No. 3-967 / 03-1010Court of Appeals of Iowa.
Filed March 10, 2004
Appeal from the Iowa District Court for Linn County, David L. Remley, Judge.
Lisa Smith appeals from an adverse ruling on a motion for summary judgment dismissing her dram shop action against Shagnasty’s. AFFIRMED.
Hugh G. Albrecht of the Tom Riley Law firm, P.L.C., Cedar Rapids, for appellant.
Jennifer E. Rinden of Shuttleworth Ingersoll, P.L.C., Cedar Rapids, for appellee.
Heard by Huitink, P.J., and Vogel and Mahan, JJ.
HUITINK, P.J.
I. Background Facts and Proceedings
Shagnasty’s is a Cedar Rapids nightclub licensed to sell and serve alcohol. Lisa Smith sued Shagnasty’s for personal injury damages after an unidentified woman struck her with a beer bottle while both were at Shagnasty’s on August 18, 2002. Smith’s theories of recovery included both dram shop and premises liability.
Smith’s deposition testimony indicates that she believed her assailant was intoxicated. Smith premised this opinion on her assailant’s aggressive and vulgar behavior. Smith testified the woman shoved her, called her an obscene name, and displayed a beer bottle in a threatening way. Smith’s deposition also includes the following testimony:
Q. And after you were struck with the beer bottle what happened next? A. I kind of like fell down.
Q. Okay. A. And then I tried to grab her, and I grabbed her by her hair.
Q. Then what happened? A. The bouncers came and they grabbed me, about five of them, and they told me to let her go. And I told them no because I didn’t think they were going to detain her until the police got there, because they like, grabbed me and shoved me against the wall. And they finally said that they were going to detain her so I let her go.
. . . .
A. Actually yeah. They had me back there and the police got there. They asked what happened to the girl, and everybody looked dumbfounded like they didn’t know what to say, because they let her go.
The responding police officer’s report included these observations:
There were multiple people in the area when the assault occurred, however, most people conveniently did not see anything and did not wish to speak to us about the incident. . . . It is believed that the unknown suspect left the establishment when we were going inside and it is unknown any direction of travel or any further information concerning the suspect.
Shagnasty’s moved for summary judgment dismissing Smith’s claims citing the absence of evidence that its employees sold or served Smith’s assailant alcoholic beverages. Shagnasty’s also cited the absence of evidence indicating its employees knew or should have known Smith’s assailant was or would become intoxicated.
Smith’s resistance cited her observations of her assailant’s behavior as evidence that her assailant was intoxicated. Smith also cited the inferences resulting from her assailant’s possession of a beer bottle and Shagnasty’s intentional failure to detain or otherwise identify her assailant as proof of Shagnasty’s sale and service of alcohol to her assailant as well as employee knowledge that her assailant was or would become intoxicated.
The trial court’s resulting ruling provides:
In order for Plaintiff to succeed on her dram shop claim, she must prove that Defendant sold and served beer, wine or intoxicating liquor to the unknown patron. The Court has thoroughly reviewed the evidence offered by both parties, and there is no testimony from any employee of Defendant that the unknown patron was sold beer, wine or intoxicating liquor. There is no evidence Defendant sold or served beer, wine or intoxicating liquor to the unknown patron. There is also no evidence that Defendant knew or should have known the unknown patron would become intoxicated. Since Plaintiff cannot prove that Defendant sold and served beer, wine or intoxicating liquor to the unknown patron, or that Defendant knew or should have known the unknown patron would become intoxicated, her dram shop claim must fail. Defendant is entitled to summary judgment on the dram shop claim.
Smith’s dram shop claim was accordingly dismissed resulting in this appeal.
On appeal Smith argues the summary judgment record is sufficient to generate material issues of fact on all of the requisite elements of her dram shop claim and the trial court erred by concluding otherwise.
II. Standard of Review
We review a district court’s ruling on a motion for summary judgment for correction of errors of law. Financial Mktg. Servs., Inc. v. Hawkeye Bank Trust, 588 N.W.2d 450, 455 (Iowa 1999). Summary judgment will be upheld when the moving party shows there are no genuine issues of material fact and the party is entitled to judgment as a matter of law. See Iowa R. Civ. P. 1.981(3). In reviewing a motion for summary judgment, we consider the evidence in a light most favorable to the party opposing the motion. Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 565
(Iowa 2000). The court must consider on behalf of the nonmoving party every legitimate inference that can be reasonably deduced from the record. State v. Unisys Corp., 637 N.W.2d 142, 149
(Iowa 2001); Crippen, 618 N.W.2d at 565; Shivvers v. Hertz Farm Mgmt., Inc., 595 N.W.2d 476, 479 (Iowa 1999). An inference is legitimate if it is “rational, reasonable, and otherwise permissible under the governing substantive law.” Butler v. Hoover Nature Trail, Inc., 530 N.W.2d 85, 88 (Iowa Ct.App. 1994) (citation omitted). On the other hand, an inference is not legitimate if it is “based upon speculation or conjecture.” Id.
If reasonable minds may differ on the resolution of an issue, a genuine issue of material fact exists. Swartzendruber v. Schimmel, 613 N.W.2d 646, 649 (Iowa 2000); Shivvers, 595 N.W.2d at 479.
