By Michael Dayton
A Charleston passenger who spent an evening barhopping with friends, then was rendered quadriplegic in a single-car accident, has settled his personal injury claims for $1.08 million.
The injury victim, Michael Leaphart, said he was too drunk to drive and turned over his car keys to one of his drinking buddies. His friend ran off the road and crashed into a tree, ejecting Leaphart from the car and paralyzing him from the chest down.
Leaphart was 21 at the time of the accident. Now 24, he sued four bars in 2003 under a dram shop theory, alleging they served drinks to him and his friends after they were already intoxicated.
Leaphart's attorneys, Stanley C. Rodgers and Geoffrey Waggoner of Charleston, said the case represented an unusual wrinkle under dram shop laws.
South Carolina case law is settled that third parties can sue bars for injuries caused by a drunk driver, but first-party claims by the intoxicated patrons are not allowed. Leaphart's case fell between those boundaries, his attorneys said, because he'd been drinking at the bars that he sued but was a passenger, not a driver, in his own car at the time of the accident.
The case settled during a recent mediation and details were finalized on Oct. 4. Leaphart received $980,000 from the bars, including $875,000 from the Joker club, where he and his friends last drank before the 2001 auto accident.
Leaphart received another $100,000 — $25,000 in liability coverage and $75,000 in underinsured motorist benefits — from his own automobile insurer, Allstate.
The case is Leaphart v. Joker Supper Club Restaurant and Lounge, Inc. et al. (Ninth Judicial Circuit Case No. 02-CP-10-4424).
2001 Accident
The single-car wreck occurred on July 1, 2001 after a night of drinking in Charleston. The evening began when Adam E. Steptoe called Leaphart and asked for a ride home.
"Steptoe called my guy up because they were friends and said, 'Will you come pick me up from work because my car's broken down?'" Rodgers said. "So my guy picked him up and on the way one of them said, 'How about let's stop for a drink at the bar?'"
The first stop was the Pour House, where Leaphart and Steptoe ran into one of their friends, Randall Hartwell. Hartwell joined them and the trio went from bar to bar in Charleston, moving from Club Fluidz to Henry's to the Joker club.
"They finally ended up at the Joker, which is more of a strip club," Rodgers said. "One of the themes of our case was that they used alcohol to try separate people from their money."
After leaving the Joker, Leaphart was too intoxicated to drive his own Jeep Wrangler, according to Rodgers, and Steptoe volunteered to take the wheel. Steptoe drove off with Hartwell as a front seat passenger and Leaphart in the backseat.
Minutes later, Steptoe lost control of the Jeep on Old Towne Road and struck a tree. Leaphart was ejected from the car and suffered a spinal cord injury that left him quadriplegic. He was hospitalized for three months because of his injuries and eventually incurred medical expenses of $250,000.
Steptoe was charged criminally with felony DUI and pled guilty to a reduced charge.
In March 2003, Leaphart sued Steptoe and the four establishments that served alcohol to him. The complaint asked for $5 million in damages and alleged that the three friends showed signs of intoxication at the first bar they visited.
The complaint alleged the bars violated the state's Dram Shop Act.
Leaphart and his friends were served drinks at all four establishments, according to the complaint, "despite their increasing and obvious intoxication, and despite the knowledge of these agents and employees that upon leaving the establishment, one or more of the three individuals would be driving an automobile with his faculties and judgment grossly and dangerously impaired."
S.C. Code Ann. Sect. 61-6-2220 holds alcohol servers responsible for harm that intoxicated patrons cause to third parties and prohibits the sale of alcohol to intoxicated persons. The statute states: "No person or establishment licensed to sell alcoholic beverages pursuant to this article may sell these beverages to persons in an intoxicated condition; these sales are considered violations of the provisions thereof and subject to the penalties contained herein."
A prior South Carolina Supreme Court case has held that there is no first-party cause of action under the Dram Shop Act. In the 1998 case of Tobias v. Sports Club, Inc., 504 S.E.2d 318, the Supreme Court ruled an adult who got drunk at a tavern but was injured in a single-car accident while driving himself home could not maintain a cause of action against the tavern owner — even if the owner knew or should have known the patron was intoxicated and continued to serve him alcohol anyway. The policy underlying the Dram Shop Act was intended to protect the public, not the intoxicated patron, the Tobias court said.
