Indiana Dram Shop Liability: Insurance Firms Eye Illinois Injury Case

A single drunk driver can alter the course of lives forever.

But sometimes, it’s not just the driver who should be held liable. Per IC7.1-5-10-15.5, Restaurants, bars and party hosts who serve alcohol to a person knowing he or she was visibly intoxicated and that the furnishing of such beverages was proximate to the cause of injury or death, may also share liability. These Dram Shop laws vary from state-to-state.

(In Indiana, not only can the victim of a drunk driver seek damages, the drunk driver is also entitled to seek damages from the social host, per the 1996 decision in Booker, Inc. v. Morrill. As an at-fault state, Indiana allows that a plaintiff can be up to 50 percent at-fault for the incident in question and still pursue compensatory damages.)

The question of how much can be recovered in these cases is also a matter that varies from state-to-state. The damages cap for a personal injury claim in Indiana has been set by the legislature at $1.25 million. But how that award is divided is sometimes a source of sharp contention.

Typically, insurance companies are going to do everything they can to try to minimize liability — the focus is not on fairness to the victim.

A recent case reviewed by the Illinois Supreme Court, Rogers v. Imeri, shows how insurance firms seek to limit Dramshop liability wherever possible. Insurance companies in other states are no doubt paying close attention.

According to court records, the case started back in 2009, when an 18-year-old man was killed on a rural highway in a head-on collision with a 60-year-old drunk driver. The 18-year-old was not drunk.

The teen’s parents received almost $27,000 from the drunk driver’s automobile insurance company and another $80,000 from their own, for a total of $107,000. The parents then went on to file a six-count complaint under the state’s Dramshop Act against Gani Imeri, the owner of Johnny’s Bar and Grill, where the defendant had been drinking just prior to the crash.

Imeri’s insurance company had a dramshop liability policy that provided for a limit of $130,400 in coverage, which is the state’s statutory cap under the Dramshop Act. In the time between when the case was filed and when it was set to go to trial, Imeri’s insurance company folded, and the case was assumed by the Illinois Insurance Guarantee Fund.

The fund subsequently argued that its maximum liability should only be about $24,000, which would be the difference between the statutory maximum and the difference obtained by the victim’s family through other insurance proceeds.

The victim’s family, while conceding there was in fact a $130,000 cap on damages, that the amount of the fund’s liability should be subtracted from the total jury award, should the jury decide in their favor.

So for example, if the jury returned a verdict of $500,000, the amount would be reduced to $393,000 (with the difference of $106,000 subtracted from the total). That $393,000 would then further be reduced to $130,000, the statutory maximum. However, let’s say the jury awarded $200,000. That amount would then be reduced to about $93,000. Being lower than the statutory minimum of $130,000, it would remain as-is.

Obviously, the difference in the two approaches would mean a significant difference in how much the insurance fund would have to pay if it lost.

The trial court denied Imeri’s motion as premature, considering that a jury hadn’t decided on the facts of the case one way or the other at that point. The court said that if the jury did find in favor of the plaintiff, the defendant could request the award be off-set at that point. Imeri requested that the court reconsider, or certify the question to a higher court.

The plaintiff agreed to a certification on the issue, and so the measure went to an appellate court for review. The appellate court found that any reduction of the award should be applied against the jury’s verdict. The appellate court sided with the plaintiffs, saying that whatever Imeri was ordered to pay should be set by the jury’s award.

However, the state supreme court, upon review, determined that the legislative intent was that the maximum amount that plaintiffs could receive in these cases was $130,000. Therefore, they reversed the appellate court’s earlier ruling and remanded the case back to trial court for further proceedings.

Indiana DUI Injury Attorney Burton A. Padove handles injury and wrongful death matters throughout northern Indiana, including Gary, Hammond and Calumet City.

Additional Resources:
Rogers v. Imeri, Nov. 21, 2013, In the Supreme Court of the State of Illinois
More Blog Entries:
Indiana Officials Target Intoxicated Drivers through Labor Day, Sept. 1, 2013, Indiana Social Host Liability Lawyer Blog