Florida Eash v. Imperial Palace of Mississippi ( 2007 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2007-SA-02063-SCT
FLORIDA EASH
v.
IMPERIAL PALACE OF MISSISSIPPI, LLC
DATE OF JUDGMENT: 10/30/2007
TRIAL JUDGE: HON. ROGER T. CLARK
COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: PAUL M. NEWTON, JR.
JONATHAN B. FAIRBANK
ATTORNEYS FOR APPELLEE: SCOTT E. ANDRESS
BRITT R. SINGLETARY
H. R. WILDER
TARA PIERRE ELLIS
RONALD G. PERESICH
RONALD G. PERESICH, JR.
NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION: AFFIRMED - 02/12/2009
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE GRAVES, P.J., RANDOLPH AND PIERCE, JJ.
GRAVES, PRESIDING JUSTICE, FOR THE COURT:
¶1. This is a patron dispute between Florida Eash and the Imperial Palace Casino
(Imperial Palace). Eash was playing a slot machine at Imperial Palace and hit a winning
combination. She subsequently initiated a patron dispute over the award for her winning
play. The Mississippi Gaming Commission (the Commission) made a final decision in favor
of Eash. Imperial Palace sought judicial review, and the circuit court reversed the final
decision of the Commission. Aggrieved by this decision, Eash appeals to this Court.
FACTS
¶2. On February 19, 2006, Florida Eash was playing a $5 Double Top Dollar slot machine
at the Imperial Palace Casino in Biloxi, Mississippi. It was the first time that Eash had
played this particular machine, and she testified that she did not read the instructions or the
description of the possible awards listed on the front of the machine before playing. A patron
could play this machine with one or two five-dollar credits wagered. After several plays, and
with two five-dollar credits wagered, Eash hit a winning combination – three double diamond
symbols lined up on the single pay line. After Eash hit the winning combination, the
following words scrolled across the electronic display on the machine (also referred to as the
“door VFD 1 ”): “Hand Pay Jackpot 200,000 credits.” The keypad LCD 2 (also referred to as
the “NexGen display”) showed that the winnings totaled $1,000,000. Eash and the other
patrons around her thought that she had won $1,000,000. However, the front of the Double
Top Dollar machine (also referred to as the “belly glass” or the “awards glass”) displayed the
permanent rules and instructions of the game, and it stated that the maximum award on that
1
Vacuum fluorescence display.
2
Liquid crystal display.
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particular machine was $8,000.3 Nothing on the machine indicated that a patron could win
more than $8,000.4
¶3. When Eash hit the winning combination, staff members of the Imperial Palace were
notified of the win and approached Eash and the machine. In order to disperse the crowd that
had gathered, a staff member cleared the keypad LCD showing the $1,000,000 win. Agent
Daniel Pearson of the Commission’s Enforcement Division was called in to investigate.
Imperial Palace staff members informed Eash that she would be paid only $8,000 for her win,
and, as a result, she initiated a patron dispute claim with the casino.
¶4. Soon after the incident and on the next day, Agent Pearson ran a battery of tests on
the machine and reviewed the videotape of the incident. He concluded that the International
Game Technology (IGT) programmer who set up the machine mistakenly entered $1,000,000
as the jackpot, rather than $8,000. The machine was also mistakenly programmed as a
“Stand Alone Progressive” machine, although nothing on the exterior of the machine
indicated that it was a progressive machine.
¶5. On March 22, 2006, the executive director of the Commission issued a written
decision stating that Eash was entitled to $1,000,000. On April 13, 2006, Imperial Palace
timely filed a Petition to Reconsider the executive director’s decision, requesting a hearing
before a hearing examiner appointed by the Commission. At the hearing, Imperial Palace
presented testimony from Agent Pearson, Eash, an IGT employee, and two Imperial Palace
3
A patron could win a larger sum of money on the bonus round of the game, but
the bonus round is not at issue in this case.
4
Again, the bonus round is not at issue here.
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employees. Eash appeared pro se, and, after being questioned by Imperial Palace, she
presented her son and daughter as witnesses and recalled Agent Pearson. The hearing officer
subsequently issued a written decision reversing the executive director’s decision. The
hearing examiner reasoned that, because the Double Top Dollar machine clearly indicated
that the maximum award on that machine was $8,000 and because there was no signage on
or around the machine indicating that a patron could win more than $8,000, Eash was entitled
to only $8,000 for her winning combination.
¶6. Eash appealed the hearing examiner’s decision to the Commission. On March 15,
2007, after reviewing the record, the Commission entered a final decision reinstating the
executive director’s decision that Eash was entitled to $1,000,000.
