Kentucky Court Rules Landlord Not Liable Under Dram Shop Act

By Denise Johnson | August 29, 2012

An attempt to hold a commercial landlord liable under Kentucky’s Dram Shop Act faltered earlier this month, when the Kentucky Court of Appeals found that the Act doesn’t address the liability of a third party.

Monica Carruthers was injured in a collision with another driver, Lucas Watson, when he allegedly drove his vehicle while intoxicated. The crash happened in the parking lot of Froggy’s Sports Bar, where he was a customer prior to the accident.

Carruthers filed suit, alleging common law negligence and liability under the Dram Shop Act. She named several defendants, including Max and Lois Ann Edwards, the owners of the premises where Froggy’s was a tenant.

Carruthers alleged Foggy’s served too much alcohol and claimed that because the landlords owned an unrelated bar they should be aware of the laws governing them. She also alleged that Froggy’s “habitually” overserved customers. As a result, she claimed the landlords had the ability to foresee her injury and a duty to prevent it.

The owners filed a motion to dismiss her complaints. The motion, granted by the circuit court, was appealed by Carruthers.

The appeals court found that the Dram Shop Act addresses only two types of people: the dram shop and its employees and the intoxicated person served. The act doesn’t address the liability of a third person, the court stated. “We conclude that no purpose intended by our Legislature’s passage of the Dram Shop Act would be served by imposing liability upon a lessor who simply holds title to property on which his properly licensed lessee engages in the regulated sales of intoxicating liquors,” the opinion said.

Though Carruthers claimed the owners were personally involved in the operation of the bar, she did not provide any evidence to support that claim. As a result, the court concluded the only relationship between the Edwards and Froggy’s was as lessor and lessee.

The court ultimately found that in order to state a cause of action based on negligence, Carruthers must allege the landlords owed her a duty of care, breached that duty and establish a causal connection between the breach of duty and injury suffered.

Opinion in the case of Monica Carruthers v. Max Edwards and Lois Ann Edwards, No. 2011-CA-001612-MR

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