Subject: IN THE SUPREME COURT OF TEXAS
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Date: Mon, 12 Mar 2007 19:34:38 -0500

IN THE SUPREME COURT OF TEXAS

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No. 02-0381

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F.F.P. Operating Partners,
L.P., D/B/A Mr. Cut Rate #602, Petitioner,

v.

Xavier Duenez and Wife Irene
Duenez, as Next Friends of Carlos Duenez and Pablo Duenez, Minors,
Respondents

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On Petition for Review from the

Court of Appeals for the Thirteenth District
of Texas

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Argued on November
30, 2005

Justice Wainwright delivered the
opinion of the Court, in which Justice
Hecht, Justice Brister, Justice Medina, Justice Green, Justice Johnson,
and Justice Willett
joined.

Chief Justice Jefferson filed a
dissenting opinion.

Justice O’Neill filed a dissenting
opinion.

We are asked
to revisit our holding in Smith v. Sewell that the proportionate
responsibility scheme of chapter 33 of the Texas Civil Practice and Remedies
Code requires an apportionment of responsibility under chapter 2 of the
Alcoholic Beverage Code. 858 S.W.2d 350 (Tex. 1993). We decline the invitation
to reverse Sewell and instead affirm its holding that the language of the
proportionate responsibility statute includes claims under the Dram Shop Act.
Neither the purpose nor the language of the Act makes a dram shop automatically
responsible for all of the damages caused by an intoxicated patron, regardless
of a jury’s determination of the dram shop’s proportion of responsibility.
Instead, pursuant to Chapter 33, a dram shop is responsible for its
proportionate share of the damages as determined by a jury. Accordingly, we
reverse the court of appeals’ judgment and remand the case for a new trial.

I. Factual and Procedural Background

After
spending the day cutting firewood while consuming a case and a half of beer,
Roberto Ruiz drove his truck to a Mr. Cut Rate convenience store owned by F.F.P.
Operating Partners, L.P. and purchased a twelve-pack of beer. The store’s
assistant manager, Carol Solis, sold the beer to Ruiz. Ruiz then climbed into
his truck, opened a can of beer, and put the open beer can between his legs.
There was conflicting testimony about whether Ruiz actually drank any of the
beer that he purchased at Mr. Cut Rate.

Ruiz then
drove onto a nearby highway and swerved into oncoming traffic several times. Two
cars dodged his truck to avoid a collision. As he crossed a bridge approximately
a mile and a half from the Mr. Cut Rate convenience store, Ruiz swerved across
the center line, hitting the Duenezes’ car head-on. All five members of the
Duenez family suffered injuries.

Ruiz was
arrested at the accident scene for drunk driving. He pled guilty to intoxication
assault and was sentenced to prison. The Duenezes brought a civil suit against
F.F.P., Ruiz, Solis, Nu-Way Beverage Company, and the owner of the land where
Ruiz had spent the afternoon cutting firewood and drinking. F.F.P. filed a
cross-action against Ruiz, naming him as a responsible third-party and a
contribution defendant. The Duenezes thereafter nonsuited all defendants except
F.F.P.

At the
pretrial conference, the Duenezes obtained a partial summary judgment that
chapter 33 of the Texas Civil Practice and Remedies Code, the proportionate
responsibility statute, did not apply to this case. The trial court then severed
F.F.P.’s cross-action against Ruiz, leaving F.F.P. as the only defendant for
trial. F.F.P.’s severed action against Ruiz remains pending in the trial court.

The Duenezes’
claim against F.F.P. proceeded to trial. At the charge conference, the trial
court refused to submit questions for determination of Ruiz’s negligence. The
court also failed to submit questions on the proportionate responsibility of
Ruiz and F.F.P.

The jury
found that when the alcohol was sold to Ruiz, it was “apparent to the seller
that he was obviously intoxicated to the extent that he presented a clear danger
to himself and others,” and that Ruiz’s intoxication was a proximate cause of
the collision. The jury returned a $35 million verdict against F.F.P., upon
which the trial court rendered judgment.

The court of
appeals affirmed the trial court’s judgment, holding:

[I]n
third-party actions under the Dram Shop Act in which there are no allegations of
negligence on the part of the plaintiffs, a provider is vicariously liable for
the damages caused by an intoxicated person, and such a provider is not entitled
to offset its liability by that of the intoxicated person.

69 S.W.3d 800,
805. In reaching that conclusion, the court distinguished our decision in
Sewell, in which we held that the comparative responsibility statute
applied to dram-shop causes of action. Id. The court of appeals concluded
that Sewell’s holding was limited to first-party actions in which the
intoxicated patron is suing for his own injuries and is inapplicable when the
plaintiff is an innocent third party injured by an intoxicated patron.
Id. at 805-06. The court also held that the trial court did not abuse its
discretion in severing F.F.P.’s contribution claim against Ruiz, concluding that
because F.F.P.’s statutory liability was vicarious and not direct, F.F.P. had an
indemnity claim rather than a contribution claim against Ruiz. Id. at
807-08. We granted F.F.P.’s petition for review and issued an opinion on
September 3, 2004. F.F.P. filed a motion for rehearing. While the motion was
pending, Xavier, Irene, and Ashley Duenez settled their claims against F.F.P.
Only the claims of Pablo and Carlos Duenez against F.F.P. remained before the
Court. On April 8, 2005, we granted the F.F.P.’s motion for rehearing. The case
was re-argued on November 30, 2005. Today we withdraw the Court’s previous
opinion and substitute this one in its place.