¶7. Imperial Palace then appealed to the Circuit Court of Harrison County. Both parties
presented arguments to the circuit court at a hearing on the matter. At the conclusion of the
hearing, the circuit court ruled in favor of Imperial Palace and found that Eash was entitled
to only $8,000. The circuit court subsequently issued a written decision reversing the
Commission’s decision on the ground that it prejudiced the substantial rights of Imperial
Palace in that it “was not made in accordance with the law, arbitrary and maybe arbitrary and
capricious, and was made upon unlawful procedure.” Eash timely appealed to this Court.
¶8. On appeal, Eash argues that this Court should reverse the circuit court’s decision
because the substantial rights of Imperial Palace were not prejudiced by the Commission’s
decision, and because the Commission’s decision was supported by the evidence, was not
made upon unlawful procedure, was not arbitrary or capricious, and was made in accordance
with the law. Imperial Palace claims that the substantial rights of Imperial Palace were
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prejudiced by the Commission’s decision, which was also arbitrary or capricious, was not
in accordance with the law, was violative of state and federal law, was unsupported by any
evidence, and was made in excess of the Commission’s statutory authority. Eash contests
Imperial Palace’s assertions in rebuttal.
ANALYSIS
¶9. “This Court applies the same standard of review that the lower courts are bound to
follow when reviewing the decisions of a chancery or circuit court concerning an agency
action.” Town of Enterprise v. Miss. Pub. Serv. Comm’n, 782 So. 2d 733, 735 (Miss. 2001)
(citing Miss. Comm’n on Envtl. Quality v. Chickasaw County Bd. of Supervisors, 621 So.
2d 1211, 1216 (Miss.1993)). According to Mississippi Code Section 75-76-171(2), when
reviewing the final decision or order of the Commission, the circuit court’s review is
conducted “without a jury and must not be a trial de novo but is confined to the record on
review.” Miss. Code Ann. § 75-76-171(2) (Rev. 2000). Section 75-76-171(3) sets out the
deferential standard of review:
(3) The reviewing court may affirm the decision and order of the
commission, or it may remand the case for further proceedings or
reverse the decision if the substantial rights of the petitioner have been
prejudiced because the decision is:
(a) In violation of constitutional provisions;
(b) In excess of the statutory authority or jurisdiction of the
commission;
(c) Made upon unlawful procedure;
(d) Unsupported by any evidence; or
(e) Arbitrary or capricious or otherwise not in accordance with law.
Miss. Code Ann. § 75-76-171; see also Miss. Gaming Comm’n v. Freeman, 747 So. 2d 231,
238 (Miss. 1999). If this Court agrees that the circuit court properly found that the
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substantial rights of Imperial Palace had been prejudiced because of any one of the five
reasons stated in Section 75-76-171, then this Court will affirm the circuit court’s decision.
Miss. Code Ann. § 75-76-171(3). If this Court finds otherwise, then this Court must reverse
the circuit court’s decision. Id.
¶10. Accordingly, we must first determine whether or not the Commission’s final decision
prejudiced the substantial rights of Imperial Palace. The Commission’s final decision
requires that Imperial Palace pay Eash $1,000,000 on a machine that was intended to pay a
maximum award of $8,000. Eash argues that the substantial rights of Imperial Palace were
not prejudiced because Imperial Palace has an indemnity agreement with IGT. The only
reference to an indemnification agreement in the record is in the Flat Fee/Stand Alone/Rental
and Servicing Agreement between IGT and Imperial Palace. The agreement states, in
relevant part:
9. Lessee [i.e., Imperial Palace] shall maintain adequate liability
insurance, naming IGT as an additional insured, and to the extent not
covered by insurance shall hold IGT harmless and indemnify IGT from
all claims which may arise as a result of the existence, use or operation
of the Equipment on the Lessee’s premises. . . .
15. Lessee agrees to indemnify IGT and hold IGT harmless from and
against liability or damage from injury or loss arising out of the
possession or use of the Equipment on the premises of Lessee, over
which IGT has no control. Within the warranty limitations set forth
above, IGT shall be responsible for the acts and omissions of its
employees and agents.
The warranty portion of the agreement states5 :
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This portion of the agreement is printed in all capital letters, which has been
altered in order to make the provision easier to read.
