Court Opinion

ID: 4249838
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:21:28.91594+00
Date Added: 2024-06-11T14:44:09.379139
License: Public Domain

IN THE SUPREME COURT OF IOWA
                                No. 08–0586

                          Filed February 12, 2010

TROY BLACKFORD,

      Appellant,

vs.

PRAIRIE MEADOWS RACETRACK
AND CASINO, INC.,

      Appellee.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Polk County, Eliza J.

Ovrom, Judge.

      The appellee seeks further review of the opinion of the court of

appeals which held the casino did not have statutory or regulatory

authority to withhold winnings from a person who had been involuntarily

excluded from the gambling facility.       DECISION OF COURT OF

APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.

      Ryan T. Beattie, Beattie Law Firm, P.C., Des Moines, for appellant.

      Dennis P. Ogden and Margaret C. Callahan, Belin Lamson

McCormick Zumbach Flynn, Des Moines, for appellee.
                                      2
BAKER, Justice.

      The appellee, Prairie Meadows, seeks further review of the opinion

of the court of appeals which held the casino did not have statutory or

regulatory authority to withhold winnings from a person who had been

involuntarily excluded from the gambling facility. We determine that no

contract existed between Prairie Meadows and Blackford, and, therefore,

his claim of conversion must fail.

      I. Background Facts and Proceedings.

      On May 5, 2006, appellant Troy Blackford went to Prairie Meadows

Racetrack and Casino to gamble. Over the course of several hours, he

won approximately $9,387 through a combination of slot machine cash

tickets and one jackpot. Due to the high amount of Blackford’s jackpot,

Prairie Meadows was required to hand pay the prize money and issue

Blackford a W-2 for tax purposes. Upon learning of Blackford’s identity,

Prairie Meadows refused to pay him because its records indicated

Blackford had previously been involuntarily and permanently banned

from entering Prairie Meadows’s premises.

      The record shows Blackford had been issued a “trespass ban” by

Prairie Meadows in August 1996 because he had struck a slot machine

and had broken the machine’s belly glass. According to Prairie Meadows,

this ban was permanent.      As a result of this incident, Blackford pled

guilty to criminal mischief and paid a fine.     Prairie Meadows found

Blackford on its premises again in March of 1998 and escorted him from

the premises.   Blackford pled guilty to trespass and paid a fine as a

consequence of this second occurrence.

      In 2000, Blackford wrote a letter to Prairie Meadows requesting

that his ban be lifted. Prairie Meadows was unable to find this letter in

May 2006 when Blackford won the jackpot, but discovered it at a later
                                         3
date.      Blackford claims he received a response letter from Prairie

Meadows lifting the ban and that he showed it to several individuals.

Prairie Meadows claims it never lifted the ban and has no record of a

response letter, although its standard policy is to send the banned

individual a response letter containing its decision.      In January 2006,

Blackford became a member of the Prairie Meadows’s Slot Club, and

Prairie Meadows’s documents show Blackford gambled using the card at

least once before May 5, 2006.

        Because Prairie Meadows’s records indicated Blackford was still

banned as of May 5, 2006, he was escorted to the security office on that

date, and his winnings were confiscated.         As a part of this process,

Prairie Meadows required Blackford to sign a trespass forfeiture form,

donating all of his winnings to the Iowa Gambling Treatment Program.

Blackford was then charged with trespassing and released.            Following

trial, the court dismissed the trespassing charge.

        Blackford thereafter filed a petition against Prairie Meadows to

recover damages based upon theories of conversion, libel, false

imprisonment, and abuse of process.          Blackford’s false-imprisonment

and abuse-of-process claims were later dismissed on Prairie Meadows’s

summary judgment motion. Blackford later dismissed his libel claim.