II. Statutory Interpretation

Statutory construction is a legal question that we review de novo, ascertaining
and giving effect to the Legislature’s intent as expressed by the plain and
common meaning of the statute’s words. Tex. Dep’t of Transp. v. City of
Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004).

A. The Dram Shop Act

The
Legislature enacted the Dram Shop Act to “deter providers of alcoholic beverages
from serving alcoholic beverages to obviously intoxicated individuals who may
potentially inflict serious injury on themselves and on innocent members of the
general public.” Sewell, 858 S.W.2d at 356. Section 2.02 of the Alcoholic
Beverage Code sets forth the scope and elements of this action:

(a)
This chapter does not affect the right of any person to bring a common law cause
of action against any individual whose consumption of an alcoholic beverage
allegedly resulted in causing the person bringing the suit to suffer personal
injury or property damage.

(b)
Providing, selling, or serving an alcoholic beverage may be made the basis of a
statutory cause of action under this chapter and may be made the basis of a
revocation proceeding under section 6.01(b) of this code upon proof that:

(1) at
the time the provision occurred it was apparent to the provider that the
individual being sold, served, or provided with an alcoholic beverage was
obviously intoxicated to the extent that he presented a clear
danger to himself and others; and

(2)
the intoxication of the recipient of the alcoholic beverage was a proximate
cause of the damages suffered.

Tex. Alco. Bev. Code § 2.02 (emphasis
added).[1] If a plaintiff meets the “onerous
burden of proof” imposed by the Dram Shop Act, then the provider is liable for
damages proximately caused by its employees or patrons. El Chico Corp. v.
Poole, 732 S.W.2d 306, 314 (Tex. 1987); see also Tex. Alco. Bev. Code § 2.03.[2] In the Dram Shop Act, the Legislature
created a duty, not recognized at common law, on alcohol providers and increased
the potential liability of providers as a means of deterring providers from
serving obviously intoxicated individuals. Historically, the “rule of
non-liability” held that an alcohol provider owed no duty to third persons for
injuries caused by the provision of alcohol. Sewell, 858 S.W.2d at
352; Poole, 732 S.W.2d at 310; see also Joel Smith, Annotation,
Common-Law Right of Action for Damages Sustained by Plaintiff in Consequence
of Sale of Gift of Intoxicating Liquor or Habit-Forming Drug to Another, 97
A.L.R.3d 528 (1980). Additionally, providers were generally able to avoid
liability because the consumption of alcohol, rather than its provision, was
considered the sole proximate cause of injury to the patron and third
persons. Poole, 732 S.W.2d at 309. Finally, even if the sale was a
proximate cause of intoxication, injury was considered to be an unforeseeable
result of the patron’s intoxication. Id. The common law effectively
precluded dram shops from incurring liability when their intoxicated patrons
caused injury to third parties. Id.; see also Mata v. Schoch, 337
B.R. 135, 136 (Bankr. S.D. Tex. 2005).

Relying on
“modern analysis,” in 1987 the Court in Poole discarded the “absolute
rule of no liability” and imposed a duty on a dram shop not to serve alcoholic
beverages to a person it knows or should know is intoxicated. Poole, 732
S.W.2d at 310. For the first time, the Court held that a provider of alcohol is
negligent as a matter of law when he knowingly sells an alcoholic beverage to an
intoxicated person, and the Court relaxed the standards for proving proximate
cause and foreseeability. Id. at 313-14. The claimant was still required
to prove that the dram shop’s conduct was the proximate cause of his or her
injury to recover. Id. at 313.

The
Legislature acted to address the problem of providers’ excessive provision of
alcohol to patrons. A week after this Court issued Poole, the Dram Shop
Act became effective and narrowed potential liability from Poole in
several ways. See id.; Parker v. 20801, Inc., 194 S.W.3d 556, 560
n.4 (Tex. App.—Houston [14th Dist.] 2006, pet. filed). First, it made the Act
the exclusive means of pursuing a dram shop for damages for intoxication. Tex. Alco. Bev. Code § 2.03.[3] Second, as an element of liability,
the patron must be “obviously intoxicated,” not just intoxicated, when
the dram shop serves him alcohol. Id. § 2.02 (emphasis added).[4] Nowhere in the legislation was the
common law requirement that the claimant prove that the dram shop proximately
caused the injuries eliminated. As under the common law, a dram shop claimant
“must establish that the liquor licensee’s negligent conduct proximately caused
his injuries.” Poole, 732 S.W.2d at 313; accord Sewell, 858 S.W.2d
at 355 (citing Tex. Alco. Bev. Code
§ 2.02) (“Under Chapter 2, the intoxication of the recipient must be a
proximate cause of the damages.”).

