L.D.G., INC., an Alaska Corporation, and Larry Gjovig, Appellants and Cross-Appellees,
Robert J. BROWN, Personal Representative of Tracy N. Eason, Deceased, Appellee and Cross-Appellant.
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Arthur S. Robinson, Robinson & Associates, Kenai, for Appellants and Cross-Appellees.
John S. Hedland, Hedland, Brennan and Heideman, Anchorage, for Appellee and Cross-Appellant.
Ruth Botstein, Assistant Attorney General, Anchorage, and Talis J. Colberg, Attorney General, Juneau, for Intervenor and Cross-Appellee State of Alaska.
Before : FABE, Chief Justice, EASTAUGH, CARPENETI, and WINFREE, Justices.
The personal representative of the estate of a woman who was shot and killed by an intoxicated man sought damages, on behalf of the woman's two surviving dependents, from a bar that allowed the man to consume alcohol while he was already intoxicated just prior to the shooting. Following a jury trial, the superior court imposed dram shop liability in favor of the personal representative, dismissed the single shareholder of the bar's corporate owner from the lawsuit, and applied a single damages cap to the non-economic damages awarded to the decedent's two surviving dependents. The corporate owner of the bar challenges (1) the superior court's entry of a judgment notwithstanding the verdict after the jury made factual findings but refused to assign legal cause to the bar; (2) the trial court's decision that the plaintiff's complaint was sufficiently broad to include the violation of the dram shop act alleged here; (3) the trial court's refusal-at a subsequent trial for damages-to allow appellant to introduce evidence of the facts and circumstances surrounding the decedent's death; (4) the trial court's instruction on legal cause in the damages trial; and (5) the trial court's decision to permit hearsay testimony in the damages trial. The personal representative (1) challenges the trial court's dismissal of the single shareholder of the bar's corporate owner from the suit and (2) argues that the damages cap is unconstitutional on its face and as applied and, if it is constitutional, that the trial court should have imposed a separate damages cap for each surviving decedent. The state, as intervenor, argues that the damages cap statute is constitutional. For the reasons stated below, we affirm the superior courts's decisions on all issues with the exception of its dismissal of the single corporate shareholder from the lawsuit. On that issue, we remand for retrial.
II. FACTS AND PROCEEDINGS
R.V. Freeman spent the evening of July 17, 1998 consuming alcohol at the J Bar B. The J Bar B is owned by L.D.G., Inc., a corporation individually owned by Larry Gjovig. Freeman was served at the bar by bartender Sharine Christensen. Freeman was served eight drinks within the span of approximately fifty minutes, and allegedly had consumed more alcohol earlier in the day. Eventually, when Freeman began to appear intoxicated, Christensen refused to serve him any more alcohol. Christensen did not remove Freeman's remaining drinks, however, and Freeman consumed at least a
part of one drink after the point at which Christensen determined that he was intoxicated.
Christensen then attempted to procure a ride home for Freeman to prevent him from driving in his intoxicated condition. Freeman refused to let Christensen call him a cab and refused to give her his car keys. Eventually another bar patron, Tracy Eason, agreed to drive Christensen to Freeman's residence to pick up Freeman's girlfriend, Jeanne Iwasko, so that Iwasko could come back with them to the bar and drive Freeman home in his own car. Eason drove Christensen to Freeman's residence, but when they arrived there they discovered that Freeman had already driven himself home and was in the driveway speaking with Iwasko.
Christensen asked to use the bathroom and Iwasko let her into the house. While Christensen was in the bathroom she heard Iwasko and Freeman arguing. Christensen then heard two gunshots. Christensen eventually left the bathroom, saw Iwasko on the floor suffering from a gunshot wound, and called 911. Christensen heard more gunshots while she was on the phone with the 911 operator. State troopers arrived on the scene and arrested Freeman. Both Iwasko and Eason, who had also been shot, died from the wounds they received that night. Freeman was convicted of first-degree murder in the deaths of both Iwasko and Eason and is currently incarcerated.
In 2000 Robert Brown, Tracy Eason's father and the personal representative of her estate, filed a wrongful death suit against L.D.G., Inc. and Larry Gjovig on behalf of the estate and Eason's surviving dependent children Jordan and Justin. The complaint alleged that the J Bar B violated Alaska's dram shop act, AS 04.16.030, when Christensen-the J Bar B's bartender-served alcoholic beverages to Freeman while he was visibly intoxicated. The complaint additionally claimed that this " negligent, reckless, and intentional" serving of alcohol to Freeman was the proximate cause of Eason's death. Brown sought actual damages, punitive damages, and costs and fees on behalf of the estate and the dependents. Brown did not seek to recover any damages from Freeman himself, and neither L.D.G. nor Gjovig sought to join Freeman or assert a third-party claim against him.
