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Honky-tonk from Hell

At a certain point in the evening, the DJ at the Legendary Crystal Chandelier likes to play some of those mesmerizing catastrophe videos.

Images of ships capsizing in high seas, extreme skiers cartwheeling down sheer cliffs, speedboat crashes, bungee cord failures, funny-car wrecks, and other snippets of mayhem flash up on the south wall between a full-sized Texas flag and a jumbo portrait of Hank Williams in a light blue jacket.

Going by lawsuits patrons have filed against the barnyard-sized Lancaster honky-tonk, the Chandelier furnishes some comparable live entertainment from time to time.

One night in August 1993, for instance, Deborah Johnston was at the club with a girlfriend. As Johnston would later claim in a lawsuit, an intoxicated urban cowboy named Kenneth Moore chased her around for a while, asking for a dance.

She finally agreed, and after a few minutes on the club's 90-foot-long dance floor, Moore busted one of those flip-the-woman-in-the-air moves. Unfortunately for Johnston, this was not The Nashville Network, where they actually know how to do that sort of thing.

Johnston landed on her head and was knocked cold. Moore, hammered on beer and shots, wandered away while Johnston lay there for a few minutes, the music playing, people dancing around and over her body, Johnston's suit alleged.

Eventually, a bouncer came to Johnston's aid and began shaking and prodding her, assuming she was passed-out drunk. Hospitalized for neck injuries, she later sued the bar and settled for a modest $16,000, which she has never collected.

Then there was the cowpoke who was run over in the parking lot by a drunken brawler behind the wheel of a Jeep; and the guy who claimed bouncers kicked him and beat him with flashlights until they broke bones.

Both men won judgments against the tangled thatch of corporations, partnerships, and other entities that owned and ran the Chandelier from the mid-1980s until last year.

Like Johnston, both these men got stiffed.
Those lamentable results make the Chandelier a good example of how some clubs and bars have responded to the push against drunk driving.

Rather than protecting themselves from drinking-related lawsuits with expensive liquor liability insurance, some bars simply shelter their assets behind networks of business entities, effectively rendering themselves judgment-proof, say attorneys involved in these suits and representatives of the bar and restaurant business.

In Texas, bars can serve thousands of drinks a night, but are not required to carry liability insurance against serving someone too many. When injuries result, a simple axiom often applies: You can sue, you can win, but good luck if you ever hope to collect a dime.

"At a lot of these places it's drink at your own risk," says Michael Shore, a Dallas lawyer who represented Johnston in her case against the Chandelier.

The 30,000-square-foot club on the edge of Interstate 35 has had a new owner since April 1995, and on May 3 of this year was issued a new liquor license by the Texas Alcoholic Beverage Commission.

There are no longer "three or four fights a night like when I got here,'' says club manager Larry Stelck, a 44-year-old with a thickened midsection and a big diamond cluster ring who represents a new era for the club.

But when a Glenn Heights laborer claimed to have gotten stinko at the Chandelier before he smashed his truck into a culvert this summer, Stelck's regime was hit with a suit of its own, giving new life to the club's rich history of liquor and lawyers.

Stelck may claim he has tamed the honky-tonk from hell, but the litigation, like some continuous loop of hard-luck C&W, yodels away in the key of 25-cent beer.

Despite the war it launched on drunken driving about a decade ago, the Texas Legislature has never seen fit to press the battle too aggressively against clubs and bars.

In 1987, the Texas Supreme Court for the first time allowed people to sue bars or other commercial sellers of alcohol for the at-times lethal consequences of their overlubricated patrons' behavior. Auto accidents were at the top of the list.

Within a week of the high court's decision, though, the Legislature came to the bars' rescue. It passed a law that put some new barriers in the way of people who sue.

Under the so-called dram shop law, merely showing that a bar served an intoxicated individual who then went out and hurt himself or some innocents is not enough to prevail in a lawsuit. Instead, as the law reads, it must be apparent to the alcohol provider that the person served was obviously intoxicated to the extent that he presented a clear danger to himself and others.

 

For bar owners, salvation is in the adjectives.
"You usually don't see those qualifiers in the law," says David Brothers, a Houston lawyer who has defended liquor providers and written articles explaining dram shop laws for the restaurant industry and its attorneys.

"It makes these things a lot harder to prove," says Brothers. "You have to bring a witness who saw that person being served after they showed the classic signs of being drunk."

By most accounts, the restaurant lobby that backed that law is one of the strongest in Austin, where liquor tax revenues hardly put anyone in the mood to slap the industry around. Another example of that clout is the lack of any state requirement that bars carry insurance covering alcohol-related claims, some lawyers say.

"You need insurance to drive a car, but you can serve liquor to thousands of people a night and not carry a dime's worth of insurance," says Shore, the Dallas attorney.

Glen Garey, general counsel for the Texas Restaurant Association, says there has been talk in Austin from time to time about making liquor liability insurance mandatory, but even Mothers Against Drunk Driving has never pushed the issue.

The coverage tends to be expensive--making it sure to shut down a lot of small operators--and bar owners fear their insurers will want some say in how the bars are run, Garey says. "The underwriters get pretty concerned if you're pushing Jell-O shots."