The common
foundation of both Chief Justice
Jefferson’s and Justice
O’Neill’s dissents is the contention that the Legislature abolished the
element of proximate cause for a third party to recover from a dram shop and
replaced it with “a form of vicarious liability,” as Chief Justice Jefferson labels it, or
“imputed liability,” as Justice
O’Neill terms it. The dissenters contend that once the dram shop provides
alcohol to an obviously intoxicated patron, it becomes responsible for all
subsequent injuries caused by the patron’s intoxication. This assumption forms
the basis of their conclusions that submitting a proportionate liability
question to the jury does not change the dram shop’s joint and several liability
for all of the damages. For example, even if the patron consumed none of the
alcohol purchased from the dram shop, the dissenters would hold the provider
liable for all the injuries caused by the patron to third parties. The statutes
do not support their approaches, which would nullify the effect of the expansive
language in the proportionate responsibility statute.

The
dissenters contend that the failure to read vicarious or imputed liability into
the Act undermines the legislative purpose. On the contrary, the Act
accomplishes the objective of deterring the sale of alcohol to obviously
intoxicated persons in several ways. The Act provides a previously foreclosed
remedy against sellers of alcohol. And unlike the prior common law, dram shops
now owe a duty to patrons and injured third parties under specified
circumstances and can be subject to civil liability for the damages they
proximately cause. Compare Poole, 732 S.W.2d at 309 with Sewell,
858 S.W.2d at 355. The Legislature also deterred irresponsible conduct by
providing that a dram shop’s alcohol license is subject to revocation for
violating the Act. Tex. Alco. Bev.
Code § 2.02(b).[5]

Justice O’Neill finds the imposition of
imputed liability on providers in a single phrase in Section 2.03 of the Act,
set out in italics: “The liability of providers under this chapter for the
actions of their customers, members, or guests who are or become intoxicated
is in lieu of common law or other statutory law warranties and duties of
providers of alcoholic beverages.” __ S.W.3d __; Tex. Alco. Bev. Code § 2.03.[6] Although Justice O’Neill states that Chapter 33
applies, she nevertheless concludes that “the dram shop is liable to injured
third parties for both its own actions and for its patron’s share of
responsibility.” __ S.W.3d __. She borrows support for this position from
section 7 of the Restatement of Torts: a party to whom liability is imputed and
who is also independently liable “is responsible for the share of the verdict
assigned to [the party whose liability is imputed] and is also responsible for
the share of the verdict assigned to its own negligence.” Id. at __;
see also Restatement (Third) of
Torts: Apportionment of Liability § 7 cmt. j (2000) (stating that “[t]he employer is
responsible for the share of the verdict assigned to the employee and is also
responsible for the share of the verdict assigned to its own negligence”). The
common law has been supplanted by statute and Section 7 is not the law on this
issue in Texas. The Proportionate Responsibility Act and the Dram Shop Act
govern this issue.

Justice O’Neill insists that the
Legislature intended the phrase “the liability of providers under this chapter
for the actions of their customers,” to mean that providers under this chapter
are liable for the actions of their customers. __ S.W.3d __; Tex. Alco. Bev. Code § 2.03.[7] The statute can mean this only if
words not in the text are inserted. Read as written, in context, Section 2.03
simply means that the Dram Shop Act provides the exclusive remedy against an
alcohol provider for damages caused by an intoxicated patron at least 18 years
of age—i.e., common law remedies are no longer available. We do not read Section
2.03 to say that a provider of alcohol is responsible, without regard to fault,
for one hundred percent of the damages caused by an intoxicated patron.

Chief Justice Jefferson seeks to
support his position with an analogy to reasoning in vicarious liability theory
for negligent entrustment cases. __ S.W.3d __. Generally in Texas, the doctrine
of vicarious liability, or respondeat superior, makes a principal liable for the
conduct of his employee or agent. See Baptist Mem. Hosp. Sys. v. Sampson,
969 S.W.2d 945, 947 (Tex. 1998). This liability is based on the principal’s
control or right to control the agent’s actions undertaken to further the
principal’s objectives. See Wingfoot v. Alvarado, 111 S.W.3d 134, 136
(Tex. 2003); Prosser & Keeton on the
Law of Torts, §§ 69-70 (W. Page Keeton et al. eds., 5th ed. 1984). Should
an innocent third party suffer injury at the hands of the agent or employee, the
theory is that the enterprise itself, not only the agent, should be held
accountable. See Wingfoot, 111 S.W.3d at 146; Keeton et al., § 69; see also
Restatement (Third) of Torts:
Apportionment of Liability § 13 (2000). Here, the patron is not the agent
or employee of the dram shop, the provider has no control or right to control
the patron, and the patron’s actions causing the accident are not in furtherance
of the provider’s business. The analogy to negligent entrustment, a form of
vicarious liability, suffers from similar deficiencies. As the late Dean Prosser
explained, the basis for imposing liability on the owner of the thing entrusted
to another is that ownership of the thing gives the right of control over its
use. Keeton et al., § 73; see
Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987)
(proving negligence by a theory of negligent entrustment requires establishment
of ownership). Hence, an owner may have to answer in damages for negligently
exercising her control by entrusting an item to a person who the owner knew or
should have known would act in a reckless or incompetent manner.
Schneider, 744 S.W.2d at 596. Because there is no ownership by the dram
shop of the object used by a patron to cause the accident, the vicarious
liability doctrine does not support—and the Dram Shop Act does not create—the
indemnification scheme proposed by Justice O’Neill or the vicarious
liability scheme that Chief Justice
Jefferson would create. Their positions expand the theory of vicarious
liability beyond its traditional boundaries.

