Feeney v. Colorado Ltd. Gaming Control Com'n

• Decision Date: 14 July 1994
• Docket Number: No. 93CA2111,93CA2111
• Citation: 890 P.2d 173
• Parties: Thomas L. FEENEY, II, Petitioner-Appellant, v. COLORADO LIMITED GAMING CONTROL COMMISSION, Respondent-Appellee. . II
• Court: Colorado Court of Appeals

Page 173

890 P.2d 173

Thomas L. FEENEY, II, Petitioner-Appellant, v. COLORADO LIMITED GAMING CONTROL COMMISSION, Respondent-Appellee.

No. 93CA2111.

Colorado Court of Appeals Div. II.

July 14, 1994.

Rehearing Denied Aug. 18, 1994.

Certiorari Denied March 13, 1995.

Cooksey & Cooksey, P.C., Michael G. Cooksey, Torres & Koktavy, P.C., Douglas D. Koktavy, Denver, for petitioner-appellant.

Gale A. Norton, Atty. Gen., Stephen K. ErkenBrack, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Susan L. Beck-Ferkiss, Asst. Atty. Gen., Denver, for respondent-appellee.

Opinion by Judge TAUBMAN.

Defendant, Thomas L. Feeney, II, appeals the order of the Colorado Limited Gaming Control Commission (Gaming Commission) revoking his limited gaming key employee license. We affirm.

Feeney originally applied for a key employee license and the Division of Gaming (Division) denied his application. Under the Limited Gaming Act of 1991, every retail gaming establishment must have a person holding such a license to be in charge of all limited gaming activities and available at all times when limited gaming is being conducted. See 12-47.1-501(1)(e) (1991 Repl.Vol. 5B).

Feeney appealed the Division's decision and was awarded a temporary conditional license by the Gaming Commission on June 3, 1992. This license contained conditions requiring Feeney to resolve back child support and tax issues and to provide the Division investigator with quarterly reports regarding the resolution of these issues within a year of the issuance of the license.

On application for renewal of his license, Feeney admitted that he was unable to meet the conditions imposed in the temporary license. The Gaming Commission renewed Feeney's license on July 1, 1993, and imposed new conditions proposed by Feeney. Specifically, the license conditions required him to pay $8,000 in back child support to the Denver District Court by July 5, 1993, to stay current with his monthly child support payments, and to pay an additional $8,000 in back child support by December 31, 1993.

The Division assigned an investigator to determine whether Feeney was complying with the conditions of his original license. The investigator was later assigned to investigate the renewal application and eventually to determine whether Feeney was complying with the conditions of his renewed license. Feeney and the investigator met several times regarding compliance with the child support conditions. Additionally, the investigator asked whether income tax returns for 1991 and 1992 had been filed. Feeney responded that the returns were complete and that he thought they had been filed. The investigator requested copies of these returns.

On October 14, 1993, the Gaming Commission issued an order summarily suspending Feeney's license, notifying him of charges, and ordering him to show cause why his license should not be revoked.

Both parties stipulated to the truth of charges 1 and 2, which described the conditions imposed under the temporary conditional license and the renewed conditional license. Charge 3 alleged that Feeney had failed to comply with the conditions imposed on his renewed license. Charge 4 asserted that he had failed to provide the Division assistance and information necessary to assure that he continued to be qualified to be a licensee, including failure to provide proof of filing and/or payment of state and federal taxes. Charge 5 asserted that he had deliberately and wilfully failed or refused to provide the Gaming Commission and the investigator with requested information. Additionally, charge 6 claimed that he knowingly made false statements of material fact to the investigator regarding compliance with conditions, rendering him unsuitable to hold a key employee license. Charge 7 alleged that Feeney had failed to file his 1991 and 1992 tax returns.

At the November 4, 1993, hearing, Feeney appeared without counsel, and the Division and the Gaming Commission had counsel present. The Division and Feeney presented evidence related to the charges. Based on the finding that the factual allegations contained in charges 1-6 had been proven, the Gaming Commission revoked Feeney's license and barred him from applying for a new license for one year.

On appeal, Feeney contends that the Gaming Commission acted ultra vires when it conditioned his license on payment of back child support and taxes. Additionally, he argues that the Gaming Commission acted arbitrarily, without due process, and revoked his license without substantial evidence.

The Gaming Commission argues that Feeney waived his right to object to its authority to impose conditions when he failed to appeal the imposition of those conditions when his license was renewed. However, we need not address this issue because we conclude that the Gaming Commission was within its statutory authority in imposing the conditions on Feeney's license.

