Pre-Paid Solutions, Inc. v. City of Little Rock

34 S.W.3d 360, 343 Ark. 317, 2001 Ark. LEXIS 4
CourtSupreme Court of Arkansas
DecidedJanuary 11, 2001
Docket00-794
StatusPublished
Cited by20 cases

This text of 34 S.W.3d 360 (Pre-Paid Solutions, Inc. v. City of Little Rock) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pre-Paid Solutions, Inc. v. City of Little Rock, 34 S.W.3d 360, 343 Ark. 317, 2001 Ark. LEXIS 4 (Ark. 2001).

Opinion

DONALD L. Corbin, Justice.

The issue in this case is whether a certain type of telephone-card vending machine is an illegal gambling device or a lottery. Appellants PrePaid Solutions, Inc., and Grady Bowers filed a petition in the Pulaski County Circuit Court seeking a declaratory judgment that the machine is not a gambling device, under Ark. Code Ann. § 5-66-104 (Repl. 1997), or a lottery, under Article 19, Section 14, of the Arkansas Constitution. Appellants also sought an injunction to prevent Appellees, the City of Little Rock; the Pulaski County Prosecuting Attorney; and the Pulaski County Sheriff, from raiding Appellants’ businesses and attempting to prohibit persons from playing the games on these machines. The trial court denied Appellants’ requested relief and found that the machine is prohibited by law, either as an illegal gambling device or a lottery. Because this appeal presents an issue of substantial public interest, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2 (b)(4). We find no error and affirm.

The record reflects that Appellant Bowers operates a video rental store in Little Rock, where he had proposed installing telephone-card vending machines supplied by Appellant Pre-Paid Solutions, Inc. The machines operate as follows. A patron places a $1 bill in the machine, and the machine prints an “Emergency Long Distance Telephone Card” good for three minutes of long distance. At the same time, the machine registers a number of play credits. The patron may then play a game on the machine “similar to tictac-toe on a 3 x 3 matrix consisting of various symbols which may be lined up for additional points.” These points may then be redeemed for a cash prize ranging from $1 to $1,000. Additionally, after using the prepaid telephone card, the patron may mail the used card to Appellants for a supplemental drawing for various prizes such as electronics or airline tickets. If a patron does not wish to purchase a telephone card but still wants to play the game, he or she may use one of the self-addressed, stamped post cards provided at the store and mail it to Appellants for a free-play certificate. A patron may then redeem the free-play certificate for a $1 bill to play the game.

The record reflects numerous motions and briefs filed by all parties. Particularly, Appellants filed a motion for summary judgment, and, likewise, Appellee Larry Jegley, Pulaski County Prosecuting Attorney, filed a motion for summary judgment. During the hearings on the motions, the trial court received testimony from two witnesses, Appellant Bowers and Daniel Jester, director of business development for Appellant Pre-Paid Solutions, Inc. The trial court also viewed a demonstration of the machine. Based upon the evidence received, the trial court granted Appellee Jegley’s motion for summary judgment. The trial judge found that the machine was an illegal gambling device, reasoning: “I am convinced that this is a slot machine, that it is just pure and simple something that looks like, sounds like, acts like, works like a slot machine is a slot machine. And I think that’s what this is[.]” Appellants now appeal this finding.

Before we address the merits of Appellants’ arguments we must clarify the nature of the trial court’s order. Appellants view the order as one granting summary judgment, and they urge us to review it as such. We believe that Appellants’ characterization of the order is inaccurate for two reasons. First, the language of the order goes beyond the grant of summary judgment to Appellee Jegley, denying all relief requested by Appellants. Second, it is undisputed that the trial court received testimony from two witnesses and also viewed an in-court demonstration of Appellants’ machine. This court has consistently held that where, in a summary-judgment hearing, the trial court goes beyond the type of evidence provided in Ark. R. Civ. P. 56(c) and receives oral testimony, the matter is converted from a proceeding for summary judgment to a bench trial. See Hannon v. Armorel Sch. Dist. #9, 329 Ark. 267, 946 S.W.2d 950 (1997); Honeycutt v. City of Fort Smith, 327 Ark. 530, 939 S.W.2d 306 (1997). Accordingly, we review the judgment in this case as that resulting from a bench trial.

Our standard of review on appeals from bench trials is whether the trial judge’s findings were clearly erroneous or clearly against the preponderance of the evidence. See Ark. R. Civ. P 52(a); Arkansas Transit Homes, Inc. v. Aetna Life & Cas., 341 Ark. 317, 16 S.W.3d 545 (2000); Neal v. Hollingsworth, 338 Ark. 251, 992 S.W.2d 771 (1999). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id. We view the evidence in a light most favorable to the appellee, resolving all inferences in favor of the appellee. Id. Disputed facts and determinations of witness credibility are within the province of the factfinder. Id.

Appellants contend that the games on their machines are merely promotional sweepstakes similar to those offered by McDonald’s, Burger King, or Pepsi Cola. They argue that because they allow a patron to play the game for free, the element of consideration is missing and, thus, the game is not a lottery under Article 19, Section 14, of the Arkansas Constitution. They also argue that because no consideration is given, a patron does not risk anything of value by playing the game. We disagree.

This court has defined gaming or gambling as “the risking of money, between two or more persons, on a contest or chance of any kind, where one must be loser and the other gainer.” State v. Torres, 309 Ark. 422, 425, 831 S.W.2d 903, 905 (1992) (quoting Portis v. State, 27 Ark. 360, 362 (1872)). Similarly, a gambling device is “an invention to determine the question as to who wins and who loses, that risk their money on a contest or chance of any kind.” Portis, 21 Ark. at 362. Our Criminal Code prohibits certain types of gaming. See Ark. Code Ann. §§ 5-66-101 to -119 (Repl. 1997). Particularly, section 5-66-104 prohibits gambling or gaming devices:

Every person who shall set up, keep, or exhibit any gaming table or gambling device ... designed for the purpose of playing any game of chance, or at which any money or property may be won or lost, shall be deemed guilty of a misdemeanor and on conviction shall be fined in any sum not less than one hundred dollars ($100) and may be imprisoned any length of time not less than thirty (30) days nor more than one (1) year. [Emphasis added.]

Similarly, section 5-66-106 prohibits any person from “betting any money or other valuable thing or any representative of any thing that is esteemed of value” on any game prohibited under section 5-66-104.

This court has had few opportunities to interpret section 5-66-104 and its predecessors. Notwithstanding, two cases decided by this court are controlling of the issue in the present case: Rankin v. Mills Novelty Co., 182 Ark. 561,

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Bluebook (online)
34 S.W.3d 360, 343 Ark. 317, 2001 Ark. LEXIS 4, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pre-paid-solutions-inc-v-city-of-little-rock-ark-2001.