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Kuahiwinui v. Zelo's Inc.

Supreme Court of Hawaii

November 21, 2019

BERNADINE KUAHIWINUI, Individually and as Personal Representative of the Estate of KRISTERPHER KAUPU-KUAHIWINUI, deceased; and KENNETH KAUPU, Respondents/Plaintiffs-Appellants,
v.
ZELO'S INC., dba SUSHI & BLUES, Petitioner/Defendant-Appellee, and TAHITI NUI ENTERPRISES, INC., dba TAHITI NUI, and STATE OF HAWAI'I, Respondents/Defendants-Appellees. (5CC08000067) ZELO'S INC., dba SUSHI & BLUES, Petitioner/Third-Party Plaintiff,
v.
SOLOMON MAKUA KUAHIWINUI, Respondent/Third-Party Defendant. (5CC08000067) STATE OF HAWAI'I, Respondent/Third-Party Plaintiff,
v.
SOLOMON KUAHIWINUI and CHRISTOPHER FERGUSON, Respondents/Third-Party Defendants. (5CC08000067) SHERYL ANN ACKERMAN, Individually; SHERYL ANN ACKERMAN, as mother of, natural guardian and next friend for BRITNEY ANN HARDSKY, minor; and SHERYL ANN ACKERMAN, as Personal Representative of the Estate of CHRISTOPHER COLE FERGUSON, deceased, Respondent/Plaintiff,
v.
ZELO'S INC., dba SUSHI & BLUES, Petitioner/Defendant, and SOLOMON MAKUA KUAHIWINUI; JAMES B. EDMONDS; TAHITI NUI ENTERPRISES, INC., dba TAHITI NUI; STATE OF HAWAI'I; and THE COUNTY OF KAUAI, Respondents/Defendants. (5CC08000069)

          CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-13-0001803)

          Michelle-Lynn E. Luke for Petitioner

          Stephen M. Tannenbaum (James J. Bickerton Nathan P. Roehrig on the brief) for Respondents Bernadine Kuahiwinui and Kenneth Kaupu

          RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

          OPINION OF THE COURT

          WILSON, J.

         Under Hawai'i's liquor control statute, Hawai'i Revised Statutes ("HRS") § 281-78 (Supp. 1996), liquor licensees have a duty to refrain from serving alcohol to patrons that they know, or have reason to know, are under the influence of intoxicating liquor. Ono v. Applegate, 62 Haw. 131, 138, 612 P.2d 533, 539 (1980). A negligent violation of this duty constitutes a cause of action known as a "dram shop" action. Id. at 134 n.2, 612 P.2d at 537 n.2. Respondents/Plaintiffs-Appellants Bernadine Kuahiwinui and Kenneth Kaupu ("Kristerpher's Estate") assert a dram shop claim on behalf of their son, Kristerpher Kuahiwinui ("Kristerpher"), [1] who died while riding as a passenger in a vehicle driven by Kristerpher's intoxicated cousin Solomon Kuahiwinui ("Solomon"). The liquor licensee that served Solomon and Kristerpher alcohol, Petitioner/Defendant-Appellee Zelo's Inc. ("Zelo's"), moved for summary judgment on the dram shop claim, alleging that Kristerpher's Estate lacked standing to bring its claim of negligence against Zelo's. The Circuit Court of the Fifth Circuit ("circuit court") granted summary judgment to Zelo's because Kristerpher was also intoxicated at the time of the accident, and therefore not an "innocent third party" with standing to bring a dram shop claim.[2] The Intermediate Court of Appeals ("ICA") reversed the circuit court's judgment, holding that there are genuine issues of material fact regarding the complicity defense, i.e. "whether Kristerpher actively contributed to or procured the intoxication of Solomon and thus, whether Kristerpher falls within the protected class of innocent third parties entitled to bring a dram shop cause of action." Kuahiwinui v. Zelo's Inc., 141 Hawai'i 368, 379, 409 P.3d 772, 783 (App. 2017). Because the complicity defense is inconsistent with application of the defense of contributory negligence, the judgment of the ICA is affirmed, but on the grounds that there are genuine issues of material fact as to whether Kristerpher's contributory negligence exceeded the negligence of Zelo's.

         I. Background

         On April 1, 2006 on the island of Kaua'i, Solomon was driving his cousin, Kristerpher, and friend, Christopher Ferguson ("Ferguson"), home after having dinner and alcoholic drinks at Sushi & Blues-a restaurant owned and operated by Zelo's. When their vehicle failed to negotiate a left turn, it tumbled down an embankment and landed in the Hanalei River upside-down. Solomon survived, but Kristerpher and Ferguson were unable to escape from the vehicle, and died.

