ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
FREDERICK N. HADLEY JAMES D. WITCHGER
COURT OF APPEALS OF INDIANA
Indianapolis, Indiana ASHLEY ROZEK HOWELL Rocap Witchger LLP
KELLY BEDLE, )
vs. ) No. 15A01-0211-CV-462
SUSAN KOWARS, )
APPEAL FROM THE DEARBORN CIRCUIT COURT
The Honorable Anthony C. Meyer, Senior Judge
Cause No. 15C01-0105-CP-093
September 23, 2003
OPINION - FOR PUBLICATION
In this case, we are presented with a classic choice of law question.
If Indiana law prevails, the cause must proceed to trial. If
Ohio law applies, the trial court correctly dismissed the complaint.FACTS
Appellant-plaintiff Kelly Bedle appeals the trial courts judgment granting appellee-defendant Susan Kowarss motion
to dismiss her claim for breach of contract against Kowars regarding an alleged
agreement they had with each other to split gambling winnings from the Argosy
Casino (the Casino) in Lawrenceburg. Specifically, Bedle argues that the trial court
erred in dismissing the complaint because an enforceable contract was created and Kowars
breached the agreement because she subsequently refused to split the winnings with her.
Concluding that Ohio law controls in this instance that prohibits such gambling
agreements, we affirm the dismissal of the complaint.
On June 16, 2000, Kowars invited Bedle to join her for a one-day
trip to the Casino in Lawrenceburg. At the time, both women resided
in Hamilton County, Ohio and a number of discussions regarding their trip were
made there. Bedle maintains that the two agreed to bring $300 for
gambling purposes to the Casino and would split any winnings. Kowars urges,
however, that no such agreement ever existed.
At some point during the gambling endeavor, Kowars pulled a lever on a
slot machine that returned a jackpot of $132,365. When the two returned
to Ohio, Kowars advised Bedle that she was not going to divide the
winnings with her and further claimed that she never agreed to do so.
As a result, Bedle filed a complaint for breach of contract, alleging
that an oral contract had been created in Ohio to share the winnings
and that Kowars breached the agreement because she refused to split the jackpot.
In response, Kowars filed a motion to dismiss the complaint pursuant to T.R.
12 (B)(1) and 12 (B)(6), claiming that the trial court lacked subject matter
jurisdiction and that Bedle failed to state a claim upon which relief could
be granted. Following a hearing, the trial court granted Kowarss motion.
In essence, the trial court dismissed the action because it determined that the
subject of the cause of action was negotiated in Ohio, Kowars and Bedle
were residents there, the contract was to be performed in Ohio, and all
witnesses in the action were Ohio residents. Bedle now appeals.
DISCUSSION AND DECISION
We initially observe that our standard of review of a trial court's grant
or denial of a motion to dismiss pursuant to Trial Rule 12(B)(1) is
a function of what occurred in the trial court. GKN Co. v.
Magness, 744 N.E.2d 397, 401 (Ind. 2001). The standard of appellate review
is dependent upon: (1) whether the trial court resolved disputed facts; and
(2) if the trial court resolved disputed facts, whether it conducted an evidentiary
hearing or ruled on a "paper record." Id. If the
facts before the trial court are not in dispute, then the question of
subject matter jurisdiction is purely one of law and no deference is afforded
to the trial court's conclusion. Id. Thus, the standard of review is
de novo. Id.
In resolving the issue that Bedle presents, we must first decide whether Indiana
law or Ohio law applies in this circumstance. Generally, Indianas choice of
law rule for contract actions calls for applying the law of the forum
with the most intimate contacts to the facts. Hartford Acc. & Indem.
Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind. Ct. App. 1997).
Thus, in applying this test, the court considers the following factors: (1)
the place of contracting; (2) the place of negotiation of the contract;
(3) the place of performance; (4) the location of the subject matter of
the contract, and (5) the domicile, residence, nationality, place of incorporation and place
of business of the parties. Id. Our courts have not hesitated
to apply the substantive law of another state where the most intimate contacts
test warrants it. See OVRS Acquisition Corp. v. Community Health Serv., Inc.,
657 N.E.2d 117, 124 (Ind. Ct. App. 1995) (holding that Kentucky law applied
when it was demonstrated that the defendant was a Kentucky corporation, the plaintiffs
principal place of business was in Kentucky, and the contract was signed in
In this case, the complaint alleges that the contract was created in Ohio
and the parties had a number of discussions there regarding their plan to
gamble at the Casino. Additionally, the place of performance was to have
been in Ohio. That is, Bedles allegation that Kowars breached the contract
by informing her that she did not intend to honor their agreement occurred
on July 2, 2000 when they were in Ohio. It is undisputed
that Kowars returned to Ohio with the check that had been issued to
her. Finally, both parties reside in Ohio and the sole contact they
had with Indiana was when they gambled at the Casino and collected the
winnings. Viewing these factors as a whole, we find that Ohio has
the most intimate contacts to this litigation. Therefore, we will apply the
substantive law of Ohio.
In accordance with Ohio law, contract terms that violate public policy are
unenforceable. Sammarco v. Anthem Ins. Cos., 131 Ohio App.3d 544, 551 (1998).
Turning to the relevant statutory provision, Ohio Rev. Code § 3763.01 sets
forth the general rule stating that promises and agreements relating to gambling are
(A) All promises, agreements, . . . or other contracts, . .
