CAESARS RIVERBOAT CASINO LLC. v. KEPHART, No. 31S01-0909-CV-403.

Docket NºNo. 31S01-0909-CV-403.
Citation934 N.E.2d 1120
Case DateSeptember 30, 2010
CourtSupreme Court of Indiana

934 N.E.2d 1120

CAESARS RIVERBOAT CASINO, LLC, Appellant (Plaintiff below),
v.
Genevieve M. KEPHART, Appellee (Defendant below).

No. 31S01-0909-CV-403.

Supreme Court of Indiana.

Sept. 30, 2010.


934 N.E.2d 1121

Gene F. Price, Steven P. Langdon, Frost Brown Todd, LLC, New Albany, IN, Attorneys for Appellant.

Terry Noffsinger, Noffsinger Law, P.C., Evansville, IN, Attorney for Appellee.

On Petition To Transfer from the Indiana Court of Appeals, No. 31A01-0711-CV-530
RUCKER, Justice.

A casino sued a patron for unpaid counter checks. The patron, a pathological gambler, countersued for damages because the casino knowingly enticed and encouraged the patron to gamble. We granted transfer to determine if casino patrons have a common law cause of action for damages stemming from the consequences of gambling losses.

Background

Historically, Indiana has prohibited gambling. The restrictions date back to at least 1851 when the State adopted a Constitution that contained a prohibition against lotteries thereby making various forms of gambling unlawful. Ind. Const. Art. 15 § 8 (1851); Ind. Gaming Comm'n v. Moseley, 643 N.E.2d 296, 297 (Ind.1994). The prohibition against lotteries was adopted to “minimize the harmful effects of gambling by sheltering the people from gaming enterprises promoted and operated for monetary gain....” State v. Nixon, 270 Ind. 192, 384 N.E.2d 152, 161 (1979) (declaring that pari-mutuel wagering on horse races was unconstitutional). Anti-gaming statutes were passed to “remove as far as possible the temptation for gambling

934 N.E.2d 1122

and prevent the evils arising therefrom.” Hatton v. Casey, 93 Ind.App. 336, 178 N.E. 303, 305 (1931).

In 1988, voters approved a referendum to amend the Indiana Constitution by deleting the general prohibition against lotteries. The General Assembly then authorized lotteries conducted by the State Lottery Commission and horse race gambling in 1989. See Pub. L. No. 341-1989, 1989 Ind. Acts 2308 (special session) (codified at Ind.Code 4-30, 4-31). In 1993 riverboat gambling was authorized subject to regulation by the Indiana Gaming Commission. See Pub. L. No. 277-1993 § 124, 1993 Ind. Acts 4821 (special session) (codified at I.C. 4-33). Aside from these exceptions, gambling in this state continues to be strictly prohibited by anti-gaming laws. Schrenger v. Caesars Indiana, 825 N.E.2d 879, 883 (Ind.Ct.App.2005), trans. denied; see I.C. §§ 35-45-5-2, 35-45-5-2 (criminalizing gambling and professional gambling such as pool-selling and bookmaking); L.E. Servs., Inc. v. State Lottery Comm'n of Ind., 646 N.E.2d 334, 340 (Ind.Ct.App.1995), trans. denied (holding the offering of out-of-state lottery tickets for sale to the public strictly prohibited by Indiana's anti-gaming laws).

Facts and Procedural History

Caesars Riverboat Casino, LLC (“Caesars”) operates a riverboat casino in Elizabeth, Indiana. Genevieve Kephart is a resident of Goodlettsville, Tennessee. Kephart has a pathological addiction to gambling. Caesars knew of Kephart's addiction. On March 18, 2006 Kephart travelled to Caesars after receiving an offer of free transportation, hotel room, food, and alcohol from Caesars. In a single night of gambling Kephart lost $125,000 through the use of six counter checks provided to her by Caesars.

