*Originally published by LaszloLaw

A recent Colorado Court of Appeals case made clear that to establish liability under the Colorado Dram Shop Act, there must be a connection between the alcohol sold and the intoxication of the person causing the injuries. Mitton v. Danimaxx of Colorado 2023COA18 (Colo.App. 2023).

First, What is “Dram Shop” Liability?

A “dram shop” is an antiquated term referring to is a bar, tavern or similar commercial establishment where alcoholic beverages are sold by the “dram,” which is an apothecary measurement for approximately 1/8 of an ounce of fluid. See Merriam-Webster Dictionary: “dram”

Under the Colorado Dram Shop Act (the Act), § 44-3-801(3)(a), C.R.S. 2022, the available cause of action is expressly set forth:

No licensee is civilly liable to any injured individual or his or her estate for any injury to the individual or damage to any property suffered because of the intoxication of any person due to the sale or service of any alcohol beverage to the person, except when:

• It is proven that the licensee willfully and knowingly sold or served any alcohol beverage to the person who was under the age of twenty-one years or who was visibly intoxicated; and
• The civil action is commenced within one year after the sale or service.

Next, What Happened in this Case?

On the day of the accident, the driver of the other car, Lindsey Ward, had consumed multiple alcohol beverages at the Clubhouse Restaurant in Breckenridge, Colorado. While intoxicated, Ward drove to the Liquor Store, where she purchased a twelve-pack of beer and a bottle of tequila. The liquor store employees saw that Ward appeared intoxicated and was having trouble with her balance and coordination. In Colorado, it is illegal to sell alcohol to a visible intoxicated person.

Ward then drove off from the liquor store, lost control of her car, and struck another vehicle, killing two people. The liquor purchased at the liquor store was found unopened in Ward’s car. Ward was convicted of multiple crimes and is currently serving a prison sentence.

The victims’ surviving family members brought a civil action, asserting wrongful death claims against Ward and claims under the Colorado Dram Shop Act against the Clubhouse Restaurant and the liquor store. Plaintiffs resolved their claims against Ward and the restaurant, leaving the liquor store as the only defendant.

The parties agreed that (1) the Dram Shop Act, which abolished any common law cause of action against “dram shops” by injured persons, provided the sole basis for potential civil liability on the part of the Market; (2) the retail liquor store was a Colorado liquor “licensee” under section 44-3-801(2) of the Act and thus subject to its terms; and (3) Ward neither opened nor consumed the alcohol she purchased from the Market on the day in question.

The parties’ entire dispute came down to how to interpret section 44-3-801(3)(a) of the Act, and the Colorado Court of Appeals concluded that the liquor store was not liable for injuries caused by Ward’s intoxication because Ward’s intoxication was not “due to” the liquor store’s sale of alcohol to her – that is, the liquor store could not be liable because there was no causal connection between the alcohol it sold and Ward’s intoxication.  You can read the entire Colorado Court of Appeals Opinion HERE.

What are The Key Takeaways?

The key takeaways from this case in my opinion are two: 1) never sell liquor to a visibly intoxicated person, this was a fundamental error made by the liquor store; 2) when evaluating liability under the Colorado Dram Shop Act, it is critical to determine whether the liquor sold caused the intoxication that led to the injury.

Finally, not only does a liquor licensee in this situation face issues of dram shop liability, it faces an almost certain liquor license violation and suspension, and in some extreme cases, liquor license revocation.