BLPR, Inc. VS National Gaming, Inc.
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 1221 BLPR INC VERSUS NATIONAL GAMING INC Judgment Rendered APR 6 2011 On Appeal the 19 Judicial District Court from In and for the Parish of East Baton Rouge Docket No 516 400 Honorable Janice Clark Judge Presiding Erik L Burns Counsel for PlaintiffAppellant Denham Springs LA BLPR Inc Michael T Tusa Jr Counsel for Defendant Appellee Mandeville LA National Gaming Inc and Philip Bohrer Baton Rouge LA BEFORE PARRO GUIDRY AND HUGHES JJ HUGHES J This is an appeal from a district court summary judgment dismissing s an action for contractual commissions allegedly owed on the placement of video poker devices at a truck stop For the reasons that follow we reverse and remand FACTS AND PROCEDURAL HISTORY In October of 1993 Gil Lerma who would later become one of the shareholders of BLPR Inc BLPR entered into an Independent Associate Contract with Louisiana Gaming Management Inc Louisiana Gaming the company assets of which would later be acquired by National Gaming Inc National Gaming Mr Lerma contract provided to him a s ten percent commission on net revenue received by Louisiana Gaming on each video draw poker device placed in a licensed establishment through his efforts Mr Lerma was successful in placing Louisiana Gaming video s draw poker devices at a Quality Inn Truck Stop now known as the Econo Lodge Lucky Bayou Truck ELLB Stop Chalmette Louisiana in March of 1994 Truck Stop located in The ELLB Truck Stop contract dated March 18 1994 was for an initial ten year term with optional additional five year renewal periods 1 The ELLB Truck Stop contract terminated effective March 18 2004 pursuant to the December 2 2003 notice of termination forwarded by the truck stop to National Gaming 2 Also in March of 1994 Mr Lerma formed the BLPR corporation with himself Richard L Barrios Jr Guy Palermo and Richard E Redd shareholders as The stated purpose of the corporation was to promote the business of and obtain contracts for Louisiana Gaming for the operation of video poker establishments At the same time Mr Lerma executed an Z Mr Barrios died on December 9 1994 owning a one quarter interest in BLPR A certified copy of the judgment of possession rendered in his succession proceeding was filed into the district court record However it is not clear which of the listed assets represented Mr Barrios sBLPR stock Several assets were listed that referenced corporate stock 2500 Shares of Blipper Inc 1000 shares Barrios Investments Inc 1000 shares of Old World Casinos Inc and 1000 Shares of Stock One Source and one asset was named as Glenn Video Poker Contract but none were denominated BLPR s Some of these assets were community property and some were separate property The judgment of Inc possession indicated that Mr Barrios swill left his wife Patricia Vosburg Barrios undivided one half interests in both his community and separate property and the other onehalf interests in Mr Barrios s community and separate property were left to his children Lisa Barrios Jordan Roxanne Barrios Pamela Barrios Cuculla and Stacie Barrios Nola Thus if the BLPR stock was community property Mrs Barrios owned a one half share of the one quarter interest in BLPR a one eighth interest in BLPR and inherited one half of Mr Barrios sone eighth share in BLPR a one sixteenth interest in BLPR which would have given Mrs Barrios a total three sixteenth interest in BLPR in other words an 18 interest Under this 75 community property scenario Mr Barrios four children would have shared equally in the other one half s interest in Mr Barrios sone eighth interest in BLPR which would have given them individually a one quarter share of a one sixteenth share in other words an undivided onesixtyfourth interest which is a 5625 1 interest each in BLPR If the BLPR stock was Mr Barrios separate property then Mrs s Barrios would have inherited one halfof that one quarter interest in BLPR a one eighth interest which is a 5 12 interest in BLPR and the children would have inherited quarter shares each in the other half of Mr sone quarter interest in BLPR in other words a one thirty second interest each which is a Barrios 125 3 interest in BLPR In brief to the district court counsel for BLPR stated that Mrs Barrios inherited a 12 interest and that the children inherited a 3 interest in BLPR indicating the separate property 5 125 scenario was correct However none of the separate property assets named in the judgment of possession sVideo Poker Contract the instant video poker contract originally belonged to Gilbert Gil Glenn Lerma 1000 shares of Old World Casinos Inc or 1000 Shares of Stock One Source Inc have any relevant or apparent connection to the BLPR stock while one of the community assets listed has a greater appearance of being the BLPR stock 2500 Shares of Blipper Inc for the following reasons It was indicated in the corporate deposition of BLPR given by Guy Palermo that originally 10 shares of 000 stock were authorized for BLPR and that each of the four stockholders were to receive 2 shares each 500 though no stock certificates were actually issued Further BLPR sArticles of Incorporation a copy of which was