DEVORE, J.
Plaintiff, Casey Deckard, appeals a judgment that dismissed his claim against defendant, the personal representative of the estate of Roland King, based on statutory liability for serving alcohol to a visibly intoxicated person.
The pertinent facts arose from an automobile accident that resulted in serious injuries to plaintiff. He was driving on Highway 101 when a heavily intoxicated driver, Diana Bunch, crossed into his lane and collided head-on into his car. Bunch had consumed a number of drinks at King's house shortly before she drove and had a blood-alcohol content of 0.22. An officer testified that she was so intoxicated that she could not perform field sobriety tests, and she was not able to speak comprehensibly.
Plaintiff brought an action against Bunch and King, alleging, as to each, common-law negligence and, as to King, statutory liability under ORS 471.565 for serving alcohol to a visibly intoxicated person. King sought dismissal of the statutory claim for failure to state a claim which the trial court granted. ORCP 21 A(8). In its order, the trial court agreed with King that ORS 471.565 does not create a statutory cause of action and is only a limitation on existing common-law claims against alcohol servers and hosts. Plaintiff proceeded to trial on his negligence claims against Bunch and King. The jury found liability as to Bunch, awarding damages, but did not find King to be negligent.
On appeal, plaintiff assigns error to the trial court's dismissal of the statutory claim. He argues that the trial court erred in determining that ORS 471.565 does not create a cause of action in favor of third parties who are injured by drunk drivers. Plaintiff contends that the Oregon Supreme Court has recognized the statutory liability of social hosts who served alcohol to visibly intoxicated guests. King, on the other hand, views ORS 471.565 as a limitation on common-law liability, rather than as a statutory basis for recovery.
To determine whether the legislature has created statutory liability, we follow the analysis set out in Scovill v. City of Astoria, 324 Or. 159, 166, 921 P.2d 1312
The parties' core disagreement about legislature's intention requires that we begin with the history of liability for social hosts who serve alcohol to visibly intoxicated patrons. That history begins before ORS 471.565, with the common-law claims in Campbell v. Carpenter, 279 Or. 237, 566 P.2d 893 (1977). In Campbell, two people had been killed by a drunk driver. The court recounted that a tavern had provided alcohol to a patron even after she was "`perceptibly under the influence of intoxicating liquors'" and the tavern knew or should have known that the patron would drive after imbibing. Id. at 239, 566 P.2d 893. In its seminal decision, the Supreme Court recognized common-law negligence as a theory of liability, concluding that "a tavern keeper is negligent if, at that time of serving drinks to a customer, that customer is `visibly' intoxicated because at the time it is reasonably foreseeable that when such a customer leaves the tavern he or she will drive an automobile." Id. at 243-44, 566 P.2d 893.
Legislation followed Campbell codifying liability for hosts who serve alcohol to visibly intoxicated patrons, at least where a third party was injured. The legislature enacted former ORS 30.950 (1979), renumbered as ORS 471.565 (2001).
Id. at 696, 696 P.2d 513. The court turned to the absence of a jury instruction on forseeability in the common-law claim. The court concluded that "the case was pled as a common-law negligence claim and the instruction did not inform the jury that the plaintiff must prove that it was reasonably foreseeable to defendant that its customer, on leaving the tavern, would drive a car." Id. at 692, 695, 696 P.2d 513. The case was reversed and remanded for a new trial.
Of significance to the case at hand, the Chartrand court related the relevant legislative history of former ORS 30.950. The legislation was spurred by "commercial hosts" who, after unfavorable decisions in common-law negligence cases, were concerned about liability insurance. 298 Or. at 697, 696 P.2d 513. The original version of the bill was an attempt to narrow hosts' potential liability. It had proposed to raise the standard for liability to gross negligence, but that standard was eventually deleted from the bill in committee. The court noted that
Id. (emphasis added). Thus, the court in Chartrand left no doubt that former ORS 30.950 gave rise to statutory liability of a commercial or social host who serves alcohol to a visibly intoxicated person.