Rodgers said the plaintiff's case fell somewhere between the first-person scenario in Tobias, where dram shop recovery is barred, and the third-party situation where recovery is allowed.
"If you go to a bar and get drunk and drive, it's clear you can't recover against the bar," Rodgers said. "But we had a different scenario here."
The defendants' primary defense was that the dram shop law did not apply to Leaphart, Rodgers said.
"They essentially argued he was more of a first party than a third party," Rodgers said. "We overcame that by arguing that he was a third party, and what may have swayed the other side at the end of the day was my client's profound injuries. He was so badly hurt, that it would have been a risk to raise that defense at trial or on appeal. The bar could have won, but the flip side was that the verdict could have come back at $10 million, when the bar only had a $1 million policy. That argument would have jeopardized the existence of the corporate defendant."
Under another defense argument, Steptoe and Leaphart were portrayed as participants in a joint enterprise, sharing the driving duties throughout their night of revelry. The negligence of each could be imputed to the other, the defendants argued, and together they were more than 50 percent at fault, barring recovery.
"That was a credible defense theory, but I think again at the end of the day the damages pulled us past those theories," Rodgers said.
Credit Card Receipts
Rodgers was able to pin down how many drinks were purchased at each bar because the friends used debit and credit cards to pay their tab.
"They drank the second-most at the first bar," Rodgers said. "The driver and the plaintiff together drank approximately $45 worth of alcohol at the first bar. We figured that was six or seven drinks each. And when they walked in they were stone sober. They'd been working and got there at 5:30 p.m. or 6 p.m. The claim was the hardest against that bar because when they walked in the door there would be no allegation that they were drunk. The only thing we could claim was that by the last drink the bar shouldn't have served them."
As the evening progressed, it should have become increasingly obvious to the bars that the trio was intoxicated, Rodgers said.
"At the second bar, they only had one drink, and at the third bar they had two or three drinks," he said. "They got to the Joker somewhere between 9:30 and 10 p.m., and they left around 11:30 p.m., so they were drinking there for up to two hours."
Rodgers said he lined up a toxicologist who was prepared to testify about the signs of intoxication the individuals would have been showing.
"We knew the driver's BAC because when he was taken to the hospital they drew his blood for the police officer," Rodgers said. "I believe it was .23. They all testified that they drank at the same rate, mainly beer and shots, throughout the night. So with that BAC reading, and with the receipts from the bars, we had a pretty good gauge on what they had to drink at each spot. Our toxicologist could map their BAC levels through the course of the evening. He could say his opinion of what their BAC levels would have been when they walked into the Joker, and what would have been the signs and symptoms of intoxication — slurred speech, unsteadiness on one's feet — of somebody at that BAC level."
Settlement Negotiations
Rodgers said the liability claim against the driver, Steptoe, was purposely left pending while settlement negotiations went forward against the Joker.
"We did not want to have an empty chair defense by the bars," Rodgers said. "We believed if we got to a trial and it was just us against a bar, the bar would be able to say the plaintiff and the driver were more at fault than the bar was. So we thought we'd lose that claim at trial if we didn't keep the driver in the case."
The plaintiff settled with the first three bars during the litigation. Pour House contributed $5,000. Club Fluidz and Henry's paid $50,000 each.
"When we reached a settlement at mediation with the Joker, we took the driver's money at the same time and settled with Allstate," Rodgers said.
The settlement from Allstate included $25,000 in liability coverage on Leaphart's policy and $75,000 in UIM benefits.
"They were in the plaintiff's car, and he turned the keys over to the defendant Steptoe," Rodgers said. "So Steptoe was covered by Allstate's policy as a permissive user, and that's where the liability coverage came from. It was my guy's policy, and since there wasn't enough liability coverage for his damages, the UIM portion of that policy kicked in. You cannot recover liability coverage and UM benefits from the same policy, but you can recover liability and UIM from the same policy."
October 18, 2004
