On certification to the Superior Court, Appellate Division, whose opinion is reported at 245 N.J. Super. 518 (1991).
For affirmance, modification and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None. The opinion of the Court was delivered by Stein, J.
In this case we consider once again the principles that determine allocation of fault in actions brought to recover damages from taverns or restaurants for serving alcohol to visibly-intoxicated patrons. Plaintiff Choi, a patron of the restaurant, who was subsequently injured as a passenger in a car accident, recovered a verdict against the restaurant on the basis that it had served alcohol to the driver when he was visibly intoxicated. Plaintiff had previously settled with the intoxicated driver.
The Appellate Division reversed and remanded, holding that the trial court had not correctly instructed the jury on the principles governing the comparative negligence of the passenger and driver. Lee v. Kiku Restaurant, 245 N.J. Super. 518, 586 A.2d 297 (1991). The court also proposed a new two-step procedure to be used by juries in allocating fault in such cases. Id. at 523-25, 586 A.2d 297. We granted certification, 126 N.J. 325, 598 A.2d 884 (1991).
Our summary of the underlying facts is based on the trial record. On March 14, 1986, plaintiff Seung Gyun Choi completed his first week as a salesman for Art Lines, an importer of Korean Art. That evening, Choi's manager, Myung Chung, took Choi and Peter Lee, Choi's co-worker, to Kiku Restaurant
to celebrate. On arriving at the restaurant, Chung ordered dinner and three carafes of saki. The men consumed the saki and a second round of three carafes before any food was served. Choi testified that although he did not like saki, Korean custom dictated that he accept the saki when it was offered by his manager.
During dinner Chung ordered a teakettle of saki, which held the equivalent of approximately five carafes. While drinking saki from the teakettle, Lee became ill and stumbled to the bathroom. Chung and Choi retrieved Lee and held him up as he walked back to the table, lurching and bumping into other customers along the way. Chung then ordered yet another kettle of saki. During dinner Chung was walking around the bar area, talking loudly, and slurring his words. After Chung and Choi had consumed the second kettle, the sushi chef commented that Chung had had too much to drink. The restaurant then served the men a complimentary half-kettle of saki. Chung drank most of it, paid the bill, and the three staggered out of the restaurant. Lee could barely walk, and Chung was talking loudly and unable to walk in a straight line.
Once outside, Chung suggested continuing the party at Chung's home. Aware that Chung was drunk, Choi asked Chung if he was capable of driving. When Chung assured him he was fine, both Choi and Lee got into the car and promptly fell asleep. About five miles from the restaurant Chung hit a truck from the rear and the three occupants of the car suffered serious injuries. Blood-alcohol tests performed at the hospital indicated that at the time of the accident all three men were significantly intoxicated.
Choi filed suit against Chung and Kiku Restaurant, alleging that the restaurant was liable because the restaurant's employees had served alcohol to Chung when he was visibly intoxicated. Kiku Restaurant filed a third-party claim for contribution against Chung. Chung failed to respond to interrogatories or appear at depositions. The trial court struck Chung's answer
because he failed to participate in discovery. See Rule 1:2-4. Chung's insurance carrier settled with Choi and Kiku Restaurant for the policy limit of $15,000.
In the ensuing trial of Choi's claim against Kiku Restaurant, the trial court instructed the jury that Chung was required to exercise such care as a driver as a reasonably prudent and sober person would have exercised under the same or similar circumstances. Similarly, the court charged the jury that Choi was required to exercise "[s]uch reasonable care and caution for his own safety as an ordinary prudent person would exercise under like circumstances. * * * The test * * * is whether an ordinarily cautious or prudent person under the same or similar circumstances would have incurred the risk of riding with the driver." The court also instructed the jury that the restaurant was negligent if the employees served alcohol to a visibly intoxicated person "in circumstances where a reasonably prudent person would foresee that by serving the alcoholic beverages to such a person he is causing or contributing to an unreasonable risk of harm to others that may result thereafter by the conduct of that intoxicated person to injuries of others."
The jury found that employees of Kiku had served Chung when he was visibly intoxicated, that Choi and Chung were also negligent, and that the negligence of all three parties proximately caused the accident. The jury assessed the damages at $75,000, and found Kiku Restaurant ten percent at fault, Choi ten percent at fault, and Chung eighty percent at fault. Choi moved for a new trial on the ground that the trial court had erred in permitting the jury to consider his contributory negligence in its allocation of fault. The trial court denied the motion.
The Appellate Division determined that the trial court did not err in submitting to the jury the issues of the driver's and the passenger's contributory negligence. 245 N.J. Super. at 521, 586 A.2d 297. The court concluded, however, that the trial court had not properly instructed the jury on the relationship
between the restaurant's fault and the ensuing conduct of Choi and Chung.
The Appellate Division held that on remand the jury should first assess the fault of the driver for driving in an intoxicated state and that of the passenger for riding with an intoxicated driver, as if no tavern had been involved. Id. at 523-24, 586 A.2d 297. On the assumption that the jury would find that the restaurant had served the driver when he was visibly intoxicated, the court stated that the jury should then apportion the fault initially imputed to the driver between the driver and the restaurant; in doing so, the jury should decrease the percentage of fault allocated to the driver to the extent that his inability to appreciate the risk of driving and his negligent operation of the car were due to the intoxication caused by the restaurant. Id. at 523-25, 586 A.2d 297.
Concerning the passenger's liability, the court directed that if the jury were to determine that the restaurant had served the passenger when he was visibly intoxicated, it should then apportion the fault initially imputed to the passenger between the passenger and the restaurant; in that process, the jury should decrease the percentage of fault allocated to the passenger to the extent that his inability to appreciate the danger of riding with an intoxicated driver was due to the intoxication caused by the restaurant. The Appellate Division also emphasized that the trial court should have focused the jury's attention not on Chung's negligent driving but on his decision to drive in a highly intoxicated state. Id. at 526, 586 A.2d 297.
In order to refine the legal principles that should govern the apportionment of fault between a dram shop and its intoxicated customers, we first trace the development of New Jersey's dram-shop rule. This Court first recognized a common-law cause of action based on the negligent sale of ...