Register v. Oaklawn Jockey Club, Inc. , 306 Ark. 318 ( 1991 )

821 S.W.2d 475 (1991) 306 Ark. 318

Paul REGISTER, Appellant,
v.
OAKLAWN JOCKEY CLUB, INC., and American Totalistor Co., Inc., Appellees.

No. 90-302.

Supreme Court of Arkansas.

December 23, 1991.

Carl A. Crow, Jr., Hot Springs, for appellant.

Janis Whitt, Fort Smith, James Simpson, Little Rock, for appellees.

DUDLEY, Justice.

We grant rehearing in this case and affirm the ruling of the trial court. The facts were accurately set out in the original opinion, Register v. Oaklawn Jockey Club, Inc., 306 Ark. 318, 319, 811 S.W.2d 315, 316 (1991) as follows:

On February 10, 1989, Mr. Register attempted to place a Classix wager, where the bettor correctly selects the winning horse in six consecutive races, at Oaklawn Park in Hot Springs. When Mr. Register attempted to place his bet, the Amtote machine failed to issue a ticket conforming to his designated selections. Upon inquiry, Mr. Register was erroneously advised by Oaklawn's ticketing clerk that one of the horses he had selected had been withdrawn from its race. Mr. Register subsequently chose another horse and made his bet. At the conclusion of the six races, Mr. Register had correctly selected five winning horses. Apparently, though, the horse that Mr. Register had been told had been withdrawn had not been "scratched" and was in fact the winner of its race. Had Mr. Register's original wager been accepted, he would have been the holder of a winning ticket to a major share in the Classix.

The "Major Share" of the Classix pool (75% of the net amount in the pool) that day was $56,165.40, which was paid to the holder of one winning ticket issued for that wager. Mr. Register filed suit to recover one-half of that amount, $28,082.70. The trial court granted the appellees' motion for summary judgment, and Mr. Register appeals and alleges that the trial court erred in granting the summary judgment on the following bases: 1) Oaklawn and Amtote owed him a duty to use ordinary care, 2) Oaklawn and Amtote owed him a contractual duty on theories of implied contract, quasicontract, and third party beneficiary, and 3) his cause of action is not barred by the Arkansas State Racing Commission Rules.

We affirmed the trial court's granting of summary judgment on the counts of implied contract, quasi-contract, and third party beneficiary, but reversed the trial court's granting of summary judgment on the count alleging negligence. We held that Oaklawn and Amtote owed Mr. Register a duty to use ordinary care in taking his bet and, as a result, Mr. Register had stated a cause of action sounding in tort.

After reading the briefs submitted to us on the petition for rehearing, we have concluded that we erred in reversing the trial court on the negligence count. That error came about in the following way. The trial court held that statutes and regulations of the Arkansas State Racing Commission barred the negligence count. Mr. Register, in his original appellant's brief, argued that the regulations did not bar the negligence claim, but he failed to abstract the regulations. Both Oaklawn and Amtote cited the statutes and quoted the regulations in the argument part of their original appellees' briefs but, even so, we refused to consider them because appellant Register had not abstracted them. That was error on our part. We should have considered the regulations for either of two reasons. First, they were set out in the appellees' brief, and second, courts take judicial notice of regulations of state agencies which are duly published. Webb v. Bishop, 242 Ark. 320, 413 S.W.2d 862 (1967). Unfortunately, we held: "Finally, Mr. Register argues that his cause of action is not barred by the Arkansas State Racing Commission Rules. However, these rules have not been included in the abstract, and we are unable to address the issue." Register v. Oaklawn Jockey Club, Inc., 306 Ark. at 321, 811 S.W.2d at 317-18 (citing Burgess v. Burgess, 286 Ark. 497, 696 S.W.2d 312 (1985)). Then, instead of affirming the trial court's holding that the statutes and regulations barred the negligence claim, we held that the trial court erred and that Mr. Register had stated a common law claim on that one count. Once the statutes and regulations on the negligence count are considered, it becomes apparent that the trial court ruled correctly, and we are the court that erred. Accordingly, we grant rehearing, modify the original opinion, and now affirm the trial court on the negligence count.

In earlier times all gaming contracts were against the public policy of this State. Our public policy was strong, so strong that since the Revised Statutes of 1838, we have had a statute that provides a losing bettor can maintain a suit to recover his losses, but a winning bettor may not do likewise because his contract is void. Ark. Code Ann. § 16-118-103(a) and (bXD (1987). In construing this statute we held that it meant that a winning wager on a horse race is illegal and void. McLain v. Huffman, 30 Ark. 428 (1875). Since a winning wager was illegal and void, there was no common law duty of care owed to a person making a wager.