        Blackford filed a motion to trifurcate the trial. In its denial of this

motion, the trial court addressed the legal question of whether Prairie

Meadows has the authority to confiscate winnings from patrons that are

involuntarily banned from its premises.         The court concluded it did,

stating:

        Once a person is banned from a facility, it is not within the
        rules for the person to be present or to gamble at the facility.
        All promises, agreements, or contracts that arise from
        wagers or bets are void, unless the wager is authorized
                                     4
      under Chapter 99F (regulating gambling facilities in Iowa).
      Iowa Code § 537A.4. A person who is excluded from a
      facility under the rules of the Racing and Gaming
      Commission would not hold a legally binding agreement with
      a gaming facility for payment of the winnings. Therefore the
      facility would not be required to pay winnings to such
      person.

      Over   the   objections   of    Blackford, the   court submitted   an

instruction to the jury which declared that for the gambling winnings to

be the property of Blackford, he must prove the trespass ban had been

lifted by Prairie Meadows prior to May 5, 2006.        The jury returned a

verdict answering “No” to a special interrogatory on whether Blackford’s

trespass ban had been lifted.        The court entered judgment in favor of

Prairie Meadows and dismissed Blackford’s conversion claim.

      Blackford appealed. The court of appeals concluded the trial court

erred in its pretrial ruling finding that Prairie Meadows would not be

required to pay winnings to a person involuntarily excluded from the

casino. It therefore reversed the trial court’s decision and remanded for

a new trial because it found no statutory provision allowed Prairie

Meadows to confiscate Blackford’s winnings.        Prairie Meadows filed an

application for further review which we granted.

      II. Scope of Review.

      This case was tried at law; therefore our review is for correction of

errors at law. Iowa R. App. P. 6.907 (2009). In a law action, findings of

fact are binding on us if supported by substantial evidence.             See

EnviroGas, L.P. v. Cedar Rapids/Linn County Solid Waste Agency, 641
N.W.2d 776, 781 (Iowa 2002). Blackford claims the issue in this case is

whether Prairie Meadows has a right under the Iowa Code to withhold

gambling     winnings   from     involuntary     trespassers.      Statutory

interpretation is also reviewed for correction of errors at law.    State v.

Iowa Dist. Ct., 730 N.W.2d 677, 679 (Iowa 2007).
                                         5
        III. Discussion and Analysis.

        In this case, there is only one issue for our review: whether Prairie

Meadows had the authority to withhold winnings from a person who had

been involuntarily banned from its gambling facility. Blackford does not

contend that there was insufficient evidence to support the jury’s finding

that he was still involuntarily banned from Prairie Meadows on May 5,

2006.

        A.   Gambling Law in Iowa.       Under the Iowa Code, all gambling

promises, agreements, and contracts are generally “void and of no effect.”

Iowa Code § 537A.4 (2005). The legislature, however, has made explicit

exceptions to this rule where gambling is authorized under Iowa Code

chapters 99B, 99D, 99G, or 99F. Id.

        The gambling that takes place at Prairie Meadows is authorized

under Iowa Code chapter 99F. See id. § 99F.4A(1) (“Upon application,

the commission shall license the licensee of a pari-mutuel dog or horse

racetrack to operate gambling games at a pari-mutuel racetrack

enclosure subject to the provisions of this chapter . . . .”). Iowa Code

chapter 99F.4 outlines the state racing and gaming commission’s

jurisdiction and powers over the gambling operations authorized by this

chapter. Id. § 99F.4. Among these powers are the ability to require a

licensee to remove a person violating a provision of this chapter or the

commission rules, or any other person “deemed undesirable” from the

gambling facility.     Id. § 99F.4(7).       The Iowa Racing and Gaming

Commission also formulated regulations giving a gaming licensee the

authority to eject or exclude any person from the licensee’s facility. See

Iowa Admin. Code r. 491–5.4(5)(d). This regulation provides:

        d. Ejection or exclusion. A licensee may eject or exclude any
        person, licensed or unlicensed, from the premises or a part
        thereof of the licensee’s facility, solely of the licensee’s own
                                   6
      volition and without any reason or excuse given, provided
      ejection or exclusion is not founded on constitutionally
      protected grounds such as race, creed, color, disability, or
      national origin.

Id. Prairie Meadows clearly had the authority to ban Blackford from its

casino.