         Solomon testified in his deposition as to the events that occurred leading up to the accident. When Solomon, Ferguson, and Kristerpher stopped at a bank to deposit their checks in the late afternoon on March 31, 2006, Ferguson purchased a twelve-pack of beer from a nearby store. They drove to Hanalei Bay, where they remained for two hours drinking beer. Kristerpher also purchased marijuana from a group of people nearby. Solomon drank two beers and smoked marijuana during this time. Solomon then drove himself, Kristerpher, and Ferguson from Hanalei Bay to Sushi & Blues, where they had dinner and drinks. They were served by Zelo's' employee Serge Bullington ("Bullington") who later stated in his deposition that Solomon did not appear intoxicated. Bullington recalled serving Solomon two beers and two shots. According to Solomon, Kristerpher also purchased a mixed drink with "strong tequila" which the three men shared.

         Solomon, Kristerpher, and Ferguson left Sushi & Blues and Solomon drove them to a nearby bar called Tahiti Nui. Solomon ordered one beer at Tahiti Nui, but after a few sips, the security guard asked Solomon and Kristerpher to leave.[3] When they left Tahiti Nui around midnight, Solomon was driving. As the car approached the Hanalei Bridge, it failed to negotiate a left turn, hit a guard rail, rolled down an embankment, and plunged into the river upside down. Kristerpher and Ferguson drowned and Solomon escaped. Blood tests later revealed that Solomon's blood alcohol content ("BAC") was 0.13, or one and a half times the legal limit for driving.[4]

         A. Circuit Court Proceedings

         As noted, Kristerpher's Estate filed a dram shop claim against Zelo's.[5] It argued that Zelo's breached its duty to refrain from serving alcohol to patrons that it knew, or had reason to know, were under the influence of an intoxicant. Zelo's moved for summary judgment with respect to the dram shop claim, arguing that "[i]ntoxicated persons . . . are simply not afforded the right to assert civil liability against a commercial seller of alcohol[.]" Because Kristerpher was intoxicated at the time of his death, [6] Zelo's argued that he did not fall within the class of persons intended to be protected by dram shop liability. The circuit court granted Zelo's' motion for summary judgment, finding that Kristerpher's Estate lacked standing to assert the claim because Kristerpher was intoxicated at the time of the accident. It held that Zelo's did not owe a duty to Kristerpher to refrain from serving alcohol to Solomon, the driver, because Kristerpher was not an "innocent third party" protected by the dram shop law. Kristerpher's Estate appealed to the ICA.

         B. ICA Proceedings

         On appeal, Kristerpher's Estate argued that the circuit court erred in holding that Kristerpher was not an "innocent third party" intended to be protected by the dram shop law. It claimed that only individuals who injure themselves as a result of drunk driving are precluded from asserting dram shop causes of action, and since Kristerpher was a passenger in a vehicle driven by a drunk driver, Kristerpher's Estate is not barred from raising the claim.

         The ICA vacated the circuit court's order granting summary judgment to Zelo's. Zelo's, 141 Hawai'i at 379, 409 P.3d at 783. It described the duty owed by a liquor licensee "not to serve alcohol to a person it knows or reasonably should know is under the influence of alcohol" and noted that the class of people intended to be protected by this legal duty are "innocent third parties." Id. at 369, 409 P.3d at 773. The ICA stated that "an innocent third party injured by a drunk driver has a negligence cause of action against a liquor licensee that, preceding the injury, served alcohol to the drunk driver, who it knew or reasonably should have known was intoxicated." Id. The ICA held that an injured third party that is intoxicated "is not automatically excluded from the class of innocent third parties entitled to pursue a dram shop cause of action." Id. at 372, 409 P.3d at 776. Rather, only an individual "who injures himself or herself while driving drunk" is precluded from raising such a claim. Id. at 376, 409 P.3d at 780 (emphasis in original).

         To determine what constitutes an "innocent third party," the ICA applied a complicity defense analysis that has been adopted in several other jurisdictions. Id. at 378, 409 P.3d at 782. Under a complicity defense, an injured third party is excluded from the class of "innocent third parties" that may bring a dram shop claim against a liquor licensee when he or she "actively contributed to or procured the intoxication of the drunk driver who injured him or her." Id. at 370, 409 P.3d at 774. Here, because Kristerpher was not the driver of the vehicle, the ICA determined that he was not automatically excluded from the class of "innocent third parties." Id. at 376-77, 409 P.3d at 780-81. However, it held that genuine issues of material fact existed concerning whether Kristerpher "actively contributed to or procured" Solomon's intoxication, which would remove him from the class of "innocent third parties" and thereby bar him from raising a dram shop claim against Zelo's. Id. at 379, 409 ...


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