Punitive Damages Are Not Recoverable in Dram Shop Cases

On December 6, 2001, the Fort Worth Court of Appeals determined that punitive damages are not recoverable under the Dram Shop Act. Steak and Ale of Texas, Inc. d/b/a Bennigan’s v. Lea Borneman, 62 S.W.3d 898 (Tex. App.-Fort Worth, 2001 pet. filed).

The Fort Worth three-member panel who reviewed this case issued a two to one decision holding that punitive damages do not apply to the Dram Shop Act. This decision marks the first time that the Texas Court of Appeals has addressed this issue. Justice Anne Gardner wrote in the majority opinion that “excluding recovery of punitive damages in Dram Shop liability is consistent with what we believe to be the intent of the Dram Shop Act.”

In short, the court reasoned that the legislature did not intend for punitive damages to be recoverable under the Dram Shop Act, as the Texas Alcoholic Beverage Code makes no provision for the assessment of punitive damages. Counsel for Plaintiff has already asked the Texas Supreme Court to review this matter.

While some attorneys in Texas have asserted that punitive damages are not recoverable in Dram Shop actions, cases on point were lacking. The Fort Worth court did not address the reasoning that often forms the basis for the argument that punitive damages are not recoverable, i.e., Civil Practice and Remedies Code Section 41.005 states that in an action arising from harm resulting from an assault, theft or other criminal act, a court may not award exemplary damages against the defendant where the criminal act is the act of another. Obviously, driving under the influence of alcohol, a misdemeanor or felony punishable by imprisonment, would qualify as a criminal act.