Ward v. West Oil Co. Inc

• Decision Date: 12 April 2010
• Docket Number: No. 26797.,26797.
• Citation: 692 S.E.2d 516,387 S.C. 268
• Court: South Carolina Supreme Court
• Parties: Charles WARD and Robby Hodge, d/b/a R & B Amusements, Petitioners,v.WEST OIL COMPANY, INC., d/b/a Markette Stores, Respondent.

387 S.C. 268

692 S.E.2d 516

Charles WARD and Robby Hodge, d/b/a R & B Amusements, Petitioners,v.WEST OIL COMPANY, INC., d/b/a Markette Stores, Respondent.

No. 26797.

Supreme Court of South Carolina.

Heard March 3, 2010.

Decided April 12, 2010.

Charles E. Carpenter, Jr. and Carmen V. Ganjehsani, both of Carpenter Appeals and Trial Support, of Columbia, D. Kenneth Baker, of Darlington, for Petitioners.

Martin S. Driggers, Jr. and William R. Calhoun, Jr., both of Sweeny, Wingate & Barrow, of Columbia, for Respondent.

Justice BEATTY.

In this contract dispute case involving “pull-tab” game machines, this Court granted the petition of Charles Ward and Robby Hodge, d/b/ a R & B Amusements (“R & B”) for a writ of certiorari to review the Court of Appeals' decision in Ward v. West Oil Co., 379 S.C. 225, 665 S.E.2d 618 (Ct.App.2008), in which the Court of Appeals affirmed the special master's award of $5,067.31 in damages to R & B for its breach of contract action against West Oil Company, Inc., d/b/a Markette Stores (“West Oil”). Because we find the parties' contract is void ab initio, we vacate the decisions of the special master and the Court of Appeals and dismiss with prejudice R & B's breach of contract action.

I. Factual/Procedural History

Charles Ward and Robby Hodge own and operate R & B, which provides games and gambling machines to businesses. In September 2001, they sought to place “pull-tab” game machines ¹ in Markette convenience stores owned by West Oil. The machines sold tickets, called “Pots of Gold,” with the potential for winning prizes. On September 11, 2001, Ward and Hodge met with Alexander West, Jr. (West), the President of West Oil, and Camp Segars (Segars), the Director of Operations for West Oil, to discuss placing machines in a number of Markette stores.

At the meeting, Ward and Hodge gave West Oil an overview of the machines and presented West Oil with a form contract, which they had obtained from their “pull-tab” machine supplier. The typewritten contract consisted of eleven paragraphs. As part of the agreement, West Oil agreed to initially place the machines at four of its convenience stores. During the remaining discussions, the parties negotiated the following changes to the contract: (1) the payout scheme; (2) a reduction of the term of the contract from three years to one year and (3) a requirement that R & B pay West Oil a $500 up-front placement fee for each machine that they installed. R & B also agreed to absorb the $180 cost of the tickets in the machines.

On September 13, 2001, Ward, Hodge, and Segars met to execute the contract. Ward and Hodge had revised the contract to conform to the parties' discussions during the initial meeting. Paragraph 7 of the typewritten contract provided for liquidated damages in the event of a breach. Segars added a handwritten provision to the top of the contract that was initialed by Segars, Hodge, and Ward. This provision stated:

Addition * In [the] event of contract termination, up front placement money will be re-imbursed [sic] at pro-rated time with no penalties to either party of this contract. This is added this day September 13th 2001.

Within two days of signing the contract, R & B placed the machines in four Markette stores, as specified in the contract. Because these machines performed well, the parties orally agreed to place machines in thirteen additional stores. With the placement of each machine, R & B paid West Oil the agreed-upon placement fee of $500.

Initially, each ticket machine held a total of $4,800 worth of “red” tickets at a time. After the red tickets sold out, R & B would remove the proceeds, pay the portion due to West Oil, and refill the machine with red tickets.²

In late 2001, R & B approached Segars to discuss changing the game from red tickets to “green” tickets known as “Jackpots,” which had different values and payouts. Segars agreed to allow R & B to change from red tickets to green tickets at one store with the stipulation that if the new cards were successful, he would consider changing the cards in all of the stores.

