VFW Post 8586 v. Ohio Liquor Control Comm.

• Decision Date: 19 August 1998
• Docket Number: 97-1384,Nos. 97-1383,s. 97-1383
• Citation: 697 N.E.2d 655,83 Ohio St.3d 79
• Parties: VFW POST 8586, Appellee, v. OHIO LIQUOR CONTROL COMMISSION, Appellant.
• Court: Ohio Supreme Court

Page 79

83 Ohio St.3d 79

697 N.E.2d 655

VFW POST 8586, Appellee, v. OHIO LIQUOR CONTROL COMMISSION, Appellant.

Nos. 97-1383, 97-1384.

Supreme Court of Ohio.

Submitted June 10, 1998.

Decided Aug. 19, 1998.

SYLLABUS BY THE COURT

1. Mere possession of a gambling device on a liquor permit premises does not constitute a violation of Ohio Adm.Code 4301:1-1-53(B).

2. To find a violation of Ohio Adm.Code 4301:1-1-53(B), the Liquor Control Commission must receive evidence tending to prove the same elements that are required to sustain a criminal conviction of one of the gambling offenses listed in R.C. 2915.01(G).

Upon commencing a warrantless administrative investigation of appellant VFW Post 8586's class D-4 liquor permit premises, agents of the Department of Liquor Control immediately observed seven video poker machines. The agents deposited a quarter into each of four of the machines and a dollar into a fifth machine and played off the credits they had purchased. The agents then ordered the opening of all of the machines, and found that they contained a total of $319. Based on this investigation, the Ohio Department of Liquor Control cited VFW Post 8586 for violating Ohio Adm.Code 4301:1-1-53.

After a hearing, the Liquor Control Commission issued an order finding that VFW Post 8586 had violated Ohio Adm.Code 4301:1-1-53 and ordered alternative sanctions of a $28,000 forfeiture or a one-hundred-forty-day suspension. The Ashland County Court of Common Pleas affirmed the commission's order on administrative appeal. On further appeal, however, the Ashland County Court of Appeals reversed, concluding that the commission had relied upon insufficient evidence to support a violation of Ohio Adm.Code 4301:1-1-53(B).

The court of appeals certified that its decision was in conflict with the decisions of the Mercer County Court of Appeals in Loyal Order of Moose Lodge No. 1473 v. Liquor Control Comm. (1994), 95 Ohio App.3d 109, 641 N.E.2d 1182; the Ross County Court of Appeals in Am. Legion Post 0014 v. Liquor Control Comm. (July 25, 1989), Ross App. No. 1482, unreported, 1989 WL 86278; the Sandusky County Court of Appeals in Am. Legion Post 0046 Bellevue v. Liquor Control Comm. (1996), 111 Ohio App.3d 795, 677 N.E.2d 384, and the Franklin County Court of Appeals in Mills-Jennings of Ohio, Inc. v. Liquor Control Comm. (1984), 16 Ohio App.3d 290, 16 OBR 321, 475 N.E.2d 1321. This cause is now before this court upon our determination that a conflict exists and pursuant to our contemporaneous allowance of a discretionary appeal.

Fawley & Associates, Darrell E. Fawley, Jr. and Kurt O. Gearhiser, Columbus, for appellee.

Betty D. Montgomery, Attorney General, and David A. Raber, Assistant Attorney General, for appellant.

COOK, Justice.

The issue certified to this court is "[w]hether, mere possession of gambling devices [on liquor permit premises] violates Ohio Adm.Code 4301:1-1-53." In its briefing of the issue and at oral argument, however, the commission has conceded that possession of a gambling device on liquor permit premises, without more, does not constitute a violation of the administrative regulation. It is clear from a simple reading of the administrative regulation that the commission's concession is proper. Ohio Adm.Code 4301:1-1-53(B) states:

"No person authorized to sell alcoholic beverages shall have, harbor, keep, exhibit, possess or employ or allow to be kept, exhibited or used in, upon or about the premises of the permit holder of [sic ] any gambling device as defined in division (F) of section 2915.01 of the Revised Code which is or has been used for gambling offenses as defined in division (G) of section 2915.01 of the Revised Code." (Emphasis added.)

