ACREE, Chief Judge:
Appellant Monica Carruthers was injured when Lucas Watson, a patron of Foolish Heart, Inc., d/b/a/ Froggy's Sports Bar, purportedly drove his vehicle while intoxicated, striking Carruthers in Foolish Heart's parking lot. Carruthers filed suit against several individuals, including Appellees Max and Lois Ann Edwards, the owners of the premises on which Foolish Heart is located. The issue in the case before us may be summarized as this: what liability can be imputed to an owner of real property, on which a bar or similar establishment is operated by a tenant, when a patron of that bar consumes alcohol and, thereafter, drives a motor vehicle causing injury or death to a third party? Following a careful review, we affirm the McCracken Circuit Court's July 28, 2011 order granting the Appellees' motion to dismiss Carruthers' complaint for failing to state a claim upon which relief may be granted.
As it pertains to the Appellees, Carruthers alleges liability under the Dram Shop Act and common law negligence.
Appellee leased real property to Foolish Heart where it operated Froggy's Sports Bar in Paducah, Kentucky. Foolish Heart negligently served too much alcohol to Lucas Watson.
Carruthers asserts that Appellees should be held liable to her, but not simply because they leased premises to Foolish Heart. Rather, Carruthers asserts that additional allegations, when taken as true, made Foolish Heart's negligent act of over-serving Watson foreseeable and, in turn, also made foreseeable Watson's negligent act that injured Carruthers. First, Appellees operated an unrelated establishment that lawfully sold alcohol to patrons at a different location and were, therefore, aware of the laws governing the operation
Appellees filed a pre-answer motion to dismiss pursuant to Kentucky Rules of Civil Procedure (CR) 12.02(f) asserting Carruthers' complaint failed to state a claim upon which relief may be granted. The motion was granted without further comment. This appeal followed.
CR 12.02(f) sets forth the standard for dismissing a complaint for failure to state a claim.
James v. Wilson, 95 S.W.3d 875, 883-84 (Ky.App.2002) (internal quotation marks and footnotes omitted). We review dismissals under CR 12.02(f) de novo, accepting as true the plaintiff's factual allegations and drawing all reasonable inferences in the plaintiff's favor. Gall v. Scroggy, 725 S.W.2d 867, 868-69 (Ky.App.1987); Pike v. George, 434 S.W.2d 626, 627 (Ky. 1968) ("For the purpose of testing the sufficiency of the complaint the pleading must not be construed against the pleader and the allegations must be accepted as true.").
We first address whether Carruthers' complaint stated a valid claim under the Dram Shop Act against the Appellees. Kentucky's Dram Shop Act, KRS 413.241, provides, in pertinent part:
KRS 413.241(1), (2).
The parties first dispute the continuing validity of the Dram Shop Act following this Court's recent opinion Taylor v. King,
The relevant sections of KRS 413.241 "imposing liability upon a dram shop or its creation of a priority of liability between the dram shop and the intoxicated tortfeasor[,]" however, remain unchanged. Id. at 244. KRS 413.241 still imposes a duty upon a dram shop and its employees, before selling or serving alcohol to a person, to use their powers of observation to perceive readily visible warning signs that a person is intoxicated, and to refrain from serving or selling alcohol to that patron. KRS 413.241(2). If the dram shop or its employees fail to perceive, or simply ignore, those warning signs, the dram shop may be held liable pursuant to KRS 413.241 provided the dram shop's negligent conduct is also the proximate cause of the plaintiff's injuries. Id.; Taylor, 345 S.W.3d at 244.
In sum, while Taylor struck down as unconstitutional the presumption of proximate cause codified in KRS 413.241(1), it neither addressed nor held the remainder of KRS 413.241 unconstitutional. 345 S.W.3d at 244. Dram shop liability — under specifically delineated circumstances — still exists in this Commonwealth, as does the statutory limitation on liability. See KRS 413.241(2).
Carruthers next argues that if the circuit court based its order dismissing her complaint on the Dram Shop Act, the order is erroneous as a matter of law and must be reversed because, in Carruthers' view, she asserted a valid Dram Shop Act claim against the Appellees. We disagree because Carruthers' complaint cannot be read as asserting such a claim under the Dram Shop Act against these Appellees.
The statute addresses two types of persons: a dram shop (and its servers) who serve alcohol to an intoxicated person, and the intoxicated person the dram shop serves. KRS 413.241(2). It does not create or comment upon the liability of a third-party who fits neither description. Although Appellees run their own dram shop, they served no alcohol to Watson. We conclude that no purpose intended by our Legislature's passage of the Dram Shop Act would be served by imposing liability upon a lessor who simply holds title to property on which his properly licensed lessee engages in the regulated sale of intoxicating liquors. See Robinson v. Walker, 63 Ill.App.2d 204, 211 N.E.2d 488, 491 (1965). Therefore, the complaint failed to state a claim based upon the Dram Shop Act.
