Pen-Yan Inv., Inc. v. Boyd Kansas City, Inc.
| Decision Date | 26 August 1997 |
| Docket Number | No. WD,PEN-YAN,WD |
| Citation | 952 S.W.2d 299 |
| Parties | INVESTMENT, INC., Respondent, v. BOYD KANSAS CITY, INC., Defendant, and Missouri Gaming Commission, Appellant. 53038. |
| Court | Missouri Court of Appeals |
Jeremiah W. (Jay) Nixon, Atty. Gen., Michael W. Bradley, Asst. Atty. Gen., Jefferson City, for Appellant.
Frank Brancato, Kansas City, for Respondent.
Patrick J. Stueve, Kansas City, for Defendant.
Before EDWIN H. SMITH, P.J., and BERREY and ELLIS, JJ.
This is an appeal by the Missouri Gaming Commission (the Commission) from a summary judgment for Pen-Yan Investment Inc., d/b/a B & G Amusement & Vending Co. (respondent) and the denial of the Commission's motion to dismiss respondent's first amended petition as to Counts II and III. In granting respondent's motion for summary judgment, the trial court declared invalid and unenforceable 11 C.S.R. 45-5.050(4)(E), a regulation promulgated by the Commission. This regulation prohibits holders of Class A and B Missouri gaming licenses granted by the Commission from, inter alia, socializing or transacting business with convicted felons.
Respondent, a company in the amusement and vending service business, entered into a service agreement with Boyd Kansas City, Inc., d/b/a Sam's Town Kansas City (Boyd), who was engaged in a riverboat gambling operation in Kansas City, Missouri, commonly referred to as Sam's Town Casino, for which Boyd held Class A and B Missouri gaming licenses. Charles C. Bengimina, a convicted felon, participated in the negotiation of the service agreement on behalf of his employer, respondent. Based on the service agreement and Charles C. Bengimina's participation in its negotiation, the Commission commenced a disciplinary action against Boyd for violating 11 C.S.R. 45-5.050(4)(E). In response to Boyd terminating its agreement with respondent as a result of the disciplinary action, respondent filed its petition for declaratory judgment, injunctive relief, and damages against the Commission and Boyd seeking, inter alia, to have the regulation declared invalid and unenforceable; or in the alternative, to have the regulation declared inapplicable to respondent, and, in either case, enjoining the Commission from preventing respondent from transacting business with Boyd or any other Class A and B licensees.
On appeal, the Commission alleges that the trial court erred: (1) in granting respondent's motion for summary judgment declaring 11 C.S.R. 45-5.050(4)(E) invalid and unenforceable because the Commission did not exceed its statutory authority in promulgating the regulation; and, (2) in overruling the Commission's motion to dismiss respondent's first amended petition as to Counts II and III for lack of jurisdiction, because § 313.840.2 1, as to the review of the Commission's decisions, grants exclusive jurisdiction to the Missouri Court of Appeals, Western District, and because respondent had not exhausted its administrative remedies.
We reverse and remand.
The facts in this case are not in dispute. Respondent is a Missouri corporation engaged in the amusement and vending service business. Its sole officer, director and shareholder is Peter Bengimina. Boyd is a Missouri corporation engaged in the business of riverboat gambling at its casino, Sam's Town, in Kansas City, Missouri.
On or about July 1, 1995, respondent and Boyd entered into a service agreement, negotiated in part by respondent's employee, Charles C. Bengimina, for respondent to place cigarette, video arcade and amusement machines in Sam's Town, for which Boyd held Class A and B Missouri gaming licenses. Charles C. Bengimina is a convicted felon, having been convicted in 1988 of bankruptcy fraud in the United States District Court for the Western District of Missouri.
As agreed, respondent placed amusement and vending machines in Sam's Town. Thereafter, on or about September 29, 1995, Boyd's counsel advised respondent by facsimile transmission that it was terminating their agreement effective October 15, 1995, because it had been advised by the Commission that the transaction of business with respondent was or could be a violation of 11 C.S.R. 45.5.050(4)(E). On November 16, 1995, the Commission filed a disciplinary action against Boyd alleging that it violated 11 C.S.R. 45-5.050(4)(E) in that it had "associated in business affairs with a person, [Charles C.] Bengimina, who [had] acted as an agent and employee of [respondent] and who [had] a felony police record." As part of its complaint, the Commission proposed the following penalties:
17. THEREFORE, under Section 313.805(6) R.S.Mo. it is proposed that an administrative penalty of $25,000 be imposed upon [Boyd] for the violation cited herein.
