Hardy v. State

• Decision Date: 03 April 2003
• Docket Number: No. 01-0779.,01-0779.
• Citation: 102 S.W.3d 123
• Parties: Milton Wayne HARDY and Lovell Green Hardy, Individually and d/b/a Game Time Amusements, Petitioner, v. The STATE of Texas, Respondent.
• Court: Texas Supreme Court

102 S.W.3d 123

Milton Wayne HARDY and Lovell Green Hardy, Individually and d/b/a Game Time Amusements, Petitioner, v. The STATE of Texas, Respondent.

No. 01-0779.

Supreme Court of Texas.

Argued September 11, 2002.

Decided April 3, 2003.

Rehearing Denied May 8, 2003.

Barry K. Bishop, Marnie Ann McCormick, Clark Thomas & Winters, Austin, for Petitioners.

Idolina Garcia, William F. Lewis, Jr., Office of the Attorney General, Howard G. Baldwin, First Assistant Attorney General of Texas, Michael T. McCaul, Executive Assistant Attorney General, Julie Caruthers Parsley, Office of the Solicitor General of Texas, Austin, Stuart Michael Madison, Bill J. Moore, Assistant County Attorneys, Cleburne, John Cornyn, United States Senate, Washington, DC, for Respondent.

Justice JEFFERSON delivered the opinion of the Court.

This is a civil forfeiture case. The State of Texas seized, among other things, twenty gaming machines, commonly known as eight-liners, while executing a search warrant at Game Time Amusements in Burleson, Texas. Milton Wayne Hardy and Lovell Green Hardy, owners of Game Time Amusements, filed a petition seeking return of the seized items, contending that the State could not satisfy its burden to prove by a preponderance of evidence that eight-liners: (1) are illegal gambling devices under section 47.01(4) of the Texas Penal Code; and (2) are not protected from seizure by an exclusion to the term "gambling device" under section 47.01(4)(B) of the Penal Code. After a hearing at which both sides presented evidence, the trial court found that the seized eight-liners were illegal gambling devices and ordered their forfeiture. The court of appeals affirmed. 50 S.W.3d 689, 697.

We granted the Hardys' petition for review to resolve recurring questions about civil forfeiture proceedings under article 18.18 of the Code of Criminal Procedure in general, and eight-liner machines in particular. 45 Tex. Sup.Ct. J. 612 (May 11, 2002). We must decide: (1) under article 18.18, which party bears the burden of proof in a civil forfeiture proceeding involving alleged gambling devices, and (2) whether an eight-liner that awards tickets exchangeable for either (a) gift certificates or (b) cash used for play on another machine, satisfies the exclusion to the definition of gambling device in section 47.01(4)(B).

We hold that the State must establish probable cause before initiating a forfeiture proceeding under article 18.18 of the Code of Criminal Procedure. The person found in possession of the seized property must then appear at a show cause hearing and prove, by a preponderance of the evidence, that those machines are not gambling devices. TEX.CODE CRIM. PROC. art. 18.18(f). We also hold that, for purposes of this statute, gift certificates like those awarded here are equivalent to the monetary amount on the face thereof in cash, and that gaming machines that dispense tickets that may be exchanged for such certificates do not come within the exclusion to the definition of a gambling device in 47.01(4)(B). Finally, we hold that an eight-liner that rewards the player with cash, even if that cash is used only to play another machine, fails to satisfy the section 47.01(4)(B) exclusion. Although we do not agree in all respects with the court of appeals' reasoning, we affirm its judgment.

I BACKGROUND

During the course of gambling investigations, the State executed a search warrant at Game Time Amusements ("Game Time") and seized twenty eight-liners, four slot machines,¹ $2,340.25 in cash, seventy-two $5.00 gift certificates for Wal-Mart/ Sam's Club, $130.00 in personal checks, and other miscellaneous items. The State sought forfeiture of these items under Texas Code of Criminal Procedure article 18.18. Following the seizure, the trial court issued a notice pursuant to article 18.18(b) of the Texas Code of Criminal Procedure advising the Hardys that they must show cause why the seized property should not be destroyed or the proceeds forfeited. See TEX.CODE CRIM. PROC. art. 18.18(b).