B. Chapter 33

Chapter 33 of
the Texas Civil Practice and Remedies Code governs the apportionment of
responsibility in cases within its scope. The 1995 version of the proportionate
responsibility scheme applies to this case because the collision that injured
the Duenezes occurred in July 1997. At that time, section 33.013 of the Civil
Practice and Remedies Code provided, with certain exceptions, that a defendant
was liable only for the percentage of responsibility found by the trier of fact,
unless the percentage of responsibility exceeded fifty percent. Tex. Civ. Prac. & Rem. Code §
33.013.[8] If a defendant’s percentage of
responsibility exceeded fifty percent, that defendant was jointly and severally
liable for all of the claimant’s recoverable damages. Id.

Section
33.003 provided that the factfinder was to compare a defendant’s responsibility
with the responsibility of the claimant, other defendants, and any responsible
third party joined by a defendant. Tex.
Civ. Prac. & Rem. Code § 33.003.[9] The statute required the trier of fact
to apportion responsibility

with
respect to each person’s causing or contributing to cause in any way the harm
for which recovery of damages is sought, whether by negligent act or omission,
by any defective or unreasonably dangerous product, by other conduct or activity
that violates an applicable legal standard, or by any combination of these . . .
.

Id. §
33.003(a).

Chapter 33
applied to a broad range of cases, including “any cause of action based on tort
in which a defendant, settling person, or responsible third party is found
responsible for a percentage of the harm for which relief is sought” and actions
brought under the Texas Deceptive Trade Practices-Consumer Protection Act.
Id. §§ 33.002(a),[10] (h).[11] Section 33.002(c) expressly excluded
from its coverage actions to collect workers’ compensation benefits, actions
against an employer for exemplary damages arising out of the death of an
employee, and claims for exemplary damages included in an action to which this
chapter otherwise applies.[12] Section 33.002(b) excluded
application of Chapter 33 to actions for damages caused by a list of intentional
criminal acts committed in concert with another person by imposing joint and
several liability.[13] Chapter 33 does not specifically
exclude the Dram Shop Act.

C. Smith v. Sewell

This Court
addressed the applicability of Chapter 33 to the Dram Shop Act in Smith v.
Sewell, 858 S.W.2d 350 (Tex. 1993). When Sewell was decided, Chapter
33 provided that it applied “[i]n an action to recover damages for negligence .
. . or an action for products liability grounded in negligence.” Tex. Civ. Prac. & Rem. Code §
33.001(a).[14] The Court held that the essential
elements of a dram-shop action replicated those of a negligence claim, hence
Chapter 33 applied to the Act. Sewell, 858 S.W.2d at 355-56.

In
Sewell, the plaintiff became intoxicated at a bar. Id. at 351. On
his way home, he lost control of his car and was severely injured in a one-car
accident. He sued the bar. This Court explicitly recognized that a cause of
action against a provider of alcohol is a direct action for the wrongful conduct
of the provider: “[L]iability under [the Dram Shop Act] is premised on the
conduct of the provider of the alcoholic beverages—not the conduct of the
recipient or a third party.” Id. at 355. The Court reasoned this is true
“regardless of whether the intoxicated individual injures himself or a third
party.” Id. The Court then examined the comparative responsibility scheme
and its exclusions and concluded that a cause of action against a provider of
alcohol was not excluded from the Comparative Responsibility Act, and therefore,
the comparative responsibility scheme applied. Id. at 356. The Court
identified the Legislature’s intent, expressed under Chapter 33, as “requir[ing]
the trier of fact to determine the percentage of responsibility attributable to
each of the parties involved in causing the injury.” Id. (emphasis
added). Under the combined effect of both statutes, an intoxicated person “will
be entitled to recover damages only if his percentage of responsibility is found
to be less than or equal to 50 percent,” and any recovery must be reduced by the
percentage of the intoxicated individual’s responsibility. Id. The Court
recognized that this interpretation of the statutes ensured a consistent and
equitable approach to dram-shop liability, whether or not the case involved
first or third person liability. Id.

In this case,
the court of appeals held that Sewell did not apply to third-party Dram
Shop claims like this one. 69 S.W.3d at 805. The court interpreted Sewell
as limiting an intoxicated patron’s recovery against a provider according to the
intoxicated person’s percentage of responsibility but not imposing similar
limitations when a third party seeks recovery against a provider for damages
caused by an intoxicated patron’s actions. Id. Instead, the court of
appeals concluded that a provider is vicariously liable for the damages caused
by an intoxicated employee or patron in third party actions in which there are
no allegations of negligence of the third party. Id. The court reasoned
that this interpretation is consistent with the Dram Shop Act because the Act
imposes liability on the provider for the actions of the intoxicated person,
“just as an employer is liable for the damages caused by an employee in the
course and scope of the employment.” Id. at 806 (citations omitted).
Thus, the court concluded, “a division of liability would be meaningless: the
vicariously liable party is liable for the other party’s actions, as though
those actions were its own.” Id.