18. It is further proposed that [Boyd] shall not collect or distribute any funds pursuant to the Agreement or the oral agreement or allow the operation of the Machines within [Boyd's] riverboat gaming operation while the Machines are owned or controlled by [respondent].
19. It is further proposed that if, after December 1, 1995, [Boyd] is not in compliance with paragraph 18 its license shall be suspended.
On this same day, counsel for Boyd advised respondent by facsimile transmission to remove all its machines from Sam's Town by November 22, 1995.
On November 20, 1995, in response to Boyd's termination of the service agreement resulting from the filing of the complaint for disciplinary action, respondent filed a petition for declaratory judgment, injunctive relief and damages against the Commission and Boyd. Respondent's request for a temporary restraining order restraining Boyd from, inter alia, removing its machines from Sam's Town was denied on December 1, 1995. On December 9, 1995, respondent filed its first amended petition alleging six counts, Counts I-III against the Commission and the remaining counts against Boyd. In Count I, respondent requested a declaratory judgment declaring 11 C.S.R. 45-5.050(4) invalid and unenforceable. In Count II, respondent requested a declaratory judgment declaring that Boyd and other licensees were not prohibited by § 313.812 and 11 C.S.R. 45-5.050(4) from transacting business with respondent. In Count III, respondent sought to restrain the Commission from enforcing 11 C.S.R. 45-5.050(4) against Boyd or other licensees transacting business with it. Counts IV-VI dealt with respondent's request for declaratory judgment, injunctive relief, and damages against Boyd.
On February 22, 1996, respondent filed a motion for summary judgment as to Count I only. On May 3, 1996, the Commission filed an answer to and motion to dismiss respondent's first amended petition. On June 5, 1996, the trial court entered summary judgment for respondent as to Count I, declaring that 11 C.S.R. 45-5.050(4)(E) was invalid and unenforceable because in promulgating the regulation the Commission exceeded its statutory authority. Further, although not part of the relief requested in Count I, the subject of respondent's motion for summary judgment, the trial court permanently restrained the Commission from enforcing the regulation. On June 14, 1996, the trial court denied the Commission's motion to dismiss. On July 9, 1996, on the Commission's motion, the trial court amended its order of summary judgment and order denying the Commission's motion to dismiss "to include the express determination under Rule 74.01(b) that there is no just reason for delay."
This appeal by the Commission follows.
The purpose of summary judgment under Missouri's fact-pleading regime is to identify cases (1) in which there is no genuine dispute as to the facts and (2) the facts as admitted show a legal right to judgment for the movant.
ITT Commercial Finance v. Mid-Am. Marine, 854 S.W.2d 371, 380 (Mo. banc 1993).
When considering appeals from summary judgments, the Court will review the record in the light most favorable to the party against whom judgment was entered. Facts set forth by affidavit or otherwise in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment motion. We accord the non-movant the benefit of all reasonable inferences from the record.
Our review is essentially de novo. The criteria on appeal for testing the propriety of summary judgment are no different from those which should be employed by the trial court to determine the propriety of sustaining the motion initially. The propriety of summary judgment is purely an issue of law. As the trial court's judgment is founded on the record submitted and the law, an appellant court need not defer to the trial court's order granting summary judgment.
Id. at 376 (citations omitted).
As to the issue of the validity of 11 C.S.R. 45-5.050(4)(E), the parties are in agreement that it was subject to summary judgment. The dispute is over whether the trial court was correct in concluding from the record that it was invalid and unenforceable.
In its first point, the Commission alleges that the trial court erred in granting respondent's motion for summary judgment declaring 11 C.S.R. 45-5.050(4)(E) invalid and unenforceable because the Commission did not exceed its statutory authority in its promulgation. We agree.
Rules and regulations are to be sustained unless unreasonable and plainly inconsistent with the act, and they are not to be overruled except for weighty reasons. The burden is upon those challenging the rules to show that they bear no reasonable relationship to the legislative objective. The interpretation and construction of a statute by an agency charged with its administration is entitled to great weight. Administrative rules should be reviewed in light of the evil they seek to cure and are not unreasonable merely because they are burdensome.
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