Teague v. Missouri Gaming Com'n

• Decision Date: 30 December 2003
• Docket Number: No. WD 62468.,WD 62468.
• Citation: 127 S.W.3d 679
• Parties: David R. TEAGUE, Appellant, v. MISSOURI GAMING COMMISSION, Respondent.
• Court: Missouri Court of Appeals

127 S.W.3d 679

David R. TEAGUE, Appellant, v. MISSOURI GAMING COMMISSION, Respondent.

No. WD 62468.

Missouri Court of Appeals, Western District.

December 30, 2003.

As Modified March 2, 2004.

Motion for Rehearing and/or Transfer to Supreme Court Denied March 2, 2004.

James B. Deutsch, Jefferson City, for Appellant.

Jeremiah W. (Jay) Nixon, Atty. Gen., Michael W. Bradley, Jefferson City, for Respondent.

Before JOSEPH M. ELLIS, C.J., HAROLD L. LOWENSTEIN and ROBERT G. ULRICH, JJ.

ROBERT G. ULRICH, Judge.

David R. Teague appeals the decision of the Missouri Gaming Commission (the "Commission") denying his application for a Level I Occupational License ("Level I License") and suspending his Level II Occupational License ("Level II License") for thirty days. He contends that the Commission erred in denying his application for a Level I License and for suspending his Level II License on the basis that he failed to disclose two prior arrests on his applications because such failure was an oversight on his part. The decision of the Commission is affirmed.

Factual and Procedural History

Mr. Teague is the Vice President of Information Systems for Isle of Capri Casinos, Inc. Isle of Capri is a holding company headquartered in Mississippi that owns several entities in Missouri, which are licensed to operate gaming facilities. Mr. Teague resides and works in Mississippi. He previously applied for and obtained a Level II License from the Commission. In his position as Vice President of Information Systems, Mr. Teague is required to obtain a Level I License.¹ He applied for a Level I License on August 24, 2001.

The Commission sent Mr. Teague a letter on March 8, 2002, informing him that revocation of his Level II License had been proposed for his failure to disclose on his application that he had been charged with possession of drug paraphernalia on September 29, 1991, in Douglas County, Nevada. On March 20, 2002, the Commission notified Mr. Teague that it had denied his application for a Level I License because he failed to disclose the same possession of drug paraphernalia charge and that he had been charged with domestic battery and spousal abuse on January 6, 1991, on his Level I License application.² He appealed both the denial of his Level I License and the revocation of his Level II License.

An evidentiary hearing was held before a Commission hearing officer on June 27, 2002. The hearing officer found that under section 313.810.3, RSMo 2000, that although Mr. Teague's conduct in omitting from both applications information regarding the two arrests was not intentional, his negligence in failing to include the information in the application was sufficient to deny his Level I License and suspend his Level II License for thirty days. Additionally, the hearing officer noted that Mr. Teague had been notified by the Louisiana gaming authorities that he had omitted the same two arrests in his Louisiana application four months prior to the preparation of his Level I License application in Missouri. The Commission subsequently adopted the hearing officer's findings of fact and conclusions of law on January 22, 2003. On January 29, 2003, the Commission reopened its decision to amend the hearing officer's decision by deleting the portion of the decision allowing Mr. Teague to reapply for a Level I License thirty days after the date of the decision.³ In effect, the Commission's amended decision allows Mr. Teague to reapply for a Level I License immediately. This appeal by Mr. Teague followed.

Points on Appeal

Mr. Teague raises three points on appeal. He claims that the Commission erred in: (1) denying his application for a Level I License; (2) finding that certain information had been omitted from his application for a Level I License because such a finding was unsupported by the evidence; and (3) suspending his Level II License for thirty days.

Standard of Review

Section 313.840.2, RSMo 2000, governs appellate review of all decisions of the Commission and provides that judicial review of all the Commission's decisions shall be directly to this court. Chapter 313 does not provide the scope of review of the Commission's decisions. "Where there is no specific statute concerning an aspect of judicial review of administrative agency decisions, for example, the scope of review in this case, Chapter 536 operates to `fill in gaps in administrative procedures.'" Grace v. Mo. Gaming Comm'n, 51 S.W.3d 891, 896 (Mo.App. W.D.2001) (quoting State ex rel. Noranda Aluminum, Inc. v. Pub. Serv. Comm'n, 24 S.W.3d 243, 245 (Mo.App.2000)). The Administrative Procedures Act, Chapter 536, governs appellate review of the Commission's decision. Id.; see also State ex rel. Riverside Joint Venture v. Mo. Gaming Comm'n, 969 S.W.2d 218, 221 (Mo. banc 1998).

