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Wessel v. Carmi Elks Home





APPEAL from the Circuit Court of White County; the Hon. HENRY LEWIS, Judge, presiding.


This action was commenced in the circuit court of White County based upon an alleged violation of section 14 of article VI of the Liquor Control Act, more commonly referred to as the Dramshop Act (Ill. Rev. Stat. 1967, ch. 43, par. 135.) Plaintiffs sought to recover damages from defendants Carmi Elks Home, Inc. (a tavern), Carl R. Barbre, d/b/a The Town House (a tavern), and Bertis Williams, the owner of the premises in which the latter establishment is located. The multicount complaint in substance alleged that Emily Rice and Jesse Cox had consumed alcoholic beverages at these taverns and that either or the two, while in an intoxicated condition, had driven an automobile through the side of a house killing one occupant, injurying another and causing property damage.

Defendants answered, denying liability, and then filed a third-party complaint against Rice and Cox based upon a theory of implied indemnity for any damages, costs of suit and attorneys fees which might result from plaintiffs' action. The third-party complaint charged that either Rice or Cox, rather than defendants, was the "active and primary cause" of any damage to plaintiffs, and that such damage did not arise out of any wrongful act or misconduct by any of the defendants, whose liability, if any, arising from any violation of the Liquor Control Act was said to be "purely secondary."

A motion to dismiss the third-party complaint was granted by the trial court and the appellate court, one justice dissenting, affirmed. (Wessel v. Carmi Elks Home, Inc. (1971), 133 Ill. App.2d 902, 272 N.E.2d 416.) Thereafter, upon defendants' petition, the appellate court issued a certificate of importance. 50 Ill.2d R. 316.

The sole issue presented for review is whether one who may incur dramshop liability because of the sale or gift of intoxicating liquors to a third party has the right to seek indemnification from the latter whose activity is alleged to be the primary or active cause of the damages. This issue has caused several appellate courts to reach divergent results.

In Coffey v. ABC Liquor Stores, Inc. (1957), 13 Ill. App.2d 510 (leave to appeal denied, 11 Ill.2d 629), a dramshop action was brought against four tavern operators seeking damages allegedly caused when plaintiff was assaulted by one who had become intoxicated. Several defendants filed a third-party complaint against the alleged assailant, which the trial court dismissed. The appellate court affirmed, reasoning that only an innocent party could seek indemnification, thus excluding a tavern operator who, by the terms of the Act, is a tortfeasor. It further concluded that the Act was penal in nature and to allow indemnity would violate equitable principles and public policy.

In the present case the appellate court adopted the rationale of Coffey. The majority was of the opinion that to hold otherwise and extend the right of indemnity to the tavern owners or operators would frustrate the penal nature of the Act and its underlying public policy, i.e., to place the ultimate burden upon the liquor industry for injuries caused by intoxicated patrons.

Two recent appellate decisions, however, have reached the opposite conclusion under factual situations analogous to Coffey, and have permitted the right to seek indemnification to those who may be liable in a dramshop action as against one to whom they have sold or given alcoholic beverages. In Geocaris v. Bangs (1968), 91 Ill. App.2d 81, the court did not accept the conclusion reached in the Coffey decision but applied the rationale of another appellate decision (Sargent v. Interstate Bakeries, Inc. (1967), 86 Ill. App.2d 187) which held that a negligent party may recover in an action for indemnity against the party whose negligence established a greater degree of culpability for the injury.

Similarly, in Walker v. Service Liquor Store, Inc. (1970), 120 Ill. App.2d 112, the appellate court found that the Liquor Control Act neither allowed nor precluded indemnification and, as such, reference to it would not be constructive. The court then stated that Illinois "does allow a passively negligent tort-feasor to obtain indemnification from an actively negligent tort-feasor. Miller v. DeWitt, 37 Ill.2d 273, 226 N.E.2d 630." (120 Ill. App.2d at 115.) Based on this conclusion the court adhered to its prior decision in Georcaris and reversed the trial court's dismissal of a third-party complaint seeking indemnity. However, in neither Geocaris nor Walker was further review sought and the present case now affords this court the first opportunity to consider whether indemnity is proper in a dramshop action in light of our recent decisions which recognized the right of implied indemnity founded upon a qualitative comparison of the tortfeasors' conduct. Miller v. DeWitt (1967), 37 Ill.2d 273; Chicago and Illinois Midland Ry. Co. v. Evans Construction Co. (1965), 32 Ill.2d 600.

After examination of the Geocaris and Walker decisions, upon which defendants herein place substantial reliance, we believe that the reasoning of those decisions is inappropriate. Both basically relied upon the Sargent case in which the injured party was struck by a vehicle. The original action in that case was commenced upon the theory of common-law negligence. In the present case the dramshop action which occasioned the claim for indemnity is sui generis. (Graham v. U.S. Grant Post No. 2665, V.F.W., (1969), 43 Ill.2d 1, 7.) Therefore, it may be said that other decisions which have broadened the concept of implied indemnity are distinguishable.

Policy considerations, as defendants concede, are of substantial importance in this matter. As repeatedly stated by this court, the statute, as applied to a dramshop owner or operator, is penal in character. (Howlett v. Doglio (1949), 402 Ill. 311, 318; Moran v. Katsinas (1959), 16 Ill.2d 169, 174.) This penal nature is further emphasized by the liability limitations contained therein.

Moreover, the Liquor Control Act specifically states that it is designed to protect health, safety and welfare and to foster and promote "temperance in the consumption of alcoholic liquors * * * by sound and careful control and regulation of the manufacture, sale and distribution of alcoholic liquors." (Ill. Rev. Stat. 1967, ch. 43, par. 94.) To this extent the statute provides a basis for the discipline of dramshop operators and owners for their indiscriminate sale of liquor and the evils resulting therefrom. (See Dworak ex rel. Allstate Insurance Co. v. Tempel (1959), 17 Ill.2d 181.) As realistically viewed in Dworak this discipline may be of an indirect nature which arises from the owner's or operator's fear of cancellation of insurance or prohibitive premiums.

These factors demonstrate that a substantial burden has been placed upon those engaged in the liquor industry. Such responsibility, although possibly more stringent than that imposed upon other business ventures, is permissible as a proper exercise of the State's regulatory control of intoxicating liquors. (Weisberg v. Taylor (1951), 409 Ill. 384, 387; California v. La Rue (1972), 409 U.S. 109, 34 L.Ed.2d 342, 93 S.Ct. 390.) We believe that by permitting the extension of the right of indemnity in this case, the public policy expressed in the statute would be frustrated and its disciplinary feature diminished. Absent a clear legislative mandate to the contrary, the cost accruing for a violation of the statute should be borne by those profiting from the sale of liquor to the public who enter such commercial enterprises with full knowledge of this attendant liability.

Defendants argue, however, that recent legislative history relating to section 14 of article VI of the Liquor Control Act indicates that the legislature has endeavored to mitigate dramshop keepers' liability by refusing to increase the maximum limits of recovery and by deleting the phrase "in whole or in part" from section 14. (P.A. 77-1186, approved August 19, 1971; Ill. Rev. Stat. 1971, ch. 43, par. 135.) They further contend that the legislature did not attempt to modify the Geocaris and Walker decisions when the 1971 amendment to section 14 ...

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