Johnson, Appellant, et al.
Montgomery; Thirty-Eight Thirty, Inc., et al., Appellees.
Submitted April 6, 2017
from the Court of Appeals for Montgomery County, Nos. 26319
and 26322, 2016-Ohio-1472.
Cole, L.L.P., Douglas R. Cole, Erik J. Clark, and Sean M.
Stiff; Dennis Mulvihill; and Wright & Schulte, L.L.C.,
and Stephen D. Behnke, for appellant.
& Corwin Co., L.P.A., Jonathan B. Freeman, and Steven E.
Bacon; and Jeffrey D. Slyman, for appellees, Thirty-Eight
Thirty, Inc., d.b.a. The Living Room, and Michael C. Ferraro.
Michael DeWine, Attorney General, Eric E. Murphy, State
Solicitor, and Michael J. Hendershot, Chief Deputy Solicitor,
urging reversal for amicus curiae state of Ohio.
W. Flowers Co., L.P.A., and Paul W. Flowers, urging reversal
for amicus curiae Ohio Association for Justice.
Law Firm, L.L.C., Peter D. Traska, Bernadette Matheson, and
Michelle Molzan Traska, urging reversal for amicus curiae
Mothers Against Drunk Driving of Ohio.
1} Under Ohio's Dram Shop Act, R.C. 4399.18,
someone injured by an "intoxicated person" may sue
a liquor-permit holder for an off-premises injury only when
the permit holder or its employee served the person knowing
her to be intoxicated or underage. This case, which has
reached us by way of a discretionary appeal, involves a
dancer at a strip club who left the club intoxicated and
caused an accident on her way home. The question is whether
the dancer qualifies as an "intoxicated person"
under the statute or whether the term encompasses only the
permit holder's patrons. The plain language of the
statute provides the answer: the ordinary meaning of
"person" includes not only patrons but also
dancers, workers, independent contractors, and others served
by the permit holder. Thus, the accident victim may pursue a
claim against the club only under the Dram Shop Act.
An Intoxicated Strip-Club Dancer Causes an Accident
2} Nichole Johnson was severely injured when the car
in which she was a passenger was struck by another car. The
other car was driven by Mary Montgomery, who had just
finished her shift as a dancer at a strip club known as The
Living Room. Montgomery admitted that she was intoxicated
when she left the club: she had ingested cocaine that day,
and while working, she had drunk "a few" beers that
had been purchased for her by customers.
3} Drinking while working was not unusual at The
Living Room. Although not required to drink, the dancers did
so as a matter of course, often to embolden themselves to
perform. The practice was encouraged by the club's
waitresses, who urged customers to buy drinks for the
dancers. Thirty-Eight Thirty, Inc., which operated The Living
Room, benefited from the dancers' drinking: the club
charged a higher price for drinks purchased for dancers.
According to Michael C. Ferraro, the sole officer and
shareholder of Thirty-Eight Thirty, 95 percent of the
club's profits came from alcohol sales, and 30 to 40
percent of the alcohol sold was purchased by customers for
the dancers. Virtually no limits were placed on how much a
dancer could drink while working. And while Ferraro claimed
that a dancer's husband or boyfriend would be called in
the event the dancer became too intoxicated to drive,
Montgomery testified that no one had ever arranged a ride
home for her.
4} Under a contract with Thirty-Eight Thirty,
Montgomery paid $30 a night to lease space for her dancing.
In return, she kept all the tips from customers. She received
no wages or compensation from Thirty-Eight Thirty or Ferraro.
The Proceedings Below
5} Johnson filed a complaint asserting
common-law-negligence claims against Montgomery, Ferraro, and
Thirty-Eight Thirty and a claim for violation of the Dram
Shop Act against Thirty-Eight Thirty and Ferraro. A default
judgment was rendered against Montgomery. The claims against
Thirty-Eight Thirty and Ferraro were tried to a jury. At the
conclusion of Johnson's case, a magistrate directed a
verdict in favor of Ferraro as to his personal liability and
in favor of Thirty-Eight Thirty as to its liability under the
Dram Shop Act. Thirty-Eight Thirty's motion for a
directed verdict on the issue of common-law negligence was
denied. The jury returned a verdict in favor of Johnson for
$2, 854, 645.55 on the negligence claim. The trial court
adopted the magistrate's decision and entered judgment in
accordance with the jury's verdict.
6} Johnson appealed the trial court's judgment
directing a verdict for Ferraro on the issue of personal
liability. Thirty-Eight Thirty and Ferraro cross-appealed.
They argued that outside the Dram Shop Act, Ohio did not
recognize a cause of action based on negligently furnishing a
tortfeasor with intoxicating beverages and that the trial
court should not have instructed the jury on common-law
negligence. The Second District agreed and concluded that
because the Dram Shop Act provided the exclusive cause of
action against Thirty-Eight Thirty, the trial court had erred
when it allowed the issue of common-law negligence to go to
the jury. Thus, the judgment against Thirty-Eight Thirty on
the common-law-negligence claim was reversed. The reversal of
that verdict rendered moot the question of Ferraro's
personal liability. We accepted Johnson's discretionary
appeal. 146 Ohio St.3d 1502, 2016-Ohio-5792, 58 N.E.3d 1173.
Ohio's Dram Shop Act
7} "The Ohio Dramshop Act, R.C. 4399.18,
embodies [the] general, common-law rule that a person (or his
representative) may not maintain a cause of action
against a liquor permit holder for injury resulting from the
acts of an intoxicated person." (Emphasis sic.)
Klever v. Canton Sachsenheim, Inc., 86 Ohio St.3d
419, 421, 715 N.E.2d 536 (1999). Liability attaches only
under the limited circumstances prescribed by the statute.
Johnson maintains that the Dram Shop Act does not apply under
the facts of this case and that Thirty-Eight Thirty's
liability for her injuries should be determined under
common-law-negligence principles. The gist of Johnson's
argument is that the statute determines a permit holder's
liability only with respect to acts by its patrons, not by
its workers or independent contractors.
8} Our starting point is the ...