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Second District: Strip Club Not Liable for Injuries Caused by Stripper in Auto Accident

Court Reverses $1.43 Million Award Assessed Against Business

A strip club is not legally responsible for the severe injuries resulting when one of the club’s dancers, who was intoxicated, crashed into a car while driving home from work, an Ohio appeals court ruled on Friday. The club’s customers often buy drinks for dancers, who are allowed to consume alcohol while they work.

When a liquor permit holder sells alcohol to a person whose actions while intoxicated cause injuries, the state’s “Dram Shop Act” allows lawsuits against the permit holder only if the person was noticeably intoxicated or was a minor. The Second District Court of Appeals concluded the law doesn’t apply to an employee in this situation, and the jury shouldn’t have considered the claim against the business owner Thirty-Eight Thirty. The jury had held the club responsible for $1.43 million of a $2.85 million damages award.

The Second District determined the trial court should have accepted, rather than overruled, the strip club’s request for a directed verdict in its favor on the negligence issue.

Owner Said Dancers Not Required to Drink Alcohol
Thirty-Eight Thirty runs a strip club called “The Living Room” in Dayton. In 2010, dancers at the club paid $30 to lease space to dance, and their wages consisted of only the tips received from customers. When customers bought drinks for dancers, the club charged a higher price than they paid for their own beverages. According to the appeals court opinion, the club’s owner, Michael C. Ferraro, said the venue typically drew 200 to 300 customers a night, and 95 percent of the club’s profits came from alcoholic drink sales.

He stated that dancers weren’t required to drink while working, but it was common for them to become inebriated from beverages bought by customers. The club didn’t have a practice of checking whether the dancers were safe to drive when they left work, and it didn’t offer alternative transportation.

On the night of July 3, 2010, Mary Montgomery was working as a dancer at the club and said she consumed three beers, which customers had purchased for her. As she was driving on Interstate 70 to her Springfield home sometime after 2 a.m. on July 4, she lost control of her car and hit a vehicle, which was forced into a brick wall. Eric Staeuble was driving that car, and Nichole Johnson was a passenger in the front seat.

Johnson was severely injured, suffering a brain injury and multiple head fractures, broken teeth and ribs, several other broken bones, a collapsed lung, and a lacerated liver. She had 11 surgeries to treat her injuries, and had extensive physical and occupational therapy for nearly a year.

Jury Awards Nearly $3 Million for Injuries
Johnson sued Montgomery and the club. The trial court issued a default judgment against Montgomery and found she was negligent in the accident. Johnson’s other claims went to trial before a magistrate. The jury concluded Johnson was entitled to $2.85 million in damages for past and future medical expenses, past and future pain and suffering, and earlier lost wages. The jury divided liability equally between Montgomery and Thirty-Eight Thirty.

No Negligence Claim Exists Against Strip Club
Writing for the Second District, Judge Mike Fain explained that the Dram Shop Act limits a liquor permit holder’s liability to distinct circumstances – when the permit holder sells alcohol to a minor or someone noticeably intoxicated and that person’s conduct causes personal injury, death, or property damage. Those conditions didn’t apply in this case, Judge Fain reasoned.

“The Dram Shop Act is an exclusive remedy and does exclude all other common law negligence claims against a liquor permit holder for the negligent acts of a person who became intoxicated by alcohol furnished by the permit holder,” he wrote. “The Dram Shop Act does not provide a cause of action against a liquor permit holder for its failure to control drinking by its employees or independent contractors during their work shift, or address the negligence that may occur by the furnishing of alcohol to workers in a manner likely to lead to intoxication coupled with the failure to discover the intoxication of any worker when their shift ended and the failure to take action to prevent drunk driving by such workers.”

The appeals court reversed and vacated this part of the trial court’s judgment and affirmed the remainder of the decision. Judges Mary E. Donovan and Jeffrey M. Welbaum joined Judge Fain’s opinion.

Johnson v. Montgomery, 2016-Ohio-1472
Civil Appeal From: Montgomery County Common Pleas Court
Judgment Appealed From Is: Reversed in part, affirmed in part
Date of Judgment Entry on Appeal: April 8, 2016

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