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4. IGT warrants that during the term of this Agreement the IGT
Equipment installed hereunder will be in good working order. Lessee’s
sole and exclusive remedy is expressly limited to the restoration of the
Equipment to good working condition by adjustment, repair or
replacement of defective parts, at IGT’s election. Except as specifically
provided in this Agreement, there are no other warranties, express or
implied, including, but not limited to warranties of merchantability or
fitness for a particular purpose. No affirmation of fact, including but
not limited to statements regarding suitability for use, performance or
percentage hold or par value of the Equipment shall be or be deemed
to be a warranty of IGT for any purpose. . . .
This agreement covers thirty IGT machines that Imperial Palace leased, including the Double
Top Dollar machine in question.
¶11. From the language in the agreement, it is clear that Imperial Palace agreed to
indemnify IGT against any claims, and it is equally clear that IGT had not agreed to
indemnify Imperial Palace. Any payment required by the Commission’s final decision would
be paid by Imperial Palace. Therefore, we find Eash’s argument that the substantial rights
of Imperial Palace were not prejudiced to be without merit. The rights of Imperial Palace
have clearly been prejudiced by the Commission’s final decision.
¶12. Next, we must determine whether or not the substantial rights of Imperial Palace were
prejudiced for one of the five reasons set out in Section 75-76-171(3). Miss. Code Ann. §
75-76-171(3)(Rev. 2000). Subsection (e) of Section 75-76-171(3) states, in part, that the
Commission’s decision may be reversed if it is “not in accordance with the law.” Consistent
with Section 75-76-171(3), this Court has recognized that agencies are constrained to follow
the law. For example, this Court has stated that “an agency’s findings may not be disturbed
by appellate courts where . . . the relevant law was properly applied to the facts.” Mickle v.
Miss. Employment Sec. Comm’n, 765 So. 2d 1259, 1261 (Miss. 2000). It follows, therefore,
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that if the agency did not properly apply the relevant law to the facts, then an appellate court
may reverse an agency’s decision.
¶13. In this case, the hearing examiner’s decision that Eash was entitled to only $8,000 was
based largely on contract law. The hearing examiner’s decision states that “[w]hen a patron
plays a casino slot machine, the patron is entering into a contract with the casino. . . . The
express terms of the contract are those that are stated in writing.” Imperial Palace of Miss.,
LLC v. Eash, Mississippi Gaming Commission Hearing Examiner Decision No. 06-
00076(SD), at 7 (Oct. 16, 2006) (citations omitted). Because the Double Top Dollar machine
clearly displayed its terms in writing on the belly glass of the machine, the hearing examiner
decided that Eash was bound by those terms, which limited her winnings to $8,000. The
circuit court’s decision to reverse the Commission’s decision was also based largely on the
contract law analysis applied by the hearing examiner in her decision.
¶14. Although this Court has not explicitly stated that a patron enters into a contract with
a casino when playing a particular machine in that casino, this Court did apply contract
principles when reviewing the patron dispute in IGT v. Kelly. Kelly, 778 So. 2d 773 (Miss.
2001). In Kelly, the question was whether Kelly’s play on a progressive poker machine – a
descending sequential royal heart flush – entitled her to the primary progressive jackpot,
which was the advertised award for a sequential royal flush in hearts. Id. at 774. IGT, the
maker of the machine, argued that the primary progressive jackpot was intended only for an
ascending sequential royal heart flush and that Kelly was, therefore, only entitled to the
secondary progressive jackpot. Id. at 775-76. The hearing examiner found that Kelly was
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entitled to the primary progressive jackpot. Id. at 774. The Commission adopted the hearing
examiner’s decision, and the circuit court affirmed the Commission’s decision. Id.
¶15. This Court stated that the signage on the poker machine in Kelly was ambiguous
because it did not specify that a patron could win the primary progressive jackpot only with
an ascending sequential royal heart flush. Id. at 775-76. Therefore, this Court concluded
that Kelly was entitled to the primary progressive jackpot for her descending sequential royal
heart flush. Id. In reaching this conclusion, this Court relied on a longstanding principle of
contract construction. See, e.g., Miss. State Highway Comm’n v. Dixie Contractors, Inc.,
375 So. 2d 1202, 1205 (Miss. 1979) (“[A]mbiguities in a written contract [must] be resolved
unfavorably to the party who drafted the contract.”). In Kelly, this Court stated that “if the
posted rules in a casino are ambiguous, then the agency will interpret the rule in favor of the
patron if the rule can be reasonably read in that fashion.” Id. at 777. The Commission had
also announced this rule in its prior decisions. Id.