This is
contrary to our opinion in Sewell, and rebutted by the deterrent effects
of the Act, discussed above. This Court has interpreted the Dram Shop Act to
create liability based “on the conduct of the provider of the alcoholic
beverages—not the conduct of the recipient or a third party.” Sewell, 858
S.W.2d at 355. The conduct for which the provider may be held liable is the same
conduct “whether the intoxicated individual injures himself or a third party.”
Id. Thus, the premise of the court of appeals’ vicarious liability
holding—that the provider’s liability stems from the conduct of the intoxicated
individual instead of the provider’s own conduct—runs contrary to both the Dram
Shop Act and our interpretation of the Act in Sewell. Compare
Sewell, 858 S.W.2d at 355, with 69 S.W.3d at 806.

The dissents
likewise recognize significant problems with their approaches in light of this
precedent. They approach the problem of Sewell differently. Chief Justice Jefferson argues that
Sewell was wrongly decided but nevertheless would keep the holding intact
as to first–party claims and create a different rule for third–party claims. __
S.W.3d __. Similarly, Justice
O’Neill would limit Sewell’s holding to first–party claims thereby
distinguishing it from the instant case. __ S.W.3d __. Nothing in the statute
supports a different rule in this regard for first– versus third–party claims.
In fact, the statute anticipates the existence of both types of claims by
describing the “person bringing the suit” broadly and referring to the danger
created by the intoxicated person as impacting “himself and others.” Tex. Alco. Bev. Code § 2.02.[15] Contrary to Chief Justice Jefferson’s dissent,
nothing in the Dram Shop Act prevents a provider from “lessen[ing] or escap[ing]
liability altogether” if a jury determined that the intoxicated patron was
completely responsible for the damages and injuries suffered by a third–party.
See __ S.W.3d __. Refusing to apply Sewell’s rule of law to cases
in which a third party is injured as a result of an intoxicated person’s actions
is contrary to the language of the Dram Shop Act, to the premise of
Sewell, and to the purpose of the Dram Shop Act: the provider’s liability
stems from its own conduct.

D. Legislative Intent

Our review is
confined to identifying the expressed legislative intent and applying it. Even
if this Court were to agree with the court of appeals that holding a provider
vicariously liable for a patron’s intoxication may be a legitimate public
policy, we would still be constrained to faithfully apply the Legislature’s
statutory proportionate responsibility scheme. Imposing vicarious liability in
dram-shop cases conflicts with the Proportionate Responsibility Act. The court
of appeals suggested that the Legislature did not intend for an innocent third
party to bear the risk of an intoxicated patron’s insolvency. But, by enacting
Chapter 33, the Legislature made the policy decision that an innocent third
party, suing the intoxicated patron and the dram shop, could be burdened with
the risk of a joint tortfeasor’s insolvency. A tortfeasor who was found less
than fifty-one percent responsible does not have to pay the entire amount of
damages, only his or her proportionate share. Tex. Civ. Prac. & Rem. Code
§§ 33.013(a), (b)(1).[16]

We recognize
that there may be a greater incentive to avoid conduct that leads to
responsibility for higher damages than to avoid conduct that leads to
responsibility for lower damages. Thus, a statute that makes providers liable
for all the damages caused by an intoxicated patron could be a greater deterrent
to serving that patron. That may influence the drafting of a statute, but it
says little about how to interpret the words of the Dram Shop and Proportionate
Responsibility Acts. The statutes only hold providers responsible for their own
conduct causing injury. On the other side of the coin, it is a fundamental tenet
of tort law that an entity’s liability arises from its own injury-causing
conduct. Under the dissenters’ positions, the provider would be responsible for
all the damages caused by an inebriated patron even if he never drank any of the
product purchased from the provider. The same would occur if an inebriated
patron drank a bit of the dram shop’s alcohol but evidence established that it
did not contribute any further to the deterioration of the patron’s ability to
drive safely. We recognize some of the alternatives the Legislature considered
as it drafted the statutes; however, we do not pick and choose among policy
options on which the Legislature has spoken. Our role is “not to second-guess
the policy choices that inform our statutes or to weigh the effectiveness of
their results; rather, our task is to interpret those statutes in a manner that
effectuates the Legislature’s intent.” McIntyre v. Ramirez, 109 S.W.3d
741, 748 (Tex. 2003). Upon a finding of liability, the statutes make dram shops
responsible for the proportionate share of the injuries their conduct
caused.

