ALERT to all Individuals serving Alcohol at Parties. Providing Alcohol to guests may make you liable when someone is injured or killed. Will insurance cover such a claim? Will you be prosecuted?

By Stephen Allen Jamieson

Over the holidays we warned readers about the possible liability for being a social host that knowingly serves alcohol to underage drinkers who then hurt themselves or others as a result of their intoxication. We also warned employers of possible liability for their drunk employees who attended company parties or otherwise acted in a way that made the employer responsible for the employees’ actions which injured others. See The Holidays and Alcohol: Potential Liability for Social Hosts and Employers, Dec. 24, 2013 SSJLaw newsletter.

This time we are reporting on a case, just decided by the California Supreme Court, that further clarifies the law on liability of a server of alcohol for the actions of a drunk minor. In Ennabe v. Manosa it is alleged that a 20 year old girl threw a party at a non-occupied house owned by her parents, advertised the party to friends and others, then charged a fee to attend the party. The fee was used to offset the cost of alcohol she provided to those attending. Her parents neither lived at the unoccupied house nor did they have any knowledge of the party. It is alleged that a 19 year old boy was then served while already obviously intoxicated, and when leaving the party struck and killed another intoxicated minor who was attending the party.

The Supreme Court decision just rendered holds that if the host of the party, the 20 year old girl who threw the party in the vacant house, is found by a jury or judge to fall within the definition of someone who sold alcohol, or caused the sale of alcohol, at the party, and if the minor that was served alcohol at the party was obviously intoxicated at the time he was served, then the host can be civilly liable to the family of the deceased minor for wrongful death.

This is an extension, some might say a change, to long standing existing law shielding “social hosts” from such civil liability. The public policy behind this law has for many years generally been that injuries or death caused by intoxicated persons are the fault of the intoxicated person, and not the fault of the person who served the alcohol to the intoxicated person.

While a “social host” is generally not civilly liable for injuries sustained by someone who was served alcohol by the host, or someone injured by the person who was drinking the alcohol, there is a narrow exception allowing such liability when a minor social host throws a party, and the parents or legal guardian of that minor knew or should have known alcohol was being served to minors at the party. See Civil Code 1714(b). Because in the Ennabe case the parents are alleged to have had no knowledge their daughter was throwing such a party at the unoccupied house the Court of Appeal held that the parents were not liable under this exception as “social hosts”.

The law has, however, been unclear whether or not a person like the host of this party, charging a cover charge, was a “social host” at all. It was argued in this case that one could consider the host of the party charging the cover charge to be a seller of alcohol just like a liquor store or nightclub or bar, etc. If the host is considered a seller of alcohol, or someone who caused the sale of alcohol, then, like all ABC licensees, she can also be potentially liable if she serves an “obviously intoxicated minor” who then injures or kills someone else as a result of his intoxication.

Business & Professions Code 25602.1 provides that a person who is licensed by the State to sell alcohol, as well as one who is required to be licensed by the State because they are selling alcohol, can be civilly liable for damages if that person serves or furnishes alcohol to an obviously intoxicated minor, and then that obviously intoxicated minor injures or kills himself or someone else.

In the context of this law a “minor” is defined not as someone under the age of majority, 18 years old, but rather in this context a “minor” is anyone under the age of 21 years. In the Ennabe matter Supreme Court has decided that if the person served was a 19 year old “minor”, and if that person served was an “obviously intoxicated minor”, and the server/host was a person who sold or caused to be sold the alcohol, then that server/host may be civilly liable for damages to the family of the young man who was run over and killed by the obviously intoxicated minor. To determine these facts the Supreme Court has remanded the case back to the trial court.

This decision by the Supreme Court therefore now holds that if the factual circumstances prove that the “host” of the party at the vacant house was actually selling alcohol at the party, or causing the sale of alcohol at the party, by charging a cover charge that included alcohol, then that “host” may be civilly liable for monetary damages to the family of the deceased boy if it is also proven that the minor who was served the alcohol was “obviously intoxicated” at the time he was served.

The message of this Supreme Court decision to the general public is clear: By charging for the alcohol provided at the house party, even if done indirectly thru a “cover charge” or other label, it may be that the host now ventures into the sea of liability that must be navigated by a seller of alcohol. We will, however, have to wait and see what the trial court determines these facts to be in this particular case.

Among the issues not resolved by the Supreme Court in this decision, however, are the following: Whether or not the insurance carrier providing coverage to the vacant house and or to this “host” will accept or decline coverage under these circumstances? Will the homeowners coverage or rental home coverage apply if the person who threw the party is deemed to have been running a business, selling alcohol, or otherwise falls in to some exception or exemption from coverage that may be stated in the policy? Whether or not the obviously intoxicated minor who killed the decedent could in turn sue the server/host to indemnify him from the claims of the decedent’s family against him for that alleged wrongful death? And, finally can the 20 year old “host” be criminally liable for being a “seller” of alcohol and not being licensed by the State ABC to sell? That is a misdemeanor. Can she be prosecuted? The Supreme Court explicitly refused to decide if she is required to be licensed under such circumstances.

Further decisions will further clarify this area of the law. When they happen we will update you.

Stephen Allen Jamieson is a Partner at Solomon, Saltsman & Jamieson. He can be reached at [email protected] or at 800/405-4222.

Copyright © 2014 Solomon Saltsman & Jamieson, All rights reserved. SSJLaw has written the California Licensee’s Alcohol Beverage Control Handbook, the Oregon Liquor Control Commission Handbook, and a Handbook on Alcohol Law related to Sovereign Tribal Nations. Downloadable copies are available at www.ssjlaw.com