In February 2002, in a meeting of store managers, Segars and West discovered that R & B had replaced the red tickets with green tickets in several store locations other than the originally-designated store. After Segars told West that he had only authorized R & B to replace the cards in the one store, West became angry and told Segars that he wanted all of the machines removed from all of the stores. West instructed Segars to leave the meeting to phone R & B and direct them to remove their machines from all West Oil stores. With thirty-one weeks remaining on the contract, R & B complied with West Oil's request and removed the machines.

Shortly thereafter, R & B filed suit against West Oil for breach of contract. The parties consented to have the matter decided by a special master. Following a bench trial, the special master issued a written order in which he concluded:

The court finds that a written, enforceable contract existed for the initial four ticket machines. The contract was terminated. Under the handwritten Addition to the contract: “In the event of contract termination, up front placement money will be reimbursed at pro-rated time with no penalties to either party of this contract.” The up front placement money was $500 per machine. This also applied for the thirteen additional machines that were added at other locations. Therefore, [R & B] initially paid [West Oil] $8,500 in up front placement money. Under [R & B's] calculations, the machines were in place for twenty-one weeks. Therefore, [R & B][is] entitled to be reimbursed the pro-rated portion of the up front placement money, which equals $5,067.31.

In a unanimous decision, the Court of Appeals affirmed the special master's order in its entirety. Ward v. West Oil Co., 379 S.C. 225, 665 S.E.2d 618 (Ct.App.2008). After the Court of Appeals denied R & B's petition for rehearing, this Court granted R & B's petition for a writ of certiorari.

II. Discussion

A.

In our order granting R & B's petition for a writ of certiorari, we directed the parties to brief the question of whether the “pull-tab” game machines at issue in this case constitute illegal gambling devices under section 12-21-2710 of the South Carolina Code. This section provides in pertinent part:

It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, or any video game machine with a free play feature operated by a slot in which is deposited a coin or thing of value, or other device operated by a slot in which is deposited a coin or thing of value for the play of poker, blackjack, keno, lotto, bingo, or craps, or any machine or device licensed pursuant to Section 12-21-2720 and used for gambling or any punch board pull board, or other device pertaining to games of chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance.

S.C.Code Ann. § 12-21-2710 (2000) (emphasis added).³

“The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature.” Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). If a statute's language is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion for employing rules of statutory interpretation and the Court has no right to look for or impose another meaning. Miller v. Doe, 312 S.C. 444, 447, 441 S.E.2d 319, 321 (1994).

“All rules of statutory construction are subservient to the one that the legislative intent must prevail if it can be reasonably discovered in the language used, and that language must be construed in the light of the intended purpose of the statute.” Broadhurst v. City of Myrtle Beach Election Comm'n, 342 S.C. 373, 380, 537 S.E.2d 543, 546 (2000). The Court should give words their plain and ordinary meaning without resort to subtle or forced construction to limit or expand the statute's operation. Sloan v. S.C. Bd. of Physical Therapy Exam'rs, 370 S.C. 452, 469, 636 S.E.2d 598, 607 (2006).

B.

As a threshold matter, R & B contends that any challenge as to the legality of the “pull-tab” cards and machines should not be considered by this Court given this issue was not previously raised or ruled upon during the course of the proceedings.

Although R & B correctly references our appellate court rules regarding error preservation,⁴ we find these rules are inapplicable as this Court will not “lend its assistance” to carry out the terms of a contract that violates statutory law or public policy. See McMullen v. Hoffman, 174 U.S. 639, 654, 19 S.Ct. 839, 43 L.Ed. 1117 (1899) (“The authorities from the earliest time to the present unanimously hold that no court will lend its assistance in any way towards carrying out the terms of an illegal contract. In case any action is brought in which it is necessary to prove the illegal contract in order to maintain the action, courts will not enforce it, nor will they enforce any alleged rights directly springing from such contract.”); White v. J.M. Brown Amusement Co., 360 S.C. 366, 371, 601 S.E.2d 342, 345 (2004) (“The general rule, well established in South Carolina, is that courts will not enforce a contract when the subject matter of the contract or an act required for performance violates public policy as expressed in constitutional provisions,...