The counter checks were returned to Caesars for insufficient funds. Caesars filed suit against Kephart on January 23, 2007 for payment of the checks, treble damages, and attorney fees as provided in Indiana Code section 34-24-3-1. Kephart counterclaimed on April 2, 2007 alleging that Caesars knew of Kephart's pathological addiction and took advantage of the addiction for gain. Kephart sought damages for the consequences resulting from the $125,000 loss, including damages for past, present, and future mental, emotional, and psychological injury; destroyed and/or strained relationships with family members and friends; doctor, hospital, pharmaceutical, or other medical expenses; loss of quality of life and enjoyment of life; and other expenses not yet known to her. Kephart contended Caesars owed her a common law duty to protect her from its enticements to gamble because it knew she was a pathological gambler.

Caesars moved to dismiss the counterclaim under Trial Rule 12(B)(6). After a hearing, the trial court denied the motion but certified its ruling for interlocutory appeal. The Court of Appeals accepted jurisdiction and in a divided opinion reversed the trial court's judgment. Caesars Riverboat Casino, LLC v. Kephart, 903 N.E.2d 117 (Ind.Ct.App.2009). We granted transfer. See 919 N.E.2d 552 (Ind.2009) (Table).

Standard of Review

We review de novo the trial court's grant or denial of a motion based on Indiana Trial Rule 12(B)(6). Babes Showclub v. Lair, 918 N.E.2d 308, 310 (Ind.2009). Such a motion tests the legal sufficiency of a claim, not the facts supporting it. Charter One Mortgage Corp. v. Condra, 865 N.E.2d 602, 604 (Ind.2007). Viewing the complaint in the light most favorable to the non-moving party, we must determine whether the complaint states any facts on which the trial court could have granted relief. Id. at 604-05.

934 N.E.2d 1123

Discussion

I.

To prevail on a claim of negligence the plaintiff must show 1) duty owed to the plaintiff by defendant, 2) breach of duty by allowing conduct to fall below the applicable standard of care, and 3) compensable injury proximately caused by defendant's breach of duty. Kroger Co. v. Plonski, 930 N.E.2d 1, 6 (Ind.2010). Absent a duty there can be no negligence or liability based upon the breach. Id.

Where, as here, the existence of a duty has not been previously articulated, the three-part balancing test this court developed in Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind.1991) (relationship between the parties, foreseeability, and public policy) can be a useful tool in determining whether a duty exists. We say “can be” because in this case the tool has not proven to be of much assistance. Both the Court of Appeals majority as well as the dissent applied the Webb factors. And despite well-reasoned and thoughtful analysis on both sides, each reached an opposite result. Speaking for the majority, Judge Mathias concluded “[t]here is no common law duty obligating a casino operator to refrain from attempting to entice or contact gamblers that it knows or should know are compulsive gamblers.” Kephart, 903 N.E.2d at 128. In dissent Judge Crone concluded, “all three [ Webb ] factors militate in favor of imposing a duty on Caesars to refrain from enticing to its casino known pathological gamblers who have not requested that they be removed from the casino's direct marketing list or excluded from the casino.” Id. at 134 (Crone, J., dissenting).

We think it unnecessary to resolve this dispute today. Assuming without deciding that casino operators in this State might otherwise have a common law duty to refrain from attempting to entice or contact gamblers that it knows or should know are compulsive gamblers, we are of the view that the Legislature has abrogated the common law.

There is a presumption that the legislature does not intend to make any change in the common law beyond those declared in either express terms or by unmistakable implication. South Bend Cmty. Schs. Corp. v. Widawski, 622 N.E.2d 160, 162 (Ind.1993). “An abrogation of the common law will be implied (1) where a statute is enacted which undertakes to cover the entire subject treated and was clearly designed as a substitute for the common law; or, (2) where the two laws are so repugnant that both in reason may not stand.” Irvine v. Rare Feline Breeding Ctr., Inc., 685 N.E.2d 120, 123 (Ind.Ct.App.1997), trans. denied.