filed into the district court record recite The aggregate number of shares the corporation shall have authority to issue is 10 Each of the four incorporators will receive 2 shares Mr Palermo 000 500 also indicated in his deposition that there was a nickname for the company When Palermo referred to the company he called it BLPR as recorded in the transcript and the examining counsel asked Just for the record when you refer to BLPR to which Mr Palermo responded I sorry BLPR It a m s nickname Although it is not further explained by the partial deposition excerpt appearing in the record on appeal it appears that Mr Palermo may have pronounced BLPR phonetically which would sound like 500 Blipper So the 2 shares of stock Mr Barrios owned in BLPR may have been listed in the succession judgment of possession as 2500 Shares of Blipper Inc We further note that on April 17 2003 in a settlement agreement between the BLPR shareholders it was stated Richard L Barrios Jr died on December 9 1994 and Darlene C Redd represents that she subsequently acquired a one eight sic 8 1 interest in BLPR Inc from four of his heirs No other documentation of this alleged transfer appears in the record on appeal Consequently if the issue is found to be a material issue of fact we note that the record presented on appeal does not establish via the pleadings depositions answers to interrogatories admissions file or affidavits precisely what percentage of BLPR shares was inherited on by Mr Barrios swife and children or whether those percentages were still owned at all relevant times 3 Mr Redd interest in BLPR was alleged to have later been transferred to his wife Darlene C Redd who s was declared to be separate in property from him and that she then transferred her interest in BLPR to her solely owned corporation Redd Investments Inc Thereafter in the April 17 2003 settlement agreement Richard E Redd Darlene C Redd and Redd Investments Inc the Redd parties transferred any and all interestsrights they possessed in BLPR to BLPR 41 assignment of rights in favor of BLPR of any revenues owed to him as a consequence of any agreement by him to act as an associate or master associate or in any capacity with Louisiana Gaming Payments were satisfactorily made to BLPR by Louisiana Gaming under the contract although the parties later agreed that only a five percent commission would be paid due to the financial difficulties of Louisiana Gaming Subsequently in approximately May of 2000 Louisiana Gaming filed for bankruptcy protection in the Bankruptcy Court for the Eastern District of Louisiana Case Number 99 15405 and the ELLB Truck Stop contract was acquired in that proceeding along with other assets by National Gaming Thereafter in August of 2000 National Gaming ceased paying commissions to BLPR ostensibly because it determined that in order to be entitled to collect the commission on the ELLB Truck Stop contract BLPR was required to meet the suitability requirements of LSAR 27 which requires certain S 31O D persons in addition to license holders to establish to the satisfaction of the division that they are suitable to be allowed to participate in the video draw poker gaming industry These persons include in summary persons controlling more than a five percent ownership income or profit interest in an entity which has or applies for a license persons who receive more than five percent revenue interest in the form of a commission finder fee loan s 4 The division as stated by LSAR 27 means the division in the office of state police S3 7 Department of Public Safety and Corrections which provides investigatory regulatory and enforcement service to the Louisiana Gaming Control Board in the implementation administration and enforcement of the Louisiana Gaming Control Law The Video Draw Poker Devices Control Law LSAR 27 S 301 et seq also provides in LSAR 27 that Division shall have the same meaning as that term S 301 6 B is defined in R 27 In furtherance of the authority granted to it by LSAR 27 the division S3 S 308 known as the Video Gaming Division of the Office of State Police VGDOSP has promulgated rules and regulations applicable to video draw poker devices in La Admin Code Title 42 Part XI 2401 et seq in order to protect the video gaming industry from infiltration by organized crime and other harmful and unscrupulous elements thereby ensuring the fair play of all video gaming devices and the prosperity and longevity ofthe industry La Admin Code Title 42 Part XI F11 B 2411 repayment or any other business expense related to the gaming operation or persons who have the ability to exercise a significant influence over the activities of a licensee No further commission payments were made to BLPR which filed the instant suit on January 27 2004 against National Gaming seeking to recover the commission payments allegedly owed along with other economic damages sustained National Gaming asserted numerous defenses to the action and subsequently filed a motion for summary judgment contending that BLPR was ineligible to receive the monies it requested because a it has failed to meet the gaming suitability requirements of LSAR S 27 and b some of its principals and others required