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Houston County Econ. Dev. Auth. v. State

Supreme Court of Alabama

November 21, 2014

Houston County Economic Development Authority
v.
State of Alabama

Released for Publication July 22, 2015.

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[Copyrighted Material Omitted]

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Appeal from Houston Circuit Court. (CV-12-900266). J. Michael Conaway, Trial Judge.

AFFIRMED.

For Appellant: Ernest H. Hornsby and Ashton Ott of Farmer, Price, Hornsby & Weatherford, L.L.P., Dothan; and John M. Bolton III and Charlanna W. Spencer of Hill, Hill, Carter, Franco, Cole & Black, P.C., Montgomery.

For Appellee: Luther Strange, atty. gen., and Megan A. Kirkpatrick, Andrew L. Brasher, and Henry T. Reagan II, deputy attys. gen., and John W. Kachelman III, asst. atty. gen.

Stuart, Bolin, Parker, Murdock, Main, Wise, and Bryan, JJ., concur. Moore, C.J., and Shaw, J., concur in the result.

OPINION

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PER CURIAM.

The Houston County Economic Development Authority (" HEDA" ) appeals from a judgment condemning 691 allegedly illegal gambling devices, $288,657.68 in cash, and various documents allegedly related to illegal gambling. We affirm.

I. Facts and Procedural History

On July 25, 2012, officers from the Houston County Sheriff's Office, the Alabama Department of Public Safety, and the Office of the Alabama Attorney General executed a search warrant at a bingo gaming facility known as Center Stage Alabama (" Center Stage" ) located in Houston County. As a result of the search, the State of Alabama confiscated 691 allegedly illegal gambling devices, which included electronic-gaming devices, computer servers, and gaming tables used for a roulette-style game called " Roubingo" ; $288,657.68 in United States currency; and various documents allegedly related to illegal gambling. On July 26, 2012, the State instituted a civil-forfeiture proceeding in the Houston Circuit Court under the provisions of § 13A-12-30, Ala. Code 1975, seeking forfeiture of the items and currency seized during the July 25 search of Center Stage.

On April 16, 2013, HEDA sought, and was granted, the right to intervene in the forfeiture action. HEDA is the operator of Center Stage.[1] The electronic-gaming devices used in the operation of Center Stage were leased by HEDA from each gaming device's respective manufacturer or developer.[2] HEDA purportedly operated Center Stage under a " Class C Special

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Permit to Operate Bingo Games" granted by the Houston County Commission to operate charitable bingo games under Amendment No. 569 to the Alabama Constitution of 1901.[3] In addition to offering electronic gaming and Roubingo, Center Stage also offered traditional " paper bingo," live entertainment, and a bar.

A bench trial was conducted beginning on August 7, 2013. Over three days, the trial court heard live testimony from law-enforcement personnel who had participated in the investigation and search of Center Stage. The testimony of several witnesses was received via submission of deposition transcripts; one of those witnesses was HEDA's expert witness, who generally testified that the electronic-gaming devices seized by the State operated in such a way as to comply with the definition of " bingo" as defined by this Court in previous cases discussed infra. The parties also offered into evidence over 50 exhibits, including video of game play at Center Stage taken by an undercover officer. Following the close of evidence, the parties submitted posttrial briefs.

On October 17, 2013, the trial court entered an order and final judgment. The trial court concluded that the devices, including the electronic devices, computer servers, and Roubingo tables, constituted illegal gambling devices. The trial court further concluded that the United States currency and other seized " gambling paraphernalia" was being used in connection with the illegal gambling operation. The trial court ordered that " the gambling devices ... be destroyed or otherwise disposed of by the State of Alabama" and ordered the State to deposit the seized currency into the State's General Fund. The trial court denied HEDA's postjudgment motion, and HEDA timely appealed.

II. Standard of Review

The trial court issued its judgment following a bench trial at which evidence was presented ore tenus.

" Our ore tenus standard of review is well settled. '" When a judge in a nonjury case hears oral testimony, a judgment based on findings of fact based on that testimony will be presumed correct and will not be disturbed on appeal except for a plain and palpable error." ' Smith v. Muchia, 854 So.2d 85, 92 (Ala. 2003)(quoting Allstate Ins. Co. v. Skelton, 675 So.2d 377, 379 (Ala. 1996)).
" '" The ore tenus rule is grounded upon the principle that when the trial court hears oral testimony it has an opportunity to evaluate the demeanor and credibility of witnesses." Hall v. Mazzone, 486 So.2d 408, 410 (Ala. 1986). The rule applies to " disputed issues of fact," whether the dispute is based entirely upon oral testimony or upon a combination of oral testimony and documentary evidence. Born v. Clark, 662 So.2d 669, 672 (Ala. 1995). The ore tenus standard of review, succinctly stated, is as follows:
" '" [W]here the evidence has been [presented] ore tenus, a presumption of correctness attends the trial court's conclusion on issues of fact, and this Court will not disturb the trial court's conclusion unless it is clearly erroneous and against the great weight of the evidence, but will affirm the judgment if, under any reasonable aspect, it is supported by credible evidence." '