I.

Feeney argues that Gaming Commission had no statutory authority to condition or revoke his license based upon his failure to pay back child support and taxes. Specifically, he contends that such conditions usurp the power of the courts, constituting extra-judicial enforcement; have no rational bearing on a licensee's suitability; and exceed the scope of the Gaming Commission's authority under the Limited Gaming Act. We disagree.

Section 12-47.1-302(1)(h), C.R.S. (1991 Repl.Vol. 5B) gives the Gaming Commission the power to issue temporary or permanent licenses. Section 12-47.1-302(2)(l ) C.R.S. (1991 Repl.Vol. 5B) permits the Gaming Commission to adopt regulations imposing conditions upon issuance of licenses. See Colorado Gaming Regulation, 1 Code Colo.Reg. 47.1-302 (August 20, 1991). Under these provisions, the Gaming Commission has broad power to condition the licenses it issues.

In order to determine the scope of such conditions, we must first look to the plain meaning of the statute. See People v. Bergen, 883 P.2d 532 (Colo.App.1994).

The legislative declaration, § 12-47.1-102(1)(a), C.R.S. (1991 Repl.Vol. 5B), states that: "The success of limited gaming is dependent upon public confidence and trust that licensed limited gaming is conducted honestly and competitively; that the rights of the creditors of licensees are protected; and that gaming is free from criminal and corruptive elements." (emphasis added) Section 12-47.1-102(2) states that: "[T]he commission should place great weight upon the policies expressed in ... subsection (1) in construing the provisions of this article." This legislative directive has been echoed by two divisions of this court. See Moya v. Colorado Limited Gaming Control Commission, 870 P.2d 620 (Colo.App.1994) and DeMarco v. Colorado Limited Gaming Control Commission, 855 P.2d 23 (Colo.App.1993).

Furthermore, § 12-47.1-103(30), C.R.S. (1991 Repl.Vol. 5B) defines, for purposes of licensure, the unsuitability of persons or their activities and specifies that a person may be unsuitable for licensure because of "prior acts, associations, or financial conditions." (emphasis added) Additionally, § 12-47.1-103(30) states that acts or practices of a person are unsuitable vis a vis licensure if they "violate or would violate the statutes or rules or would be contrary to the declared legislative purposes of this article."

The statute also requires licensees to be "of good moral character, honesty, and integrity ..." and must be persons "whose prior activities ... reputation, habits, and associations do not pose a threat to the public interests of the state...." Section 12-47.1-801(2)(a) and (b), C.R.S. (1991 Repl.Vol. 5B).

The plain meaning of the statute reveals that the General Assembly intended to give the Gaming Commission broad power to ensure public confidence in limited gaming and those who operate the games. This broad language clearly demonstrates the General Assembly's intent that the Gaming Commission consider licensees' financial backgrounds in granting and renewing licenses. Thus, under these provisions, the Gaming Commission acted within the scope of its statutory authority to determine that prompt payment of child support and taxes is in the public interest of the state.

We reject Feeney's arguments that such conditions result in extra-judicial enforcement of a child support order and are not rationally related to the suitability of the licensee or the legislative purposes of the Limited Gaming Act.

We note that the issuance and renewal of other licenses conditioned on similar financial issues have been upheld. See Mr. Lucky's v. Dolan, 197 Colo. 195, 591 P.2d 1021 (1979) (liquor license suspended for failure to file corporate taxes). Furthermore, such financial conditions have a direct bearing on the suitability of licensees and the legislative purposes of the Limited Gaming Act. As stated above, the statute expressly requires that licensees should be financially responsible to ensure that the public trust in limited gaming is maintained. See Moya v. Colorado Limited Gaming Control Commission, supra (license application properly denied to applicant that had several past criminal convictions for theft).

II.

Feeney next contends that, even if the Gaming Commission had statutory authority to impose conditions on his license, it acted arbitrarily and without due process when it revoked his license, and its decision was not supported by substantial evidence. We disagree.

Because procedures for revocation of licenses are subject to the requirements of the Colorado Administrative Procedure Act (APA), we must employ a three-step analysis required for compliance with the APA to determine whether the Gaming Commission acted properly when it revoked Feeney's license. See § 24-4-101, et seq., C.R.S. (1988 Repl.Vol. 10A). Specifically, we must determine whether the Limited Gaming Act contains sufficient standards to ensure that the Gaming Commission's revocation was not arbitrary; whether the Gaming Commission acted within its...