Pena v. Neal, Inc.

Majority - Shirley W. Butts, Justice

No, the trial court erred in granting summary judgment for Neal, Inc. because genuine issues of material fact exist concerning both Neal's statutory "safe harbor" defense and the essential element of providing alcohol to an obviously intoxicated person. The court first addressed Neal's attempt to establish a "safe harbor" defense under Section 106.14 of the Texas Alcoholic Beverage Code, which protects employers if they require and their employees attend commission-approved seller training programs, and the employer has not directly or indirectly encouraged the employee to violate the law. While the first two components were conceded, Neal failed to conclusively prove the third. Doak Neal's affidavit, stating that neither he nor anyone at Neal, Inc. encouraged violations, was deemed a mere conclusory statement that simply repeated the statutory language and thus was insufficient summary judgment evidence. The court noted that affidavits must state facts, not conclusions. Furthermore, the plaintiffs presented an expert affidavit (Dr. James Calder) detailing Neal's failures in loss control and policy enforcement (e.g., no camera monitors, disregard for reporting intoxication or policy violations), which raised a fact issue as to whether Neal had indirectly encouraged its employee, Margarito de la Cruz, to provide alcohol to intoxicated persons. Therefore, the "safe harbor" defense was not established as a matter of law. Second, the court found that Neal failed to negate as a matter of law the essential element of the plaintiffs' dramshop claim, which requires proof that it was apparent to the provider that the individual was obviously intoxicated to the extent of presenting a clear danger, and that the intoxication was a proximate cause of damages. While de la Cruz denied providing alcohol to Sturm on March 16, 1992, other summary judgment evidence created a factual dispute. De la Cruz himself admitted he could tell Sturm was "drunk" on the morning of the accident. Affidavits from customers Villareal and Carrasco stated they saw Sturm drinking in her car outside the store and de la Cruz motioning her to conceal the bottle, and delaying calling the police. Mary Sturm's deposition provided extensive evidence of a long-standing "course of dealing" where de la Cruz frequently provided alcohol to an already intoxicated Margaret, often without payment, and allowed her to consume it on the premises. Citing Tex. R. Civ. Evid. 406, the court held that evidence of this habit and similar occurrences over an extended period was relevant circumstantial evidence to prove de la Cruz's conduct on the day of the accident conformed to this habit. This created a genuine issue of material fact regarding whether Neal, through its employee, provided alcohol to an obviously intoxicated Sturm. Given that both of Neal's defensive theories failed to support summary judgment as a matter of law, the court reversed the trial court's judgment and remanded the case for trial.