Dram Shop Liability Is Not Just For Bars ' Take Care When Serving Alcohol

• Published date: 22 March 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Riley Bennett Egloff
• Author: Mr Justin Sorrell

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 75 (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.

In another case, Gentry v. Day, 22 N.E.3d...