Perseus, Inc. v. Canody
995 S.W.2d 202, 1999 WL 173987 (1999)
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Rule of Law:
An alcohol provider cannot claim the statutory 'safe harbor' affirmative defense against liability if it fails to prove that every employee on duty was certified in a seller training program and if its internal policies could be construed as indirectly encouraging employees to continue serving alcohol to intoxicated persons.
Facts:
- On March 20, 1994, Sam Selman arrived at the Hippodrome nightclub, owned by Perseus, Inc., already appearing intoxicated.
- Over several hours, Selman drank at least seven or eight malt liquors and possibly other alcoholic beverages.
- Selman's companions described his intoxication as 'obvious to anyone there,' noting that he stumbled, was unsteady on his feet, slurred his speech, and had bloodshot eyes.
- A friend, concerned about Selman's condition, offered him twenty dollars to take a taxi home, but Selman refused.
- Perseus, Inc.'s written policies included a suggestion that if a customer shows signs of intoxication, employees could 'serve them ‘light’ drinks or not at all.'
- Another policy listed serving a minor as grounds for termination but did not list serving an intoxicated person.
- Selman left the Hippodrome shortly after midnight and drove his own vehicle.
- While driving home, Selman's vehicle struck and killed Ruben Tijerina and Alisha M. Martin as they walked along the shoulder of a road.
Procedural Posture:
- The surviving parents of Ruben Tijerina and Alisha M. Martin sued Sam Selman and Perseus, Inc. in a Texas trial court for wrongful death.
- The case was tried before a jury, which found Selman 65 percent responsible and Perseus 35 percent responsible.
- The jury rejected Perseus's affirmative defense under the statutory 'safe harbor' provision.
- The trial court entered a judgment awarding damages exceeding two million dollars to the plaintiffs.
- Perseus, Inc., as the appellant, appealed the judgment to the Texas Court of Appeals, Fourth District, with the surviving parents as appellees.
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Issue:
Does a provider of alcohol establish the statutory 'safe harbor' defense as a matter of law when it cannot definitively prove all employees on duty were certified and its written policies suggest serving 'light' drinks to intoxicated patrons rather than ceasing service?
Opinions:
Majority - Justice Catherine Stone
No. A provider of alcohol does not establish the statutory 'safe harbor' defense as a matter of law under these circumstances. The court reasoned that the jury had sufficient evidence to reject Perseus's defense. First, Perseus failed to prove that every employee working on the night of the incident had actually attended the required seller training program; the testimony from its general manager was equivocal and admitted that records could be missing. Second, the jury could have reasonably inferred that Perseus indirectly encouraged its employees to violate the law. The company's own written policy, which suggested serving 'light' drinks to customers showing signs of intoxication, provided a basis for the jury to find that Perseus encouraged continued service to intoxicated individuals, thereby negating the third element of the safe harbor defense.
Analysis:
This decision clarifies the high evidentiary burden an alcohol provider must meet to successfully assert the 'safe harbor' defense under the Texas Dram Shop Act. It establishes that a general company policy of requiring training is insufficient; the provider must offer conclusive proof that all specific employees on duty during the incident were actually certified. Furthermore, the court's analysis of 'indirect encouragement' signals that internal policies will be scrutinized for any inconsistencies or suggestions that subtly undermine the legal prohibition against serving intoxicated patrons. This precedent makes the safe harbor defense more difficult to claim and strengthens the position of plaintiffs in dram shop litigation by allowing juries to infer liability from ambiguous or incomplete evidence presented by the defendant.
