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Clark v. Peterson: LIQUOR LAW - civil damages act: liable for sale violating compact building requirement

STATE OF MINNESOTA
IN COURT OF APPEALS
A06-2006
Jean Clark, individually and as trustee
for the next of kin of Tina Grove, deceased, et al.,
Respondents,
vs.
Roy Jorgen Munkholm Peterson, et al.,
Defendants,
Gordon Wheeler d/b/a Camp Ripley Store/Bar/Cafe and Krazy Rabbit,
Appellant.
Filed November 13, 2007
Affirmed
Toussaint, Chief Judge
Morrison County District Court
File No. C0-021358
Susan J. Bowden, McCullough, Williams, Bowden & Cyr, P.A., 905 Parkway Drive, St.
Paul, MN 55117-3198 (for respondents)
Britton D. Weimer, Jones Satre & Weimer, PLLC, 3440 Federal Drive, Suite 120, Eagan,
MN 55122 (for appellant)
Considered and decided by Klaphake, Presiding Judge; Toussaint, Chief Judge; and
Kalitowski, Judge.
S Y L L A B U S
A sale of liquor that violates the compact-and-contiguous building requirement in
Minn. Stat. 340A.410, subd. 7 (2006), subjects the liquor vendor to liability under the
2
Minnesota Civil Damages Act, Minn. Stat. 340A.801, subd. 1 (2006).
O P I N I O N
TOUSSAINT, Chief Judge
In this civil-damages action, appellant Gordon Wheeler, d/b/a Camp Ripley
Store/Bar/Cafe and Krazy Rabbit, challenge the judgment in favor of respondents Jean
Clark, individually and as trustee for the next of kin of Tina Grove, deceased, Michael
Juetten, as parent and natural guardian of Chelsea Grove, and Chad Lindberg, as parent
and natural guardian of Cody Lindberg. Wheeler argues that the district court erred in
ruling as a matter of law that a liquor sale that violated the compact-and-contiguous
building requirement in Minn. Stat. 340A.410, subd. 7 (2006), was an illegal sale giving
rise to liability under the Minnesota Civil Damages Act, Minn. Stat. 340A.801, subd. 1
(2006). Because the compact-and-contiguous building requirement is substantially
related to the purposes of the civil damages act and is consistent with established
categories of illegal sales, we affirm.
FACTS
In 1981, Wheeler acquired a liquor license to operate the Camp Ripley Bar, an
adult-entertainment establishment. In July 1999, Wheeler was granted a zoning permit to
construct a 40- by 100-foot building adjacent to the Camp Ripley Bar. The permit
application described the building as a storage building. In June 2001, following the
issuance of a stop-work order applicable to unpermitted construction, Wheeler applied for
an after-the-fact land-use permit for a structure, described as a walkway, connecting the
new building to the Camp Ripley Bar and another structure expanding the new building.
3
In the application, Wheeler indicated that he intended to sell alcoholic beverages out of
the new building. In July 2001, the county zoning administrator sent a letter to Wheeler
denying the application for an after-the-fact permit, explaining that the proposed
construction would be an impermissible expansion of the adult-entertainment
establishment, and stating that the stop-work order remained in effect. Wheeler did not
appeal the denial of the application for an after-the-fact permit but continued and
completed construction of the structures.
In June 2001, Wheeler was granted a license renewal to operate Camp Ripley
Store/Bar/Cafe. The renewal did not list any other establishment. In late 2001 or early
2002, Wheeler began operating a sports bar named Krazy Rabbit, which served food and
alcoholic beverages, out of the 40- by 100-foot building adjacent to the Camp Ripley Bar.
The walkway connecting the Krazy Rabbit to the Camp Ripley Bar is used for storage and
not accessible to the public. Wheeler alleges that in 2000, Michael McManus, a liquorcontrol
investigator, and Sheriff Paul Tschida advised him that the walkway would satisfy
the compact-and-contiguous building requirement of Minn. Stat. 340A.410.
After Roy Peterson was served alcohol at Krazy Rabbit on April 6, 2002, the
vehicle he was driving was involved in an accident. Petersons passenger, Tina Grove,
was killed in the accident.
Clark, Juetten, and Lindberg brought this civil-damages action against Wheeler.
Concluding that the liquor sale as a matter of law violated Minnesota Statutes chapter
340A and that the violation was substantially related to the purposes of the civil damages
act, the district court granted partial summary judgment for Clark, Juetten, and Lindberg.
4
The parties stipulated to the remaining issues, and judgment was entered for Clark,
Juetten, and Lindberg.
ISSUE
Did the district court err in concluding that the violation of the compact-and
contiguous building requirement is substantially related to the purposes of the civil
damages act?
ANALYSIS
On appeal from a summary judgment, this court examines the record to determine
whether any genuine issues of material fact exist and whether the district court erred in
applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). This court
must view the evidence in the light most favorable to the party against whom judgment
was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Statutory
construction is a question of law subject to de novo review. Vlahos v. R & I Constr., 676
N.W.2d 672, 679 (Minn. 2004).
The Minnesota Civil Damages Act (the act) is both remedial and penal. Lefto v.
Hoggsbreath Enters., Inc., 581 N.W.2d 855, 857 (Minn. 1998). When its provisions are
clear as to intent and purpose, the supreme court has liberally construed the act so as to
suppress the mischief and advance the remedy. Id. (quotation omitted). But liberal
construction is not without limitations and . . . the Act is to be strictly construed in the
sense that it cannot be enlarged beyond its definite scope. Id. (quotation omitted).
A person injured by an intoxicated person, or by the intoxication of another person,
has a cause of action for all damages sustained against a party who caused the
5
