Metis TPS v. Cal. Dept. of Public Health etc. CA2/2 ( 2021 )

Filed 4/2/21 Metis TPS v. Cal. Dept. of Public Health etc. CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
METIS TPS, LLC, B302776
Defendant and Appellant, (Los Angeles County
Super. Ct. Nos.
v. 18STCV00408,
18STCV04552)
CALIFORNIA DEPARTMENT
OF PUBLIC HEALTH, OFFICE ORDER MODIFYING
OF PROBLEM GAMBLING, OPINION
Defendant and NO CHANGE IN
Respondent. JUDGMENT
THE COURT:*
IT IS HEREBY ORDERED that the opinion filed herein on
March 3, 2021, be modified as follows:
1. On page 2, line 7, “Metis TPS LLC” should be “Metis
TPS, LLC.”
2. On page 2, footnote 2, “Pubic” should be “Public.”
3. On page 3, lines 13-14, “problem gambling and
prevention” should be “problem gambling prevention.”
4. On page 3, line 14, delete the quotation mark after
“services.”
5. On page 5, line 7, “CGCC-07” should be “CGCC-037.”
6. On page 6, line 8, “$1,293,0000” should be “$1,293,000.”
7. On page 6, line 13, “problem gambling and prevention”
should be “problem gambling prevention.”
8. On page 8, footnote 8, add a closing quotation mark at
the end of the footnote after “winnings.”
There is no change in judgment.
_______________________________________________________
* LUI, P. J. ASHMANN-GERST, J. CHAVEZ, J.
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Filed 3/3/21 Metis TPS v. Cal. Dept. of Public Health etc. CA2/2 (unmodified opinion)
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
METIS TPS, LLC, B302776
Defendant and Appellant, (Los Angeles County
Super. Ct. No. 18STCV00408 &
v. 18STCV04552)
CALIFORNIA DEPARTMENT OF
PUBLIC HEALTH, OFFICE OF
PROBLEM GAMBLING,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Michael P. Linfield, Judge. Affirmed.
Sheppard, Mullin, Richter & Hampton, Tracey A. Kennedy,
Ryan J. Krueger and Adria K. Harris for Defendant and
Appellant.
Xavier Becerra, Attorney General, Sara J. Drake, Senior
Assistant Attorney General, T. Michelle Laird, Supervising
Deputy Attorney General, James G. Waian, Deputy Attorney
General, for Defendant and Respondent.
This appeal concerns entitlement to $1,293,000 won by
Tommy Ngo (Ngo) at the Commerce Casino, a gambling
establishment operated by plaintiff California Commerce Club,
Inc. (Commerce). At the time Ngo won the $1,293,000, he was on
a state-wide gambling self-exclusion list. A dispute arose over
payment of the winnings, and Commerce filed an action for
interpleader and declaratory relief against Ngo, Metis TPS LLC
(Metis), and the California Department of Public Health, Office of
Problem Gambling (OPG). The trial court ruled that OPG is the
only party with a viable claim to the interpleaded funds and
issued an order granting OPG’s motion for judgment on the
pleadings. Metis appeals from that order.
THE PARTIES
Metis is a third-party provider of proposition player
services and acts as the “bank” or “house” for gaming activities at
the Commerce Casino. (Bus. & Prof. Code, § 19984.)1 OPG was
established under section 4369 of the Welfare and Institutions
Code2 and is charged with developing and providing statewide
prevention and treatment programs and services to address
gambling disorders. (Welf. & Inst. Code, §§ 4369, 4369.2;
https://www.cdph.ca.gov/Programs/OPG/Pages/about-opg.aspx)
1 Because California law prohibits Commerce Casino, a non-
tribal casino, from having a stake in the games that it offers (Pen.
Code, §§ 330, et seq.), it retained Metis to provide proposition
player services. (Bus. & Prof. Code, § 19984.)
2 Welfare and Institutions Code section 4369 states: “There
is within the State Department of Pubic Health, the Office of
Problem Gambling.”
2
BACKGROUND
Ngo won $1,293,000 playing baccarat at the Commerce
Casino on September 28, 2017. Ngo had previously executed, on
May 21, 2008, a voluntary self-exclusion request form pursuant
to California Code of Regulations, title 4, section 124643 allowing
him to exclude himself from gambling establishments. Ngo’s self-
exclusion request form was received by the Bureau of Gambling
Control on May 27, 2008. In his self-exclusion request form, Ngo
agreed that should he attempt to use the services of a gambling
establishment, “any winnings or prizes I may have accrued or
losses recovered will be confiscated and remitted by the Gambling
Establishment or participating gambling facility for deposit into
the Gambling Addiction Program Fund for problem gambling and
prevention and treatment services” through the Department of
Alcohol and Drug Programs, Office of Problem and Pathological
Gambling.”4
Metis paid Ngo his $1,293,000 in baccarat winnings in
chips. When Ngo attempted to exchange the chips for cash at the
Commerce Casino, Commerce determined that Ngo was on the
statewide self-exclusion list and confiscated Ngo’s winnings.