The broad
coverage of the proportionate responsibility statute to tort claims is
persuasive. The Chapter 33 proportionate responsibility scheme includes
exceptions for certain torts, but claims against providers of alcohol are not
among those exceptions. See, e.g., Tex. Civ. Prac. & Rem. Code
§§ 33.002(b),[17] (c).[18] For example, the Legislature carved
out exceptions for a host of criminal acts, declaring that there should be joint
and several liability instead of proportionate responsibility, but only if there
was specific intent to do harm to others and the defendant acted in concert with
another. Id. § 33.002.[19] The list of crimes is numerous and
broad in scope, ranging from capital murder to fraudulent destruction of a
writing, and also includes theft when “the punishment level . . . is a
felony of the third degree or higher.” Tex. Civ. Prac. & Rem. Code
§ 33.002(b)(13).[20] Section 33.002(c) expressly excluded
from its coverage actions to collect workers’ compensation benefits, actions
against an employer for exemplary damages arising out of the death of an
employee, and claims for exemplary damages included in an action to which this
chapter otherwise applies.[21] When the Legislature has chosen to
impose joint and several liability rather than proportionate liability, it has
clearly said so.

The
Legislature created a strict liability cause of action against a person who
manufactures methamphetamine for injuries, damages, or death arising from the
manufacture or exposure to the manufacturing process of that drug. Tex. Civ. Prac. & Rem. Code
§§ 99.002–.003. The Legislature declared that a person who manufactures
methamphetamine and is found liable for any amount of damages arising from the
manufacture is jointly liable with any other defendant for the entire amount of
damages arising from the manufacture. Id. § 99.004. In both the
statute that created the cause of action against such manufacturers and in
amendments to the Proportionate Responsibility Act, the Legislature specifically
said that the proportionate responsibility scheme “does not apply in an action
for damages arising from the manufacture of methamphetamine.” Id.
§ 99.005; see also id. § 33.002(c)(3). The Legislature did not
carve out an exclusion for alcohol providers in either the Proportionate
Responsibility Act or the Dram Shop Act.

Both dissents
struggle to conclude that an injured third party may recover his damages
entirely from the alcohol provider under the Dram Shop Act. Chief Justice Jefferson argues that the
Act creates “a form of vicarious liability,” while Justice O’Neill allows a jury to
apportion liability but ultimately holds the provider liable for the full amount
of damages, regardless of the jury’s determination. The stated public policy
behind the Alcoholic Beverage Code, including the Dram Shop Act, is “the
protection of the welfare, health, peace, temperance, and safety of the people
of the state.” Tex. Alco. Bev. Code
§ 1.03. More specifically, the Dram Shop Act codifies the exclusive
action against an alcohol provider for injuries or damages resulting from the
intoxication of a patron. Id. § 2.02. The legislative intent to protect
the public and provide a potential remedy against an alcohol provider does not
equate to a guarantee of recovery against a provider by an injured party. The
Act simply supplants in a single codified action all prior common law theories
that previously could have been employed by the injured party (either a third
party or the intoxicated patron himself) against a provider. See id. §
2.03. While the dissents’ positions might express sound public policy, we are
constrained to conclude that neither correctly applies the Legislature’s
statutory proportionate responsibility scheme. Both read more into the Dram Shop
Act than the words chosen by the Legislature can bear.

At the time
of the Duenezes’ injuries, the proportionate responsibility scheme imposed joint
and several liability on those who caused toxic tort injuries and those who
released hazardous substances into the environment if their responsibility was
equal to or greater than fifty percent. Tex. Civ. Prac. & Rem. Code
§ 33.013(c).[22] In such cases, liability was not
limited by proportionate responsibility. In 2003, the Legislature revisited that
exclusion and repealed it in its entirety.[23] Now, defendants found liable for
these tortious acts are subject to the general proportionate responsibility
scheme. The Legislature seemed intent on creating a general scheme of
proportionate responsibility, subject to specific statutory exclusions.

Finally, our
controlling interpretation of that statutory scheme has remained in place since
our 1993 decision in Smith v. Sewell. 858 S.W.2d at 356 (holding that
“[a]pplication of the principles of comparative responsibility to causes of
action brought under [the Dram Shop Act] establishes a consistent and equitable
approach to the issue of ‘dramshop liability’ generally, and first party
‘dramshop liability’ specifically”). In the thirteen years since Sewell
was decided, the Legislature has amended the Dram Shop Act and has extensively
amended the proportionate responsibility statutes, but it has never excluded a
cause of action against a provider of alcohol from comparative or proportionate
responsibility. We presume that the Legislature knew of our holding in
Sewell and that by subsequently re-enacting the Proportionate
Responsibility Act and the Dram Shop Act, it accepted this Court’s construction
of those statutes. “‘The Legislature must be regarded as intending statutes,
when repeatedly reenacted, as in the case here, to be given that interpretation
which has been settled by the courts.’” Wich v. Fleming, 652 S.W.2d 353,
355 (Tex. 1983) (quoting Marmon v. Mustang Aviation, Inc., 430 S.W.2d
182, 187 (Tex. 1968)); Coastal Indus. Water Auth. v. Trinity Portland Cement
Div., Gen. Portland Cement Co., 563 S.W.2d 916, 918 (Tex. 1978).

