Carrick v. Franchise Associates, Inc.

Citations: 164 Vt. 418; 671 A.2d 1243; 1995 Vt. LEXIS 136Docket: No. 94-637

Court: Supreme Court of Vermont; October 27, 1995; Vermont; State Supreme Court

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Plaintiff Sandra Carrick appeals a summary judgment from the Rutland Superior Court that favored defendants in her claims of franchisor liability under the Dram Shop Act (7 V.S.A. 501-507). The case stems from a traffic accident on January 16, 1991, involving Shawn C. Forrest, who consumed eight mixed drinks at the Plug. Feather Lounge before colliding with a vehicle driven by plaintiff’s decedent, Michael Carrick, resulting in Mr. Carrick's death.

The Plug. Feather, located within a Howard Johnson Restaurant, operates under a franchise agreement with Franchise Associates, Inc. (FAI), and is associated with Howard Johnson Company (HJC) and Prime Hospitality Corporation (Prime). Carrick alleges that these defendants violated the Dram Shop Act by allowing Brown. Currier, the operators of the lounge, to overserve Mr. Forrest. Defendants sought summary judgment, asserting that they did not sell or furnish alcohol to Mr. Forrest as required by the Act.

The court granted summary judgment, concluding that the defendants, as franchisors, could not be held liable under the “furnishing” provision of the Dram Shop Act. The Act stipulates that liability applies to those who have caused a person's intoxication by selling or furnishing alcoholic beverages. The court noted that “furnishing” implies possession or control of the alcoholic beverage, aligning with previous rulings which define “furnishing” and “supplying” alcohol interchangeably. The ruling emphasized that defendants did not possess or directly provide alcohol to Forrest, thereby affirming the summary judgment in their favor.

Defendants were not alleged to have possessed the alcoholic beverages served to Mr. Forrest at the Plug. Feather, and to avoid summary judgment, evidence of their control over the beverage service was necessary. The only evidence presented was a franchise agreement between FAI and Brown. Currier, which allowed Brown. Currier to operate a restaurant under the "Howard Johnson" name, including serving alcoholic beverages. FAI, as the franchisor, had the authority to set and approve operational standards, while Brown. Currier was obligated to conform to these standards, which included compliance with unprovided Manuals. Failure to adhere to the standards could lead to default and termination of the franchise. The plaintiff argued that these provisions indicated that defendants had control over the restaurant's operations, thus making them liable for overserving Mr. Forrest. However, the court found no evidence that defendants actually prescribed any service standards, including bartender training for alcohol service. The Manuals, referenced in the agreement, were not part of the record. The court refrained from addressing the issue of franchisor liability under the Dram Shop Act and concluded that the plaintiff did not present enough evidence to prove defendants’ control to support claims under the Act. The court affirmed the decision, noting that claims against Shawn Forrest and Brown. Currier, Inc. had been settled and were no longer relevant. Additionally, there was no evidence to differentiate the level of control among the defendants, including Prime, the franchisor of a nearby establishment, who had no role in the restaurant's franchising or operation. The court ruled that insufficient evidence existed to sustain claims against any of the three defendants.