¶16. Although the patron won the jackpot in Kelly, that case cannot be cited in support of
awarding Eash $1,000,000 for her winning combination, because the facts of Kelly are
distinguishable from the facts in this case. While there was ambiguity in the permanent
signage on the progressive poker machine in Kelly, there was no ambiguity in the permanent
signage on the Double Top Dollar machine here. The signage on the machine in this case
clearly stated that a winning combination entitled the patron to $8,000. When Eash or any
other patron played that Double Top Dollar slot machine, she was playing for a chance to win
$8,000 and nothing more. The fact that the electronic displays erroneously stated that Eash
won $1,000,000 after she hit the winning combination does not create an ambiguity
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analogous to the one in Kelly. Though it unfortunately caused some confusion, there was no
indication from anything on the machine before Eash began playing that indicated that a
patron could win anything more than $8,000 with three double diamonds lined up on the pay
line. In other words, there was no question, ex ante, as to what a winning combination was
or what the corresponding award would be on the machine in this case. In contrast, in Kelly,
the permanent signage on the machine was unclear (at all times) as to what constituted a
winning combination. Kelly, 778 so. 2d 773.
¶17. In Allen v. Isle of Capri, Vicksburg, the hearing examiner stated that a “contract
between the patron making the bet and the casino” is formed when the patron places “a
wager . . . of the amount allowable in the particular game.” Allen v. Isle of Capri,
Vicksburg, Mississippi Gaming Commission Hearing Examiner Decision No. 97-00285, at
4-5 (June 24, 1997). The formation of a contract between a patron and a casino has also been
recognized in the gaming industry. See Anthony Cabot & Robert Hannum, Advantage Play
and Commercial Casinos, 74 Miss. L.J. 681, 682-83 (2005) (“Casino-style gambling
involves a contract, which is simply a promise, or set of promises, between the casino and
the player. . . . [T]he casino promises to pay the patron a predetermined sum if certain
conditions are met. In turn, the patron agrees to place the sum of the wager at risk if those
certain conditions are not met.”).
¶18. In this case, the Commission decided that Eash was entitled to $1,000,000 because of
the Commission’s “broader responsibility in some cases, without ignoring the law or
regulations, to ensure that reasonable fairness and the perception of fairness prevails.”
However, in deciding that Eash was entitled to $1,000,000 for hitting a winning combination
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on a machine that advertised a maximum award of $8,000, the Commission did ignore the
law. Contract law dictates that when Eash put her money into the Double Top Dollar
machine, she and Imperial Palace entered into a contract whereby Imperial Palace would pay
her $8,000 if her ten-dollar wager resulted in three double diamond symbols lined up on the
single pay line. Since her play resulted in that winning combination, Eash is entitled to
$8,000. The Double Top Dollar machine clearly stated that the maximum award on that
machine was $8,000, and no information was displayed on the machine that indicated
otherwise. Therefore, despite the regrettable programming error that led Eash to believe that
she had won $1,000,000, she is entitled only to an $8,000 award.
¶19. It should be noted that this Court’s decision in Pickle v. IGT also supports the result
reached by this Court today. Pickle v. IGT, 830 So. 2d 1214 (Miss. 2002). The patron
dispute in Pickle concerned whether or not Pickle had hit the progressive jackpot on a Wheel
of Fortune game when her play resulted in a non-winning combination. Id. at 1215. The
bells, whistles, and other indicators showed that she had hit the jackpot. Id. at 1215.
However, the Commission’s Gaming Laboratory found that Pickle’s combination was not
a winning combination, and that the bells, whistles, and other secondary indicators were
activated because of a “technical problem.” Id. at 1218. The hearing examiner made a
similar finding, which the Commission adopted. Id. at 1219. The circuit court subsequently
affirmed the Commission’s decision, and this Court affirmed the circuit court. Id. at 1219,
1221-22.
¶20. Thus, this Court found in Pickle that a patron’s award (or lack thereof) is determined
by the combination resulting from the patron’s play, and not the secondary indicators
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activated by the play. Id. at 1221. In the same way, the proper award here is determined by
the rules and instructions on the permanent signage on the Double Top Dollar machine, and
not the information displayed electronically on the machine after the winning combination
was hit.
¶21. Because this Court finds that the Commission’s final decision is not in accordance
with the law, the arguments made regarding the other grounds for reversal of the
Commission’s decision need not be addressed. See Miss. Code Ann. § 75-76-171(3) (Rev.
2000).
CONCLUSION
¶22. This Court finds that the Commission’s final decision in favor of Eash is not in
accordance with the law. Therefore, the circuit court’s decision to reverse the Commission’s
final decision is affirmed.
¶23. AFFIRMED.
WALLER, C.J., CARLSON, P.J., DICKINSON, RANDOLPH, LAMAR,
KITCHENS, CHANDLER AND PIERCE, JJ., CONCUR.
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