The Supreme Court was again called upon to consider the application of former ORS 30.950 in Gattman v. Favro, 306 Or. 11, 757 P.2d 402 (1988). Unlike the drunk-driving backdrop of Chartrand, the plaintiff in Gattman was violently assaulted by a drunken patron, Favro. The plaintiff brought a statutory liability action alleging that a lounge had served Favro alcohol while he was visibly intoxicated, that Favro left the premises, and that he stabbed the plaintiff. Id. at 13, 757 P.2d 402. The defendants moved for dismissal of the statutory liability claim pursuant to ORCP 21 A(8), and the trial court granted the motion. On review, the Supreme Court concluded that the trial court did not err in dismissing the plaintiff's claim. 306 Or. at 15, 757 P.2d 402.
Significantly, the Gattman decision indicated what statutory liability was, when it decided what it was not. The court explained that former ORS 30.950 was intended to protect only those plaintiffs injured in drunk-driving accidents. Id. at 22, 757 P.2d 402. The court discerned that the legislature had not intended to create "licensee and permittee liability for all actions" in which an injured plaintiff could establish that a host had furnished a visibly intoxicated patron with alcohol. Id. (emphasis added). The court emphasized that, in discussing the bill, legislators focused exclusively on fact patterns involving "the context of automobile or traffic related injuries." Id. at 22, 757 P.2d 402 (citing Minutes, House Committee on Judiciary, June 28, 1979, June 26, 1979, June 27, 1979; Minutes, Senate Committee on State and Federal Affairs and Rules, June 30, 1979). Consistently with that legislative history, the court distinguished Chartrand. The court noted that "Chartrand involved a claim for injuries arising from the very risk with which the legislature was concerned, the intoxicated driver," whereas the plaintiff in Gattman was "not within the class of persons intended to be protected by the statute and the harm is not of a type intended to be protected against."
The issue of statutory liability would not re-emerge for more than a decade. The court returned to the issue in Grady v. Cedar Side Inn, Inc., 330 Or. 42, 997 P.2d 197 (2000). In Grady, the plaintiff was injured in a car accident while he was the passenger of a drunk driver. The plaintiff had participated in the driver's intoxication by providing alcohol throughout the day. He sought recovery from Cedar Side Inn for serving alcohol to the driver while the driver was visibly intoxicated. Id. at 44, 997 P.2d 197. The defendants moved for summary judgment, and the trial court granted the motion. The plaintiff appealed, and, on review, the Supreme Court concluded that "nothing in the statute itself, or the cases construing it, * * * suggest that plaintiff is barred, as a matter of law, from recovery under ORS 30.950." 330 Or. at 48-49, 997 P.2d 197.
In reaching its decision in Grady, the court deemed former ORS 30.950 to create statutory liability and labored to resolve only whether plaintiffs, under the circumstances of the case, fell within the statute's purview. 330 Or. at 49, 997 P.2d 197 ("ORS 30.950 subjects licensees, permittees, and social hosts to liability to third parties for injuries caused by the intoxicated patron or guest whom they served."). After examining the text and context of former ORS 30.950, the court concluded that there was no evidence of legislative intent to "limit liability under the statute to claims made by `innocent' third parties." 330 Or. at 48, 997 P.2d 197. "[T]he legislative history of the statute and the cases construing it focus entirely on liability to third parties injured by intoxicated drivers," but the legislature had not distinguished a focus of the statute regarding "innocent" and "non-innocent" third parties. Id. (emphasis added).
In 2001, the legislature revised former ORS 30.950 to address recovery for "non-innocent" plaintiffs. Or. Laws 2001, ch. 534, § 1.
ORS 471.565.
The legislative history of ORS 471.565 does not support an inference that the legislature intended to wholly eliminate statutory liability. To the contrary, legislative history indicates only an intention to exclude "non-innocent" plaintiffs who contributed to their own intoxication or who were complicit in the intoxication of a patron.
Tape Recording, House Committee on Judiciary, SB 925, May 23, 2001, Tape 69, Side A (statement of Bill Perry). Similarly, Representative Lane Shetterly explained that the bill would not encourage hosts to serve visibly intoxicated guests because of a continued risk of liability if harm befalls third parties:
Tape Recording, House Committee on Judiciary, SB 925, May 23, 2001, Tape 69, Side A (statement of Rep Lane Shetterly). In other words, the revised text did not undermine the court's conclusion in Chartrand, 298 Or. at 695-96, 696 P.2d 513, that an innocent third-party could rely on a statutory claim.
