Court Of Appeals Conflict Panel: Stipulated Final Order Not Required To Reserve Appellate Rights; Dramshop Act Does Not Bar Claims Based On Conduct Unrelated To Intoxication

Jaber v P & P Hospitality, LLC

• Opinion Published: December 6, 2024 (Boonstra, P.J., and Jansen, Markey, Borrello, Rick, Patel, and Young , JJ.)

• Docket No. 363572

• Washtenaw County Circuit Court

Holding: Court of Appeals conflict panel holds that a stipulated final order does not require reservation of appellate rights language in order to review interlocutory order. Dramshop Act does not bar claims for negligence related to hiring, training and supervision of employee unrelated to actions of intoxicated patron.

Facts: In Jaber v P & P Hospitality, LLC, ___ Mich App ___  (issued December 6, 2024, Docket No: 363572) (Jaber II), a conflicts panel considered whether a reservation of appellate rights is required in a stipulated final order of dismissal in order to pursue appellate review of a prior interlocutory order. The panel was invoked to resolve the conflict between Jaber v P & P Hospitality, LLC, __ Mich App __ (issued June 27, 2024, Docket No: 363572) (Jaber I) and the opinion in Sandoval v Farmers Ins Exch, __ Mich App __ (issued January 25, 2024, Docket No: 361166).

Sandoval involved a dispute as to  priority of insurers relative to a claim under the No Fault Act. After the trial court ruled that Zurich American Insurance Company was the responsible insurer, the remaining claims were dismissed via stipulated final order. Zurich then filed a claim of appeal from the stipulated final order, seeking review of the interlocutory order finding it the responsible insurer. On appeal, the Sandoval Court held that because the stipulated order of dismissal was the final order and its language did not preserve a right to appeal the earlier trial court order, Zurich was precluded from pursuing appellate review by right from the final order in favor of Farmers.

In Jaber I, the Court of Appeals was faced with a similar procedural question. Plaintiff Jaber filed claims against defendant bar and its bouncer following injuries she suffered when the bouncer forcibly ejected a drunk patron, throwing him from the bar into a door, striking her. The trial court dismissed her claims against the bar, finding that all her claims against them were barred by the exclusive remedy of the Dramshop Act (DSA), including her claims based on the negligent hiring, training and supervision of the staff and the bouncer. After the trial court’s order dismissing the claims against the bar, Jaber resolved her claims against the bouncer and entered into a stipulated order of dismissal.  The Jaber I panel held under MCR 7.215(J)(1), it was bound by the ruling in Sandoval to dismiss Jaber’s claim of appeal seeking review of the order dismissing her claims against the bar because the stipulated order did not preserve her right to seek appellate review of those orders. However, the Jaber I panel noted its disagreement with the Sandoval ruling as required by MCR 7.215(J)(2), and explained that it would have concluded that under ordinary contract principles governing consent judgments, given Farmers’ lack of participation in the stipulated final order, Zurich remained an aggrieved party as to the earlier summary disposition order.

Key Appellate Rulings

Language preserving right to appeal interlocutory order is not necessary in stipulated final order when appeal does not challenge the substance of the stipulated order.

The conflict panel in Jaber II agreed with Jaber I’s criticism of the Sandoval ruling. The conflict panel affirmed the general rule that a party who consents to a final order cannot appeal its merits, e.g., Dora v Lesinski, 351 Mich 579, 582 (1958); Weiss v Hodge (After Remand), 223 Mich App 620, 636 (1997). However, it adopted the reasoning of Jaber I, finding that a stipulation to dismiss which results in a final order does not divest an appellant of the right to review a prior order in the case to which it is still an aggrieved party, even in the absence of reservation language in the stipulation permitting a party to claim an appeal from an earlier order. “In sum, we reject the notion that the failure to add reservation language to a stipulated order in these circumstances should operate as a trap for the unwary and bar appellate jurisdiction.” Jaber II, slip op at 11.

Dramshop Act does not bar claims against bar based on conduct unrelated to intoxication.

Turning to the substantive issue on appeal, the Court of Appeals reversed the trial court’s dismissal of Jaber’s negligence claims, finding that the DSA was not a bar. The court agreed that the negligence claims arise out of the conduct of the bouncer and not the intoxicated patron.  The Court of Appeals affirmed that common law rule that “employers can be found liable for ‘their negligence in hiring, training, and supervising their employees’”. Jaber II, slip op at 14.