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PLAINTIFF INSURER CAN SUE, AS A SUBROGEE, THE CLUB WHICH SERVED ALCOHOL TO ITS INSUREDS, WHO WERE VISIBLY INTOXICATED, PURSUANT TO THE DRAM SHOP ACT; THE INSUREDS WERE INJURED IN A SINGLE CAR ACCIDENT AND THE INSURER PAID OUT MORE THAN $500,000 (SECOND DEPT). ​

The Second Department, in a full-fledged opinion by Justice Love, affirming Supreme Court, determined that plaintiff insurance company, Drive Insurance, could stand in the shoes of its insureds (as a subrogee) and sue the defendant club, Atlantis, pursuant to the Dram Shop  Act. Plaintiff alleged defendant served alcohol to the visibly intoxicated insureds who were then injured in a single-car accident. Plaintiff paid out over $500,000 to the insureds (named Aly, Perez and Abreu-Mateo):

… Drive Insurance alleged that Aly, Perez, and Abreu-Mateo were injured and the vehicle was damaged by Perez, who was visibly intoxicated at the time that Atlantis sold her alcohol. Accordingly, the Supreme Court properly determined that Drive Insurance was entitled to assert, as subrogee, a cause of action pursuant to the Dram Shop Act and that Drive Insurance stated a claim against Atlantis for violation of the Dram Shop Act. If the owner of the vehicle and the passengers have causes of action pursuant to the Dram Shop Act against Atlantis to recover damages arising out of the accident on the theory that Atlantis unlawfully served Perez when she was visibly intoxicated, causing the accident and their injuries, which causes of action do not fall into one of the exclusions discussed supra, then, since Drive Insurance alleges that it made payments as to the damaged vehicle and the injured passengers pursuant to the policy, Drive Insurance is entitled to stand in the shoes of its insured and seek indemnification from Atlantis based on Atlantis’s alleged violation of the Dram Shop Act. Drive N.J. Ins. Co. v RT Hospitality Group, LLC, 2025 NY Slip Op 02188, Second Dept 4-16-25

Practice Point: An insurance company which has paid the insureds’ medical bills and vehicle-repair costs after a single-car accident, can, as a subrogee, sue the bar which served alcohol to the visibly intoxicated insureds under the Dram Shop Act.

 

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