Larry VanEgdom, in an intoxicated state, bought alcoholic beverages from the Hudson Municipal Liquor Store in Hudson, South Dakota.
An hour later, VanEgdom, while driving a car, struck and killed Guy William Ludwig, who was stopped on his motorcycle at a stop sign. Lela Walz, as special administrator of Ludwig's estate, brought an action against the city of Judson, which operated the liquor store, for the wrongful death of Ludwig.
Walz alleged that the store employee was negligent in selling intoxicating beverages to VanEgdom when he knew or could have observed that VanEgdom was drunk. Decision?