      B.    Conversion Claim.        Blackford alleges Prairie Meadows

intentionally misappropriated or took dominion or control over the

jackpots he won on May 5, 2006.         He claims that such taking was

wrongful and constitutes conversion of his property. Conversion is “ ‘the

wrongful control or dominion over another’s property contrary to that

person’s possessory right to the property.’ ”     Whalen v. Connelly, 621
N.W.2d 681, 687 (Iowa 2000) (quoting Condon Auto Sales & Serv., Inc. v.

Crick, 604 N.W.2d 587, 593 (Iowa 1999)).          In order to establish a

conversion claim, the plaintiff must establish a possessory interest in the

property.   See Kendall/Hunt Publ’g Co. v. Rowe, 424 N.W.2d 235, 247

(Iowa 1988).
      Blackford does not explain how his possessory interest arises,
stating only that “[p]atrons expect to be paid their winnings and
Blackford expected to be paid his.”        He cites no authority for this
proposition, nor explains the basis for this statement.       In its pretrial
ruling, the trial court held that “[a] person who is excluded from a facility
. . . would not hold a legally binding agreement with a gaming facility for
the payment of winnings.” We agree with the trial court that Blackford
was required to prove a legally binding contract with Prairie Meadows for
the payment of winnings to prove a possessory interest in the jackpots he
won on May 5, 2006.      See Condon Auto Sales, 604 N.W.2d at 593–94
(affirming judgment in the amount of $700 against the defendant on a
claim of conversion of monies to which the plaintiff was entitled).
                                         7
      The nature of the contract created between a patron and a

gambling establishment is an issue of first impression in Iowa.         There

appear to be two approaches to this issue.        The first is that gambling

interactions follow traditional contract theory with the requirements of

offer, acceptance, and consideration.        See Ledoux v. Grand Casino-

Coushatta, 954 So. 2d 902, 907 (La. Ct. App. 2007) (stating “the law of

contracts is determinative of the issues before us” in a breach of contract

action against a casino for failure to pay out jackpots allegedly won); see

also In re Chomakos, 69 F.3d 769, 771 (6th Cir. 1995) (“Where gambling

is lawful . . . the placing of a bet gives rise to legally enforceable contract

rights.”); Romanski v. Detroit Entm’t, L.L.C., 265 F. Supp. 2d 835, 845

(E.D. Mich. 2003) (noting “[w]hen a person places money into a gambling

game, that person is effectively entering into an aleatory contract with

the casino”); Sokaitis v. Bakaysa, 975 A.2d 51, 56 (Conn. 2009) (stating

“legal wagering . . . involve[s] an express or implied contract under which

the consideration is ‘money . . . bet’ ”).

      The second approach is that gambling interactions do not create a

traditional contract but a contract “completely determined by legislative

enactment.”     Marcangelo v. Boardwalk Regency Corp., 847 F. Supp.
1222, 1229 (D.N.J. 1994); see also Tose v. Greate Bay Hotel & Casino,

Inc., 819 F. Supp. 1312, 1317 n.8 (D.N.J. 1993) (stating “every aspect of

the relationship between the gambler and the casino is minutely

regulated by the state and there is little freedom of contract in the usual

sense, there seems to be at least significant doubt that the New Jersey

Supreme Court would recognize obligations not specifically called for by

statute or regulations.”); Register v. Oaklawn Jockey Club, Inc., 811
S.W.2d 315, 317 (Ark. 1991) (“The Law specifically provides that the only

legislatively authorized way for a patron at a race track to recover money
                                         8
based upon the outcome of a horse race is through pari-mutuel or

certificate system of wagering.      Any wagering contract on horse races

outside the scope of the Law is therefore invalid and illegal.” (citations

omitted)).