Our law so continued until 1956, when the voters of Arkansas adopted the 46th Amendment to the Constitution of Arkansas which provides: "Horse racing and pari-mutuel wagering thereon shall be lawful in Hot Springs, Garland County, Arkansas, and shall be regulated by the General Assembly." (Emphasis added.) The General Assembly has now regulated pari-mutuel wagering and has expressly provided for the disposition of wagering money as follows:

Excepting only the moneys retained for the use and benefit of the franchise holder, the amounts paid to the commission for the use and benefit of the State of Arkansas, the amount paid to the commission for deposit in the Arkansas Racing Commission Purse and Awards Fund, and the amount paid to a city, town, or county as provided in this subchapter, all moneys received by the franchise holder from wagers pursuant to this subchapter shall be paid over to bettors holding winning pari-mutuel tickets in accordance with the provisions and at those times specified in the various race programs written by the franchise holder for the racing meet, as their respective interests may appear, upon presentation of the tickets. [Emphasis added.]

Ark.Code Ann. § 23-110-406(a) (1987). The meaning of the statute is clear. All wagering money received by Oaklawn shall be paid over to bettors holding winning tickets.

In addition, Ark.Code Ann. § 23-110-405(d)(2) (1987), in pertinent part provides, "There shall be no wagering on the results of any races except under the pari-mutuel or certificate method of wagering as provided for in this section...." Again, it is clear that the General Assembly intends for all money received from wagers to be paid over to the bettors, subject to the other provisions of the statute.

Rule 2416 of the Arkansas State Racing Commission Rules and Regulations Governing Horse Racing in Arkansas (1989), provides:

Any claim by a person that a wrong ticket has been delivered to him must be made before leaving the mutuel ticket window. No claims shall be considered thereafter and no claim shall be considered for tickets thrown away, lost, changed, destroyed or mutilated beyond identification. Payment of wagers will be made only on presentation of appropriate pari-mutuel tickets. [Emphasis added.]

Classix wagers are governed by Rule 2460(D) as follows:

(1) The net amount in the Classix parimutuel pool will be divided into the Major Share (75%) and the Minor (Consolation) Share (25%).

(a) The Major Share (75%) will be distributed among the holders of Classix tickets which correctly designate the official winner in each of the six races comprising the Classix.

(b) The Minor Share (25%) will be distributed among the holders of the Classix tickets which correctly designate the most official winners, but fewer than six, of the six races comprising the Classix. [Emphasis added.]

In summary, pari-mutuel wagering is now authorized by the Constitution of the State of Arkansas and "shall be regulated by the General Assembly." The General Assembly has enacted statutes heavily regulating such wagering, has created the Arkansas State Racing Commission, and has authorized it to promulgate rules and regulations. That Commission has promulgated rules and regulations concerning Classix wagering. Under the statutes and regulations, a bettor must hold a pari-mutuel ticket that correctly designates the winner of all six races in order to receive any money from the Classix Major Share Pool.

All other jurisdictions that have considered similar statutes and regulations have concluded that common law negligence claims such as the one now before us are barred. Bourgeois v. Fairground Corp., 480 So. 2d 408 (La.App.1985); Seder v. Arlington Park Race Track Corp., 134 Ill.App.3d 512, 89 Ill. Dec. 657, 481 N.E.2d 9 (1985); Valois v. Gulfstream Park Racing Ass'n, 412 So. 2d 959 (Fla.App.1982); Hochberg v. New York City Off-Track Betting Corp., 74 Misc. 2d 471, 343 N.Y.S.2d 651 (1973); affd, 43 A.D.2d 910, 352 N.Y.S.2d 423 (1974).

In holding no liability on a negligence claim in a case almost identical to the one at bar, the court, in Seder v. Arlington Park Race Track Corp., 134 Ill.App.3d 512, 89 Ill. Dec. 657, 659-60, 481 N.E.2d 9, 11-12 (1985), relied on a comparable statute and wrote:

[T]he only legislatively authorized way for a patron at a racetrack to recover money based upon the outcome of a horse race is through the pari-mutuel or certificate system. (Ill.Rev.Stat.1983, ch. 8, pars. 37-26.) ... The Act also establishes a board to supervise the pari-mutuel system and to prescribe rules, regulations and conditions governing the conduct of the races. Under the rules and regulations adopted by the board, it is clear that in order to receive any funds from the sweep six wagering pool, a patron must hold a pari-mutuel ticket which correctly designates the winner of the six races. See Illinois Racing Board Rules B5.14, B17.3.

In Valois v. Gulfstream Park Racing Ass'n, 412 So. 2d 959, 960 (Fla.App.1982), in affirming the dismissal of a complaint which included a negligence count, the court cited the applicable regulation that provided, "[p]ayment of winning pari-mutuel tickets shall be made only upon presentation and surrender of such tickets. No claims shall be allowed for lost or destroyed winning tickets." It additionally cited, but did not apply, a statute enacted after the occurrence of the alleged negligent act as expressing the public policy of the state that there should be no recovery for such a claim.