Because a violation of Ohio Adm.Code 4301:1-1-53(B) expressly requires that the gambling device or devices possessed are used or have been used for one of the gambling offenses defined in R.C. 2915.01(G), mere possession of a gambling device on a liquor permit premises does not constitute a violation. Accordingly, we summarily dispose of the issue certified to this court.

We also accepted this case on discretionary appeal, and, in briefing and arguing the case, the parties have significantly diverged from the certified issue. The parties have framed much of their arguments in this appeal around the issue of whether the commission received sufficient evidence to find that VFW Post 8586 violated Ohio Adm.Code 4301:1-1-53(B). There is no dispute that VFW Post 8586 possessed video poker machines or that the machines are gambling devices as defined in R.C. 2915.01(F). See Mills-Jennings of Ohio, Inc. v. Dept. of Liquor Control (1982), 70 Ohio St.2d 95, 24 O.O.3d 181, 435 N.E.2d 407, syllabus (stating that under R.C. 2915.01[D] and [F], electronic draw poker machines are gambling devices per se ). Instead, it is that portion of Ohio Adm.Code 4301:1-1-53(B) requiring that a gambling device "is or has been used for gambling offenses as defined in division (G) of section 2915.01 of the Revised Code" that provides the point of contention in this case.

Initially, we note our agreement with VFW Post 8586 that, in finding a violation of Ohio Adm.Code 4301:1-1-53(B), the commission must determine that the gambling devices in question were used to commit a gambling offense listed in R.C. 2915.01(G). Accordingly, to find a violation of Ohio Adm.Code 4301:1-1-53(B), the commission must receive evidence tending to prove the same elements that are required to sustain a criminal conviction of one of the gambling offenses listed in R.C. 2915.01(G). See Abdoney v. Bd. of Liquor Control (1955), 101 Ohio App. 57, 60, 1 O.O.2d 33, 34, 135 N.E.2d 775, 778.

The quantum of evidence required to obtain a conviction on a criminal offense differs, however, from that required to find a regulatory violation. While a criminal conviction must be supported by proof beyond a reasonable doubt, a violation of Ohio Adm.Code 4301:1-1-53 need only be supported by a preponderance of the evidence. See Angola Corp. v. Liquor Control Comm. (1972), 33 Ohio App.2d 87, 62 O.O.2d 142, 292 N.E.2d 886.

In reviewing the commission's order pursuant to an R.C. 119.12 appeal, a common pleas court is required to affirm if the commission's order is supported by "reliable, probative, and substantial evidence and is in accordance with law." In connection with this standard of review, this court has stated that "an agency's findings of fact are presumed to be correct and must be deferred to by a reviewing court unless that court determines that the agency's findings are internally inconsistent, impeached by evidence of a prior inconsistent statement, rest on improper inferences, or are otherwise unsupportable." Ohio Historical Soc. v. State Emp. Relations Bd. (1993), 66 Ohio St.3d 466, 471, 613 N.E.2d 591 595. With respect to purely legal questions, however, the court is to exercise independent judgment. Id. at 471, 613 N.E.2d at 595-596.

Based on the stipulated evidence, we conclude that the commission had sufficient evidence before it to find that the gambling machines had been used to violate R.C. 2915.02(A)(2), ¹ which provides:

"(A) No person shall do any of the following:

" * * *

"(2) Establish, promote, or operate or knowingly engage in conduct that facilitates any scheme or game of chance conducted for profit."

As part of its argument, VFW Post 8586 notes that the commission did not receive direct evidence that anyone aside from the agents played the machines or that anyone was paid off in connection with playing the machines. There is no requirement, however, that a violation be proved by direct evidence. The commission is permitted to draw reasonable inferences based on the evidence before it.

The stipulated evidence permits a reasonable inference that someone other than the officers in question had played the video poker machines: agents found video poker machines on the permit premises in a location accessible to club patrons, the poker machines were operational and could be played upon the deposit of money, and the agents recovered $319 from the machines after depositing less than $3. Accordingly, the commission could reasonably infer that club patrons had played the machines.

Further, because the video machines in question played poker, the department was not required to come forward with evidence of payoff or any other evidence tending to show that the machines were played in the hope of gain....