This blog, written by Thomas E. Rutledge, focuses primarily on business entity law in Kentucky. Postings on contract law, contractual and statutory construction, and the entity law of other jurisdictions appear as well. There may as well be some random discussions of classical, medieval and renaissance history.
Monday, December 22, 2014
Dram Shop Action Barred by Plaintiff’s Settlement with the Drunk Driver
Shop Action Barred by Plaintiff’s Settlement with the Drunk Driver
A decision rendered last Friday by
the Kentucky Court of Appeals upheld a dismissal of a dram shop action on the
basis that the plaintiffs’ settlement with the at-fault driver’s insurer
eliminated the possibility of a recovery against the club.Butt v.
Independence Club Venture, No. 2013-CA-001400-MR (Ky. App. Dec. 19, 2014).
King, after drinking at the Electric Cowboy, was driving a car in which the
plaintiffs were passengers.An accident
ensued, and three of the plaintiffs were killed; a fourth passenger was
injured.The plaintiffs settled their
respective cases against King and his insurer, expressly reserving the right to
bring a dram shop action against Electric Cowboy on the basis that it continued
serving King after he was intoxicated, but stating inter alia that they have no
further claim against King/the insurer.
Electric Cowboy sought and was
awarded summary judgment, which was upheld by the Court of Appeals, on the
basis that (i) Electric Cowboy would have a claim for indemnification from King
to the extent that it was responsible to the plaintiffs, (ii) the plaintiffs
had released King of any further liability and therefore (iii) the plaintiffs
could have no further recovery.In
support of this determination the Court of Appeals relied upon DeStock #14 v. Logsdon, 993 S.W.2d 952
(Ky. 1999) for the proposition that under Kentucky’s dram shop statute “the
tortfeasor remains primarily liable for injuries while the dram shop is
secondarily liable with a right of indemnity against the tortfeasor. Butt, slip op. at 7, citing DeStock #14, 993 S.W.2d at 957.
In that the release deprived
Electric Cowboy of its legal capacity to demand the King make it whole should
it have any liability to the plaintiffs, the plaintiffs could not proceed
against Electric Cowboy.