      We hold that the traditional contract approach is more consistent

with our statutory scheme and precedent.          Iowa Code section 537A.4

refers to gambling contracts and provides that such contracts are legal if

permitted under chapter 99F. The freedom to contract is not, however,

unlimited.    When a contract addresses an area of law regulated by a

statute, the statutory provisions and restrictions are a part of the parties’

contract. See, e.g., Lee v. Grinnell Mut. Reins., 646 N.W.2d 403, 406–07

(Iowa 2002); see also C & F Maint. & Prop. Mgmt., Inc. v. Eliason & Knuth

Drywall Co., 418 N.W.2d 44, 45–6 (Iowa 1988) (recognizing that local

building     ordinances   may   be    implied   obligations   of   construction

contracts).      Chapter 99F does not contain a provision or a related

regulation addressing whether the winnings of involuntarily banned

individuals may be withheld.         We must, therefore, employ traditional

contract principles to analyze whether a contract requiring payment of

Blackford’s winnings has been formed under the facts of this case.

      “All contracts must contain mutual assent; mode of assent is

termed offer and acceptance.” Anderson v. Douglas & Lomason Co., 540
N.W.2d 277, 285 (Iowa 1995). “An offer is a ‘manifestation of willingness

to enter into a bargain, so made as to justify another person in

understanding that his assent to that bargain is invited and will

conclude it.’ ” Id. (quoting Restatement (Second) of Contracts § 24

(1981)). “We determine whether an offer has been made objectively—not

subjectively.”    Heartland Express, Inc. v. Terry, 631 N.W.2d 260, 268

(Iowa 2001). “ ‘The test for an offer is whether it induces a reasonable
                                       9
belief in the recipient that [the recipient] can, by accepting, bind the

sender.’ ” Anderson, 540 N.W.2d at 286 (quoting Architectural Metal Sys.,

Inc. v. Consol. Sys., Inc., 58 F.3d 1227, 1229 (7th Cir. 1995)).

      In making an offer, “[t]he offeror is the master of his offer; just as

the making of any offer at all can be avoided by appropriate language or

other conduct, so the power of acceptance can be narrowly limited.”

Restatement (Second) of Contracts § 29, cmt. a, at 83. As master, the

offeror may decide to whom to extend the offer.           Id. § 29, at 83.

According to the Restatement,

      (1) The manifested intention of the offeror determines the
      person or persons in whom is created a power of acceptance.

      (2) An offer may create a power of acceptance in a specified
      person or in one or more of a specified group or class of
      persons, acting separately or together, or in anyone or
      everyone who makes a specified promise or renders a
      specified performance.

Id.

      In this situation, Prairie Meadows is the offeror. It makes an offer

to its patrons that, if accepted by wagering an amount and the patron

wins, it will pay off the wager. Simply stated, the issue is whether Prairie

Meadows made an offer to Blackford. Because Prairie Meadows has the

ability to determine the class of individuals to whom the offer is made, it

may also exclude certain individuals. Id. Blackford had been banned for

life from the casino. He was provided a notice which provided as follows:

“ON THIS DATE YOU HAVE BEEN ADVISED THAT YOU HAVE BEEN

PERMANENTLY DENIED ENTRANCE OR ACCESS TO THE FACILITY OF

PRAIRIE MEADOWS RACETRACK AND CASINO.”                  Under an objective

test, unless the ban had been lifted, Blackford could not have reasonably

believed he was among the class of individuals invited to accept Prairie

Meadows’s offer. The jury found that the ban against Blackford had not
                                           10
been lifted, and, therefore, Prairie Meadows had not extended him an

offer to wager.      Because there was no offer to him, no contract could

result.      Without the contract, Blackford could not show a possessory

interest in the jackpot, and his conversion action must fail. 1

        C.     Jury Instructions.        Blackford also objects to the jury

instructions given by the district court.              The court submitted the

following instruction:

              In order for the winnings to be the property of Troy
        Blackford, he must prove by a preponderance of the evidence
        that the trespass ban against him had been lifted by Prairie
        Meadows prior to May 5, 2006.