At trial, the jury heard testimony regarding Freeman's level of intoxication when Christensen served him the alcoholic beverages and the circumstances surrounding Christensen's refusal to serve him any additional alcohol. Additionally, the jury heard testimony from several witnesses who described Freeman's typical behavior when sober and when intoxicated. The jury was also shown portions of a video recorded in the bar on the night in question. At the close of the trial, Gjovig moved for a directed verdict on the claims against him personally. The superior court granted Gjovig's motion, leaving L.D.G. as the sole remaining defendant.
The court then submitted the case to the jury, providing the jury with a special verdict form to determine the extent of L.D.G.'s liability. Responding to questions laid out in the special verdict form, the jury declined to find that " an employee of the J Bar B [sold] alcohol to R.V. Freeman with criminal negligence when he was a drunken person," but did find that " an employee of the J Bar B with criminal negligence allow[ed] R.V. Freeman to consume an alcoholic beverage in the bar when he was a drunken person." The jury also found that it was " more likely true than not true that, if R.V. Freeman had not been intoxicated, he would not have killed Tracy Eason." But the jury declined to find that " the intoxication of R.V. Freeman [was] so important in bringing about the death of Tracy Eason that a reasonable person would regard it as a cause and attach responsibility to it." Because the jury did not find that Freeman's intoxication was a legal cause of Eason's death, they did not reach the question of damages.
Following receipt of the jury's verdict, Brown filed a motion for entry of judgment in his favor and a new trial to determine damages. The superior court granted Brown's motion, finding that " fair-minded jurors could not have concluded that the intoxication of the murderer, who they found
would not have killed Tracy Eason but for that very intoxication, was not a substantial factor in this wrongful death." The superior court therefore entered a judgment notwithstanding the verdict, finding L.D.G. liable for Eason's death and ordering a new trial on damages. L.D.G. filed a motion for reconsideration of the order, and the superior court denied this motion. L.D.G. then petitioned this court for review; we denied the petition.
At the beginning of the new trial on damages, the superior court ordered, over L.D.G.'s objection, that the trial would be limited to the question of wrongful death damages and that the jury would not be informed of the circumstances surrounding Eason's death. The jury ultimately determined damages, using a special verdict form identifying past and future economic and non-economic damages, at $705,856 for Justin Eason and $749,026 for Jordan Eason. Each of these awards included $28,290 in past non-economic damages and $537,508 in future non-economic damages. Brown then moved for an entry of judgment setting damages at the amounts determined by the jury. L.D.G. responded with a motion for remittitur claiming that the non-economic damages were subject to a damages cap under AS 09.17.010, which would limit the non-economic damages to a total of $421,824 (based on Tracy Eason's life expectancy at the time of her death multiplied by $8,000) for the combined claims of both of Eason's surviving dependents. Brown responded to L.D.G.'s motion for remittitur by arguing that the damages cap should not apply in this case, that if the damages cap did apply there should be a separate cap for each of the boys' claims, and in the alternative that the appropriate damages cap was a one million dollar cap under AS 09.17.010(c). Brown also argued that the entire damages cap statute was facially unconstitutional as a denial of equal protection and the right to a jury trial, and unconstitutional as applied in this case because it applied an aggregate cap to multiple beneficiaries.
After the original judge, Superior Court Judge John Suddock, recused himself in January 2005 because he had previously been involved as counsel in a case relied upon by the parties regarding the constitutionality of AS 09.17.010, the case was reassigned to Superior Court Judge Morgan B. Christen. Judge Christen then entered a final judgment in April 2005 interpreting AS 09.17.010 as imposing a single damages cap. The superior court declined to address the constitutional arguments because it found that Brown had not met the burden of proof required to overcome the presumption of constitutionality. Accordingly, the superior court applied a single cap of $421,824 to the aggregate non-economic damages awarded to the boys.
Brown moved for reconsideration of the order imposing the single damages cap, asking the court to reach the constitutional issues. L.D.G. did not respond to the motion, and the superior court ordered supplemental briefing on the constitutional issues. The parties submitted supplemental briefing, and the court notified the Attorney General of Alaska that the supplemental briefing called into question the constitutionality of a statute. The court also requested amicus briefing on the constitutional questions from organizations representing plaintiffs' counsel and defense counsel. The state successfully moved to intervene in the litigation to defend the constitutionality of the damages cap legislation. The superior court ultimately found that AS 09.17.010(b) is not unconstitutional on its face or as applied. The superior court again entered a single award for both boys for non-economic damages of $421,824.
Brown and L.D.G. both appealed; the state continues to defend the constitutionality of the damages cap.
