Amtote Intern. v. Pngi Charles Town Gaming
| Decision Date | 20 February 1998 |
| Docket Number | No. CIV.A. 3:97-CV-146.,CIV.A. 3:97-CV-146. |
| Citation | 998 F.Supp. 674 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | AMTOTE INTERNATIONAL, INC., Plaintiff, v. PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY, and Penn National Gaming, Inc., Defendants. |
Richard L. Douglas, Gerard J. Gaeng, Martinsburg, Baltimore, MD, for plaintiff.
Benjamin L. Bailey, Charleston, WV, for defendants.
This matter comes before the Court for consideration of the plaintiff's motion for preliminary injunction. For reasons set forth below, the Court denies this motion.
Plaintiff Amtote International, Inc., ("Amtote") filed a complaint along with a motion for a temporary restraining order on December 17, 1997. After the Court gave notice to the defendants, PNGI Charles Town Gaming Limited Liability Company ("PNGI") and Penn National Gaming, Inc. ("Penn National"), the Court conducted a hearing on this motion by telephone conference on December 23, 1997. In addition to counsels' oral argument, the Court considered the parties' memoranda on this issue.
As a result of the hearing, the Court issued a temporary restraining order on December 24, 1997. This order set the matter for an evidentiary hearing on January 14, 1998, to determine whether a preliminary injunction should be issued.
The hearing was held on January 14, 1998 as scheduled. Both Amtote and Penn National presented witnesses and introduced exhibits in support of their respective positions. At the conclusion of the hearing, the Court directed both counsel to file memoranda concerning the legal matters pertinent to a preliminary injunction. In particular, the Court directed the parties to focus on the issues of irreparable harm and specific performance. Counsel complied and submitted the matter for a decision.
This civil case involves the interaction of several contracts entered into by Amtote with Charles Town Races, Inc., ("CTR") and Charles Town Racing Limited Partnership ("CTRLP"). CTR and CTRLP were the prior owners and operators of the Charles Town Race Track located in Charles Town, Jefferson County, West Virginia. The first contract was the Wagering Services Agreement, dated September 9, 1994, which concerned horse race wagering systems operations. The second contract was the Binding Agreement, dated October 20, 1994, concerning video slot terminal systems. The third contract was the Amendment to the Binding Agreement, dated January 1, 1995. The fourth contract was the Amendment to the Wagering Services Agreement, dated February 1, 1995. Although bearing different dates, both of the amendment contracts were signed later in March 1995. The fifth contract was the Assignment and Assumption Agreement, dated February 22, 1996, between Amtote and GTECH Corporation (GTECH), at one time the owner of Amtote.
Amtote is a Delaware corporation with its principal place of business in Hunt Valley, Maryland. PNGI is a West Virginia limited liability company with its principal business being the Charles Town Race Track in Charles Town. Penn National is a Pennsylvania corporation with its principal place of business in Wyomissing, Pennsylvania. Penn National is the majority owner of PNGI.
On January 15, 1997, PNGI purchased the Charles Town Race Track from CTR and CTRLP. PNGI conducts horse racing with facilities for pari-mutual wagering at the Charles Town Race Track. As well, PNGI started operating State government approved video slots terminal gaming systems in September 1997.
For many years, Amtote has been the exclusive provider of pari-mutual wagering services at Charles Town Race Track. Amtote and CTR, the prior owner of the race track, entered into the Wagering Services Agreement on September 9, 1994. By the Wagering Services Agreement, Amtote obtained the right to continue as the exclusive provider of pari-mutual wagering services at the Charles Town Race Track until December 31, 1996. Amtote's compensation for its services was to be determined according to a schedule contained in the Wagering Services Agreement. This base compensation was to be computed by multiplying the total daily wagers ("handle") by 0.005 (or 0.5%).
At the time of the Wagering Services Agreement, Amtote was a wholly-owned subsidiary of GTECH. When State government approved the use of video slots terminal gaming in West Virginia, Amtote and CTR entered into another contract on October 20, 1994, the Binding Agreement. By this contract, Amtote paid CTR $50,000 and provided a loan of $750,000 for the right to provide a video lottery terminal system at Charles Town Race Track. Paragraph 17(a) of this contract permitted Amtote to assign any or all of the Binding Agreement to the parent or subsidiary of Amtote.