We next address whether Count IV of the complaint stated a common law claim against the Appellees.
Carruthers asserts in her brief that, "because the allegations in the Complaint must be taken as true, it must be accepted that the Edwards were personally involved in the operation of [Foolish Heart d/b/a] Froggy's." We have carefully read the claim against the Appellees, including those other portions of the complaint incorporated by reference, and we do not agree. The relationship between Appellees and Foolish Heart was that between
We find no common law claim based on Appellees' status as owners of the premises.
"It cannot be disputed that as a general rule the landlord is not liable for the negligent acts of his tenant." Green v. Asher Coal Min. Co., 377 S.W.2d 68, 69 (Ky.1964). However, there are exceptions to the general rule. These exceptions "arise in those cases where the condition or use of the premises is so potentially harmful that the courts will not permit the owner to hide behind a lease." Asher Coal, 377 S.W.2d at 70. Kentucky courts have never determined that, by their nature, establishments serving intoxicating beverages pursuant to a license issued and regulated by the Commonwealth are "so potentially harmful." Id.; Taylor, 345 S.W.3d at 240.
Although Carruthers does not cite Restatement (Second) of Torts § 379A, we believe her asserted claim is most consistent with that section. Kentucky has not embraced the articulation of the tort described in § 379A
Our research reveals but a single case in American jurisprudence that applies this section to a fact pattern involving a tenant that sold intoxicating beverages. In Phoung Luc v. Wyndham Management Corporation, 496 F.3d 85 (1st Cir.2007), the plaintiff alleged that "the Hotel [lessor] knew, at the time the lease was signed, that the Roxy [the dram shop] would serve alcohol and had grounds to know that there would be an unreasonable risk of over-serving patrons." Id. at 92. The First Circuit held that, "[w]hatever the merits abstractly of these theories of liability against the Hotel, they fail[.]" Id. at 93. The court noted that "Restatement § 379A states that a landlord may only be liable if he knew, or had reason to know, that the tenant's activities would `unavoidably involve such an unreasonable risk.'" Id. As we noted above, Kentucky has never concluded that this tenant's activity — the licensed operation of a bar — would unavoidably involve the unreasonable risk of over-serving patrons. Taylor, 345 S.W.3d at 240. Until a legislative enactment indicates that, as a matter of policy, the risk of over-serving patrons is so unreasonable and unavoidable that liquor licenses will no longer be issued, we must conclude otherwise.
Furthermore, with § 379A, "liability hinges on the landowner's knowledge, at the inception of the lease, regarding the
This jurisprudence is entirely consistent with Asher Coal, wherein our highest court said:
Asher Coal, 377 S.W.2d at 70 (citation omitted; emphasis added).
For these reasons, we find no claim in the complaint that would justify holding Appellees liable on this or a similar theory.
We also fail to find, independent of their status as lessors, any claim of negligence against the Appellees that would survive a motion pursuant to CR 12.02(f).
In order to state a cause of action based on negligence, Carruthers must allege that the Appellees owed her a duty of care, that they breached that duty, and that a causal connection exists between the breach of the duty and the injury she suffered. Lewis v. B & R Corporation, 56 S.W.3d 432, 436-37 (Ky.App.2001). Unfortunately for Carruthers, the claim in Count IV against Appellees fails to describe any duty of care that was owed. As noted in footnote 1, the claim never uses the terms "negligence," "duty," "breach," "foreseeability," or "proximate cause." We would have to strain beyond the breaking point the loose confines placed upon the complaint by notice pleading concepts in order to find that Appellees owed a duty to Carruthers to prevent the negligence of Watson by first preventing the negligence of Foolish Heart. That relational context between Appellees and Carruthers is too attenuated to be palatable in our jurisprudence. Jenkins v. Best, 250 S.W.3d 680, 691 (Ky.App.2007) ("[O]ur courts have never found liability in tort unless we have first found circumstances giving rise to a relationship of some kind in which one particular party owed a duty to another particular party."). We find no duty owed by Appellees to Carruthers even under the most liberal reading of the complaint.
For the foregoing reasons, we affirm the McCracken Circuit Court's July 28, 2011 order granting the Appellees' motion to dismiss Carruthers' complaint for failing to state a claim upon which relief may be granted.
ALL CONCUR.