. when the whole or part of the consideration thereof is for money
or other valuable thing won or lost, laid, staked, or betted at or
upon a game of any kind, . . . or on a wager,
or for the repayment of money lent or advanced at the time of
a game, play, or wager, for the purpose of being laid, betted, staked,
or wagered, are void.
(B) Sections 3763.01 to 3763.08 of the Revised Code do not apply
to . . . any game of chance that is not subject to
criminal penalties under section 2915.02 of the Revised Code.
While section (B) quoted above exempts games of chance that are permitted in
Ohio such as charitable bingo games, it is apparent that a slot machine
qualifies as a game of chance that is subject to criminal penalties.
Thus, in accordance with O.R.C. § 3763.01, agreements relating to slot machine gambling
are void. We also note that the statute provides no basis for
distinguishing between gambling conducted in Ohio and that conducted elsewhere. Therefore, so
long as the subject of the contract is a type of gambling that
is subject to criminal penalties when performed in Ohio, the statute operates to
void the contract. Inasmuch as Ohio law prevails in this instance and
the purported contract between Bedle and Kowars was void in accordance with the
relevant statutes, we must conclude that the trial court properly dismissed Bedles complaint.
As we noted at the outset, however, had the circumstances been otherwise, and
Indiana law applied here, the gambling contract between the Bedle and Kowars might
very well have survived a motion to dismiss. As our supreme court
Kaszuba v. Zientara, 506 N.E.2d 1, 3 (Ind. 1987), there is
nothing perceptibly evil, vicious, wicked, immoral or shocking to the prevailing moral sense
regarding such agreements. Moreover, our General Assembly has expressly authorized gambling to
be conducted by licensed owners on riverboats. Ind. Code § 4-33-9-1.
SHARPNACK, J., concurs.
BROOK, C.J., concurs in result with opinion.
COURT OF APPEALS OF INDIANA
KELLY BEDLE, )
vs. ) No. 15A01-0211-CV-462
SUSAN KOWARS, )
BROOK, Chief Judge, concurring in result
In my view, Bedles arguments are based on the faulty premise that the
trial court dismissed her complaint because her contract with Kowars is unenforceable under
both Indiana and Ohio law. Nothing could be further from the truth.
Kowars sought to dismiss Bedles complaint on the grounds of lack of subject-matter
jurisdiction and failure to state a claim upon which relief can be granted,
as well as on the alternative ground of forum non conveniens. See
Appellants App. at 38 (motion to dismiss); id. at 47-51 (memorandum discussing forum
non conveniens considerations under Ind. Trial Rule 4.4(C)). Indiana Trial Rule 4.4(C)
Jurisdiction under this rule is subject to the power of the court to
order the litigation to be held elsewhere under such reasonable conditions as the
court in its discretion may determine to be just.
In the exercise of that discretion the court may appropriately consider such factors
(1) Amenability to personal jurisdiction in this state and in any alternative forum
of the parties to the action;
(2) Convenience to the parties and witnesses of the trial in this state
in any alternative forum;
(3) Differences in conflict of law rules applicable in this state and in
the alternative forum; or
(4) Any other factors having substantial bearing upon the selection of a convenient,
reasonable and fair place of trial.
At the hearing, Kowarss counsel informed the trial court,
As you may or may not know, there is another case now pending
in this Court filed by another plaintiff against Mrs. Kowars alleging that he
too is entitled to one-half the jackpot won by Mrs. Kowars, and in
the interest of judicial efficiency and economical litigation, we would like to
time, withdraw our Motion To Transfer The Venue, and should this Court deny
the Motion To Dismiss on the basis of Jackson v Kraus, that the
case remain here in Indiana so that the two matters can be consolidated
and handled together. Obviously, our desire is to have this Court apply
the Ohio law before it and decide that an Ohio Court would not
enforce the alleged agreement, but if we lose this Motion
in consultation with her
attorneys, Mrs. Kowars would desire for the case to stay here, so we
withdraw the Motion To Transfer Venue on the basis form non-convenience [sic] at
Id. at 17-18. The trial court confirmed that Bedle had no objection
to Kowarss motion to withdraw but never specifically ruled on the motion.
The trial courts order on Kowarss motion to dismiss reads in relevant part
And the Court, having been duly advised in the premises and having heard
the evidence herein, the arguments of counsel and having reviewed briefs of the
parties, now finds:
1. That the contract which is the subject of this cause of action was
negotiated and made in the State of Ohio;
2. That the parties are both residents of the State of Ohio and were
at the time the contract was made;
3. That the contract was to be performed in the State of Ohio; and
4. That the witnesses in this cause of action have their residences in the
State of Ohio within the Hamilton County area.
For all the above reasons, the Court grants [Kowarss] motion to dismiss.
Id. at 5.
Clearly, the trial court did not dismiss Bedles complaint on the basis that
the contract was unenforceable under both Indiana and Ohio law. Given that
Bedle does not challenge the stated basis of the order, I would find
her arguments waived and affirm the trial courts dismissal of her complaint.
A similar result was reached in
Jackson v. Krauss, C.A.
No. L-82-015, 1982 WL 6377 (Lucas Cty., April 30, 1982), where the Court
of Appeals of Ohio for the Sixth District, in an unpublished decision, upheld
the dismissal of a complaint for breach of contract based on an alleged
agreement for the defendant to place gambling wagers on the plaintiffs behalf in
Las Vegas. The Jackson court dismissed the complaint for the reason that
the contract alleged to exist between the parties was against public policy.