When the General Assembly legalized riverboat gambling in 1993, it expressed its intent as follows:

This article is intended to benefit the people of Indiana by promoting tourism and assisting economic development. The public's confidence and trust will be maintained only through:

(1) comprehensive law enforcement supervision; and

(2) the strict regulation of facilities, persons, associations, and gambling operations under this article.

I.C. § 4-33-1-2. The Legislature established the Indiana Gaming Commission (“Commission”) as the administrative agency responsible for administration, regulation and enforcement of the riverboat gaming system. See generally I.C. § 4-33-4-1. Under this statute the Commission has jurisdiction and supervision over “[a]ll persons on riverboats where gambling operations are conducted” and enjoys “[a]ll powers necessary and proper to fully and effectively execute” the statute.

934 N.E.2d 1124

I.C. § 4-33-4-1(3)(B), (2). Those powers...

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60 practice notes
  • Howard v. United States, No. 09-575L
    • United States
    • Court of Federal Claims
    • August 16, 2012
    ...the common law beyond those declared in either express terms or by unmistakable implication." Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1123 (Ind. 2010). However, "[a]n abrogation of the common law will be implied (1) where a statute is enacted which undertakes to cover the......
  • Pfenning v. Lineman, No. 27S02–1006–CV–331.
    • United States
    • Indiana Supreme Court of Indiana
    • May 18, 2011
    ...(2) a breach of the duty, and (3) an injury proximately caused by the breach of duty. Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1123 (Ind.2010). “Absent a duty, there can be no breach, and therefore, no recovery for the plaintiff in negligence.” Vaughn v. Daniels Co. (West ......
  • Kapoor v. Dybwad, No. 49A04–1410–CT–492.
    • United States
    • Indiana Court of Appeals of Indiana
    • December 15, 2015
    ...court's grant or denial of [49 N.E.3d 120 a motion based on Indiana Trial Rule 12(B)(6).” Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind.2010) (citing Babes Showclub v. Lair, 918 N.E.2d 308, 310 (Ind.2009) ).A motion to dismiss under Rule 12(B)(6) tests the legal suffi......
  • Medley v. Lemmon, No. 61A01–1209–PL–420.
    • United States
    • Indiana Court of Appeals of Indiana
    • September 12, 2013
    ...“Such a motion tests the legal sufficiency of a claim, not the facts supporting it.” Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind.2010). “That is to say, it tests whether the allegations in the complaint establish any set of circumstances under which a plaintiff woul......
  • Request a trial to view additional results
60 cases
  • Howard v. United States, No. 09-575L
    • United States
    • Court of Federal Claims
    • August 16, 2012
    ...the common law beyond those declared in either express terms or by unmistakable implication." Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1123 (Ind. 2010). However, "[a]n abrogation of the common law will be implied (1) where a statute is enacted which undertakes to cover the......
  • Pfenning v. Lineman, No. 27S02–1006–CV–331.
    • United States
    • Indiana Supreme Court of Indiana
    • May 18, 2011
    ...(2) a breach of the duty, and (3) an injury proximately caused by the breach of duty. Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1123 (Ind.2010). “Absent a duty, there can be no breach, and therefore, no recovery for the plaintiff in negligence.” Vaughn v. Daniels Co. (West ......
  • Kapoor v. Dybwad, No. 49A04–1410–CT–492.
    • United States
    • Indiana Court of Appeals of Indiana
    • December 15, 2015
    ...court's grant or denial of [49 N.E.3d 120 a motion based on Indiana Trial Rule 12(B)(6).” Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind.2010) (citing Babes Showclub v. Lair, 918 N.E.2d 308, 310 (Ind.2009) ).A motion to dismiss under Rule 12(B)(6) tests the legal suffi......
  • Medley v. Lemmon, No. 61A01–1209–PL–420.
    • United States
    • Indiana Court of Appeals of Indiana
    • September 12, 2013
    ...“Such a motion tests the legal sufficiency of a claim, not the facts supporting it.” Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind.2010). “That is to say, it tests whether the allegations in the complaint establish any set of circumstances under which a plaintiff woul......
  • Request a trial to view additional results

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