even though the jury found PJ's was negligent.
But we decline to decide whether the verdict was inconsistent because we conclude the Murfitts waived any objection to the verdict when they failed to object before the jury was dismissed. The Murfitts' briefing suggests that they decided not to object to the verdict for tactical reasons. In their supplemental brief, the Murfitts write that they "risked the loss of the verdict, as well as considerable attorney fee and cost exposure, had they objected to the inconsistency and had the jury elected to resolve that inconsistency against them." We take this to mean that they risked loss of the verdict if the jury decided to resolve the inconsistency by changing its holding that PJ's acted negligently, rather than increasing the amount of fault allocated to PJ's. The Murfitts' brief goes on to say that they did not anticipate this court would reverse the trial court's ruling on PJ's liability. Thus, the Murfitts were apparently aware of the pros and cons of challenging the verdict, and decided that the danger of the judge's ruling being overturned on appeal was less than the danger of challenging the jury verdict. Whatever their reason for failing to object to the verdict, they waived their objection.
See Bouy v. ERA Helicopters, Inc., 771 P.2d 439, 446 n. 7 (Alaska 1989) ("Challenges to the consistency of a verdict are deemed waived unless made prior to discharge of the jury.").
The Murfitts also argue that we should remand for a new trial because they reasonably relied on the judge's ruling in making their trial decisions. They argue that, had they known that PJ's would only pay for its own percentage of fault, they would have presented more evidence at trial minimizing Harshfield's fault.
We decline to remand on these grounds. When ruling against allocation, the superior court clearly ordered the parties to argue allocation to the jury and warned them that, if this court reversed its allocation ruling, the jury allocation would stand and the case would not need to be remanded for a new trial. Judge Stowers said: "I want the parties to put your [allocation] evidence on. I want you to give [the jury] a special verdict that will allow them to make that finding [allocating fault] if they . . . get to that point. And then we'll preserve a complete record for the Supreme Court." The court also said: "If I'm wrong on that, the Supreme Court will know what the jury thought and we won't have to retry the case, at least for that reason." Then the Murffits' lawyer said: "I would agree, Your Honor. While we maintain our position, I think that's a perfectly fair thing to do." The court gave these instructions at the same time as it informed the parties of its decision. Thus, the Murfitts could not have reasonably relied on the trial court's ruling against allocation and thought that they would not have to put on allocation evidence. The Murfitts were explicitly advised to adduce evidence concerning allocation of fault. They had a full opportunity to litigate allocation at trial, and we will not remand for a retrial on allocation.
B. We Reverse the Award of Attorney's Fees to the Murfitts.
PJ's also appealed the superior court's award of attorney's fees to the Murfitts. Because we have reversed the judgment in favor of the Murfitts, we also reverse the award of attorney's fees and remand the question of attorney's fees to the superior court.
V. CONCLUSION
Pursuant to Sowinski v. Walker, PJ's is liable only for the percentage of damages that corresponds to its percentage of fault as allocated by the jury. Here, because the jury allocated zero percent of fault to PJ's, judgment in favor of PJ's must be entered. Because the Murfitts waived any argument that the verdict is inconsistent with the jury's finding that PJ's acted negligently, and because PJ's percentage of fault is zero, we REVERSE the judgment in favor of the Murfitts and REMAND this matter to the superior court for further proceedings consistent with this opinion.