III. STANDARD OF REVIEW
We review de novo the grant of a directed verdict and the grant of a judgment notwithstanding the verdict to determine whether the evidence, viewed in the light most favorable to the non-moving party, is
such that reasonable persons could not differ in their judgment. We review a determination of the sufficiency of a complaint for abuse of discretion. Questions regarding the admissibility of evidence are reviewed for abuse of discretion. Where " the admissibility of evidence turns on whether the trial court applied the correct legal standard, we review the [lower] court's decision using our independent legal judgment."  We review jury instructions de novo.  Issues regarding the constitutionality of statutes are questions of law that we review de novo.  We review the interpretation of a statute de novo, adopting the rule of law most persuasive in light of precedent, reason, and policy.
A. The Trial Court Did Not Err in Granting Brown's Motion for a Judgment Notwithstanding the Verdict After the Original Trial.
Following completion of the original jury trial, and after the jury had entered its finding that Freeman's intoxication was not a legal cause of Eason's death, the superior court granted Brown's motion for a judgment notwithstanding the verdict (JNOV). L.D.G. argues that Brown was not entitled to a j.n.o.v. because reasonable persons could differ in their judgment on the issue, and therefore the jury's verdict should have been allowed to stand. To support this argument, L.D.G. asserts that Alaska's dram shop liability statutes are not strict liability statutes, and therefore the plaintiff must establish that violation of the statutes was both the factual and proximate cause of the injuries. In this case, L.D.G. argues, Brown must show not just that L.D.G. violated the dram shop statutes by serving alcohol to an intoxicated person, but also that " the injuries to the decedent ‘ resulted from the intoxication,’ or were proximately caused by the intoxication."
Brown responds that the entry of a JNOV was appropriate because the jury had been given an improper instruction on legal causation and because the special verdict form included an improper question on legal causation. Brown supports these claims by asserting that in a statutory dram shop case the only relevant issues of proximate cause are whether the defendant acted with criminal negligence under the statute in serving the actor alcohol, and whether the actor's intoxication led to the injuries. Brown argues that, because the jury returned findings in the affirmative on both of these questions, there was no need for an additional jury question on legal causation and the superior court acted appropriately in entering judgment in favor of Brown.
In deciding whether to issue a JNOV, a trial court must determine whether the evidence, when viewed in the light most favorable to the non-moving party, is such that reasonable persons could not differ in their judgment.  Under Alaska's dram shop liability statutes, a person who provides alcohol to another is generally not liable for injuries resulting from that person's intoxication. However, the statutes provide an exception for a liquor licensee who allows an intoxicated person to consume an alcoholic beverage on licensed premises. Alaska Statute 04.21.020 provides in relevant part that
a person who provides alcoholic beverages to another person may not be held civilly liable for injuries resulting from the intoxication
of that person unless the person who provides the alcoholic beverages holds a license ... or is an agent or employee of such a licensee and ... the alcoholic beverages are provided to a drunken person in violation of AS 04.16.030.
Alaska Statute 04.16.030 prohibits a licensee acting with criminal negligence from " sell[ing], giv[ing], or barter[ing] alcoholic beverages to a drunken person" or " allow[ing] a drunken person to ... consume an alcoholic beverage within licensed premises."
Here, in its decision granting Brown's motion for a JNOV, the superior court found that " fair-minded jurors could not have concluded that the intoxication of the murderer, who they found would not have killed Tracy Eason but for that very intoxication, was not a substantial factor in this wrongful death." The superior court's decision to enter judgment in favor of Brown, therefore, was based on its determination that the jury acted unreasonably in failing to assign legal causation to the J Bar B's actions in allowing Freeman to consume alcohol when he was already intoxicated, even though the jury had already found that the J Bar B had acted with criminal negligence and that Freeman's intoxication was the factual cause of Eason's death.
Generally, Alaska courts apply a two-part test to determine legal causation in negligence cases, asking first whether the accident " would not have happened ‘ but for’ the defendant's negligence," and then asking whether " the negligent act was so important in bringing about the injury that reasonable individuals would regard it as a cause and attach responsibility to it."  We have also specifically outlined the requirements for legal causation in dram shop cases in Gonzales v. Safeway Stores, Inc.: 
Under ordinary principles of causation a plaintiff would have to prove that the liquor unlawfully sold was a substantial contributing factor to the intoxication which caused the accident. Under the dram shop act the plaintiff has an easier task. The plaintiff must show only an unlawful sale to an intoxicated person who, in consequence of such intoxication, caused injury to another. The plaintiff need not show that the sale substantially contributed to the intoxication.[]
Thus, the issue of legal causation in dram shop liability cases hinges on whether the actor's intoxication was so important in bringing about the injury that a reasonable person would regard it as a cause and attach responsibility to it. This is true whether or not the plaintiff has established that the intoxication ...