Tivolino Teller House, Inc. v. Fagan, 95SA283
| Decision Date | 04 November 1996 |
| Docket Number | No. 95SA283,95SA283 |
| Citation | 926 P.2d 1208 |
| Parties | TIVOLINO TELLER HOUSE, INC., Plaintiff-Appellant, v. Renny FAGAN, in his capacity as the Executive Director of the Colorado Department of Revenue; Colorado Limited Gaming Control Commission; and the State of Colorado Department of Revenue, Defendants-Appellees. |
| Court | Colorado Supreme Court |
Lentz, Evans and King, P.C., Robert A. Wherry, Jr., Thomas E. McCarty, Denver, for Plaintiff-Appellant.
Gale A. Norton, Attorney General, Stephen K. ErkenBrack, Chief Deputy Attorney General, Timothy M. Tymkovich, Solicitor General, Maurice Knaizer, Deputy Attorney General, Larry A. Williams, First Assistant Attorney General, Thomas D. Fears, Assistant Attorney General, General Legal Services Section, Denver, for Defendants-Appellees.
On joint motion of plaintiff-appellant, Tivolino Teller House, Inc. (Tivolino) and the defendants, Executive Director of Revenue, Renny Fagan, the Colorado Limited Gaming Control Commission, and the Colorado Department of Revenue (collectively described as the Department), the court of appeals certified this appeal to the Supreme Court pursuant to section 13-4-109, 6A C.R.S. (1987), and we accepted jurisdiction. 1 Tivolino appeals the Denver District Court's order in Tivolino Teller House, Inc. v. Fagan, No. 94CV2549 (Colo. Dist. Ct. June 1, 1995), which granted summary judgment for the Department, affirming the result of the ruling of the Colorado Limited Gaming Control Commission (Commission) which upheld the denial of Tivolino's claim for refund by the Director of the Division of Gaming (Director). The district court, interpreting article XVIII, section 9(4)(a) of the Colorado Constitution and section 12-47.1-103(1), 5B C.R.S. (1991), held that Tivolino's promotional Casino Slot Club payouts are not deductible as "payments to players" for purposes of computing taxable adjusted gross proceeds. We affirm.
Tivolino, a Colorado corporation, operates a casino in Central City. Tivolino offers free memberships in a slot club program (the Program) to all patrons at least 21 years of age. As part of the Program, an eligible patron receives a membership card which identifies the patron when the card is inserted into any slot, video poker, or keno machine. With the card inserted, members receive a "bonus point" for every dollar they spend on the machines. Members receive the bonus point for having placed the wager, regardless of its outcome. The bonus points then may be redeemed in 200 point increments. Members receive one dollar for every 200 points redeemed.
Tivolino considered the Program payouts to be excludable from its "adjusted gross proceeds" as that term is defined by section 9(4)(a) of article XVIII of the Colorado Constitution (the Limited Gaming Amendment). Because the Division of Gaming treated the payouts as non-deductible, pursuant to Rule 47.1-1613, 1 C.C.R. 207-1 (1991) (Colorado Gaming Regulation 1613), Tivolino did not deduct Program payouts in computing its adjusted gross proceeds for the taxable periods ending on the last day of February, March, and April, 1993. The non-deducted Program payout amounts for the period at issue equalled $6,275.00, $14,348.00, and $21,279.00, respectively. Tivolino then filed timely requests for refunds with the Department.
The Director denied Tivolino's claims for a refund, and Tivolino subsequently filed a request for a hearing with the Commission. The Commission ruled against Tivolino, upholding the Director's denial of a refund. Tivolino then appealed the Commission's decision to the Denver District Court (district court). Both parties submitted motions for summary judgment, and the district court granted summary judgment for the Department.
Tivolino appealed the district court's decision to the court of appeals, and on joint motion of the parties the court of appeals certified the case to the supreme court pursuant to section 13-4-109, 6A C.R.S. (1987).
Summary judgment is appropriate only if the pleadings and supporting documents demonstrate that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." C.R.C.P. 56(c); Graven v. Vail Assocs., 909 P.2d 514, 516 (Colo.1995). The burden is on the moving party to establish that no genuine issue of fact exists and any doubts in this regard must be resolved against the moving party. Peterson v. Halsted, 829 P.2d 373, 376 (Colo.1992).
Here, the parties stipulated to the facts and we agree, as did the district court, that the case presents solely a question of law. The issues presented in this case are the proper interpretation of the language of section 9(4)(a) of the Limited Gaming Amendment and the validity of Colorado Gaming Regulation 1613.