Given the
many instances in which the Legislature has (1) expressly said that certain
causes of action are excluded from the Proportionate Responsibility Act, which
would otherwise limit liability commensurate with proportionate responsibility,
and (2) has expressly tailored special joint and several liability
provisions for some causes of action, the phrase in Section 2.03 cannot
reasonably be read to require vicarious liability and joint and several
liability in lieu of proportionate liability for alcohol providers.

The
dissenters suggest that the Court’s opinion exonerates dram shops from
liability. They draw a stark distinction between excusing a dram shop from
liability for its conduct that violates the Act, which they assert to be the
Court’s opinion, and making the provider liable for all the injuries caused by
an inebriated patron, which is the dissenters’ position. For several reasons,
our interpretation does not excuse dram shops from liability for their conduct.
First, it is simply inaccurate to describe the Court’s holding as allowing the
dram shops to escape liability. The central issue in this case is the
apportionment of damages among liable parties. Second, we follow the
Legislature’s guidance in the language of the statute, as explained above.
Third, it is not true that juries will always assign most of the responsibility
for injury, as between a provider and an inebriated patron, to the patron.
Juries have found the dram shop equally or more responsible than the patron for
injuries to third parties. See, e.g., I-Gotcha, Inc. v. McInnis,
903 S.W.2d 829, 837 (Tex. App.— Fort Worth 1995, writ denied) (jury found that
the dram shop proximately caused fifty-one percent of the injuries);
Venetoulias v. O’Brien, 909 S.W.2d 236, 239 (Tex. App.—Houston [14th
Dist.] 1995, writ dism’d by agr.) (trial court found that the patron proximately
caused thirty-three percent of the injuries and the dram shop thirty-three
percent). Unlike Chief Justice
Jefferson’s position, which would take the question of apportioning
responsibility away from the jury, we leave this determination to the
fact-finder imbued with “constitutional authority to weigh conflicting
evidence.” See Volkswagen of Am., Inc. v. Ramirez, 159 S.W.2d 897, 913–14
(Tex. 2004) (Jefferson, C.J., dissenting).

III. Severance

The trial
court severed F.F.P.’s cross-claim against Ruiz and then tried the case with
F.F.P. as the only defendant. The court of appeals affirmed the trial court’s
severance order, concluding that because F.F.P. was vicariously liable for
Ruiz’s conduct, F.F.P.’s right of recovery, if any, was through an
indemnification action only. 69 S.W.3d at 807. The court of appeals held that
any indemnity claim F.F.P. might have against Ruiz would not accrue until
F.F.P.’s liability to the Duenezes’ was “fixed and certain.” Id. at
807-08. By this reasoning, F.F.P.’s claim for indemnification against Ruiz would
not become actionable until an adverse judgment was taken. Id. The court
rejected F.F.P.’s request to include Ruiz as a responsible third party under
Chapter 33, reasoning that F.F.P.’s vicarious liability puts F.F.P. in the same
position as Ruiz would have been. Id. at 808. Because Ruiz’s actions are
imputed to F.F.P., the court continued, Ruiz is not a responsible third party
who may be included in a proportionate responsibility question. Id.

Rule 41 of
the Texas Rules of Civil Procedure provides that “[a]ny claim against a party
may be severed and proceeded with separately.” We will not reverse a trial
court’s order severing a claim unless the trial court abused its discretion.
Guar. Fed. Sav. Bank v. Horseshoe Op. Co., 793 S.W.2d 652, 658 (Tex.
1990).

A claim is
properly severable if (1) the controversy involves more than one cause of
action, (2) the severed claim is one that would be the proper subject of a
lawsuit if independently asserted, and (3) the severed claim is not so
interwoven with the remaining action that they involve the same facts and
issues.

Id. We
have explained that avoiding prejudice, doing justice, and increasing
convenience are the controlling reasons to allow a severance. See id.

As already
explained, the Dram Shop Act does not make a provider vicariously liable for the
conduct of an intoxicated patron. F.F.P.’s liability arises from the actions of
its employees and agents—not through the actions of Ruiz. See Sewell, 858
S.W.2d at 355. Thus, F.F.P.’s claim against Ruiz is not one for indemnification
that could be properly severed; it is one of contribution for Ruiz’a
proportionate share of the damages for which he is responsible. F.F.P.’s claim
against Ruiz is “interwoven with the remaining action”: it involves the same
facts and issues to be litigated in the Duenezes’ action against F.F.P. In fact,
to succeed in a claim against F.F.P., the Duenezes had to prove that Ruiz was
clearly intoxicated and that his conduct proximately caused damages—the same
facts and issues that would be litigated in a separate suit by F.F.P. against
Ruiz. The trial court abused its discretion in severing F.F.P.’s claim against
Ruiz.