At the show cause hearing, Lovell Hardy testified that the eight-liners are electronic devices that operate at least partially by chance. The object is to win tickets redeemable for cash or prizes. Winnings on the eight-liners are determined by matching symbols in one of eight lines — three horizontal, three vertical, and two diagonal — which give the machines their name. When a player inserts money in one of these eight-liners, the machine records the number of credits. For each play, the machine records the "bets" made and reduces the available credits accordingly. For each win, the machine records the number of points won. When a player finishes playing a particular machine, an attendant "verifies" the points won. The attendant then presses a button on the machine to dispense a number of tickets corresponding to the number of points earned. Once the button is pressed, the point total is deleted so another person can play. The "penny machines" dispense one ticket for every 100 points accumulated, while the "nickel machines" dispense one ticket for every 500 points accumulated.

Hardy testified that the 100-point tickets are worth $1.00 and the 500-point tickets are worth $5.00. A player could exchange these tickets for a $5.00 gift certificate to Wal-Mart or Sam's Club or for credits to play another machine. To exchange tickets for re-play, a player had to present the tickets to an attendant who would then place a corresponding amount of money in another machine.

At the conclusion of the show cause hearing, the trial court found that the eight-liners were gambling devices and that the currency, gift certificates, and miscellaneous items seized were gambling paraphernalia or proceeds. Accordingly, the trial court ordered the seized items, including the eight-liners, slot machines, currency, and gift certificates, forfeited to the State.

At the Hardys' request, the trial court filed findings of fact and conclusions of law. The trial court found that (1) the gift certificates to Wal-Mart and Sam's Club were "things of value" under Texas Penal Code section 47.01(4); (2) the eight-liner machines constituted "gambling devices and gambling paraphernalia" under section 47.01(4); and (3) the eight-liners did not fit within the exclusion set forth in section 47.01(4)(B) of the Texas Penal Code.

The Hardys appealed contending that the evidence was factually and legally insufficient to support the trial court's conclusion that the eight-liners were gambling devices.² The court of appeals affirmed the trial court's order and held that "the State bears an initial burden in an article 18.18 forfeiture hearing to show that the seized property is contraband subject to forfeiture." Hardy, 50 S.W.3d at 694. The court of appeals held that, once the State makes this showing, the burden shifts to the claimant to prove by a preponderance of the evidence that the seized property is not subject to forfeiture. Id. at 694-95. Concluding that the Hardys had not met this burden, the court of appeals held that the eight-liners were gambling devices not covered by the statutory exclusion. Id. at 697. Although we disagree that the State bears an initial burden at the forfeiture hearing, we affirm the court of appeals' judgment.

II APPLICABLE LAW

A Burden of Proof

A civil forfeiture proceeding under chapter 18 of the Texas Code of Criminal Procedure is an in rem procedure. See State v. Rumfolo, 545 S.W.2d 752, 754 (Tex.1976). Thus, it is a proceeding against the property itself, not against the owner, and "does not involve the conviction of the owner or possessor of the property seized." Id. A forfeiture proceeding begins when the State presents an affidavit to a magistrate and ends after a show cause hearing in which the magistrate determines whether the seized property should be destroyed or forfeited. In order to initiate a forfeiture proceeding, the State must obtain a search warrant based on a sworn affidavit averring "sufficient facts ... to satisfy the issuing magistrate that probable cause does in fact exist for its issuance." TEX.CODE CRIM. PROC. art. 18.01(b). The affidavit underlying the search warrant is public information, and the magistrate's clerk must make a copy of the affidavit available for public inspection. Id. After the magistrate issues the search warrant, the State executes the warrant by conducting a search and seizure of the property. Id. arts. 18.06, .09.

Article 18.18(b) of the Code of Criminal Procedure authorizes forfeiture when, as here, the person found in possession of the property has not been convicted or prosecuted following a seizure. See id. art. 18.18(b). In such a case, the statute provides:

[T]he magistrate to whom the return was made shall notify in writing the person found in possession of the alleged gambling device or equipment, altered gambling equipment or gambling paraphernalia, gambling proceeds, prohibited weapon, obscene device or material, criminal instrument, or dog-fighting equipment to show cause why the property seized should not be destroyed or the proceeds forfeited. The magistrate, on the motion of the law enforcement agency seizing a prohibited weapon, shall order the weapon destroyed or forfeited to the law enforcement agency seizing the weapon, unless a person shows cause as to why the prohibited weapon should not be destroyed or forfeited. A law enforcement agency shall make a motion under this section in a timely manner after the time at which the agency is informed in writing by the attorney representing the state that no prosecution will arise from the seizure.

Id. This section requires the magistrate to notify the person found in possession of the alleged gambling device to show cause why the seized property should not be destroyed or forfeited. Id; see also id. art. 18.18(d) (stating that the magistrate must send notice to the person found in possession of the property or, if no one is found in...