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By Michael Booth
New Jersey Law Journal
08-11-2006

A year and a half after a Bergen County, N.J., jury stunned the arena concession industry with a $105 million award to a child paralyzed by a drunken fan -- the largest dram shop verdict in U.S. history -- an appeals court has reversed.

A three-judge panel on Aug. 31 found multiple trial errors, most markedly the admission of evidence of a "culture of intoxication" at Giants Stadium, where the fan had been served alcohol hours before colliding with the car in which Antonia Verni was riding, leaving her a ventilator-dependent quadriplegic.

By allowing testimony about drunken, rowdy behavior at Giants games and negligent supervision and inadequate training of vendors -- all irrelevant to liability under the Licensed Alcoholic Beverage Server Fair Liability Act -- the trial judge gave free rein to the plaintiff's lawyer to warp the result, the appeals court found in Verni v. Harry M. Stevens Inc., A-3951-04T3.

The appeals judges were unanimous in finding that the evidentiary error, compounded by a lack of curative instructions, led the jury to assess $30 million in compensatory damages and $75 million in punitives against Aramark Corp., the nation's largest stadium concessionaire.

"Due to multiple errors in the course of the trial, we reverse and remand for a new trial," wrote Judge Mary Catherine Cuff, joined by Judges William Gilroy and Anthony Parrillo.

The plaintiffs lawyer, David Mazie, of Roseland's Nagel Rice & Mazie, says the appeals panel misread the record and that he will seek certification to the state Supreme Court.

The ruling was welcome relief for Philadelphia-based Aramark, the sole defendant when the case went to the jury. Before trial, Superior Court Judge Richard Donohue dismissed claims against the Giants, the National Football League, NFL Commissioner Paul Tagliabue and the New Jersey Sports and Exposition Authority, which had settled with the plaintiffs for $700,000. The intoxicated fan who caused the accident, Daniel Lanzaro of Cresskill, settled with the plaintiffs for $200,000.

The jury found that an Aramark vendor sold too many beers to Lanzaro at a Giants game on Oct. 24, 1999, the day of the accident. At 6:25 p.m. that evening, Lanzaro had a blood-alcohol content of .266 percent, more than 2 1/2 times the legal limit. Trial evidence showed that to reach that level, he would have had to consume the equivalent of 16 12-ounce light beers during the day.

But in order to hold Aramark liable under the Beverage Server Act, N.J.S.A. 2A:22A-1 et seq. -- New Jersey's exclusive remedy for a civil dram shop claim -- the plaintiffs should have had to show that Lanzaro was served beer while he was visibly intoxicated.

Instead, Donohue permitted plaintiffs lawyer Mazie to introduce a "plethora of evidence of rowdy behavior" at the stadium over the years, including testimony that Aramark employees routinely ignored a two-beer-per-customer limit policy at the stadium and created an atmosphere in which intoxicated patrons could still be served alcohol.

By doing so, Donohue ignored settled case law that the character of a liquor-serving establishment is not relevant to liability under the statute. "[N]egligence is not definable by reference to regulations or standards governing dispensers of alcoholic beverages or holders of liquor licenses," wrote Cuff. "The character of the place of dispensation is also inadmissible because it is irrelevant to the central issue."

Cuff wrote that "evidence of drunken attendees is inadmissible because it does not account for the possibility that patrons may have consumed the alcohol off premises, before the game at a tailgate event, or that the alcohol was purchased by a sober patron here who supplied it to an intoxicated patron."

Nor was allowing the evidence harmless error. "The evidence had the clear capacity to mislead the jury, to inflame the jury and to detract from the central issue in the case of whether Lanzaro was visibly intoxicated at the time of purchase," wrote Cuff. "[W]e have no confidence that the jury was able to evaluate the relevant evidence in a dispassionate manner."