by 310 or law have failed to apply for or meet gaming suitability requirements as required by LSAR 27 by order of the Bankruptcy Court and by S 310 the Louisiana Gaming Control Board LGCB Following a hearing on the motion for summary judgment the district court rendered judgment in favor of National Gaming granting the motion and dismissing BLPR action In its oral reasons for judgment the district s court stated that the Court is firmly of the opinion that if five percent is met they obligated to meet suitability requirements in accordance with re statutory interpretation inasmuch as gaming is a business that is effective sic with the public good It got to be strictly controlled This appeal s followed On appeal BLPR asserts that the trial court erred in granting summary judgment in favor of National Gaming as material facts remain in dispute BLPR further assigns as error the consideration by the district court of evidence submitted relative to the administrative suitability investigation conducted by the Video Gaming Division of the Office of State Police 5 VGDOSP as to BLPR contending that such a reconsideration of those issues by the district court was violative of the separation of powers doctrine as well as exceeded the district court original subject matter s jurisdiction asserting that review of the administrative findings would constitute an exercise of appellate jurisdiction LAW AND ANALYSIS Motion for SummaLy Judgment The summary judgment procedure is designed to secure the just speedy and inexpensive determination of every action except those disallowed by LSAC art 969 the procedure is favored and shall be P C construed to accomplish these ends LSA C art 966 Summary P 2 A judgment shall be rendered in favor of the mover if the pleadings depositions answers to interrogatories and admissions on file together with the affidavits if any show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law LSAC art P C B 966 Appellate courts review summary judgments de novo under the same criteria that govern a district court consideration of whether summary s judgment is appropriate Samaha v Rau 20071726 pp 3 4 La 2 08 26 977 So 880 882 Allen v State ex rel Ernest N Morial New Orleans 2d Exhibition Hall Authority 2002 1072 p 5 La 4 842 So 373 03 9 2d 377 Boudreaux v Vankerkhove 2007 2555 p 5 La App 1 Cir 08 11 8 993 So 725 729 30 2d In ruling on a motion for summary judgment the judge role is not to s evaluate the weight of the evidence or to determine the truth of the matter but instead to determine whether there is a genuine issue of triable fact All C doubts should be resolved in the non moving party favor s Hines v Garrett 20040806 p 1 La 6 876 So 764 765 04 25 2d A fact is material if it potentially insures or precludes recovery affects a litigant ultimate success or determines the outcome of the legal dispute s A genuine issue is one as to which reasonable persons could disagree if reasonable persons could reach only one conclusion there is no need for trial on that issue and summary judgment is appropriate Id 20040806 at p 1 876 So at 765 66 2d On motion for summary judgment the burden of proof remains with the movant However if the moving party will not bear the burden of proof on the issue at trial and points out that there is an absence of factual support for one or more elements essential to the adverse party claim action or s defense then the non moving party must produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial If the opponent of the motion fails to do so there is no genuine issue of material fact and summary judgment will be granted See LSAC P C art 966 2 C When a motion for summary judgment is made and supported as provided in LSA C art 967 an adverse party may not rest on the mere P allegations or denials of his pleadings but his response by affidavits or as otherwise provided in LSAC art 967 must set forth specific facts P C showing that there is a genuine issue for trial If he does not so respond summary judgment if appropriate shall be rendered against him LSA P C art 967 See also Board of Supervisors of Louisiana State B University v Louisiana Agricultural Finance Authority 2007 0107 p 9 La App 1 Cir 2 984 So 72 79 80 Cressionnie v Intrepid 08 8 2d Inc 2003 1714 p 3 La App 1 Cir 5879 So 736 738 04 14 2d FA Because it is the applicable substantive law that determines materiality whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case Richard v Hall 2003 1488 p 5 La 4 874 So 131 137 Dyess v American National 04 23 2d 1 Property and Casualty Company 2003 1971 p 4 La App Cir 04 25 6 886 So 448 451 writ denied 20041858 La 10 885 2d 04 29 2d So 592 Cressionnie v Intrepid Inc 2003 1714 at p 3 879 So at 2d 738 39 Video Draw Poker Devices Control Law The applicable law in this case is provided by the Louisiana Gaming Control Law LSAR 27 et seq and the Video Draw Poker Devices S 1 Control Law LSAR 27 S 301 et seq Louisiana Revised Statute B 309 27 makes it a crime for any person to operate a video draw poker device without the license required by LSAR 27 et seq S 301 The primary licensing requirements for a video draw poker device owner operator or distributor are set forth in LSAR 27 and LSAR S 306 S 