Sections 536.100 to 536.140, RSMo 2000, apply to contested cases. Grace, 51 S.W.3d at 896. The scope of judicial review in a contested case extends to determination of whether the agency's action was: (1) in violation of constitutional provisions; (2) in excess of the statutory authority or jurisdiction of the agency; (3) unsupported by competent and substantial evidence upon the whole record; (4) for any other reason, unauthorized by law; (5) made upon unlawful procedure or without a fair trial; (6) arbitrary, capricious, or unreasonable; (7) an abuse of discretion. § 536.140.2, RSMo 2000. Although a reviewing court defers to the administrative agency's findings of fact, when its decision is based upon an interpretation, application, or conclusion of law, the decision is subject to the reviewing court's independent judgment. § 536.140.3, RSMo 2000;⁴ Wells v. Dunn, 104 S.W.3d 792, 794 (Mo.App. W.D.2003) (citing Cmty. Bancshares, Inc. v. Sec'y of State, 43 S.W.3d 821, 823 (Mo. banc 2001)). A reviewing court gives "due weight to the agency's opportunity to observe the witnesses." Grace, 51 S.W.3d at 897 (quoting Hornsby v. Dir. of Revenue, 865 S.W.2d 662, 663 (Mo. banc 1993)); § 536.140.3, RSMo 2000.

I. Denial of Level I License

In his first two points on appeal, Mr. Teague challenges the Commission's denial of his application for a Level I License. He claims that the Commission erred in denying his application for a Level I license based on section 313.812.14(7), RSMo 2000, and 11 CSR 45-4.260(4)(D) because his failure to disclose two arrests on his application was unintentional. He contends that a Level I License may only be denied on the basis of section 313.812.14(7) and 11 CSR 45-4.260(4)(D) when an applicant intentionally omits information or knowingly provides false information on the application. Mr. Teague argues that there is no support for the Commission's legal conclusion that negligence in preparing a Level I License application by failing to include certain information is grounds for denying the license under section 313.812.14(7), RSMo 2000, and 11 CSR 45-4.260(4)(D). Second, Mr. Teague argues that the Commission's finding that he omitted certain information from his Level I License application was not supported by competent and substantial evidence. He asserts that his application contained information from which the Commission could investigate the circumstances surrounding the two arrests and determine that he had been charged with possession of drug paraphernalia and spousal abuse.

A. Commission's Finding Supported by Substantial and Competent Evidence

As a preliminary matter, Mr. Teague's second point on appeal that the Commission's finding that he omitted two arrests from his Level I License application is not supported by the evidence is addressed. Mr. Teague argues that his application contained sufficient information for the Commission to determine that he had been charged with possession of drug paraphernalia and spousal abuse. In support of his argument, Mr. Teague notes that he provided the case information on the drug charge and that he had previously provided the spousal abuse charge information to the Commission on his Level II License application.

With respect to the drug paraphernalia charge, Mr. Teague was arrested on September 29, 1991, for driving under the influence. He was later charged, as part of the same incident that resulted in his arrest, with possession of drug paraphernalia. Mr. Teague claims that he included the case information on the DUI charge in his application. Although he does not contest that he failed to disclose the related possession of drug paraphernalia charge in his application, he asserts that the application only requested information about each incident resulting in arrest and not about each arrest, charge, or conviction associated with that incident. He further argues that he relied on the court documents in his possession, which only listed the DUI charge, in completing this portion of his application.

Under section 313.810.3, RSMo 2000, an applicant for either a Level I or Level II occupational license is responsible for proving to the Commission his suitability for licensure. "It is the burden of the applicant to show by clear and convincing evidence his suitability as to character, experience and other factors as may be deemed appropriate by the commission." § 313.810.3, RSMo 2000. The Commission bares no burden to demonstrate that an applicant is suitable. The burden is entirely the applicant's to prove suitability for licensure. The applicant's burden is emphasized on the first page of the Level I License application which contains the following warning:

Each question must be answered fully, accurately, and completely. Any misrepresentation or omission can result in application denial. When information is unknown, so indicate. You must make a substantial inquiry to determine the answers to all questions. Any statement that is not true or not disclosed, which becomes known at any later date, is cause for revocation of the Riverboat Gaming License.

An applicant can prove suitability, inter alia, only by fully and...