Dram Shop Liability Is Not Just For Bars – Take Care When Serving Alcohol
By : Justin O . Sorrell - RBE Partner
Alcohol is a highly regulated substance . State governments often regulate who , what , when , where , and how alcohol can be produced , sold , purchased , and consumed . For example , many states have “ dram shop ” laws which regulate when a bar ( also known as a “ dram shop ”) may provide alcohol to a patron . Under Indiana ’ s Dram Shop Act , a person who “ furnishes ” alcohol to another may be liable for damages ( including injury or death ) caused by the other person ’ s intoxication if the furnisher had actual knowledge that the person who consumed the alcohol was visibly intoxicated when the alcohol was furnished . See Ind . Code § 7.1-5-10-15.5 . The term “ furnish ” includes bartering , delivering , selling , exchanging , providing , or giving away alcohol .
The Dram Shop Act most often is discussed in the context of bars and other establishments which sell alcohol to the public . However , the Dram Shop Act is not limited to the commercial sale of alcohol . For example , Indiana ’ s courts have determined that a person “ furnishes ” alcoholic beverages to another person when one is the “ active means ” by and through which the alcohol is placed in the other person ’ s control . This may occur by purchasing beverages on the other person ’ s behalf , by knowingly allowing another to take possession of beverages , by selling the beverages to a third person with knowledge that the third person intends to furnish them to another , or by buying another person a drink . See Lather v . Berg , 519 N . E . 2d 755 ( Ind . Ct . App . 1988 ). Thus , liability may extend to a “ social host ,” such as somebody who serves alcohol for free at a house party .
Further , Indiana ’ s courts have determined that even absent active service of alcohol , simply allowing another to take alcohol from one ’ s possession may constitute “ furnishing ” under the Dram Shop Act . For example , in Brattain v . Herron , 309 N . E . 2d 150 ( Ind . Ct . App . 1974 ), a sister allowed her underage brother and two friends to drink alcohol from her refrigerator , after which the brother and two friends were involved in a fatal car crash . The jury found the sister negligent for knowingly giving alcohol to the minor who later caused the car crash , even though she gave it to him for free . On appeal , the Court of Appeals observed that , even though the sister did not actively serve the alcohol , she still was aware her brother and friends were obtaining alcohol from her refrigerator . Thus , the Court of Appeals affirmed the jury ’ s verdict .
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Riley Bennett Egloff LLP - July 2021