Clause in Lease Agreement Pertaining to Work at Entertainment Venue Required Arbitration of Texas Dram Shop Claim

When alcohol is a factor in an east Texas car accident, the defendant in the case is usually an allegedly intoxicated driver whose negligence or recklessness caused or contributed to the crash. This is not always the case, however.

Under the Texas Dram Shop Act, an establishment that “over-serves” a person who is obviously intoxicated to a point at which he or she presents a danger to themselves or others can also be held liable in a lawsuit brought by a person harmed by the over-served individual. In some cases, the over-served person may also seek compensation under the Act.

Facts of the Case

The plaintiff in a recently decided Texas Court of Appeals case (No. 05-17-00647-CV; Fifth District of Texas) was a woman who suffered severe injuries in a single-vehicle accident that occurred after she left the defendant nightclub, where she worked under a lease agreement. She filed suit against the defendant under the Texas Dram Shop Act, Texas Alcoholic Beverages Code Ann § 2.02(b), asserting claims for negligence and gross negligence. According to the plaintiff’s complaint, the defendant was liable because it served the plaintiff an excessive number of alcoholic beverages after she had become obviously intoxicated and presented a clear danger to herself and others. The petition further alleged that the defendant had required the plaintiff to consume alcoholic beverages and that, in so doing, it had violated its duty to provide a reasonably safe workplace

The defendant moved to compel arbitration, citing a provision it its lease agreement with the plaintiff. The trial court denied the defendant’s motion, and the defendant appealed.

Decision of the Court

The appellate court reversed the trial court’s decision and remanded the case for entry of an order compelling arbitration and granting an appropriate stay. According to the court, the arbitration clause in the lease cited by the defendant unambiguously required binding arbitration for any claims arising out of the plaintiff’s work – at any time. This was true regardless of whether such claims were contractual, in tort, or based upon common law or statute.

Although the plaintiff argued that the scope of the agreement was too narrow to reach the personal injury claims set forth in her complaint, the appellate court stated that there was a presumption favoring agreements to arbitrate, particularly as to claims arising out of, relating to, and connected with the contract at issue. In so holding, the court pointed out that the plaintiff had alleged that the defendant required her to drink alcoholic beverages during her performance of the duties to which she had agreed under the lease agreement.

(Importantly, this does not mean that the plaintiff’s claims will ultimately fail, only that the issues in her case will be determined by an arbitrator rather than a jury.)

Contact an Experienced East Texas Trial Attorney

If you or a loved one has been hurt in an east Texas auto accident, Earl Drott Law is here to help. We have been helping those who have been injured in car and truck wrecks in and around Tyler and Smith County for many years, and we are ready to put our experience to work in helping your family pursue the compensation to which you are entitled. For a free consultation, call us at 903-531-9300.

Related Blog Posts:

Night Out at Texas Piano Bar Leads to Liability Claims Against City After DUI Crash

Court Did Not Abuse Discretion in Striking the Pleadings in Dram Shop Case Resulting from Car Accident, According to Texas Court of Appeals

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