Goodhue County District Court File No. C6-02-1121.
Considered and decided by Halbrooks, Presiding Judge; Schumacher, Judge; and Dietzen, Judge.
Minnesota's Civil Damages Act, Minn. Stat. § 340A.801, subd. 1 (2004), gives rise to a cause of action in derogation of the common law and must be strictly construed, providing a cause of action only against persons who are in the business of providing liquor.
The opinion of the court was delivered by: Halbrooks, Judge
Dissenting, Schumacher, Robert H., Judge
Appellant Todd Urban, on behalf of himself and his three minor children, challenges the district court's award of summary judgment on claims brought under Minnesota's Civil Damages Act against respondents American Legion and American Legion Department of Minnesota. Appellants also challenge the district court's issuance of protective orders that ended discovery in this matter. On appeal, American Legion and American Legion Department of Minnesota move to strike portions of the appendix to appellants' brief. Respondent American Legion Post 184 is not a party in this appeal. Because we conclude that the Civil Damages Act does not provide for a cause of action against American Legion or American Legion Department of Minnesota, we affirm the district court's summary judgment. Because the district court did not abuse its discretion, we affirm the district court's issuance of the discovery protective orders. We further grant respondents' motion to strike portions of appellants' appendix as outside the record on appeal.
Appellant Todd Urban, on behalf of himself and his three minor children, commenced an action against American Legion Post 184 (Post 184) under Minnesota's Civil Damages Act (the Act). On August 10, 2004, Todd and Barbara Ann Urban and their three children were driving on Highway 52 in Pine Island when their car was hit by a vehicle driven by Orvin Roland. As a result of the accident, Barbara Ann died, one child sustained permanent physical disabilities, and another child suffered permanent brain damage. Appellants allege that Roland was intoxicated at the time of the accident and that Post 184 caused his intoxication by illegally selling alcohol to him. Appellants subsequently brought claims under the Act against American Legion (National) and American Legion Department of Minnesota (Department), contending that these entities are vicariously liable for Post 184's illegal alcohol sale.
National, Department, and Post 184 are separately incorporated entities. The U.S. Congress chartered National in 1919 and authorized it to establish regional and local organizations. National issued charters to both Department and Post 184. Thereafter, both Department and Post 184 separately incorporated in Minnesota.
According to the "Officer's Guide," which is published by National, the local post "is the combat unit of The American Legion" and "is to a large degree autonomous, restricted only by broad general guidelines carried in the National or Department Constitution and By-Laws." National promulgates recommendations for forming local posts, conducting ceremonies and post meetings, writing post constitutions and bylaws, and using the American Legion's name and emblems. In part, materials published by National explain that a local post typically "will be unable to remain solvent if its princip[al] source of income is derived from membership dues." National lists "operation of club rooms and dining facilities for [the local post's] members" as one of three sources of possible supplementary sources of income. The "Post Operations Manual" lists a number of standards of operation, including, "If the post's activity center includes a bar, it should always be closed during post meetings. There is no exception to this flat rule. Keep the bar closed during meetings and, obviously, do not permit beverages of any kind to be served or drunk during the meeting."
National also provides posts with legal advice. For example, the record shows that National has advised local posts to incorporate to protect individual members from liability in dram-shop litigation. National has also advised local posts for tax purposes to obtain club licenses and to serve alcohol only to members.
National has the power to revoke a local post's charter. Revocation generally occurs due to low membership or the failure of a post to transmit dues owed to National and Department. Revocation can also occur due to misconduct. In at least one instance, a local post's charter was cancelled because "[it] was a completely illegal post," "[b]eing operated as a for[-]profit club," and had been paying fines imposed by the "State Liquor control [board]." Finally, National has the authority to audit or investigate a post's membership rosters and financial statements.
According to the affidavit of Lyle Foltz, Department Adjutant, Department provides communication between local posts and National, guidance and leadership, and the administration of programs that local posts may choose to participate in, but "has no day-to-day control over Post 184 or any other post." According to a letter from Lee P. Harris, Deputy Director, National Public Relations, the "Department Adjutant" is "responsible for the daily business operation of the elements of the organization in the state."
Post 184, located in Pine Island, has about 270 members. It collects dues from its members and transmits a portion to National and Department as required under its constitution. In addition to collecting dues, Post 184 raises 94% of its revenue through the operation of a private club and alcohol sales. Post 184 uses revenue from the club to satisfy membership dues on behalf of members who are unable to pay.
National and Department filed motions for summary judgment, arguing that the Act does not provide a cause of action against them and requested protective orders to stop discovery. The district court granted the requests for summary judgment, concluding that National and Department could not be sued under the Act because neither is a commercial vendor of alcohol or holder of a liquor license. The district court further concluded that even if National or Department could be sued under the Act, appellants failed to raise a genuine issue of material fact on the theory of vicarious liability and failed to provide notice to those entities as required by the Act. The district court also granted National and Department's motions for discovery protective orders. Appellants argue that the district court erred because (1) the Civil Damages Act applies to entities that are vicariously liable, (2) genuine issues of material fact exist regarding vicarious liability, (3) appellants complied with the Civil Damages Act's notice requirement, and (4) the district court abused its discretion by granting a protective order to stop all discovery against National and Department.*fn1
I. Did the district court err by granting summary judgment on claims brought under the Act ...