Julieann K. ALESNA, Appellant, v. Henry LeGRUE and Etta LeGrue, Appellees.
No. 4406.
Supreme Court of Alaska.
Aug. 8, 1980.
1387
Warren C. Colver, Anchorage, for appellees.
Before RABINOWITZ, C. J., and CONNOR, BOOCHEVER,* BURKE and MATTHEWS, JJ.
OPINION
BOOCHEVER, Justice.
This is an appeal from a summary judgment dismissing a complaint against Henry and Etta LeGrue, licensees of The Beachcombers, a Kodiak restaurant and bar. The superior court held that the LeGrues were not vicariously liable for acts of employees on the premises. We conclude that the LeGrues may be held civilly liable for violations of Alaska‘s liquor laws, and in so holding, overrule our decision in Barton v. Lund, 563 P.2d 875 (Alaska 1977).
On July 13, 1974, Chris Peterson was driving an automobile while allegedly intoxicated when he collided with a motorcycle on which Julieann Alesna was riding as a passenger. Alesna suffered severe physical injuries as a result of the accident. Earlier in the evening, Peterson had been drinking at The Beachcombers. In her complaint, Alesna alleged that employees of The Beachcombers had “intentionally or negligently” served alcoholic beverages to Peterson while he was intoxicated, in violation of
Alesna named four defendants in her complaint: Henry and Etta LeGrue, who were named as licensees on the Alcoholic Beverage Control Board‘s liquor license, and James A. Williams and Queen of the North, Inc., an Alaska corporation. Williams and Queen of the North were in the final process of buying The Beachcombers from the LeGrues at the time of the accident, and were awaiting transfer of the liquor license.2 Williams and the corporation were actually operating the premises after May 6, 1974, when the LeGrues left Alaska for Bellingham, Washington.
Alesna‘s claim against the LeGrues is predicated on a theory of vicarious liability. She claims that liability flows from Williams and Queen of the North and their employees to the LeGrues on either of two possible theories. First, she argues that the LeGrues continued to have a right of con-
Appellant concedes in her brief that she could not produce any factual evidence that the LeGrues exercised actual control after May 6, 1974. Her contention is that under the agreement signed by the buyers and sellers the LeGrues retained an implied right of control.4
On May 1, 1974, the LeGrues prepared a warranty deed, bill of sale and application for transfer of the liquor license. On May 6, 1974, the parties signed a “managerial agreement” which allowed the buyers to operate the premises until closing and approval of the transfer of the liquor license. Paragraph 3 of the agreement provides:
3. Manager agrees to be responsible for all costs and expenses incurred after this date including loan payments and in return shall be entitled to retain all revenues and receipts taken in from the operation of the business hereafter, and shall manage the business and assume full responsibility therefore [sic] from and after this date.
The remaining provisions deal with an escrow deposit and damage remedies in the event that either side breaches the sale agreement.
The appellant has not pointed to any provision in the agreement which would allow the LeGrues to retain control over the premises. Rather, she argues that the agreement does not contain any affirmative provisions restricting control. In his memorandum decision, the trial judge stated that the LeGrues “retained only a security interest to assure payment of the balance of the purchase price.”
Although the meanings to be given the words of a contract are treated in the same manner as a question of law, Day v. A & G Construction Co., 528 P.2d 440, 443 (Alaska 1974), and on appeal we need not defer to the judgment of the trial judge, we do not think that there was any error in the trial judge‘s interpretation of the agreement. Paragraph 3 of the agreement plainly gives all operational control to Williams, and Alesna conceded that she could produce no evidence of such control by the LeGrues. Consequently, vicarious liability cannot be predicated on control by the LeGrues over operations by Williams and Queen of the North.
An evaluation of Alesna‘s second argument, that
Alesna urges that Barton can be distinguished from the present case. The essence of her argument is that in Barton the two licensees who were dismissed were never active in operating the business, whereas here the licensees, who formerly were active in operating an establishment, have attempted to contract away their liability. In Barton, at least one licensee remained responsible, whereas here no licensee would be responsible. Although there is some merit to this distinction, we believe that it makes more sense to overrule Barton entirely rather than attempt to limit it.
In Barton, a majority of this court concluded that
The rationale for the majority‘s holding was twofold: first, that the purpose of
We are no longer persuaded that the second reason has validity, as an additional important purpose for the enactment of
Additionally, social policy suggests that the legislature intended this purpose. Much of Alaska‘s crime and physical injury to persons can be traced to alcohol abuse. A licensee‘s liability to the public for statutory violations creates an incentive to see that the establishment is conducted lawfully so that members of the public are not harmed.6 Although it is true that policy embodied in
The Barton majority expressed the concern that it was unfair to hold a person
Our decision in Alaska Airlines, Inc. v. Sweat, 568 P.2d 916 (Alaska 1977), supports our conclusion that it is equitable to hold a licensee responsible for the conduct of a business. We stated in Sweat:
A scheduled common carrier . . . is given a monopoly or semi-monopoly primarily for the purpose of furnishing safe and reliable scheduled air transportation. It should not be permitted to barter away its responsibility to the traveling public by means of contracts with other carriers. If this were permissible, an air carrier could avoid liability by engaging in independent contracts for furnishing food, maintenance of its planes and conceivably even for supplying crews. Regardless of whether such contracts may be permitted by regulatory authorities, the traveling public is entitled to look for protection to the certificated carrier responsible for the scheduled route.
Alesna alleges, in part, that she was injured as a result of the unlawful service of liquor to an intoxicated person. Since we have decided that the legislature intended that the licensee assume responsibility for injuries from unlawful conduct of the business, we reverse the summary judgment granted in favor of the LeGrues.
Such a result does not conflict with our opinion in Morris v. City of Soldotna, 553 P.2d 474 (Alaska 1976), which concluded that the Safe Place to Work Act and the General Safety Code did not create an implied private right of action by an employee of an independent subcontractor against the general contractor and owner. Those statutes do not give a licensee a valuable franchise, nor do they expressly fix responsibility on the owner or general contractor in the manner that the statute here fixes responsibility on the licensee.
Nor does allowing a private right of action disturb our opinion in Sabre Jet Room, Inc. v. K & L Distributors, Inc., 384 P.2d 952 (Alaska 1963), that liability for debts accrued by a corporate officer of a licensee who operated a liquor store under a lease management agreement could not be attributed to the corporate licensee solely because the corporation held the liquor license. First, the case presented a general question of commercial law that had nothing to do with the operation of the premises as a business involved in retail liquor sales. Second, no “unlawful” conduct was alleged so as to render the licensee responsible under the terms of
REVERSED in part, and REMANDED.
CONNOR, Justice, concurring in part, dissenting in part.
I would distinguish Barton v. Lund, 563 P.2d 875 (Alaska 1977), in the manner argued for by appellant and would, therefore, reverse. I would not overrule Barton, and to that extent I dissent.
Notes
The right to control and vicarious liability were considered in the context of independent contractors in Morris v. City of Soldotna, 553 P.2d 474 (Alaska 1976) (finding no right to control) and recently in Hammond v. Bechtel, Inc., 606 P.2d 1269 (Alaska 1980) (finding that possibility of such control existed).A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other‘s control or right to control.