State v. $223,405.86

Decision Date31 March 2016
Docket Number1141044,1150027.
Citation203 So.3d 816
Parties STATE of Alabama v. $223,405.86 et al. KC Economic Development, LLC v. State of Alabama.
CourtAlabama Supreme Court

Luther Strange, atty. gen., and Andrew L. Brasher, deputy atty. gen., and John L. Kachelman III, asst. atty. gen., for appellant/cross–appellee State of Alabama.

Joe Espy III, J. Flynn Mozingo, Ben Espy, and William M. Espy of Melton, Espy & Williams, P.C., Montgomery; Sam Heldman of The Gardner Firm, P.C., Washington, D.C.,; and John M. Bolton III and Charlanna Skaggs of Hill, Hill, Carter, Franco, Cole & Black, PC, Montgomery, for appellee/cross–appellant KC Economic Development, LLC.


The State of Alabama appeals from two orders of the Macon Circuit Court dismissing the State's petition for forfeiture of certain electronic-gambling devices and related records and currency located at VictoryLand casino (appeal no. 1141044). We reverse both orders and render a judgment for the State in appeal no. 1141044. KC Economic Development, LLC ("KCED"), cross-appeals (appeal no. 1150027). We dismiss KCED's cross-appeal as moot.

I. Facts and Procedural History

On February 15, 2013, in Ex parte State of Alabama, 121 So.3d 337, 340 (Ala.2013), this Court issued a writ of mandamus ordering Circuit Judge Tom F. Young, Jr., to issue a search warrant "as to certain allegedly illegal gambling devices and related items" located at the VictoryLand casino in Shorter. The warrant was issued the following day and was executed on February 19, 2013. During the search pursuant to the warrant, the State seized 1,615 gambling machines, $263,105.81 in currency,1 and related servers, terminals, and other equipment. On February 25, the State filed in the Macon Circuit Court a "Petition for Forfeiture and Condemnation" of the items seized. See § 13A–12–30, Ala.Code 1975 (providing for forfeiture to the State of unlawful gambling devices, records, and money "used as bets or stakes" in unlawful gambling activity). The petition named Macon County Greyhound Park, Inc. ("MCGP"), and KCED as the persons found in possession of the seized property.2

On August 23, 2013, this Court, in response to a petition filed by the State, issued a writ of mandamus disqualifying Judge Young from presiding over the forfeiture proceeding. Ex parte State (In re State v. $223,405.86 U.S. Currency et al. ) (No. 1120757). All the other eligible judges in the Fifth Judicial Circuit, which includes Macon County, voluntarily recused themselves. On November 12, 2013, Montgomery Circuit Judge William Shashy was appointed to preside over the case. On December 9, 2013, Judge Shashy scheduled a bench trial for June 3, 2014. The trial date was extended for three months at the request of the parties. On September 9–12, 2014, Judge Shashy conducted a four-day bench trial. The State's witnesses testified about the characteristics of the seized machines, which the State argued were illegal gambling devices. Witnesses for KCED testified that the intent of the voters who in 2003 ratified Macon County's "bingo amendment," Local Amendment, Macon County, § 1, Ala. Const. 1901 (Off.Recomp.) ("Amendment No. 744") was to legalize the very types of devices that had been seized. Nine months later, on June 25, 2015, Judge Shashy entered an order dismissing the forfeiture action on equal-protection grounds, i.e., on the basis that the State tolerated at other locations in Alabama the operation of casinos that used the same type machines at issue in this forfeiture case. The order did not address the issue of the legality of the machines.

On July 7, 2015, KCED filed a postjudgment motion requesting that the trial court specifically find that the intent of the voters in approving Amendment No. 744 was to authorize the use in Macon County of electronic-gambling machines like those allegedly available at other locations in the State. KCED additionally requested that the trial court order that all the seized property be returned. The State, also dissatisfied with the court's order, disagreed that it had selectively enforced Alabama's gambling laws and contended that the equal-protection rationale was legally untenable. The State also argued that under settled Alabama law the seized machines were illegal gambling devices and thus contraband. KCED filed a rebuttal to the State's response, which included two affidavits from individuals who attested that they had visited casino locations in Alabama subsequent to the trial court's June 15 order and found in operation electronic- gambling machines just like those seized as contraband at VictoryLand.