                You are further instructed that a casino licensed to do
        business in our state is permitted to eject or exclude any
        person from the premises of the casino’s facility solely of the
        casino’s own decision, and without any reason or excuse
        given provided that the ejection or exclusion is not founded
        on a constitutionally protected ground, such as race, creed,
        color, disability, or national origin. This is known as a
        “trespass.” If a person has been trespassed from a casino’s
        facility, but returns and gambles at the facility, the
        trespassed person is not gambling according to the rules
        applicable to that facility, and such activities do not give the
        trespassed person any property right in the money or other
        valuable thing won during such gambling.

        The jury was also asked to answer the following special

interrogatory:       “Had Troy Blackford’s trespass ban at the Prairie

Meadows facility been lifted before May 5, 2006?” The jury’s answer was
“no”.

        Blackford objected to this instruction on four grounds:               (1) that

Prairie Meadows does not have the right to withhold winnings from one

who has been involuntarily banned from the casino; (2) that even if it did

have the right, it was an affirmative defense and the burden was on

        1Blackfordsought only to recover the jackpot. He has not sought a return of the
money gambled under a rescission theory or any other theory. See, e.g., Marcangelo,
847 F. Supp. at 1229–31.
                                      11
Prairie Meadows to prove the ban; (3) that Blackford was entitled to

instructions of express and implied consent to show that the ban had

been lifted; and (4) that the instruction placed undue emphasis on the

rights of Prairie Meadows without any mention of Blackford’s rights. In

his brief, Blackford specifically states with respect to the fourth

argument that he is “not assert[ing] this argument herein.” It is therefore

waived.

      We have already disposed of his first objection. With respect to the

second objection, Blackford was required to show that he had a

possessory right to the winnings. Kendall, 424 N.W.2d at 247. To do so,

he was required to show the existence of a contractual right to the

money.    Seekamp v. Small, 237 P.2d 489, 492 (Wash. 1951).         In this

case, it is Blackford’s burden to prove the existence of a contract. Cf.

Anderson, 540 N.W.2d at 283 (holding party seeking recovery on basis of

breach of contract has the burden to prove the existence of such

contract). Thus he was required to show that Prairie Meadows extended

an offer to him. The existence of an offer was not an affirmative defense,

but a subsidiary component of an element of Blackford’s claim that he

was required to prove. 18 Am. Jur. 2d Conversion § 94, at 218 (2004)

(“Since, in order to maintain an action for conversion, the plaintiff must

have an interest in the thing converted, carrying with it a right of

possession at the time of the conversion, the burden rests on the plaintiff

to establish his or her interest, and right of possession at the time of the

conversion.” (footnotes omitted)).   The trial court properly placed the

burden on Blackford.

      Blackford’s third objection must also fail. Blackford sought, based

on the evidence produced, to have the jury instructed on express consent

and implied consent, concepts from common law trespass.           Blackford
                                         12
cites his ownership of a slot club card, the numerous times he gambled

at the facility between 1996 and May 5, 2006, and Prairie Meadows’s

ability to track its patrons’ wagering as evidence that Prairie Meadows

impliedly consented to his presence at the facility.

         Blackford, however, failed to order the transcript of the trial. Iowa

Rule of Appellate Procedure 6.803(1) provides: “If the appellant intends

to urge on appeal that a finding or conclusion is unsupported by the

evidence or is contrary to the evidence, the appellant shall include in the

record a transcript of all evidence relevant to such finding or conclusion.”

Without      the   transcript,   we   cannot   determine   whether   such   an

instruction was warranted.

         Notwithstanding the failure to provide a proper record, Blackford’s

ability to enter into a gambling contract was addressed by the

interrogatory and the jury’s finding that the ban against Blackford had

not been lifted. After analyzing all the evidence, the jury determined that

Prairie Meadows’s actions did not indicate Blackford’s “trespass ban” had

been lifted. If the ban was still in effect, no offer was extended to him,

and his claim must fail.

         IV. Conclusion.

         Because we find that Prairie Meadows had the authority to

withhold winnings from a person who had been involuntarily excluded

from the gambling facility, we affirm the district court’s entry of judgment

in favor of Prairie Meadows and dismissal of Blackford’s conversion

claim.

         DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT JUDGMENT AFFIRMED.