Commerce filed a complaint in interpleader and for
declaratory relief in October 2018 against Ngo, Metis, and OPG.
The case was consolidated with an action Ngo had filed against
Commerce for damages and punitive damages.
3 All further references to regulations are to title 4 of the
California Code of Regulations.
4 The Office of Problem and Pathological Gambling is the
predecessor agency to OPG. (See former Welf & Inst. Code,
§ 4369; Stats. 2003, ch. 210 (A.B. 673, § 3.)
3
OPG filed a motion for judgment on the pleadings as to
Commerce’s declaratory relief claim, arguing that it was the only
party with a viable claim to the $1,293,000. The trial court
granted OPG’s request for judicial notice of Ngo’s self-exclusion
form. The trial court concluded, “[b]ased on the allegations in the
First Amended Interpleader Complaint and the judicially noticed
matters demonstrating Ngo’s participation in the Self-Exclusion
Request, there are not sufficient facts alleged to demonstrate that
Ngo, Metis, and [OPG] are all subject to conflicting viable claims
to the Interpleaded Funds. Rather, only [OPG] has a viable claim
to the Interpleaded Funds.” The court ruled that the
interpleader complaint failed to state a cause of action against
the interpleader defendants and granted OPG’s motion for
judgment on the pleadings. This appeal by Metis followed.
DISCUSSION
I. Standard of review
A motion for judgment on the pleadings is reviewed de
novo, and all properly pleaded material facts are deemed to be
true. (Adams v. Bank of America, N.A. (2020) 51 Cal.App.5th
666, 670.)
II. Statewide self-exclusion program
To assist those with gambling disorders and to promote the
prevention of problem gambling, the State of California, in
cooperation with California gambling establishments, has
implemented a program for responsible gambling. (Cal. Code
Regs., tit. 4, ch. 7.) The program for responsible gambling
includes a patron self-exclusion program. (§ 12460 et seq.) The
self-exclusion program allows those who may be engaging in
problem gambling to execute a self-exclusion form, thereby
4
placing themselves on a statewide self-exclusion list maintained
by the Bureau of Gambling Control. (§§ 12460, subd. (a), 12464.)
The current implementing regulations for the self-exclusion
program provide in pertinent part: “Licensees5 shall implement a
program that allows patrons to exclude themselves from
gambling establishments using a form entitled Self-Exclusion
Request, form CGCC-07 (Rev. 07/17), attached in Appendix A to
this chapter. That program shall contain, at a minimum, the
following: [¶] . . . [¶] Policies and procedures for the forfeiture of
any unredeemed jackpots or prizes won by an excluded person
and the remittance of the combined value for deposit into the
Gambling Addiction Program Fund for problem gambling
prevention and treatment services through the State Department
of Public Health, Office of Problem Gambling . . . .” (§ 12464,
subd. (a)(5).)
III. Standing
We reject OPG’s argument that Metis lacks standing to
appeal. To have standing to appeal, a person generally must be a
party of record and sufficiently aggrieved by the judgment or
order. (Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th
289, 295.) “One is considered ‘aggrieved’ whose rights or
interests are injuriously affected by the judgment.” (County of
Alameda v. Carleson (1971) 5 Cal.3d 730, 737.) Metis meets both
criteria.
Metis was a party of record in the interpleader action. Its
answer to the interpleader complaint includes statements
asserting its right of recovery against OPG and Ngo. OPG’s
disagreement with the legal basis for Metis’s claimed entitlement
5 A licensee is the holder of a license to operate a gambling
business. (§§ 12220, subd. (b)(13), 12233-12239.)
5
to the interpleaded funds does not deprive Metis of standing to
challenge the trial court’s order. Metis is sufficiently aggrieved
by the order granting OPG’s motion for judgment on the
pleadings and releasing the interpleaded funds to OPG.