On August 4, 2015, Judge Shashy held a hearing on the postjudgment motions. On October 2, 2015, he issued an order that provided the findings of fact sought by KCED and concluded that "the Macon County voter when voting on the amendment understood it to be all forms of bingo." He also repeated his finding from the June order that the State of Alabama was "cherry picking which facilities should remain open or closed" and thus was "not enforcing the law equally." Judge Shashy then entered a conditional order for return of the seized property: "Unless the State of Alabama initiates legal action and/or forfeiture proceedings within 45 days against [casinos in Greene County and Lowndes County], then all seized equipment, records, and currency shall be returned to [KCED]." The State appealed from the trial court's orders; KCED "out of an abundance of caution" cross-appealed to preserve its claim for return of the seized property and its position that the seized machines were legal under Alabama law. To prevent the trial court's 45–day deadline for return of property from being triggered during the pendency of the appeal, the State moved this Court to stay the order, which this Court granted on November 9, 2015.3

II. Standard of Review

When a judge tries a case without a jury, we apply the following standard of review:

" [W]hen a trial court hears ore tenus testimony, its findings on disputed facts are presumed correct and its judgment based on those findings will not be reversed unless the judgment is palpably erroneous or manifestly unjust.’ Philpot v. State, 843 So.2d 122, 125 (Ala.2002). "The presumption of correctness, however, is rebuttable and may be overcome where there is insufficient evidence presented to the trial court to sustain its judgment." Waltman v. Rowell, 913 So.2d 1083, 1086 (Ala.2005) (quoting Dennis v. Dobbs, 474 So.2d 77, 79 (Ala.1985) ). ‘Additionally, the ore tenus rule does not extend to cloak with a presumption of correctness a trial judge's conclusions of law or the incorrect application of law to the facts.’ Id. "

Fadalla v. Fadalla, 929 So.2d 429, 433 (Ala.2005).

III. Analysis

The State challenges the trial court's orders on three grounds: (1) that the equal-protection analysis was erroneous; (2) that the trial court's reliance on "voter intent" to define the word "bingo" was improper; and (3) that the machines in question do not constitute "bingo" under prior decisions of this Court and therefore are contraband that is due to be forfeited. KCED cross-appeals, asking for relief in its favor beyond that ordered by the trial court.

A. Equal Protection
1. Background

The attorney for KCED began his opening statement at trial by displaying a chart entitled "Facilities in Alabama with Electronic Bingo Machines." The chart listed the number of days five different organizations allegedly had operated electronic-gambling machines in Alabama claimed to constitute "bingo" in the preceding four years and one month. According to the chart, (1) three tribal casinos had operated such machines every day during that period and (2) two casinos in Greene County and one in Houston County had been open and operating such machines for an average of 1,119 days in the same period—75% of the time, or three years out of the four. By contrast, VictoryLand allegedly had operated such machines in the same period for only 63 days—4% of the time, or two months. The chart was a demonstrative device; no evidence was offered at trial to substantiate the numbers reflected on the chart. KCED's purpose in displaying the chart was to show that such machines were in use in other locations in Alabama and, therefore, to argue that "Victoryland, like the other facilities in Alabama, can run the same thing so the people of Macon County can have the same thing." KCED did not raise a formal equal-protection claim but instead relied primarily on the argument that the intent of the voters in approving Amendment No. 744 was to approve the same type of machines KCED claimed other casinos had in operation.

The trial judge seized upon the statement of KCED's counsel that the same machines as in the forfeiture proceeding before the trial court were freely available to patrons at other locations in the State. On his own initiative, Judge Shashy raised the equal-protection issue with KCED's counsel.

"THE COURT: Is there an equal protection claim?
"MR. JOE ESPY (KCED): Well, we may have to eventually go there. We are trying to go this other route first."

The trial court jousted with counsel for the State about what appeared to the court to be an injustice. The State argued that it had consistently enforced the law but that certain facilities had reopened after their machines had been seized and cases were tied up in litigation.

"THE COURT: Well, I mean, it gets to equal protection to me.
"MR. REAGAN (STATE): But, Your Honor, we have conducted law enforcement operations at every facility and tried to be consistent with our approach to dealing with this problem. And if folks reopen, when the State is able to go in and seize machines, we do it each time."

The only witness who arguably offered testimony about the equal-protection issue was Dr. Lewis Benefield, a veterinarian and the chief operating officer of KCED. He stated that during the week preceding the trial he had visited the three tribal casinos in Alabama as well as the casino...

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