Metropolitan Greyhound Management Corp. v. Wisconsin Racing Board

460 N.W.2d 802, 157 Wis. 2d 678, 1990 Wisc. App. LEXIS 766, 1990 WL 145780
CourtCourt of Appeals of Wisconsin
DecidedAugust 14, 1990
Docket89-2154, 90-0454
StatusPublished
Cited by12 cases

This text of 460 N.W.2d 802 (Metropolitan Greyhound Management Corp. v. Wisconsin Racing Board) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Metropolitan Greyhound Management Corp. v. Wisconsin Racing Board, 460 N.W.2d 802, 157 Wis. 2d 678, 1990 Wisc. App. LEXIS 766, 1990 WL 145780 (Wis. Ct. App. 1990).

Opinion

FINE, J.

These consolidated appeals present two significant issues of first impression. First, whether, and under what circumstances, an applicant for a racetrack license in Wisconsin has the right to a contested-case hearing under the procedures established by secs. 227.44 through 227.50, Stats. Second, whether a trial court has authority to reconsider its decision in a review proceeding under Chapter 227 pending an appeal from that decision. We conclude that the appellants were entitled to a contested-case hearing, and that the trial court had authority to reconsider its decision. Accordingly, we reverse.

*681 I.

Metropolitan Racing Association applied for a license to own and operate a dog racing facility in Menomonee Falls, Wisconsin, pursuant to sec. 562.05(1)(a), Stats. (1987-88), and Metropolitan Greyhound Management Corporation applied for a license, to manage that facility, pursuant to sec. 562.05(1) (b), Stats. (1987-88). 1 The applications were denied by the Racing Board on June 3, 1989. 2

On April 25, 1989, the Wisconsin Racing Board, which is charged with the regulation of "racing and on-track pari-mutuel betting in this state," secs. 15.81, 562.01(2), and 562.02, Stats. (1987-88), held a public hearing on the applications, pursuant to sec. 562.05(Im), Stats. 3 Representatives of Metropolitan Racing and Metropolitan Greyhound Management spoke at the public hearing, which was attended by three of the Racing *682 Board's five members as well as by members of the public. As characterized at the hearing by Racing Board secretary and member C. David Bugher, the hearing was "held in order to allow public comment" on the proposed facility. All the parties to this appeal agree that the public hearing was not a contested-case hearing under secs. 227.44 through 227.50, Stats. Since the Racing Board's refusal to grant a contested-case hearing concerns the discussion at the public hearing that related to the ownership of Metropolitan Racing and Metropolitan Greyhound Management, review of that discussion is necessary to understand the contested-case-hearing dispute.

The first speaker at the public hearing in support of the applications was Don Carmichael, vice-chairman of Delaware North Companies, which Carmichael described as "the nation's largest owner-operator of parimutuel sports with 12 facilities across the country." According to Carmichael, the proposed Menomonee Falls facility would be owned by Metropolitan Racing, and managed by Metropolitan Greyhound Management. Steve Manion, assistant general counsel for Delaware North Companies and a director of Metropolitan Racing, explained that Metropolitan Racing was owned by Milwaukee Sportservice, a Delaware North subsidiary, and that Metropolitan Greyhound Management was owned by Thomas Shehan and his wife. Thomas Shehan told those attending the public hearing that "I have my own firm which would manage the Menomonee Falls facility under contract to Delaware North, the owner and operator of the proposed facility." Noting that he would report to the proposed facility's board of directors, he added that " [t]here will be a close working relationship between my company and Delaware North." Later, in response to questions posed by Kurt N. Schacht, the *683 Racing Board's chief counsel, Shehan indicated that he was "not sure" who the directors of his corporation were, but contended that he was in charge as "the,president and the owner." The following colloquy between Schacht and Shehan revealed some uncertainty as to the actual chain of command: *684 Phillips explained that Delaware North was the guarantor of the bank loans that would underwrite the operation's overall financing. When racing board chief counsel Schacht noted that in his view this indicated that Delaware North not only had "apparent management control" over Metropolitan Racing and Metropolitan Greyhound Management but had "financial control" over them as well, Peter Peshek, counsel for Metropolitan Racing, responded that he did not think Schacht's conclusion was "a fair characterization of the record."

*683 MR. SCHACHT: What I am trying to establish is, to who does — to whom does Mr. Shehan report to as an officer of the company?
MR. SHEHAN: In my testimony I testified that I would report to the directorship.
MR. SCHACHT: And the directors at this point are the two members of the Delaware North Company?
MR. SHEHAN: Right.
MR. PHILLIPS: 4 No. Let's get that clarified. I believe Mr. Shehan testified that he is the owner of the management corporation and the president of that, and he will be responsive to the directors of the Racing Association, the owner of the property. The Delaware North or Mr. Michels or Mr. Manion will not have any directorships in the management corporation that Mr. Shehan owns 100 percent of. 5
MR. SCHACHT: The — currently the directors of the corporation as disclosed to us.
MR. PHILLIPS: If that's the case, that will be corrected. They will not be directors of the corporation. 6

*684 Schacht's concern over the relationships between Delaware North, Metropolitan Racing, and Metropolitan Greyhound Management was reflected in the Racing Board's decision to deny the applications. The Racing Board gave five reasons for the denial:

—The Racing Board determined that there was insufficient disclosure concerning the directors and officers of Metropolitan Greyhound Management Corporation, and that this violated Wis. Adm. Code sec. Race 5.04(2).
—The Racing Board determined that "Thomas Shehan would hold both the offices of President and Secretary of Metropolitan Greyhound Management, in violation of both Wisconsin Statute and the bylaws of Metropolitan Greyhound Management Corporation," and that this violated certain provisions of the Wisconsin Administrative Code. Additionally, the Racing Board found "that the disclosures by the applicants relating to the identities of the directors of *685 Metropolitan Greyhound Management Corporation were inadequate to properly assess corporate organization and control."
—The Racing Board found that there were "discrepancies and vacillations in the information submitted by the applicants to the Board relating to the identity of the officers and directors of the company and . . . inconsistencies in the oral testimony of the applicants relating to such matters," and that this violated Wis. Adm. Code sec. Race 5.20.

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Bluebook (online)
460 N.W.2d 802, 157 Wis. 2d 678, 1990 Wisc. App. LEXIS 766, 1990 WL 145780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/metropolitan-greyhound-management-corp-v-wisconsin-racing-board-wisctapp-1990.