IV. Disposition of interpleaded funds
The trial court properly determined that Metis has no
viable claim to the interpleaded funds. The terms of the self-
exclusion form executed by Ngo require the $1,293,0000 to be
forfeited to OPG. Ngo expressly agreed that “any winnings or
prizes I may have accrued or losses recovered will be confiscated
and remitted by the Gambling Establishment or participating
gambling facility for deposit into the Gambling Addiction
Program Fund for problem gambling and prevention and
treatment services . . . .” The Gambling Addiction Program Fund
is currently managed and maintained by OPG. (§ 12464, subd.
(a)(5).)
Metis does not dispute that Ngo executed the self-exclusion
form, that Ngo was on the statewide self-exclusion list at the time
he won $1,293,000 at the Commerce Casino, that the Commerce
Casino is a gambling establishment, or that the $1,293,000 are
properly characterized as “winnings.” The terms of Ngo’s self-
exclusion form are controlling and govern the disposition of the
$1,293,000 in interpleaded funds.
We reject Metis’s contention that the terms of Ngo’s self-
exclusion form alone do not govern disposition of the interpleaded
funds because a factual issue exists as to whether Commerce
Casino had implemented a program with policies and procedures
requiring forfeiture of the $1,293,000 to OPG. Metis bases its
argument on implementing regulations that require gambling
establishments such as Commerce Casino to “implement a
6
program that allows patrons to exclude themselves from
gambling establishments” by using a self-exclusion request form.
(§ 12464, subd. (a).) Metis’s argument fails because those
regulations require such self-exclusion programs to contain
policies and procedures for the forfeiture of an excluded person’s
winnings and remittance of the winnings to OPG.
The implementing regulations in effect at the time Ngo won
the $1,293,000 state that a gambling establishment’s self-
exclusion program must contain “[p]olicies and procedures for the
forfeiture of any unredeemed jackpots or prizes won by an
excluded person and the remittance of the combined value for
deposit into the Gambling Addiction Program Fund for problem
gambling prevention and treatment services through the State
Department of Public Health, Office of Problem Gambling.”
(§ 12464, subd. (a)(5).)6 The regulations require forfeiture of an
excluded person’s winnings and remittance to OPG. No factual
issue exists as to whether the $1,293,000 in winnings forfeited by
Ngo, an excluded person, should be remitted to OPG.
We also reject Metis’s argument that there is a factual
issue as to whether the $1,293,000 constitutes an “unredeemed
jackpot” or “prize” subject to forfeiture and remittance to OPG
6 The regulations in effect in 2008, when Ngo executed his
self-exclusion form, similarly required the self-exclusion program
to contain “policies and procedures for the forfeiture of any money
or prizes won or any losses recovered by an excluded person and
the remittance of such for deposit into the Gambling Addiction
Program Fund for problem gambling prevention and treatment
services through the Department of Alcohol and Drug Programs
Office of Problem and Pathological Gambling.” (former § 12464,
subd. (a)(4).)
7
under the implementing regulations.7 Metis admitted in its
answer to the interpleader complaint that Ngo won a jackpot
while playing baccarat at the Commerce Casino. Metis also
affirmatively alleged in its answer to the complaint that Ngo
“won a jackpot in the amount of the Interpleaded Funds.”
Metis argues that it should have been allowed to amend its
answer to retract these admissions. Metis did not, however, file a
motion for leave to amend its answer, and the trial court did not
rule on such a motion.8 We therefore decline to consider the
argument.
7 A “jackpot” is defined in the regulations as “a gaming
activity where the prize is awarded based on specified criteria
occurring in the play of a controlled game.” (§ 12002, subd. (t).)
A “controlled game” is defined in the Penal Code as “any poker or
Pai Gow game, and any other game played with cards or tiles, or
both, and approved by the Department of Justice, and any game
of chance, including any gambling device, played for currency,
check, credit ,or any other thing of value that is not prohibited
and made unlawful by statute or local ordinance.” (Pen. Code,
§ 337j, subd. (e)(1); Bus. & Prof. Code, § 19805, subd. (g).)
8 The record shows that Metis unsuccessfully sought to
obtain a stipulation by the parties allowing it to amend its
answer. In its opposition to the motion for judgment on the
pleadings, Metis stated: “Metis is in the process of amending its
Answer with respect to this [jackpot] allegation. To the extent
the Court considers granting the OPG’s Motion on the basis of
Metis’ Answer, Metis requests leave to amend its Answer with
respect to the nature of Ngo’s winnings.
8
DISPOSITION
The order granting the motion for judgment on the
pleadings is affirmed. OPG shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
____________________________, J.
CHAVEZ
We concur:
__________________________, P. J.
LUI
__________________________, J.
ASHMANN-GERST
9