III. The Merits
Iowa Code section 123.92 (2001) provides:
Any person who is injured in person . . . by an intoxicated person . . . has a right of action for all damages actually sustained, severally or jointly, against any licensee or permittee . . . who sold and served any beer, wine, or intoxicating liquor to the intoxicated person when the licensee or permittee knew or should have known the person was intoxicated, or who sold to and served the person to a point where the licensee or permittee knew or should have known the person would become intoxicated.
This statute is the exclusive remedy against a licensee or permittee for selling and serving alcohol to an intoxicated person. Grovijohn v. Virjon, Inc., 643 N.W.2d 200, 203 (Iowa 2002). A successful dram shop plaintiff must prove the licensee: (1) sold and served the intoxicating substance to the patron; (2) when the licensee knew or should have known the patron would become intoxicated or knew or should have known the patron has already become intoxicated. See Iowa Code § 123.92.
The plaintiff may prove these elements by direct or circumstantial evidence. Horak v. Argosy Gaming Co., 648 N.W.2d 137, 148 (Iowa 2002). The sold and served element may be established by proof that the licensee sells alcoholic beverages and generally holds itself out as a place where patrons are served. Id. (citing Kelly v. Sinclair Oil Corp., 476 N.W.2d 341, 346 (Iowa 1991)). The plaintiff, however, need not prove the patron actually consumed the dram shop’s alcohol. Kelly, 476 N.W.2d at 347. The plaintiff accordingly need not produce the actual server or servers of the alcohol to the patron. Id.
The knowledge element may be satisfied by subjective or objective proof of the licensee’s knowledge. Hobbiebrunken v. G S Enters., Inc., 470 N.W.2d 19, 22 (Iowa 1991). Circumstantial proof of employee knowledge includes employee observations of a patron’s visible intoxication. Horak, 648 N.W.2d at 148.
Contrary to the trial court’s conclusions, we find the record sufficient to generate a fact question on the intoxication as well as the sold and served elements of Smith’s dram shop claim. Smith’s observations of her assailant’s aggressive and vulgar behavior raise a legitimate inference that her assailant was intoxicated. Id. Additionally, there is no dispute that Smith was struck with a beer bottle and that Shagnasty’s was licensed to sell and serve beer on its premises. A fact finder could legitimately infer from these facts that Shagnasty’s sold and served beer to Smith’s assailant. Id.
Smith contends that Shagnasty’s failure to detain or otherwise identify her assailant was intended to conceal or destroy evidence by which Smith could prove the knowledge element of her dram shop claim. The resulting negative inferences, she argues, are sufficient to generate the requisite questions of fact necessary to defeat Shagnasty’s motion for summary judgment. We disagree.
“Spoliation” is the term used to describe the nonproduction, alteration, or destruction of evidence. Phillips v. Covenant Clinic, 625 N.W.2d 714, 718 (Iowa 2001) (citations omitted). Spoliation of evidence relevant to proof of an issue in legal proceedings supports an inference that such evidence would have been unfavorable to the party responsible for its nonproduction, alteration or destruction. Id.
Although predominantly invoked in situations involving physical evidence, the concept of spoliation includes other obstructive conduct regarded as an admission. See McCormick on Evidence § 265, at 179-83 (5th ed. 1999) (applying undue pressure by bribery, intimidation, or other means to influence a witness to testify or not to testify or avoid testifying); John M. McGuire
Robert C. Vincent, Admissions Implied from Spoliation or Related Conduct, 45 Yale L.J. 226, 236 (1935) (obstructing evidence or “spiriting” a key witness out of the jurisdiction). To benefit from the inference, the party seeking its invocation must show the destruction, alteration, or nonproduction was intentional and the missing evidence was within the offending party’s control Phillips, 625 N.W.2d at 719. The general rule is that the resulting inference “does not amount to substantive proof and cannot take the place of proof of a fact necessary to the other party’s cause.” 29 Am. Jur.2d Evidence § 244, at 256 (1994) see also McCormick on Evidence § 265, at 179-83.
Our review of Iowa cases in which a spoliation issue was raised indicates that Iowa has followed the general rule. When the issue was submitted, the jury was permitted to conclude no more than the spoiled evidence would be unfavorable to the offending party Phillips, 635 N.W.2d at 718; Hendricks v. Great Plains Supply Co., 609 N.W.2d 486, 491 (Iowa 2000); Gamerdinger v. Schaefer, 603 N.W.2d 590, 595 (Iowa 1999); see State v. Langlet, 283 N.W.2d 330, 335 n. 4 (Iowa 1979) (probative value of inference is weak); see also I Iowa Civ. Jury Instructions 100.22 (2001). We have found no instance in which the spoliation inference was substituted as substantive proof of a party’s claim. In the absence of other substantive evidence from which it can be shown or inferred that Shagnasty’s employees observed the cited behaviors of Smith’s assailant or otherwise knew she was or would become intoxicated, the spoliation inference upon which Smith relies is insufficient as a matter of law to generate a fact question on this issue. Because Smith fails to cite and the record reveals no such evidence, the trial court correctly concluded Smith cannot establish the knowledge element of her dram shop claim. We accordingly affirm the trial court’s ruling granting Shagnasty’s motion for summary judgment.
AFFIRMED.