The judges also agreed with defense counsel Steven Cozen that Donohue erred when he allowed Mazie to lump the Aramark subsidiaries involved in the stadium's concessions -- Harry M. Stevens Inc. of New Jersey, Aramark Services Management of New Jersey Inc. and Aramark Sports and Entertainment Group Inc. -- under the Aramark banner and thus "pierce the corporate veil."

Joinder of all the subsidiaries under the Aramark name deprived the subsidiaries, and Aramark, of the right to defend themselves against the allegations, since the New Jersey rule is that blame does not always flow upward from subsidiaries to owners. "[M]ere ownership of a subsidiary does not justify the imposition of liability on the parent," Cuff said, quoting Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001).

She also quoted a state Supreme Court case, Lyon v. Barrett, 89 N.J. 294 (1982), that, "In the absence of fraud or injustice, courts generally will not pierce the corporate veil to impose liability on the corporate principles."

In addition, Donohue improperly told the jury that loss-of-enjoyment damages could include compensation for Antonia Verni's shortened life expectancy. An economist estimated her life-care expenses at $42 million. "[S]hortened life expectancy is not an element of loss of enjoyment of life damages in an action for personal injury," Cuff said, citing Paladino v. Campos, 145 N.J. Super. 555 (Law Div. 1976).

And Donohue was wrong to grant summary judgment on the claims against the NFL, the Giants, Tagliabue, the Sports and Exposition Authority and The Gallery, a strip club Lanzaro visited after the game and before the accident, said Cuff. The jury should have been allowed to consider evidence against all the defendants and to possibly apportion liability among them.

"If the evidence at the conclusion of the new trial warrants consideration of apportionment among any or all defendants in addition to [Aramark and its subsidiaries], the jury must be allowed to apportion the liability among all defendants," Cuff wrote. "New Jersey law favors the apportionment of fault among responsible parties," she said, quoting Boryszewski v. Burk, 380 N.J. Super. 361 (App. Div. 2005).

Both the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.8, and the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -5, were enacted to ensure that blame was shared by all responsible defendants and "to prevent a plaintiff from arbitrarily selecting his or her victim."

The judges did rule that Donohue properly refused to allow testimony about how Antonia Verni's mother, Fazila Baksh Verni, had removed the toddler from her car seat, leaving her unrestrained at the time of the crash. The judges noted that Antonia had become ill and had soiled her seat. "This is the type of ordinary child care decision a parent must make every day," Cuff said. "The trial judge correctly barred reference to the failure of the child to be properly restrained."

Though Aramark had sought to have the appeals court declare that it was insulated from punitive damages, since the Beverage Server Act is silent on the issue, the judges declined to rule on that issue, instead leaving it up to the trial judge to decide at a later date. "We conclude that the issue is anticipatory, and perhaps remote, dependant as it is on the record adduced at the new trial," Cuff wrote.

Mazie says he takes issue with the panel's rulings about culture-of-intoxication evidence, piercing the corporate veil and dismissal of the NFL and sports authority as defendants.

"The evidence on a culture of intoxication is clear," he says. "They have a written policy that they won't serve anybody who is highly intoxicated. They'll serve anybody as long as they're not out of control."

He says he will continue to pursue a case against Aramark, the parent company. "They all overlap each other. These subsidiaries are all shell companies. Some of them don't even have any employees."

Mazie says he believes there is no reason the NFL defendants and the authority should be brought back into the case. "They had nothing to do with this. There is no proof that they had anything to do with how Lanzaro was served," he says. "The decision makes no sense. The court shouldn't be allowed to do this."

One of Aramark's lawyers, Michael Rodburg, said the ruling "vindicates" the company. "I think the court, in my reading, pretty much followed the arguments we made," said Rodburg, of Roseland's Lowenstein Sandler.

Harry M. Stevens's lawyer, Cozen of Philadelphia's Cozen O'Connor, agrees. "They obviously saw this case for what it was, an unfair trial," says Cozen. "They have now corrected that and have given some direction to the trial court with respect to what is to occur."