Third-party exception precludes immunity

Listen to this article

Hon. Michael W. Hoover

The Wisconsin Court of Appeals held on Nov. 26 that immunity under sec. 125.035 does not extend to an adult who provided alcohol to a minor, when the minor in turn provides it to another minor who died of acute alcohol poisoning.

According to the allegations in the complaint (and assumed true, because the defendants refused depositions on Fifth Amendment grounds), in 1999, Mary Anne Brasure purchased a bottle of vodka for her son, Gregory, who was not yet 21 years old. She left it for him along with a note that said, "Greg, you owe me $12.00."

Gregory took the bottle along on a trip with two friends, Robert Tripp and Craig Anderson, who was also under 21. The three drank the vodka, and Craig ultimately died from acute alcohol intoxication.

The Andersons brought suit against Mary Anne, Gregory, and Mary Anne’s insurer, American Family Mutual Insurance Company.

The defendants moved for summary judgment, arguing they were immune from civil liability for providing alcohol to another, pursuant to sec. 125.035(2).

Marinette County Circuit Court Judge Tim A. Duket granted summary judgment to Mary Anne and Gregory, and to American Family for the claims asserting liability against it based on their actions.

Duket also considered coverage issues, in the event the claims were reinstated on appeal, holding that American Family’s policy did not cover any liability imposed on Gregory, but that genuine issues of material fact existed as to Mary Anne’s coverage.

The Andersons appealed the first three holdings, but American Family did not cross-appeal the fourth.

On appeal, in a decision by Judge Michael W. Hoover, the court affirmed both that American Family was not liable for Gregory’s actions, and that Gregory was immune under sec. 125.035(2).

However, the court reversed as to Mary Anne, and held that she was not immune under the statute.

The Statute

Section 125.035(2) provides, "A person is immune from civil liability arising out of the act of procuring alcohol beverages for or selling, dispensing or giving away alcohol beverages to another person."

Section (4)(b) provides the following exception, however: "Subsection (2) does not apply if the provider knew or should have known that the underage person was under the legal drinking age and if the alcohol beverages provided to the underage person were a substantial factor in causing injury to a 3rd party."

Mary Anne’s Immunity

Relying on Kwiatkowski v. Capitol Indem. Corp., 157 Wis.2d 768, 461 N.W.2d 150 (Ct.App.1990), Mary Anne put forth three contentions as to why she could not be liable for Craig’s death.

First, Mary Anne argued that Kwiat-kowski stands for the proposition that, "An underage drinker who does nothing but drink (e.g., provides only to himself) is not a "third party" and thus cannot take advantage of the nonliability exception to sue those who provided to him."

Second, Mary Anne argued, "An alcohol provider cannot be sued by the underage drinker when the underage drinker hurts himself after drinking too much."

And third, "It does not matter whether the alcohol provider gave the alcohol directly to the injured underage drinker, or provided it to another person who in turn provided it to the injured underage drinker: there is no cause of action against either provider."

The court found Kwiatkowski distinguishable, however. In that case, Kwiatkowski, an underage drinker, and another person, Pederson, went to a bar owned by Schmechel. Schmechel (via his bartenders) served both Kwiatkowski and Pederson. On occasions during the evening, he also served Pederson, who then, in turn, brought drinks to Kwiatkowski.

The court held that Kwiatkowski could not be considered a third party, because both Schmechel and Pederson provided alcohol directly to Kwiatkowski. For this reason, the court labelled Mary Anne’s third contention "inaccurate."

Rejecting Mary Anne’s second contention, the court held it inconsistent with the following language in the case of Miller v. Thomack, 204 Wis. 2d 242, 264, 555 N.W.2d 130 (Ct. App. 1996): "We cannot say that it is clear that the legislature intended that a person who provides alcohol to an underage person … is immune from liability in a suit by [a] third party solely because that third party … illegally consumed alcohol."

The court limited the rule that an underage drinker who hurts himself cannot sue the provider to those instances when there are only two parties — the provider and the drinker. Here, however, there were two levels of "providers."

In so holding, the court emphasized the "transactional focus" of sec. (4)(b), and cited the recent case of Meier v. Champ’s Bar & Grill, 2001 WI 20, 241 Wis.2d 605, 623 N.W.2d 94.

In Meier, the Wisconsin Supreme Court held, "the transactional focus of sec. 125.035(4)(b) is the provision of alcohol to underage persons. The principal parties to such a transaction are: (1) providers and (2) underage drinkers. When the transaction between these principals is a substantial factor in causing harm to a third party the statutory immunity is lifted and a third party may proceed against a provider."

Focussing on the individual transactions involved in the case at bar, the court stated, "In this case, there are two transactions. In the first transaction, Mary Anne provided the alcohol to Gregory. In the second transaction, Gregory provided the alcohol to Craig. The transactions are separated by time, location, and participants."

Noting there was no indication that Craig was aware of the transaction between Mary Anne and Gregory, or that Mary Anne knew Gregory would give the vodka to others, the court concluded, "Because Mary Anne provided alcohol to Gregory only, Craig was a third party to that transaction, and the alcohol was a substantial factor in Craig’s death, Mary Anne is not immune from suit under Wis. Stat. 125.035(2)."

Accordingly, the court reversed on this issue.

Gregory’s Immunity

The court affirmed that Gregory was immune, however, because he did provide alcohol directly to Craig.

	Links Wisconsin Court of Appeals Related Article Case Analysis

The court rejected the Andersons’ attempts to get around immunity by arguing that Gregory was negligent in failing to supervise Craig’s consumption of the vodka, concluding that any alleged failures to supervise cannot be separated from the "transactional focus" of the statute. The court reasoned, "[The failures] cannot give rise to a separate cause of action because they are necessarily part of Gregory’s provision of the vodka."

Because both Gregory and Craig were at least 18 at the time, the court concluded neither had any heightened duty to supervise the other.

Insurance

Turning to the coverage issue, the court affirmed that American Family is not liable for Gregory’s actions, even if he wasn’t immune. The insurance policy provided an exception for damage arising out of the insured’s knowingly permitting or failing to take action to prevent the illegal consumption of alcohol by an underage person.

Because Gregory’s actions fit within this exception, the court affirmed the grant of partial summary judgment to American Family on this issue.

Click here for Case Analysis.

David Ziemer can be reached by email.