intoxication by illegally selling alcoholic beverages. Minn. Stat. 340A.801, subd. 1
(2006). A sale of alcohol constitutes an illegal sale under the act if (1) the sale violates
a provision of Minnesota Statutes chapter 340A and (2) the violation is substantially
related to the purposes of the act. Rambaum v. Swisher, 435 N.W.2d 19, 21 (Minn.
1989).
The sale in this case violated Minn. Stat. 340A.410, subd. 7 (2006), which states,
A licensing authority may issue a retail alcoholic beverage license only for a space that is
compact and contiguous. A retail alcoholic beverage license is only effective for the
licensed premises specified in the approved license application.1
In addressing Wheelers argument that the district court improperly expanded the
categories of sales deemed illegal under Minn. Stat. 340A.801, subd. 1, we have as our
focus the purposes of the act. The concern of the Civil Damages Act is intoxication
which results in injury to the intoxicated persons dependants or others. Hollerich v.
City of Good Thunder, 340 N.W.2d 665, 668 (Minn. 1983). The acts purposes are (1) to
protect the health, safety, and welfare of the public through careful regulation of liquor
distribution, (2) to penalize vendors for the illegal sale of liquor, and (3) to provide a
remedy for innocent third persons injured as a result of anothers intoxication. Englund v.
MN CA Partners, 555 N.W.2d 328, 332 (Minn. App. 1996), affd mem., 565 N.W.2d 433
(Minn. 1997). Imposing liability on vendors acts as an incentive to the vendors to avoid
1 On appeal, Wheeler does not address the issue of whether the sale of liquor to Peterson
violated Minn. Stat. 340A.410, subd. 7 (2006). Failure to brief an issue for this court
waives the issue. State v. Tracy, 667 N.W.2d 141, 145 (Minn. App. 2003).
6
illegal sales and also reflects the legislative judgment that the vendors can best bear the
loss. Conde v. City of Spring Lake Park, 290 N.W.2d 164, 166 (Minn. 1980). The act
reflects a deep concern over alcohol abuse. Rambaum, 435 N.W.2d at 22.
In determining whether a sale is an illegal sale under the act, the supreme court has
looked to the manner in which certain kinds of illegal sales impact on the publics access
to and consumption of alcoholic beverages. Id. The supreme court considers significant
the legislatures limitations based on population on the number of regular liquor licenses
that a municipality may issue based on population, and the fact that the exception from
those limitations for clubs has a proviso limiting sales to club members and guests. Id.
(holding that fraternal clubs sale of liquor to person, not member or guest, is illegal sale
under act). The court found that the proviso limited clubs competition for business with
other licensed vendors, thereby reducing the potential for alcohol abuse that occurs with
competition for consumers in an over-saturated market. Id. Other sales that have been
deemed illegal under the act include (1) sales during prohibited hours, (2) sales to minors,
(3) sales to obviously intoxicated persons, and (4) sales on prohibited days. Englund, 555
N.W.2d at 330-33 (holding that sale of alcohol in open container by on-sale vendor
without safeguarding against off-premises consumption is illegal sale under act).
We are not persuaded by Wheelers argument that it is a significant distinction that
this case involves a statute governing the shape of the vendors building, whereas cases
in which a sale has been deemed illegal for purposes of the act all involved regulations
restricting persons to whom liquor can be sold or the time of sale. Like the illegal sale in
Rambaum, Wheelers operation of two separate establishments in two separate buildings
7
circumvents statutory limits based on population on the number of liquor licenses that a
municipality may issue, thereby increasing the potential for alcohol abuse and the injury
of innocent persons. Also, both Englund and this case involve the place where alcohol
consumption occurs after the sale. The district courts conclusion that an illegal sale
under the act occurred in this case is consistent with Minnesota law and the purposes of
the act. Minnesota law does not support Wheelers argument that Clark, Juetten, and
Lindberg were required to present evidence documenting a causal connection between
violation of the compact-and-contiguous requirement and increased public consumption
of alcohol.
Wheeler argues that until the district court granted partial summary judgment for
Clark, Juetten, and Lindberg, he believed the Krazy Rabbit to be in compliance with
Minn. Stat. ch. 340A, and should not be held retroactively liable for the illegal sale. But
the July 2001 letter from the county zoning administrator notified Wheeler that the
proposed construction was an impermissible expansion of the existing adultentertainment
establishment. The legislature has imposed on liquor vendors the
responsibility of complying with the requirements of chapter 340A, which requires
vendors to take affirmative steps to ensure that all liquor sales are legal. Englund, 555
N.W.2d at 332.
Finally, Wheeler argues that a violation of the compact-and-contiguous building
requirement should not give rise to liability under the act because whether a violation
occurred may require a fact-intensive determination. That a fact-intensive determination
may be required does not preclude liability under the act. See Strand v. Village of
8
Watson, 245 Minn. 414, 416, 72 N.W.2d 609, 612 (1955) (addressing sufficiency of
evidence to create fact question as to whether individual was obviously intoxicated); see
also Jaros v. Warroad Mun. Liquor Store, 303 Minn. 289, 296-97, 227 N.W.2d 376, 381-
82 (1975) (same).
D E C I S I O N
The district court properly determined that the sale of liquor to Peterson was an
illegal sale under the act and granted summary judgment for Clark, Juetten, and Lindberg
on the issue.
Affirmed.
 

 
 
 

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