310 27 et seq In this case National Gaming was required to be licensed as the owner operator or distributor of the video poker devices located at the ELLB Truck Stop As stated in the case cited to this court by National Gaming Gaming Venture Inc v Tastee Restaurant Corporation 2008 310 La App 5 Cir 9 996 So 515 writ denied 2008 2590 La 08 30 2d 5 Louisiana Revised Statute 27 Bprovides 309 Any person who manufactures distributes sells possesses or operates a gambling device as described in R 15 or a video draw poker device as described in S 31 this Chapter without the license required by this Chapter or at a location or on premises not authorized by the division shall upon conviction be imprisoned with or without hard labor for not more than ten years or be fined not more than ten thousand dollars or both 6 A person is defined as including any corporation See LSA R 27 27 S 3 301 22 B 22 0 09 9 1 998 So 723 licensing along with the accompanying requisite 2d contract and suitability reviews by the VGDOSP are prerequisites to beginning the operation of video poker machines pursuant to LSAR S 306 27 and La Admin Code Title 42 Part XI 2411 See Gaming Venture Inc v Tastee Restaurant Corporation 2008 310 at p 4 996 2d So at 517 Further LSAR 27 specifically states in S 306 a 7 A pertinent part that a person applying for a truck stop facility license ny must meet all requirements provided by this Chapter prior to licensing Louisiana Revised Statute 27 l E also provides that n license shall be 31 o issued by the division except upon receipt of a sworn application and a finding by the division that the applicant the application and all persons described in R 27 meet the requirements of that Section S 310 Even though it was not asserted in this case that BLPR was required to obtain a license other gaming participants may be required to submit to a suitability review in accordance with LSA R 27 and if so required shall S 310 D 9 However we note that the Gaming Venture case dealt only with the license holder and did not address any issues related to a person entitled to a commission by virtue of a contractual agreement related to facilitation of the establishment of the video poker gaming operation therefore the case has limited applicability in the instant litigation In Gaming Venture at issue was the validity and enforceability of contracts for the installation and operation of video poker machines by the plaintiff in several of the slocations however the machines were never installed and one of the defenses presented in the defendant ensuing breach of contract suit was that with respect to one location the contract had not been properly submitted for approval to the VGDOSP as required by the Video Draw Poker Devices Control Law In Gaming Venture the plaintiff suit was dismissed by partial summary judgment upon a finding by the s trial court that the contracts were absolute nullities because of noncompliance with licensing regulations On appellate review the Fifth Circuit recognized that the law required that a location sowners must be subjected to a suitability determination before receiving a license No such determination had been made in that case and the result reached by the trial judge was found correct Although the parties may have previously been licensed and passed a suitability review the appellate court held that compliance with applicable laws was required for each new contract citing La Admin Code Title 42 Part XI 2 H 2411 requiring a llapplicants and licensees shall submit copies of all written contracts pertaining to which they are party or intend to become party within 10 to the operation of video gaming devices business days of signing or making such contracts and LSAR 27 making it a criminal offense S 309 B for any person to operate a video poker machine without complying with all of the requirements for obtaining a license Gaming Venture 2008310 at pp 34 996 So at 516 17 The Fifth Circuit 2d affirmed the trial court finding that since there had been incomplete compliance with the licensing procedures for the contracts at issue the contracts had not become effective and enforcement of the contracts would be against public policy See Gaming Venture 2008 310 at p 4 996 So at 517 We 2d note that the circumstances of the instant case differ on a significant point from those presented in Gaming Venture in that in this case the licensee National Gaming presumably has met all requisite suitability requirements and the issues presented herein deal only with whether a non licensee BLPR was also required to be declared suitable by the VGDOSP meet all suitability requirements and qualifications for licensees as stated therein In its motion for summary judgment National Gaming asserted that BUR was required to submit to an administrative suitability review pursuant to LSA R 27 administrative regulations and the S 310 D Bankruptcy Court order We will review each of these asserted authorities s LSAR 27 S 310 D In addition to licensees Louisiana law has required since July 1 1994 that eperson very who receives more than five percent revenue related to the gaming operation interest in the form of a commission shall meet all suitability