Moushon v. AAA Amusement, Inc.

Citation: 267 Ill. App. 3d 187Docket: No. 4—93—0971

Court: Appellate Court of Illinois; April 29, 1994; Illinois; State Appellate Court

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Section 28.8 of the Criminal Code of 1961 allows individuals who lose $50 or more in illegal gambling bets the right to sue for treble damages against the winner. Plaintiffs Gloria Moushon and Chuck McMasters initiated a lawsuit against several defendants, including Fleetwood Restaurant and Chuck Frank, after losing money on gambling machines at multiple establishments between August 1991 and January 1992. The claims against Illinois Tap and Allstar Music were dismissed before trial, as were those against Fleetwood. Following a jury trial, Moushon was awarded $1,252 against Chuck and Linda Frank, who then appealed, arguing that the relevant statutes violate constitutional provisions, that the evidence did not support the verdict, that jury instructions on damages were erroneous, and that a fraud was perpetrated against them. The court affirmed the judgment, addressing constitutional issues related to the equal protection clause and prohibitions against special legislation under the Illinois Constitution. Section 28.8 specifies the conditions under which individuals may recover gambling losses, stipulating that if action is not pursued within six months, any person may initiate it. The court will determine the loss amount, and the judgment will be triple that amount. Additionally, Section 28.1 outlines activities considered gambling, while providing certain immunities for specific activities like parimutuel betting and charitable games.

Section 28.1(c) of the Code categorizes certain gambling activities as a Class A misdemeanor, with repeat offenses escalating to a Class 4 felony. The Franks argue that amendments to section 28.1(b), which create exemptions impacting section 28.8, violate the equal protection clause and constitute special legislation under the Illinois Constitution of 1970. They contend these amendments lack a rational basis, as they allow for the recovery of certain gambling losses while excluding others. 

Legal precedent indicates that classifications under the law typically require only a rational basis to align with equal protection and special legislation standards. The Franks reference Miller v. Sincere, where an amendment to the Criminal Code was found unconstitutional for providing special privileges to specific trading entities, as it lacked a rational justification.

However, the Miller court did not invalidate provisions for loss compensation, only the exemptions. Subsequent cases, particularly People v. Monroe, suggest that the structure of article 28 of the Code adheres to the due process clause and constitutional standards. In Monroe, various constitutional challenges to horse racing legislation were dismissed, with the court noting the significant regulatory oversight of pari-mutuel betting, distinguishing it from other forms of gambling.

The Monroe court differentiated between legitimate transactions and illegal gambling by categorizing betting on horse races as "malum prohibitum" rather than "malum in se," especially in light of legislative authorization that aligned with public policy. In the case of Albers v. Lamson, the court reversed a lower ruling against a brokerage firm, noting significant public policy changes since Miller, including the validation of the Horse Racing Act and the enactment of the Securities Exchange Act and the Commodity Exchange Act, which legitimized trading in futures. The opinion emphasized that legislative authorization could now encompass activities previously classified as illegal gambling without establishing a clear rationale for differentiating between permitted and prohibited gambling. 

In Finish Line Express, Inc. v. City of Chicago, the Illinois Supreme Court upheld the Illinois Horse Racing Act, affirming the legislature's authority to regulate gambling, with the justification that prohibiting certain activities could protect state revenue from betting. The courts consistently applied a rational basis standard rather than strict scrutiny when distinguishing between legal and illegal betting. It noted that regulating and taxing gambling in taverns posed challenges, whereas doing so on licensed riverboats was more manageable. Consequently, specific provisions of the Code appropriately allowed for a cause of action for losses in prohibited gambling while exempting losses in legally permitted gambling. Overall, the statutory framework under article 28 of the Code was deemed constitutional, leading to an examination of the proof supporting the verdict.

Moushon testified that from August 1, 1991, to January 15, 1992, she frequently visited Linda’s Place, playing video slot machines, particularly the 'Cherry Master.' Players could insert between 25 cents to $20 to accumulate points by matching objects, and cashing in 200 points yielded $10. Although she won occasionally, her overall losses exceeded her winnings, and she typically played four to six days each week for about four hours. She financed her play through cashing checks and ATM withdrawals, totaling approximately $1,989 from 30 checks and 20-25 ATM transactions. On cross-examination, it was revealed that Moushon reconstructed her spending records a month after discontinuing her visits to Linda’s Place, relying on bank statements and receipts. She acknowledged stopping payment on three checks totaling $190 due to a machine malfunction and confirmed she did not return to Linda’s Place after this incident in October 1991. Following her departure, she began visiting another bar, Fleetwood, where she also cashed checks and later stopped payment on six checks totaling $305 for gambling reasons. 

Charles McMasters, who lived with Moushon, testified about their frequent visits to Linda’s Place, often spending significant amounts, up to $400 in a night. He noted that Moushon typically lost money, and he described her gambling as detrimental. He corroborated the cash payment process for points at the establishment, mentioning he had witnessed numerous cash transactions. Both Linda and Chuck Frank testified as adverse witnesses; Linda confirmed her ownership of Linda’s Place and her agreement with Chuck regarding the distribution of proceeds from the machines supplied by Chuck’s business, AAA.

Linda testified that neither she nor her husband made cash payments related to game machines at their establishments. She typically left the bar by 9 a.m. to care for her mother. Chuck Frank corroborated Linda's statements, asserting that there were no cash payments to patrons based on video slot machine results, but noted a policy for cashing checks and providing credit slips for continued play. Foy Duane Wilson, a former employee of AAA, contradicted this, claiming to have witnessed cash payments made to players based on points from the Cherry Master machine. 

Chuck Frank explained the machine’s operation and reiterated that no cash payments were made. Gloria Moushon identified bank statements and 39 checks she had written, indicating her expenditures at Linda’s Place on the Cherry Master machine. Kathy Palmer, a bartender, testified she never made payouts for the machines. Timothy Day, who had a relationship with Moushon’s daughter, recounted overhearing a conversation about writing checks and canceling them if losses occurred, suggesting a belief that the Fleetwood could not enforce payment on gambling debts. Day admitted to having gambling issues himself.

Moushon and McMasters denied the conversation described by Day. The jury awarded Moushon $1,252 despite her claiming losses of $1,989, suggesting they may have discounted losses incurred at other establishments unrelated to the Franks.

The court addressed claims of error regarding jury instructions and communication during deliberations. The jury inquired about the limits on their damage award, and the trial judge, without the attorneys present, wrote a response allowing them to determine any appropriate amount based on the facts and law. This communication was later disclosed to the attorneys, who did not object, and the judge's neutral response was deemed non-prejudicial to the Franks, resulting in no reversible error. Additionally, the Franks alleged that Moushon committed fraud, supported by Timothy Day's testimony, indicating potential misuse of the Franks’ games to create a legal claim. Day admitted to alcohol issues and gambling, and discrepancies in his testimony regarding the timing of check payments were noted. Ultimately, the jury could reasonably conclude there was no fraud by the plaintiff. The court affirmed the previous decision. Judges McCullough and Steigmann concurred.