Paragraph 5 of the Binding Agreement set forth the following as to the contract terms:
Term of the Agreements
The combined initial term of this Binding Agreement and the Gaming Services Agreement will be for a period of seven (7) years from the installation and initial operation of the video lottery system, subject to the Buy-out Option (the "Term"). The parties presently expect the installation and initial operation of the video lottery system in at least four (4) months after the approval of the Referendum and all necessary governmental approval and actions allowing the operation of a video lottery system at Charles Town. The term of the Wagering Services Agreement shall expire on the later of (a) 31 December 1996, or (b) the expiration or earlier termination of the Term.
In November 1994, the voters of Jefferson County, West Virginia rejected the local referendum authorizing video slots terminal gaming. This prevented Amtote from becoming the exclusive provider of video slots terminals to Charles Town Race Track. For financial reasons, CTR stopped horse racing at Charles Town and tried to sell the track. Thereafter, Amtote and CTR entered into negotiations concerning amendments to the Wagering Services Agreement and the Binding Agreement.
As previously stated, the amendments would bear different dates, but they were signed and returned by CTR to Amtote on March 16, 1995. The Amendment to the Binding Agreement was dated January 1, 1995. Amtote and CTR agreed that the Binding Agreement would be enforced against any buyer of the race track. As to contract terms, the Amendment to the Binding Agreement states in paragraph 6 as follows:
The Wagering Services Agreement and Binding Agreement, as amended, will expire on 31 December 1997, provided that on or prior to such date (i) the Referendum has not been approved and (ii) the Loan has been repaid in full. If the Referendum has been approved, then the Wagering Services Agreement and Binding Agreement remain in effect pursuant to their respective terms. If the Referendum has not been approved and the Loan has not been repaid in full, then the Wagering Services Agreement and Binding Agreement shall remain in full force and effect until such time as the Loan has been repaid in full.
The Amendment to the Wagering Services Agreement was dated February 1, 1995. Amtote and CTR agreed that the Wagering Services Agreement would continue until December 31, 1997. As to contract term, the Amendment to the Wagering Services Agreement states in paragraph 2 as follows:
Exhibit B.3. is hereby deleted in its entirety and the following is substituted in lieu thereof.
This Agreement shall be in full force and effect for the period as of the date hereof and for a period of approximately three (3) Operating Years, beginning on or about 10 February 1995 and continuing until its termination at the close of business on 31 December 1997.
During this period of negotiations, GTECH was in the process of divesting itself of its wholly-owned subsidiary, Amtote. Mudge Acquisition Group and GTECH entered into a Purchase and Sale Agreement for Amtote on February 20, 1996. The effective date of this transaction has not been determined. GTECH and Amtote entered into the Assignment and Assumption Agreement, dated February 22, 1996. This agreement intended to convey the right to provide video lottery terminals via the Binding Agreement from Amtote to GTECH.
Subsequently, Penn National and CTR entered into negotiations for the sale and purchase of the Charles Town Race Track. Penn National helped fund a new election campaign to approve local video slots gaming. On November 5, 1996, the voters of Jefferson County approved a new referendum approving video slot gaming. During the negotiations for the sale of the race track, GTECH filed a civil action against Penn National, PNGI, CTR and CTRLP to enforce the Binding Agreement and the Amendment to Binding Agreement. GTECH Corporation v. Charles Town Races, Inc., et al., Civil Action No. 3:96-CV-72, (N.D.W.V. filed December 11, 1996). Although a preliminary injunction was entered in that case on May 23, 1997, the action was dismissed upon a settlement reached by the parties. Id., Order entered July 17, 1997 (Document Number 81). GTECH then provided the video slots terminal systems to Charles Town Race Track. PNGI started operating video slot gaming for the public on September 15, 1997.
During the GTECH and Penn National litigation in 1997, Edward T. Mudge, IV, the President of Amtote contacted Penn National concerning the possible reopening of the Charles Town Race Track. Mr. Mudge wanted to negotiate a new agreement with Penn National and PNGI if the race track resumed operations.
Mr. Mudge wrote to PNGI by letter dated July 31, 1997, concerning the tote contract. Penn National wanted to consolidate the horse wagering tote services at its three race tracks and started talking with the three major providers of tote services during the summer of 1997. When the video slots terminals began operation in September 1997, the issue of the term of the Wagering Services Agreement arose. By a voice mail message left for William...
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Hudak v. Selene Fin. LP
...characteristic of specific performance is its inability to be valued in terms of damages. See Amtote Int'l, Inc. v. PNGI Charles Town Gaming, LLC, 998 F. Supp. 674, 679 (N.D.W. Va. 1998) ("Under West Virginia law, plaintiff cannot seek specific performance if it has an adequate remedy at la......