requirements and qualifications for licensees See LSAR 27 and its precursor former LSA R 33 as S 310 D S 4862 D 10 amended by 1994 La Acts 3d Ex Sess No 13 1 effective July 1 1994 emphasis added National Gaming contends that BUR was required to meet suitability requirements on the basis of this provision However in the instant case it was not established that BUR was receiving more than a five percent revenue interest in the ELLB Truck Stop contract Although BLPR original contract with Louisiana Gaming s 8 Participants in the gaming industry that are required to be licensed include device owners operators distributors service entities and gaming establishments See LSAR 27 S 311 9 Louisiana Revised Statute 27 Dprovides in full 310 Every person who has or controls directly or indirectly more than a five percent ownership income or profit interest in an entity which has or applies for a license in accordance with the provisions of this Chapter or who receives more than five percent revenue interest in the form of a commission finder fee loan repayment or any other s business expense related to the gaming operation or who has the ability in the opinion of the division to exercise a significant influence over the activities of a licensee authorized or to be authorized by this Chapter shall meet all suitability requirements and qualifications for licensees For the purposes of this Chapter all gaming related associations outstanding loans promissory notes or other financial indebtedness of an applicant or licensee must be revealed to the division for the purposes of determining significant influence and suitability No facts were alleged in the instant case implicating the applicability of the provision relative to persons who have the ability to exercise a significant influence over the activities of a licensee therefore it is not at issue herein 10 provided for a ten percent commission BLPR had verbally agreed with Louisiana Gaming to take only a five percent commission The date on which this agreement was made was not conclusively established in the record though it was before Louisiana Gaming went bankrupt The parties do not appear to dispute that National Gaming was also paying only a five percent commission to BLPR before the payment of commissions was discontinued in August of 2000 Thus the record presented on appeal does not establish that BLPR was receiving more than five percent in order to trigger the LSAR 27 mandate for a suitability determination as S 310 D to BUR Administrative Requirements National Gaming further contends that a suitability determination was required to be made as to BLPR under the authority of La Admin Code Title 42 Part XI 3 H 2411 stating If requested every person who is party to any video gaming contract with an applicant for a video gaming license or a licensee of the division shall provide the division with any and 10 National Gaming arguments on appeal also seem to assert that certain BLPR minority shareholders s were subject to LSAR 27 requirement that e person who has or controls directly or S 310 s D very indirectly more than a five percent ownership income or profit interest in an entity must pass a suitability review National Gaming contends that the suitability of these BLPR shareholders i the children of Mr e Barrios Lisa Jordan Roxanne Barrios Pam Cuculla and Stacie Nola who allegedly owned more than a five percent interest in BLPR should have been determined and was not However the foregoing referenced provision of LSARS 27 qualified by the phrase which has or applies for a license Dis 310 in accordance with the provisions of this Chapter therefore the provision only applies to an entity that has or applies for a license As previously stated herein BLPR did not nor was it required to hold or apply for a license We find no merit in this argument by National Gaming However we note that only if BLPR receives more than a five percent revenue interest so as to trigger LSAR 27 suitability S 310 s D requirement on that basis would the requirement that all suitability requirements and qualifications for licensees be met thereby also triggering the requirement that e person who has or controls directly very or indirectly more than a five percent ownership income or profit interest in an entity pass a suitability review In such a case BLPR more than five percent shareholders would also be required to meet s suitability requirements Notwithstanding as noted hereinabove Mr Barrios children would only have s owned either a 1or a 3 interest each in BLPR depending on whether Mr Barrios stock 5625 125 s was community or separate property and would not be required to meet suitability pursuant to this LSA S 310 R 27 Dprovision 11 We do not reach the issue of whether the revenue interest discussed in LSA R 27 S 310 D references the gaming operation of the licensee in this case National Gaming as an entity which might include other gaming locations owned or operated by the licensee or whether the gaming operation is limited only to those gaming locations in which the person in this case BLPR has a revenue interest as a ruling on the issue is not necessary for the resolution of the issues presented in this