In Hochberg v. New York Off-Track Betting Corp., 74 Misc. 2d 471, 343 N.Y.S.2d 651, 656 (1973), the court held, "Defendant, in this case, owes no duty to the plaintiff or any other OTB [New York City Off-Track Betting Corporation] bettor with respect to the accuracy of the information and neither plaintiff nor any other bettor is entitled to rely on the information and hold defendant liable for any mistakes therein." In so holding the court relied on a statute which provided that "all sums deposited in any off-track pari-mutuel pools shall be distributed to the holders of winning tickets therein...." Id., 343 N.Y.S.2d at 655.

In conclusion, we erred in not considering the statutes and regulations in our original opinion. Upon considering them we now hold, as have all other jurisdictions having similar statutes and regulations, that without the presentation of a winning Classix ticket, a bettor is precluded from asserting a claim sounding in either tort or contract. Accordingly, rehearing is granted, the original opinion of this court is modified, and the decision of the trial court is affirmed.

HOLT, C.J., and GLAZE and CORBIN, JJ., dissenting.

HOLT, Chief Justice, dissenting.

The petitioner, American Totalisator Co., Inc. (Amtote), submits its petition for rehearing on the basis that this court should reconsider its analysis of the decisions of courts in other jurisdictions. Amtote makes two assertions: 1) the other courts relied on statutes or rules and regulations virtually identical to those in effect in Arkansas, and 2) the plaintiff in every one of the five cited cases attempted to recover on a negligence theory, as well as a contract theory, and the negligence claim was rejected in each case.

Arkansas Sup.Ct. R. 20(g) states as follows:

The petition for rehearing should be used to call attention to specific errors of law or fact which the opinion is thought to contain. Counsel are expected to argue the case fully in the original briefs, and the brief on rehearing is not intended to afford an opportunity for a mere repetition of the argument already considered by the court.

Amtote essentially requests that this court reassess its analysis of the decisions of courts in other jurisdictions. In its opinion of July 15, 1991, this court stated, "The existence of a duty depends upon whether a relation exists between the parties that the community will impose a legal obligation upon one for the benefit of the other. Under our well-established principles of common law duty and the facts before us, we find that a duty existed between the appellees and Mr. Register."

In addressing the parties' arguments on appeal, this court also noted that "Oaklawn and Amtote's reliance on cases decided in other jurisdictions is misplaced in that those cases generally had statutes or rules and regulations limiting tort liability or dealt with the contractual theory of liability." (Emphasis added.)

Given the court's phrasing in finding a duty owed by Amtote to Mr. Register, and analysis of the decisions of other jurisdictions, it is apparent to the dissent that this court addressed Amtote's extensive appellate arguments.

In our previous opinion, we declined to reach Mr. Register's final argument that his cause of action was not barred by the Arkansas State Racing Commission Rules inasmuch as he had failed to abstract them and noted that Amtote likewise had failed to properly supplement the abstract with the rules. Granted, we were partially wrong in this regard. Amtote, in its original brief, presented Rules 2416 and 2460(D) of the Arkansas State Racing Commission Rules and Regulations (ed. 1989), covering horse racing in this state, to support its argument that Mr. Register's cause of action is barred by the Racing Commission rules.

Rule 2416 provides as follows:

Any claim by a person that a wrong ticket has been delivered to him must be made before leaving the mutuel ticket window. No claim shall be considered thereafter and no claim shall be considered for tickets thrown away, lost, changed, destroyed or mutilated beyond identification. Payment of wagers will be made only on presentation of appropriate pari-mutuel tickets.

Rule 2460(D) provides that the Classix pari-mutuel pool shall be handled as follows:

(1) The net amount in the Classix parimutuel pool will be divided into the Major Share (75%) and the Minor (Consolation) Share (25%).

(a) The Major Share (75%) will be distributed among holders of Classix tickets which correctly designate the official winner in each of the six races comprising the Classix.

(b) The Minor Share (25%) will be distributed among the holders of Classix tickets which correctly designate the most official winners, but fewer than six, of the six races comprising the Classix.

In its petition for rehearing, Amtote again provided us with Rules 2416 and 2460(D), noting that it had cited "these rules in its brief, and this court may take judicial notice of rules and regulations promulgated pursuant to statutory authorization and brought to the attention of this court."

Taking judicial notice of Rules 2416 and 2460(D), they may well limit contractual liability; however, they do not restrict tort liability. The fact still remains that under our well-established principles of common law duty and the facts before us, a duty existed between Amtote and Mr. Register. Accordingly, I disagree with the court's present finding that our statutes and regulations preclude a claim of tort liability of Oaklawn Jockey Club, Inc. and Amtote.

Consequently, Amtote impermissibly attempts to reargue the interpretation of cases decided in other jurisdictions and does not point out any specific errors of law or fact thought to be contained in this opinion.

I respectfully dissent to the granting of the petition for rehearing.

GLAZE and CORBIN, JJ., join in this dissent.