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" Reed v. Board of Trs. for Alabama State Univ., 778 So.2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane, 342 So.2d 358, 360 (Ala. 1977)). However, 'that presumption [of correctness] has no application when the trial court is shown to have improperly applied the law to the facts.' Ex parte Board of Zoning Adjustment of Mobile, 636 So.2d 415, 417 (Ala. 1994)."

Kennedy v. Boles Invs., Inc., 53 So.3d 60, 67-68 (Ala. 2010).

III. Analysis

HEDA raises a number of issues on appeal. First, HEDA contends that the language of the constitutional amendment permitting bingo in Houston County, the related implementing statute, and the county bingo resolution exempt the property in this case from seizure and forfeiture under Alabama's general antigambling laws, including § 13A-12-30. Second, HEDA argues that a bond-validation proceeding related to the construction and development of what is now Center Stage conclusively established the legality of the electronic-gaming operation. Third, HEDA argues that, even if § 13A-12-30 applies, the State failed to meet its burden to establish that the seized gaming devices were illegal gambling devices and that the evidence instead demonstrated that the devices played legal bingo as that game has been defined by this Court. Finally, HEDA argues that there was no evidence indicating that the seized currency or documents were used in or related to illegal gambling.

The central issue in this case is whether the gaming devices seized by the State were illegal gambling devices or whether they were used to conduct lawful " bingo" games, authorized by Amendment No. 569. We address that issue first.

A. Whether the seized gaming devices played the " traditional game of bingo."

Amendment No. 569 authorizes " bingo" to be played in Houston County under certain circumstances.[4] Like most of Alabama's local constitutional amendments relating to bingo, Amendment No. 569 does not expressly define the term " bingo." The implementing legislation for Amendment No. 569, however, does provide that the term " bingo" refers to " [t]he game, commonly known as bingo, where numbers or symbols on a card are matched with numbers or symbols selected at random." § 45-35-150(1), Ala. Code 1975.

This Court repeatedly has held that " bingo" is a form of lottery prohibited by Ala. Const. 1901, Art. IV, § 65. See, e.g., Barber v. Cornerstone Cmty. Outreach, Inc., 42 So.3d 65, 78 (Ala. 2009); City of Piedmont v. Evans, 642 So.2d 435, 436 (Ala. 1994). We therefore begin our analysis by emphasizing once again that the various constitutional amendments permitting " bingo" are exceptions to the general prohibition of § 65 and that, as such, they must be " narrowly construed." As we held in Cornerstone:

" 'Since 1980, Alabama has adopted various constitutional amendments creating exceptions to § 65, specifically allowing the game of bingo under certain circumstances. See Ala. Const. [1901], Amendments 386,

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387, 413, 440, 506, 508, 542, 549, 550, 565, 569, 599, and 612.' (Emphasis added.) Thus, the bingo amendments are exceptions to the lottery prohibition, and the exception should be narrowly construed."

42 So.3d at 78 (quoting Opinion of the Justices No. 373, 795 So.2d 630, 634 (Ala. 2001)).

In addition to this fundamental principle of " narrow construction," we also recognized in Cornerstone the need, " except where the language of a constitutional provision requires otherwise," to " look to the plain and commonly understood meaning of the terms used in [the constitutional] provision to discern its meaning." 42 So.3d at 79. Furthermore, we noted that, " '[a]lthough a legislative act cannot change the meaning of a constitutional provision, such act may throw light on its construction.'" Id. at 79 (quoting Jansen v. State ex rel. Downing, 273 Ala. 166, 169, 137 So.2d 47, 49 (1962)). Based on the above-described rules of construction, together with an examination of persuasive authority from other jurisdictions, we held in Cornerstone that the term " bingo" " was intended to reference the game commonly or traditionally known as bingo." 42 So.3d at 86. Furthermore, we identified six elements that characterize the game of bingo, the list being nonexhaustive:[5]

" Based on the foregoing, we must conclude that the term 'bingo' as used in Amendment No. 674[6] was intended to reference the game commonly or traditionally known as bingo. The characteristics of that game include the following:
" 1. Each player uses one or more cards with spaces arranged in five columns and five rows, with an alphanumeric or similar designation assigned to each space.
" 2. Alphanumeric or similar designations are randomly drawn and announced one by one.
" 3. In order to play, each player must pay attention to the values announced; if one of the values matches a value on one or more of the player's cards, the player must physically ...

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