Amusement Sales, Inc. v. State

730 S.E.2d 430, 316 Ga. App. 727, 2012 Fulton County D. Rep. 2369, 2012 Ga. App. LEXIS 646
CourtCourt of Appeals of Georgia
DecidedJuly 11, 2012
DocketA12A0200
StatusPublished
Cited by7 cases

This text of 730 S.E.2d 430 (Amusement Sales, Inc. v. State) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amusement Sales, Inc. v. State, 730 S.E.2d 430, 316 Ga. App. 727, 2012 Fulton County D. Rep. 2369, 2012 Ga. App. LEXIS 646 (Ga. Ct. App. 2012).

Opinion

BARNES, Presiding Judge.

In this civil in rem forfeiture action arising out of allegations of illegal commercial gambling at a convenience store, the jury found in favor of the State of Georgia, resulting in the forfeiture of eight electronic game machines and a portion of the money found in those machines to the State. The trial court entered judgment on the jury verdict, and Amusement Sales, Inc., the owner of the machines, now appeals. In several enumerations of error, Amusement Sales contends that it was entitled to judgment as a matter of law because the State failed to demonstrate that illegal commercial gambling had occurred, and because it had no actual or constructive knowledge of the alleged gambling. Amusement Sales further contends that the trial court erred in denying its motion to disqualify the special assistant district attorneys (“SADAs”) appointed to prosecute the action on a contingency fee basis. Lastly, Amusement Sales contends that the trial court erred in its charge to the jury on the “innocent party” defense.

As discussed below, we reject Amusement Sales’s contention that it was entitled to judgment as a matter of law on the State’s forfeiture [728]*728claim. However, we conclude that contingency fee arrangements for SADAs appointed to represent the State in civil forfeiture actions violate Georgia public policy, given that those types of arrangements cause the SADAs to have a personal financial stake in the outcome of the proceedings. Consequently, we agree with Amusement Sales that its motion to disqualify should have been granted, and, as a result, we reverse the judgment and remand the case for a new trial. In the interest of judicial economy, we also address the trial court’s jury charge on the “innocent party” defense and conclude that a different charge should be given on retrial.

The pertinent factual and procedural history is as follows. Pursuant to Georgia’s Racketeer Influenced and Corrupt Organizations Act (the “RICO Act”), OCGA § 16-14-1 et seq., the State of Georgia filed a complaint in the Superior Court of Emanuel County, alleging that a local convenience store known as KT’s Place had made illegal cash payouts to customers who played electronic game machines located on the premises. The State alleged that the machines were gambling devices, that the store was being operated as a gambling place, and that the felony crime of commercial gambling had repeatedly occurred on the premises in violation of OCGA § 16-12-22. The State further alleged that the criminal acts of commercial gambling constituted a pattern of racketeering activity under OCGA § 16-14-3 (8) (A) and (9) (A) (xvii). Based upon these allegations in the complaint, the State sought in rem forfeiture of eight electronic game machines and money seized from those machines by law enforcement officials on the ground that the property was “used or intended for use in the course of, derived from, or realized through the foregoing pattern of racketeering activity.”1 See OCGA § 16-14-7 (a).

The complaint was filed on behalf of the State by Andrew J. Ekonomou and Michael G. Lambros, whom the District Attorney for the Middle Judicial Circuit of Georgia had appointed as SADAs to pursue the State’s forfeiture claims against a number of convenience stores. The SADAs were in private practice and entered into a contingency fee arrangement with the State to prosecute and recover a percentage of any forfeited proceeds.

Amusement Sales answered the complaint and made a claim for the property seized from the convenience store. Amusement Sales leased the electronic game machines to the store and claimed ownership of the machines and the money seized from them. According to [729]*729Amusement Sales, the machines were bona fide coin-operated amusement machines under OCGA §§ 16-12-35 (d) and 48-17-1 (2) rather than gambling devices, and it was an innocent party that had no actual or constructive knowledge of illegal cash payouts made to store customers. Consequently, Amusement Sales asserted that the machines and money were not subject to forfeiture and should be returned to it by the State.

Amusement Sales also filed a motion to disqualify the SADAs from prosecuting the case, contending that their contingency fee arrangement created an impermissible conflict of interest and that Emanuel County had never properly approved of their appointment or compensation. The trial court denied the motion, and the case proceeded to a jury trial, with SADA Lambros serving as lead attorney for the State.

Piyush Patel, the owner and operator of the convenience store, testified at trial as a State’s witness. He conceded that he knew that customers playing the eight electronic game machines inside his store were supposed to be rewarded exclusively with noncash gift merchandise when they won a game. Patel admitted, however, that he instead rewarded winning customers with illegal cash payouts on a daily basis for at least two years prior to the seizure of the machines by law enforcement. According to Patel, the highest single cash payout he made to a customer was $500. He further testified that he purchased gift merchandise from Amusement Sales for use in his store only one time during the years that the machines were located there.

Robert Jue, an employee of Amusement Sales, described for the jury how the electronic game machines inside the convenience store were played. Jue testified that the machines would show combinations of “fruit or numbers” on wheels spinning on the screen, and a player would insert cash into the machine to play and punch a button to stop the wheels. The player would win or lose based on the combination of symbols appearing on the screen once the wheels stopped. According to Jue, a player would just punch the button on the machine, “and whatever comes up[,] comes up.”

Jue was in a position to know how the machines were played because he traveled to the convenience store every other week to collect 30 percent of the net profits from the machines, the amount owed to Amusement Sales under its arrangement with the store. To determine the amount of net profits owed to Amusement Sales, Jue would print out an “audit ticket” from each of the machines and “add up the net profit” shown on the tickets. Although Jue claimed that he was unaware that Patel allowed customers to redeem their winnings for cash rather than gift merchandise, he conceded that he ignored all [730]*730information on the audit tickets pertaining to the issue of winnings. Jue admitted that he did not “bother” with reviewing that type of information because his “job [was] just to collect 30 percent for the company on net profit.”

The owner of Amusement Sales, Rudolph Bairas, also testified. He testified that the eight electronic game machines in the convenience store netted a profit of $331,658 in cash over a thirteen-month period. The net profit was divided between Amusement Sales, which received 30 percent, and the store, which received 70 percent.

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Cite This Page — Counsel Stack

Bluebook (online)
730 S.E.2d 430, 316 Ga. App. 727, 2012 Fulton County D. Rep. 2369, 2012 Ga. App. LEXIS 646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amusement-sales-inc-v-state-gactapp-2012.