Archive for February, 2012

Have Private Homes Become The New Safe Havens For Teen Drinking?

February 28, 2012

Social Host Liability

What is meant by social host liability? When used as a legal term it usually means that a homeowner or a member of the homeowners family has either served alcohol to a guest or supplied the alcohol that a guest consumed. The facts most frequently contain a description of how the guest consumed alcohol on the premises; how he became intoxicated and how he injured himself while driving home, or injured a third-party on the highway. The third-party could be driving another car or be a pedestrian. The host of the party could be a minor with or without his/her parent being home; or he could be an adult host making alcohol available to adult guests or to minors. The most troubling scenario for the states’ Supreme Courts has been when the drinking was at a home, but the alcohol was brought to the premises by the guests themselves, be they adults or minors. What is the responsibility of an adult host to an adult guest when the alcohol is furnished by the host? What if the guests are minors and they are given alcoholic drinks by an adult? Does that responsibility change if the guests bring their own beer, wine or liquor? Each state has different laws that govern this vexing topic. Part of the problem is that our fellow citizens are equivocal about the issue of drinking alcoholic beverages. Some people see drinking as a harmless social activity. Others see it as a right of passage as one approaches adulthood. Yet another viewpoint is that alcohol is “harmless or the least harmful drug” as compared to heroine, cocaine or marijuana. There are those that think alcohol should be heavily regulated and supervised especially when it causes so much death and destruction. MADD constantly lobbies that under age drinking is one of the biggest causes of teenage deaths. The people of Massachusetts are typical in their simultaneous holdings of  these conflicting views. The Massachusetts Legislature and the Supreme Judicial Court reflect this ambiguity and equivocation. At the present time, no homeowner in Massachusetts can be  held liable for a guest’s intoxication and injury to himself or others unless the homeowner serves the intoxicated guest or makes the alcohol available to her when she is visibly intoxicated. If the guest brings his own alcoholic drinks to a party held at a private residence there is no homeowner liability for the guest’s alcohol related injury; or the injury he may cause a third-party. For example, an inebriated guest crashing his car into that of another driver. Last week the Massachusetts SJC had another opportunity to clarify the law and the social policy upon which the law is based. It again visited the topic of alcohol consumption in the home by a  guest who ultimately becomes intoxicated. The name of the case is Juliano, et al v. Simpson, et al. Here are the facts: a 16-year-old girl was seriously injured when the car in which she was a passenger struck a utility pole. The driver was a 19-year-old who had brought alcohol to a party which they both had attended. The host of the party was another teenager whose parents where not at home. The father of the minor hostess was unaware of the party, and the drinking of alcohol at his home by underage guests. The question presented on appeal was whether the underage host and her absent father were liable for the alcohol related injuries to the two minors in the car. The plaintiffs asserted that, of course, they were liable because they controlled the premises at which the party was held. They should have done something to prevent the drinking or the intoxication or both because they controlled the property that was their home. The Massachusetts Supreme Court rejected the plaintiffs’ theory of liability and refused to find the defendants negligent. The court stated that “… if mere control of premises gave rise to a duty of care for social hosts, the difficulties facing judges and juries charged with ascertaining the limits of liability would be manifold… Moreover, we are reluctant to impose a duty of care in the absence of clear existing social values and customs supporting such a step.”  The Court invited the Legislature to amend the law regarding social host liability. It stated that the Legislature could more readily reflect the political and social consensus necessary before any changes are made to this evolving legal issue. In the meantime, private homes have become the new safe havens for teen drinking; and high school graduation parties are just around the corner.

Punitive Damages Part 3

February 20, 2012

A few weeks ago, in part two of our discussion concerning punitive damages, I referred to a case that was before the Massachusetts Supreme Court. The case is entitled Rhodes, et al v. AIG Domestic Claims, Inc., et al. Last week the court announced its decision. It stated that under the Massachusetts Consumer Protection laws, Chapters 93A and 176D, insurance companies are required to negotiate in good faith. It also held that if liability is reasonably clear insurance companies must make a reasonable offer of settlement in an attempt to settle the case, prior to litigation. The court then went on to explain the consequences to insurance companies for refusing to obey the Consumer Protection laws. If a jury returns a verdict for the plaintiffs there may be punishment damages awarded by the trial judge in addition to the jury’s award of compensatory damages. The judge may hold a separate hearing on whether the insurance company engaged in bad faith and unreasonably delayed the settlement of the case or refused to engage in a good faith negotiations. In the Rhodes case,  the Massachusetts Supreme Court decided, in clear and understandable language, that the insurance companies engaged in bad faith and that punitive damages were appropriate. The S.J.C. in Rhodes has done more to redress the economic disparity between the powerful and the weak, and the rich and the poor, than all the legislation passed in Massachusetts in the past 20 years. There was no dispute about liability. The car occupied by Mr. and Mrs. Rhodes was rear-ended by a truck. Mrs. Rhodes sustained severe injuries. The jury returned a verdict, with interest, of approximately $11,000,000. Under the Consumer Protection laws the award may be doubled or tripled as a punishment and as a deterrent. The state Supreme Court decided that 2x the jury award was an appropriate remedy for the many years of delay caused by the insurance companies. The punitive damage award was $22,000,000. I previously stated, in Part 2 of our punitive damages discussion, that money is the only sanction that gets the attention of an insurance company. At least in Massachusetts, insurance companies now have a clear motivation to do the right thing. It just became more expensive to ignore the law than to follow its requirements. The total amount of money that the insurance companies are required to pay  Mr. and Mrs. Rhodes is approximately $33,000,000. This case is particularly significant for the little guy who gets hurt once when injured and once again when they just string it out and hope to lowball and stonewall him. Prior to this ruling, the Massachusetts courts were looked upon as paper tigers on the issue of 93A and 176D. All this case does is to bring the courts back into line with what is fair and reasonable.