In this case, defendant nevertheless argues that ORS 471.565 does not create statutory liability and only serves as a limit to common-law claims. In support of that contention, he views the discussion of statutory liability in Chartrand as dictum that was later set aside in Gattman. Defendant contends that the legislative history supports his view. As we have recounted, however, that is not the case. There is no indication that the court's observation in Chartrand was implicitly overruled. Indeed, the Supreme Court recently relied on its statement in Chartrand "that the legislature intended to create statutory liability." Doyle, 356 Or. at 351. We are unaware of any legislative history that would undermine the Supreme Court's analysis in Chartrand.
For years, cases have recognized, even if not directly held, that ORS 471.565 creates statutory liability for plaintiff's class of injured persons. See Doyle, 356 Or. at 360, 378, 337 P.3d 797 (observing that the court in Chartrand concluded that the legislature intended to create statutory liability); see also Davis v. Campbell, 144 Or.App. 288, 292-93, 925 P.2d 1248 (1996), affd, 327 Or. 584, 965 P.2d 1017 (1998) (recognizing statutory liability pursuant to former ORS 30.950). Prior judicial construction serves an important purpose in our current understanding of legislative intent. See, e.g., State v. Cloutier, 351 Or. 68, 100, 261 P.3d 1234 (2011) ("Our analysis of [the statute] is also informed by this court's prior construction of that statute or its predecessors."); Blacknall v. Board of Parole, 348 Or. 131, 142, 229 P.3d 595 (2010) ("As context, * * * [prior] cases may illuminate or explain the meaning of the statutory text.").
In light of the court's observations and the history, text, and context of ORS
Defendant argues that any error was harmless. To warrant reversal, an erroneous trial court ruling must be prejudicial. Scanlon v. Hartman, 282 Or. 505, 511, 579 P.2d 851 (1978); see also ORS 19.415(2) ("No judgment shall be reversed or modified except for error substantially affecting the rights of a party."). Defendant contends that the dismissal of the statutory liability claim "appears to have made no difference." Defendant asserts that the jury received the instruction that would have been given had the statutory liability claim gone forward, yet the jury still did not find any liability as to King. Defendant treats the following instruction as to King as if it were a description in its entirety of his potential liability:
Defendant suggests that the statutory claim, previously dismissed, surfaced nonetheless in this instruction. We disagree.
When viewed in context, that instruction did not serve to provide the jury with a distinct, statutory claim. Defendant takes the instruction out of context. With the statutory claim dismissed, the pleadings left only negligence claims as against Bunch and King. The instructions explained that there were different standards of proof. The claim against Bunch required proof by a preponderance of evidence, while the claim against King required clear and convincing evidence.
The court advised the jury that Bunch had admitted negligence. It then gave the instruction on which defendant relies. In context, that instruction served only to raise the standard of proof by indicating that plaintiff must prove by clear and convincing evidence that King served alcohol to Bunch while she was visibly intoxicated. It was immediately followed by further instructions to help the jury with its task of assessing negligence:
(Emphasis added.) Insofar as Bunch had admitted liability, the negligence instructions pertained only to King. Because explanations about negligence preceded and followed the elevated standard of proof on serving an intoxicated person, a jury would have understood the instructions about negligence, reasonable care, and foreseeability all to be prerequisites to King's liability of any sort. After all, "[a] person is liable only for reasonably foreseeable consequences of their actions." That evaluation, of course, was already made when the legislature provided statutory liability for serving a visibly intoxicated person. Nothing told the jury that liability for such conduct followed without proof of negligence. Thus, the instructions did not resurrect the statutory claim. The error was not harmless.
Reversed and remanded.
The relevant portion of the statute was again amended in 1997 for reorganizing, correction of syntax, and addition of a notice requirement. Or. Laws 1997, ch. 841 § 1.
In 1987, the legislature repealed former ORS 30.955 and amended former ORS 30.950 so that the latter statute would apply to social hosts and licensees and permittees. Or. Laws 1987 ch. 774 § 13, § 14. See former 30.955 (1979), repealed by Or. Laws 1987, ch. 774, § 14 (governing liability of social hosts).