appeal 11 all information requested by the division that is necessary for a determination of suitability Emphasis added A March 27 1997 letter from the chairman of the LGCB directed to renewal applicants also declared that included within the persons required to submit to a suitability determination was anyone who receives a percentage of the gaming revenue and their spouses Emphasis added Further a copy of the LGCB application instructions was filed into the record and states that the term person required to meet suitability includes any person who receives or may receive a percentage of the gaming revenue from the applicant lso a spouses of any person who receives or may receive a percentage of the Emphasis added In conjunction gaming revenue from the applicant with its motion for summary judgment National Gaming filed into the record a copy of an August 8 2000 letter from Trooper Kirk A Pierce of the VGDOSP requesting in connection with National Gaming purchase of s the Louisiana Gaming assets suitability applications from National s Gaming associates receiving video poker revenue and specifically naming in addition to others BLPR National Gaming asserts that BLPR was never found suitable by the LGCB Underscoring original Our review of the record reveals a question of fact as to whether BLPR was in fact found suitable by the VGDOSP application for suitability on December 13 2001 BLPR filed its Excerpts from the 12 Louisiana Administrative Code Title 42 Part III B 120 requires that a llapplicants licensees permittees and persons required to be found suitable shall fully comply with all instructions contained in the prescribed forms and shall provide all documentation and information requested therein 13 We note that suitability investigations are not conducted directly by the LGCB but rather in accordance with LSA R 27 these S 310 1 B determinations are made by the division which as stated hereinabove pursuant to LSAR 27 is the division in the office of state police Department of S3 7 Public Safety and Corrections which provides investigatory regulatory and enforcement service to the Louisiana Gaming Control Board in the implementation administration and enforcement of the Louisiana Gaming Control Law known as the Video Gaming Division of the Office of State Police VGD OSP Thus it is the VGDOSP that makes the suitability determinations with respect to the Video Draw Poker Devices Control Law 12 deposition and written report of Trooper Pierce the investigating agent for the VGDOSP were filed into the record Following his investigation and the settlement agreement between BLPR and the Redd parties Trooper Pierce stated that pursuant to the law and regulations governing video draw poker specifically LSA RS 27 he found nothing to preclude anyone 310 associated with BLPR to receive commission though he could not say 14 whether a letter to that effect as to BLPR had been issued Trooper Pierce also indicated that the investigation concerning BLPR was unique in that BLPR was not applying for a license he stated that licensees always receive written notification of the results of an investigation Trooper Pierce further indicated that because BLPR was not seeking a license and its case only involved third party revenue i commissions he was not sure whether the e investigation results had been issued in writing Trooper Pierce also stated that he had never encountered this type situation before However Trooper Pierce related that the Attorney General office became involved in s reviewing the BLPR documents and ascertaining whether the April 17 2003 settlement agreement reached between BLPR and the Redd parties whereby the Redd parties divested themselves of any interestsrights in BLPR would result in BLPR meeting suitability requirements Trooper Pierce stated that when a corporation under review has a shareholder who presents suitability issues the corporation is given the opportunity to rectify the situation Trooper Pierce further stated that it is sometimes possible for a corporation to remove the party with questionable suitability i purchasing stock e by 14 With respect to BLPR shareholders Gil Lerma Guy Palermo and Patricia Barrios the Office of State Police did issue individual letters as to each on December 5 2003 reciting satisfactory results following suitability investigations We note that if the allegations made in the instant suit are true and correct i e that Richard Barrios children sold their interests in BLPR to Darlene Redd and that she thereafter s transferred all of her interests rights in BLPR to BLPR then the only remaining shareholders at that time would have been Gil Lerma Guy Palermo and Patricia Barrios 13 changing officers etc and after approval by the Attorney General office s an investigation may be satisfactorily finalized in that way Trooper Pierce indicated that this was the procedure utilized in the BLPR case The deposition testimony of Trooper Pierce and accompanying documentation taken as a whole indicates that BLPR was found suitable No evidence was presented to the contrary Moreover we find no in merit the assertion that the cited administrative rules regulations and or actions validly require a