The Limited Gaming Amendment was adopted by the voters in the 1990 general election and became effective through the Governor's proclamation on January 3, 1991. The Limited Gaming Amendment legalized limited gaming in Central City, Black Hawk, and Cripple Creek as of October 1, 1991. In 1991, pursuant to the Limited Gaming Amendment, the General Assembly enacted the Limited Gaming Act of 1991 (Limited Gaming Act). §§ 12-47.1-101 to -1501, 5B C.R.S. (1991 & 1996 Supp.). The Limited Gaming Act provides for the creation of "the division of gaming" within the Department of Revenue. § 12-47.1-201, 5B C.R.S. (1991). Section 9(2) of the Limited Gaming Amendment also mandated the creation of a limited gaming control commission, and thus section 12-47.1-301 of the Limited Gaming Act provides for the creation of the Colorado Limited Gaming Control Commission within the Division of Gaming.
Section 9(4)(a) of the Limited Gaming Amendment defines "adjusted gross proceeds" as follows:
"Adjusted gross proceeds" means the total amount of all wagers made by players on limited gaming less all payments to players; said payments to players being deemed to include all payments of cash premiums, merchandise, tokens, redeemable game credits, or any other thing of value.
Colo. Const. art. XVIII, § 9(4)(a) (emphasis added). 2 Colorado Gaming Regulation 1613 limits deductions for promotional expenses and states in relevant part:
(1) A licensee who engages in promotions to increase business and gaming at his business may not deduct payouts made pursuant to the promotion from adjusted gross proceeds except for money or tokens paid at face value directly to a patron as the result of a specific wager. A specific wager requires two or more persons to stake something of value on an event, the outcome of which is uncertain. Depending upon the outcome, the winning party receives everything that was staked. If only one party risks something of value, there is no wager.
(2) No deduction is allowed in the computation of adjusted gross proceeds for any prizes, premiums, drawings, benefits, or tickets that are redeemable for money, merchandise, or other promotional allowances.
Rule 47.1-1613, 1 C.C.R. 207-1 (1991).
Tivolino advances two alternative arguments. Tivolino's main argument is that Program payouts are included within the clear meaning of "payments to players" in the Limited Gaming Amendment and Limited Gaming Act and that Colorado Gaming Regulation 1613 is improper and invalid. Alternatively, Tivolino contends that because members are guaranteed to receive .5cents on the dollar for every $200 spent, only 99.5cents of every dollar spent by Program members constitutes a wager. Thus, Tivolino argues that .5cents of every dollar spent by Program members should be excluded from taxable "wagers made by players," and that it is entitled to a refund of the amounts that were erroneously included in the computation of its taxable "adjusted gross proceeds."
Before addressing Tivolino's arguments, we will briefly summarize the familiar rules of statutory construction applicable in this case.
Where a constitutional amendment or statute contains plain, clear language, we do not resort to rules of construction to construe its meaning. Carrara Place, Ltd. v. Arapahoe County Bd. of Equalization, 761 P.2d 197, 202 (Colo.1988); Colorado State Civil Serv. Employees Ass'n v. Love, 167 Colo. 436, 444-45, 448 P.2d 624, 627 (1968). Where the language is ambiguous, however, several well-established principles guide us in construing a constitutional amendment. Our primary task is to "ascertain and give effect to the intent of those who adopted [the amendment]." Urbish v. Lamm, 761 P.2d 756, 760 (Colo.1988) (citing Cooper Motors v. Board of County Comm'rs, 131 Colo. 78, 83, 279 P.2d 685, 688 (1955)). In the case of constitutional amendments adopted by popular vote, we must consider the intent of the voters in enacting the provision, and to that end, we must give the words of the amendment their natural and popular meaning. Urbish, 761 P.2d at 760. In addition, however, we must give deference to the reasonable interpretations of the administrative agencies that are authorized to administer and enforce the law. North Colo. Medical Ctr., Inc. v. Committee on Anticompetitive Conduct, 914 P.2d 902, 907 (Colo.1996); Urbish, 761 P.2d at 761. We have said that "administrative regulations are presumed valid and will be set aside only when the challenging party establishes their invalidity beyond a reasonable doubt." Urbish, 761 P.2d at 761 (citations omitted). With these principles in mind, we turn to Tivolino's arguments.
Tivolino argues that the constitutional and parallel statutory language defining "adjusted gross proceeds" is clear and that we need not resort to rules of construction. The district court agreed that the constitutional provision at issue is clear, but concluded that the Commission and Department's interpretation of it is the correct one. Considering the sentence defining "adjusted gross proceeds" as a whole, the district court found specifically that "the leg...
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