Pen-Yan Investment, Inc. v. Boyd Kansas City, Inc.

952 S.W.2d 299, 1997 Mo. App. LEXIS 1492, 1997 WL 520826
CourtMissouri Court of Appeals
DecidedAugust 26, 1997
DocketWD 53038
StatusPublished
Cited by13 cases

This text of 952 S.W.2d 299 (Pen-Yan Investment, Inc. v. Boyd Kansas City, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pen-Yan Investment, Inc. v. Boyd Kansas City, Inc., 952 S.W.2d 299, 1997 Mo. App. LEXIS 1492, 1997 WL 520826 (Mo. Ct. App. 1997).

Opinion

EDWIN H. SMITH, Presiding Judge.

This is an appeal by the Missouri Gaming Commission (the Commission) from a summary judgment for Pen-Yan Investment Inc., d/b/a B & G Amusement & Vending Co. (respondent) and the denial of the Commission’s motion to dismiss respondent’s first amended petition as to Counts II and III. In granting respondent’s motion for summary judgment, the trial court declared invalid and unenforceable 11 C.S.R. 45-5.050(4)(E), a regulation promulgated by the Commission. This regulation prohibits holders of Class A and B Missouri gaming licenses granted by the Commission from, inter alia, socializing or transacting business with convicted felons.

Respondent, a company in the amusement and vending service business, entered into a service agreement with Boyd Kansas City, Inc., d/b/a Sam’s Town Kansas City (Boyd), who was engaged in a riverboat gambling operation in Kansas City, Missouri, commonly referred to as Sam’s Town Casino, for which Boyd held Class A and B Missouri gaming licenses. Charles C. Bengimina, a convicted felon, participated in the negotiation of the service agreement on behalf of his employer, respondent. Based on the service agreement and Charles C. Bengimina’s participation in its negotiation, the Commission commenced a disciplinary action against Boyd for violating 11 C.S.R. 45-5.050(4)(E). In response to Boyd terminating its agreement with respondent as a result of the disciplinary action, respondent filed its petition for declaratory judgment, injunctive relief, and damages against the Commission and Boyd seeking, inter alia, to have the regulation declared invalid and unenforceable; or in the alternative, to have the regulation declared inapplicable to respondent, and, in either case, enjoining the Commission from preventing respondent from transacting business with Boyd or any other Class A and B licensees.

On appeal, the Commission alleges that the trial court erred: (1) in granting respondent’s motion for summary judgment declaring 11 C.S.R. 45-5.050(4)(E) invalid and unenforceable because the Commission did not exceed its statutory authority in promulgating the regulation; and, (2) in overruling the Commission’s motion to dismiss respondent’s first amended petition as to Counts II and III for lack of jurisdiction, because § 313.840.2 1 as to the review of the Commission’s decisions, grants exclusive jurisdiction to the Missouri Court of Appeals, Western District, and because respondent had not exhausted its administrative remedies.

We reverse and remand.

Facts

The facts in this case are not in dispute. Respondent is a Missouri corporation engaged in the amusement and vending service business. Its sole officer, director and shareholder is Peter Bengimina. Boyd is a Missouri corporation engaged in the business of riverboat gambling at its casino, Sam’s Town, in Kansas City, Missouri.

On or about July 1, 1995, respondent and Boyd entered into a service agreement, negotiated in part by respondent’s employee, Charles C. Bengimina, for respondent to place cigarette, video arcade and amusement machines in Sam’s Town, for which Boyd held Class A and B Missouri gaming licenses. Charles C. Bengimina is a convicted felon, having been convicted in 1988 of bankruptcy fraud in the United States District Court for the Western District of Missouri.

As agreed, respondent placed amusement and vending machines in Sam’s Town. Thereafter, on or about September 29, 1995, Boyd’s counsel advised respondent by facsimile transmission that it was terminating then-agreement effective October 15, 1995, because it had been advised by the Commission *302 that the transaction of business with respondent was or could be a violation of 11 C.S.R. 45.5.050(4)(E). On November 16, 1995, the Commission filed a disciplinary action against Boyd alleging that it violated 11 C.S.R. 45-5.050(4)(E) in that it had “associated in business affairs with a person, [Charles C.] Ben-gimina, who [had] acted as an agent and employee of [respondent] and who [had] a felony police record.” As part of its complaint, the Commission proposed the following penalties:

17. THEREFORE, under Section 313.805(6) R.S.Mo. it is proposed that an administrative penalty of $25,000 be imposed upon [Boyd] for the violation cited herein.
18. It is further proposed that [Boyd] shall not collect or distribute any funds pursuant to the Agreement or the oral agreement or allow the operation of the Machines within [Boyd’s] riverboat gaming operation while the Machines are owned or controlled by [respondent].
19. It is further proposed that if, after December 1, 1995, [Boyd] is not in compliance with paragraph 18 its license shall be suspended.

On this same day, counsel for Boyd advised respondent by facsimile transmission to remove all its machines from Sam’s Town by November 22,1995.

On November 20, 1995, in response to Boyd’s termination of the service agreement resulting from the filing of the complaint for disciplinary action, respondent filed a petition for declaratory judgment, injunctive relief and damages against the Commission and Boyd. Respondent’s request for a temporary restraining order restraining Boyd from, inter alia, removing its machines from Sam’s Town was denied on December 1, 1995. On December 9, 1995, respondent filed its first amended petition alleging six counts, Counts I—III against the Commission and the remaining counts against Boyd. In Count I, respondent requested a declaratory judgment declaring 11 C.S.R. 45-5.050(4) invalid and unenforceable. In Count II, respondent requested a declaratory judgment declaring that Boyd and other licensees were not prohibited by § 313.812 and 11 C.S.R. 45-5.050(4) from transacting business with respondent. In Count III, respondent sought to restrain the Commission from enforcing 11 C.S.R. 45-5.050(4) against Boyd or other licensees transacting business with it. Counts IV-VI dealt with respondent’s request for declaratory judgment, injunctive relief, and damages against Boyd.

On February 22, 1996, respondent filed a motion for summary judgment as to Count I only. On May 3, 1996, the Commission filed an answer to and motion to dismiss respondent’s first amended petition. On June 5, 1996, the trial court entered summary judgment for respondent as to Count I, declaring that 11 C.S.R. 45-5.050(4)(E) was invalid and unenforceable because in promulgating the regulation the Commission exceeded its statutory authority. Further, although not part of the relief requested in Count I, the subject of respondent’s motion for summary judgment, the trial court permanently restrained the Commission from enforcing the regulation. On June 14, 1996, the trial court denied the Commission’s motion to dismiss. On July 9,1996, on the Commission’s motion, the trial court amended its order of summary judgment and order denying the Commission’s motion to dismiss “to include the express determination under Rule 74.01(b) that there is no just reason for delay.”

This appeal by the Commission follows.

I.
Standard of Review

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Bluebook (online)
952 S.W.2d 299, 1997 Mo. App. LEXIS 1492, 1997 WL 520826, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pen-yan-investment-inc-v-boyd-kansas-city-inc-moctapp-1997.