Given that, he says, the alcohol service world tends to divide itself into responsible types with assets to protect who are willing to pony up for the coverage, and slicker operators who use other strategies.

"It's kind of like with auto insurance," Garey says. "The guy who probably needs it the most doesn't have it."

And there's no telling who is covered. For instance, in a lawsuit involving a fatal wreck in Arlington on Christmas Day 1994, the owners of three Dallas clubs where the driver allegedly had been drinking were asked if they carried liquor liability insurance. Two, the owners of Iguana Mirage and Blue Planet, said their clubs were covered for up to $1 million; a copy of Blue Planet's policy showed it paid $30,000 for one year of coverage. A third club, Eden 2000, had no insurance coverage applicable to the case, according to the lawsuit.

For many bars without insurance, sheltering assets behind layers of corporate structure is a technique used to protect against all sorts of litigation, Garey says. The courts may eventually see through it, but it makes suing and collecting so difficult--and so costly--that plaintiffs get tired and give up.

Which brings us to James F. Douglas Jr., the previous owner of the Crystal Chandelier and Borrowed Money, a now-defunct sister club once located in Caruth Plaza in North Dallas.

Douglas, along with his daughter and son-in-law, controlled the companies that ran the clubs until last year. In 1986, he moved to Dallas from San Angelo, where he ran a club called Sugars. "I was enticed by four or five high-rollers to come up here and put a bar in," he said in a deposition last year. A few of his backers ended up going to jail for making false statements to banks.

Mark Ticer, a Dallas lawyer who is doggedly pursuing a dram shop lawsuit against Douglas and Borrowed Money, has found more than 20 legal entities--corporations, a trust, limited partnerships, companies formed to hold the stock of other companies--with a connection to Douglas or his immediate relatives.

Ticer claims in his suit that Douglas used the arrangement to confuse creditors and avoid liabilities.

"There are monies to recover, but I'm not going to discuss my trial strategy," says Ticer, who is a representing a 23-year-old Denton woman who, he says, has accumulated more than $1 million in medical bills since a July 1993 accident on LBJ Freeway rendered her a paraplegic. She alleges that the driver of the Jaguar in which she was riding was allowed to get stumbling drunk at Borrowed Money.

"[Borrowed Money employees] just waved them through because they were two attractive women," says Ticer. "Told them when they left, 'You all be careful,' as they stumbled down the stairs."

Douglas says the women were never at his club that night, and claims he has videotape to prove it.

In fact, he contends every one of the 10 or so dram shop lawsuits filed against him and his bars has been baseless.

"It's just the jurisprudence system has gone to hell," Douglas says. "There are too many lawyers and not enough cases." Douglas says he used to keep files on all the cases pending against him. "Now I just throw it all in a box."

 

The 51-year-old Mabank resident says the Chandelier generated fewer lawsuits than his North Dallas club because the country crowd was less litigious.

"It was a pretty rednecky place," he says. In Douglas' view, rednecks possess a keener sense of personal responsibility than the urbanites who frequented Borrowed Money.

The Chandelier was known as the most authentic 'kicker bar around, he boasts. Sure, there were lots of fights, but that too was a function of the lowly socioeconomic status of the crowd, Douglas says. "Some people are just mad at life, and they find an excuse to lash out...It doesn't have anything to do with the bar."

Besides, he confides, the 25-cent beers were so watered down, nobody could get drunk from them.

Douglas says the clubs were profitable, but he ran into some tough years in the early '90s. An unrelated oil venture went bad, some bank accounts were overdrawn, and authorities moved to collect years of unpaid property taxes on the Chandelier, which Douglas put into bankruptcy. The company that actually owned the club, GID II Inc., filed to reorganize in September 1994, court records show.

The dram shop cases also weighed him down, Douglas says. "You can't defend all these lawsuits. It's impossible." Still, Douglas is casting about for a new venture in the bar business.

Shore and other attorneys who have sued the Crystal Chandelier say the various Douglas bankruptcies have made it impossible for them to collect their judgments.

The guy who was run over in the Chandelier's parking lot received a $750,000 default judgment earlier this year, but has not seen a dime of it. The man who was beat up was awarded $28,700 in actual damages and $86,000 in punitive damages, but also has received nothing.

"The character who was running the bar was pretty slick," says attorney Gregory Marks, who filed the parking-lot suit. "If someone shifts assets between corporations, you need to get a sophisticated asset finder to determine if there's anything there. So far we haven't done that."

Shore, whose client was tipped on her head on the club's dance floor, says that when he first saw the size of Douglas' two clubs, "I thought they had to have insurance. I was wrong."

His client recovered from her neck injury. But, he says, "It's unpleasant being in one of these cases. You have to turn over a lot of personal information. You have to relive the incident again and again."

Shore says that after coming away with nothing, he does not plan to sue any more uninsured bars. "I'm not that stupid," he says.

"You've got to hold 'em upside down by the feet and you still might not get anything," says Dallas lawyer Jerome Ferguson.