Chapter 33
requires “[t]he trier of fact, as to each cause of action asserted, [to]
determine the percentage of responsibility . . . for [each claimant, defendant,
settling person, and responsible third party who has been joined under Section
33.004] with respect to each person’s causing or contributing cause in any way
the harm for which recovery of damages is sought . . . .” Tex. Civ. Prac. & Rem. Code §
33.003. This statutory mandate is not discretionary; failing to correctly apply
the law is an abuse of discretion. In re Kuntz, 124 S.W.3d 179, 181 (Tex.
2003). Therefore, F.F.P. was entitled to a charge that included a question to
allow the trier of fact in a single trial to determine Ruiz’s proportionate
share of responsibility. The trial court’s severance constituted reversible
error.

IV. Conclusion

The trial
court abused its discretion by severing F.F.P.’s claim against Ruiz, proceeding
to trial with F.F.P. as the only defendant, and refusing to submit jury
questions for determination of Ruiz’s negligence and proportion of
responsibility. We reverse the court of appeals judgment and remand the case to
the trial court for a new trial.

________________________________________

J. Dale
Wainwright

Justice

OPINION DELIVERED:
November 3, 2006

[1] The Legislature has amended much of the code applicable
to this case. For clarity, the text references the codified version of the
statutes applicable to the case as current law with the full citation appearing
in footnotes. Citations without clarifying footnotes refer to the version in
effect on the date of this opinion.

Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3, 1987
Tex. Gen. Laws 1673, 1674, amended by Act of June 17, 2005, 79th Leg.,
R.S., ch. 643, § 1, 2005 Tex. Gen. Laws 1617, 1617 (current version at Tex. Alco. Bev. Code §
2.02).

[2] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674, amended by Act of June 20, 2003, 78th
Leg., R.S., ch. 456, § 1, 2003 Tex. Gen. Laws 1698, 1698-99 (current version at
Tex. Alco. Bev. Code §
2.03(a)).

[3] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2003).

[4] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2005).

[5] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2005).

[6] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2003).

[7] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2003).

[8] Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1,
1985 Tex. Gen. Laws 3242, 3271, amended by Act of June 3, 1987, 70th
Leg., 1st C.S., ch. 2, § 2.09, 1987 Tex. Gen. Laws 37, 42, amended by
Act of May 8, 1995, 74th Leg., R.S., ch. 136, § 1, 1995 Tex. Gen. Laws
971, 974, amended by Act of June 2, 2003, 78th Leg., R.S., ch. 204,
§§ 4.07, 4.10(5), 2003 Tex. Gen. Laws 847, 858-59 (current version at Tex. Civ. Prac. & Rem. Code
§ 33.013).

[9] Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, §
2.06, 1987 Tex. Gen. Laws 37,41, amended by Act of May 8, 1995, 74th
Leg., R.S., ch. 136, § 1, 1995 Tex. Gen. Laws 971, 972, amended by Act of
June 2, 2003, 78th Leg., R.S., ch. 204, § 4.02, 2003 Tex. Gen. Laws 847, 855
(current version at Tex. Civ. Prac.
& Rem. Code § 33.003).

[10] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41, amended by Act of May 29, 1989, 71st
Leg., R.S, ch. 380, § 4, 1989 Tex. Gen. Laws 1490,1492, amended by
Act of May 8, 1995, 74th Leg., R.S., ch. 136, § 1, 1995 Tex. Gen. Laws
971,971-72, amended by Act of May 21, 2001, 77th Leg., R.S., ch. 643, §
2, 2001 Tex. Gen. Laws 1208, 1208-09, amended by Act of June 2, 2003,
78th Leg., R.S., ch. 204, § 4, 2003 Tex. Gen. Laws 847, 858-59 (current version
at Tex. Civ. Prac. & Rem. Code
§ 33.002).

[11] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001, repealed
2003).

[12] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001,
2003).

[13] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001, repealed
2003).

[14] Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1,
1985 Tex. Gen. Laws 3242, 3271, amended by Act of June 3, 1987, 70th Leg.
1st C.S., ch. 2, § 2.04, 1987 Tex. Gen. Laws 37, 40, amended by Act of
May 8, 1995, 74th Leg., R.S., ch. 136, § 1, 1995 Tex. Gen. Laws 971, 971
(current version at Tex. Civ. Prac.
& Rem. Code § 33.002). Section 33.001 grounded the applicability
of the statute in negligence. However, Section 33.002, added to the code in
1987, is specifically devoted to the applicability of the chapter and is rooted
in torts, giving the current law a broader application than that at the time of
Sewell.

[15] Act of June 1, 1987, 70th Leg., R.S., ch. 303, § 3,
1987 Tex. Gen. Laws 1673, 1674 (amended 2005).

[16] Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1,
1985 Tex. Gen. Laws 3242, 3271 (amended 1987, 1995, 2003).

[17] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001, repealed
2003).

[18] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001,
2003).

[19] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001,
2003).

[20] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001, repealed
2003).

[21] Act of June 3, 1987, 70th Leg., 1st C. S., ch. 2, §
2.05, 1987 Tex. Gen. Laws 37,41 (amended 1989, 1995, 2001,
2003).

[22] Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1,
1985 Tex. Gen. Laws 3242, 3271 (amended 1987, 1995, 2003).

[23] Act of June 2, 2003, 78th Leg., R.S., ch. 204,
§ 4.10(5), 2003 Tex. Gen. Laws 847,
859.