suitability review as to BLPR because legislativelyestablished such a requirement would exceed the parameters for suitability The regulations promulgated by an agency may not exceed the authorization delegated by the Legislature 2d So State v Alfonso 99 1546 pp 8 9 La 11 753 99 23 156 162 Farmer Seafood Company v s State Through the Department of Public Safety 20101746 p 14 La App 1 Cir 2 11 14 3d So s Piazza Seafood World LLC v Odom 2007 2191 p 12 La App 1 Cir 12 6 So 820 828 08 23 3d See also LSAR S 963 49 An agency exercising delegated authority is not free to pursue any and all ends but can assert authority only over those ends that are connected with the task delegated by the legislative body The openended discretion to choose ends is the essence of legislative power it is this power that the legislative body possesses but its agents lack State v Alfonso 99 1546 at p 9 753 So at 162 2d With respect to this case we conclude that although the legislature has delegated the power of investigation as well as other powers to the LGCB 15 Louisiana Revised Statute 49 provides in pertinent part that t 963 he validity or applicability of a rule may be determined in an action for declaratory judgment in the district court of the parish in which the agency is located and that t he court shall declare the rule invalid or inapplicable if it finds that it violates constitutional provisions or exceeds the statutory authority of the agency or was adopted without substantial compliance with required rulemaking procedures iEl and the VGDOSP including authority to promulgate rules and regulations in furtherance of that power pursuant to LSAR 27 27 27 S 15 20 24 308 27 and 27 neither the LGCB nor the VGDOSP should be allowed 313 to enlarge the scope of this investigatory power to instances not statutorily authorized To the extent the cited administrative rules and regulations or and other administrative actions seek to legislate prescribe or expand those instances in which a non licensee is required to meet suitability in addition to those set forth by the legislature in LSAR S 27 we conclude that D 310 these administrative directives do not create any suitability requirement beyond that contained in LSA R 27 S 310 Bankruptcy Court Order National Gaming asserts in brief to this court that the Bankruptcy Court specifically ordered associates of Louisiana Gaming and anyone receiving commissions from gaming revenues to apply to meet suitability We disagree The order of the Bankruptcy Court for the Eastern District of Louisiana stated in pertinent part as follows Pursuant to Sections 365 and 1123 of the Bankruptcy a 2 b all executory contracts between Debtor Louisiana Code Gaming Management Inc and any person or enti shall be y t assumed by the Debtor under this Plan and assigned to the r161 except Purchase 1 Associate Contracts between the Debtor and persons or entities determined to be unsuitable by the LGCB The Associate Contracts shall be assumed in accordance with the Plan and the May 25 2000 National Gaming offer in that the commission paid on the assumed Associate Contracts shall be the lesser of the contract rate or twenty percent 20 of the net gaming revenue as that term is defined in the associate contracts i6 Although it was not directly stated in the Bankruptcy Court order the parties do not dispute that the purchaser referenced was National Gaming V Finally all location agreements of the Debtor including those specifically listed on Exhibit B to the Plan are expressly assumed and assigned to Purchaser and Purchaser shall have all ofthe Debtor rights title and interest under those contracts s Emphasis added National Gaming asserts that the phrase in this order stating except Associate Contracts between the Debtor and persons or entities determined to be unsuitable by the LGCB constitutes an affirmative directive to all persons or entities having associate contracts with Louisiana Gaming being transferred to National Gaming to apply for and obtain a declaration of suitability On the contrary the language at issue was obviously meant to declare only that if in the normal course of its business and pursuant to the application of Louisiana law the LGCB determined any of the referenced persons or entities to be unsuitable the contracts of those personsentities were not required to be assumed by National Gaming We find no merit in National Gaming sargument on this issue Having rejected contending BLPR all was of National required to s Gaming obtain a asserted favorable bases for suitability determination but failed to do so we conclude National Gaming was not entitled to summary judgment in its favor Having decided the appeal on these grounds we find it unnecessary to address the remaining assignments of error asserted by BLPR CONCLUSION For the reasons assigned herein the judgment of the district court rendering summary judgment in favor of National Gaming Inc and dismissing the claims of BLPR Inc is hereby reversed and the matter is remanded for further proceedings in accordance with the foregoing costs of this appeal are to be borne by National Gaming Inc REVERSED AND REMANDED 16 All
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