Sanford v. Fillenwarth
863 N.W.2d 286 (2015)
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Rule of Law:
A "sale" of alcohol under the Iowa Dramshop Law can occur indirectly when the cost of the alcoholic beverages is included in the price of other goods or services, such as an amenities package for a resort stay. The provision of such beverages to an intended third-party beneficiary of the underlying purchase contract also qualifies as a sale to that person.
Facts:
- Fillenwarth Beach, a resort owned by Kenneth Fillenwarth, advertised and provided amenities to its paying guests, including complimentary boat cruises on Lake Okoboji where free alcoholic beverages were served.
- On July 31, 2011, Michael Lawler paid for his family, including his adult son James Lawler, to stay at the resort.
- The Sanford family were also paying guests at the resort at the same time.
- Members of both the Lawler family, including James, and the Sanford family participated in an evening adults-only lake cruise provided by the resort.
- During the cruise, James Lawler consumed multiple alcoholic beverages, including mixed drinks and beer, served by Fillenwarth Beach staff.
- Approximately thirty minutes after the cruise ended, James Lawler assaulted Joseph Sanford on the resort property, causing serious injury.
Procedural Posture:
- Joseph and Suzanna Sanford filed a lawsuit in the Iowa District Court for Dickinson County against Fillenwarth Beach and James Lawler.
- The Sanfords' claims against Fillenwarth Beach included dramshop liability.
- Fillenwarth Beach filed a motion for summary judgment on the dramshop claims, arguing it had not 'sold' alcohol to James Lawler.
- The district court (trial court) granted summary judgment in favor of Fillenwarth Beach, ruling as a matter of law that no sale had occurred.
- The Sanfords, as appellants, sought and were granted interlocutory review by the Supreme Court of Iowa.
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Issue:
Does serving complimentary alcoholic beverages to resort guests as part of an advertised amenities package for which a fee was paid constitute a 'sale' of alcohol under the Iowa Dramshop Law, Iowa Code § 123.92?
Opinions:
Majority - Cady, Chief Justice
Yes, serving complimentary alcoholic beverages as part of a paid amenities package constitutes a 'sale' under the Iowa Dramshop Law. The statute is intended to cover all direct and indirect sales supported by consideration that tangibly benefits the licensee. The court reasoned that the legislature, by removing the word 'give' from the statute, intended to eliminate liability only for 'purely gratuitous undertakings,' not for situations where alcohol is part of a commercial transaction. Here, the boat cruises with alcoholic beverages were advertised amenities included in the price of a stay at Fillenwarth Beach, making them part of the consideration for the hotel stay, not a true gift. Furthermore, the court held that a sale can be made to a third-party beneficiary; because Michael Lawler paid for the room and amenities with the intent that his son James would benefit, James was an intended beneficiary of the contract, and the resort's provision of alcohol to him constituted a sale.
Analysis:
This decision significantly broadens the interpretation of 'sale' under Iowa's dramshop statute, extending liability beyond direct, over-the-counter transactions. By recognizing indirect sales, the court prevents businesses from avoiding liability by bundling the cost of alcohol into package deals and labeling it 'complimentary.' The ruling establishes that the economic reality of the transaction, rather than its form, will determine whether a sale has occurred. This precedent will likely impact the hospitality industry, including resorts, all-inclusive venues, and bed-and-breakfasts, by confirming their responsibility to serve alcohol responsibly even when no separate charge is made for the drinks.