He should know. In 1993, Ferguson convinced the state Supreme Court that Texans have the right to sue bars for their own alcohol-related injuries. Previously, only innocent third parties injured by drunks could sue in Texas.

Ferguson's precedent-setting case involved Charley's Angels, a bygone topless bar on R.L. Thornton Freeway that served a 20-year-old four pitchers of beer before he drove home, lost control of his car, and severely injured his spine in a one-car wreck.

Ferguson declined to discuss details of the settlement he reached with the bar two years ago. He only would say he collected "some money" for his quadriplegic client.

That is more than the lawyers who won judgments against the bankrupt Chandelier say they are likely to see. Two say they have sent their case files to the warehouse. None seems very optimistic about collecting a dime from the bar's previous owner.

Nobody disputes that Richard Wingo, a 27-year-old Glenn Heights man who works putting cabinets together, went to the Chandelier this past May 30.

According to the club's records, he arrived at 9:22 p.m. It was Ladies' Night--meaning quarter beers till 10--and, Wingo says, he settled in for several hours at a table with friends, knocking back beers and shots of Hot Damn, a cheap-tasting cinnamon liqueur. "I was extremely drunk," he related through his attorney, Brian Becker.

Becker says his client does not remember how he got to his vehicle. But sometime around 1:20 a.m. on Friday, May 31, Wingo drove his 1983 GMC Jimmy off Bear Creek Road and into a concrete culvert, about a mile west of the bar, according to a Glenn Heights police report.

"I have a witness who says he drank so much he could barely stand up at the bar," says Becker. "At the hospital they say he reeked of alcohol."

Wingo sustained some broken teeth and a gash on his face. On June 17 he filed suit, claiming the club was negligent and in violation of Texas' dram shop act because he was served after he was intoxicated and "a clear danger to himself and others."

 

A lot of lawyers say they won't take these kinds of cases because the suits are almost impossible to win. In this era of heightened political rhetoric about personal responsibility, jurors are not very sympathetic to someone who claims the bartender made him drunk.

Larry Stelck, the current manager of the Chandelier, puts more of a point on it. "It's extortion...and from what I know happened, it's an absolute lie."

Stelck says he has an "ace-in-the-hole witness" who says Wingo left the club around 11 p.m. And the accident report clearly states that police believe Wingo merely fell asleep before he wrecked.

"If the man was so drunk he couldn't drive a minute or two down the road, we would have spotted him," Stelck says.

Wingo's lawsuit aside, Stelck does appear to have cleaned up the Chandelier somewhat since taking over last year.

Lancaster police (who are forbidden from moonlighting at taverns) say they are happy about the way Stelck has straightened up things. Their records show only 11 calls for fights, disturbances, and assaults during the past three months.

TABC violations also are down, if you don't count the write-up last August against Stelck for running an open bar. The Chandelier, located in a dry area, operates as a private club. When a TABC investigator bought a drink without first buying a membership, the agency collected a $750 fine in lieu of shutting the place down for five days last December.

When Stelck stepped in to purchase the bar, Lancaster schools and city government, as well as Dallas County, were able to collect a total of $212,000 in back taxes owed by the Douglas interests. "I've tried to do this proper," Stelck says over the sounds of clicking pool balls and the rumble of the bar crowd.

"They cleaned it up a lot," says Shawn Shepard, a 27-year-old who--curiously--has been going to the bar for eight years. "This place used to be pretty easy about I.D.," she says.

A visit to the club one recent Thursday night made it clear that the Chandelier can move the booze. Throughout the smoky room, guys in hats or checker-board shirts huddled around tables covered with eight-ounce plastic cups of 25-cent beer. They mowed them down as Angel Fire, the bar band, covered songs like "Beaches of Cheyenne" or "Welcome to My Crazy Life."

For a two-song break that included a very noncountry Coolio number, longnecks dropped to $1 and the number of people in lines around the beer tub stretched to a dozen or more.

(Stelck said later, "I prefer not to give anything away that cheap, but you have to compete." On Fridays, the specials run all night: 25-cent draft beer, $1 well drinks, and $1.50 longnecks.)

A leggy woman browsed the club as sort of a walking tequila dispenser, shot glasses strapped across her chest in a brown leather sash, $2.50-a-snort Cuervo Gold holstered on her leg.

Eventually, several people in the crowd of about 700 staggered to the exit, although all were stopped by security people in black T-shirts and portable headsets, apparently to make sure they weren't driving.

Stelck, who says that like the Douglas clan he has no liquor liability insurance at the bar, says his only assets are "two thousand dollars in the bank."

"This club is no million-dollar honey, I guarantee," he says.
The Chandelier building and just about everything in it, including furniture, are leased, Stelck says. And while records from one of the Douglas company bankruptcies show that Stelck made clear he was purchasing the property, courthouse documents list Lester Stelck, Larry's father, and another investor as owners of record. That arrangement would isolate those assets from dram shop claims, lawyers say.

In other words, on the outside chance Wingo might win his lawsuit, he has little hope of seeing money.

"They're barking up the wrong tree," Stelck says in less legalistic terms. "They ain't gonna get jack shit.


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