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09/28/95 ANTHONY CIE v. COMDATA NETWORK

September 28, 1995

ANTHONY CIE, MICHAEL OWCARZ, AND MILTON ROSENBLUM, INDIVIDUALLY AND PURPORTEDLY ON BEHALF OF OTHER PERSONS SIMILARLY SITUATED, PLAINTIFFS-APPELLANTS,
v.
COMDATA NETWORK, INC.; DISCOVER CARD SERVICES; SECURITY STATE BANK AND TRUST; GARY-WHEATON BANK, N.A.; TECH FEDERAL CREDIT UNION; AND BANKAMERICARD, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable Walter Bieschke, Judge Presiding (1992). Honorable Aaron Jaffe, Judge Presiding (1993).

As Corrected October 18, 1995. Released for Publication November 3, 1995. Petition for Leave to Appeal Denied January 31, 1996.

The Honorable Justice S. O'brien delivered the opinion of the court: Hoffman, P.j. and Cahill, J., concur.

The opinion of the court was delivered by: O'brien

JUSTICE S. O'BRIEN delivered the opinion of the court:

Plaintiffs appeal the dismissal of their complaints for failure to state a cause of action. They ask this court to construe section 28-7(a) of the Criminal Code of 1961 (hereafter the Gambling Act), Ill. Rev. Stat. 1991, ch. 38, par. 28-7(a) (now 720 ILCS 5/28-7(a) (West 1994)), as making all loans for gambling void and unenforceable in Illinois, to reverse the dismissal, and remand the cause to the trial court. We affirm.

Plaintiffs obtained loans at legal gambling establishments in the form of "cash advances" on their credit cards purportedly for the purpose of gambling in those establishments. To get a cash advance, plaintiffs ran a credit card through a card reader attached to a "Comchek" apparatus at or near a gambling cage owned and maintained by defendant Comdata Network, Inc. ("Comdata"). The Comchek apparatus would issue a check, drawn on a Comdata account, which plaintiffs would endorse in exchange for gambling chips, betting vouchers, or cash.

Comdata received fees under agreements with the other defendants (collectively, the "Credit Card Defendants"), all of which are financial institutions that issue credit cards.

Plaintiff Anthony Cie used cash advances for pari-mutuel betting on horses in race tracks and off-track betting parlors within Illinois. Plaintiffs Michael Owcarz and Milton Rosenblum used cash advances to gamble in Nevada casinos. None of the gambling could lead to criminal conviction in the state where it occurred.

The parties present two issues for review. First, as to Plaintiff Cie, whether cash advancesfor legalized gambling within the state of Illinois are void and unenforceable under section 28-7(a) of the Gambling Act (Ill. Rev. Stat. 1991, ch. 38, par. 28-7(a) (now 720 ILCS 5/28-7(a) (West 1994))), and as a matter of public policy. And second, as to Plaintiffs Owcarz and Rosenblum, whether cash advances for legalized gambling outside the state are unenforceable in Illinois courts under section 28-7(a), as a matter of public policy, and pursuant to the commerce clause. (U.S. Const. Art. I, § 8, cl. 3.) Section 28-7(a) of the Gambling Act reads:

§ 28-7 Gambling contracts void. (a) All promises, notes, bills, bonds, covenants, contracts, agreements, judgments, mortgages, or other securities or conveyances made, given, granted, drawn, or entered into, or executed by any person whatsoever, where the whole or any part of the consideration thereof is for any money or thing of value, won or obtained in violation of any Section of this Article are null and void.

(Ill. Rev. Stat. 1991, ch. 38, par. 28-7(a) (now 720 ILCS 5/28-7(a) (West 1994)).)

I.

Plaintiff Cie first contends that all loans for the purpose of gambling, except those covered by section 28-7(d) of the Gambling Act, are void and unenforceable in Illinois pursuant to the rule of statutory construction expressio unius est exclusio alterius. Under this maxim, a statute which specifies one exception to a general rule excludes other exceptions by implication.

Section 28-7(a) expresses the general rule that gambling contracts "where the whole or any part of the consideration thereof is for any money or thing of value, won or obtained in violation of any Section of this Article are null and void." (Ill. Rev. Stat. 1991, ch. 38, par. 28-7(a) (now 720 ILCS 5/28-7(a) (West 1994)).) Subsection (d) excepts extensions of credit to gambling patrons by licensed riverboat casino operators from this rule. Cie argues that because the legislature enacted subsection (d) no other creditor may recover such debts. We disagree.

The plain language of section 28-7(a) limits its applicability to those contracts in which the lender participated in the unlawful gambling enterprise. There was no wager between Cie and the defendants herein. Instead, the Credit Card Defendants advanced Cie a loan through their agent, Comdata, which was to be repaid regardless of whether Cie won or lost. For Cie to claim this transaction is an illegal gambling contract misses the entire process of how the debt was incurred -- pursuant to a cardholder's agreement wherein the card issuer promises to advance the cardholder funds up to a given limit and the cardholder promises to repay the loan (presumably with interest). (See National Recovery System v. Kasle (E.D. Mich. 1987), 662 F. Supp. 139, 141.) This is a simple contract having nothing whatever to do with gambling. Accordingly, the general rule regarding gambling contractsin section 28-7(a) does not apply to cash advances such as those obtained by Plaintiff Cie. Because the general rule of section 28-7(a) does not apply, the exception to the rule enumerated by subsection (d) does not implicate expressio unius est exclusio alterius to void Cie's debts to defendants.

Plaintiff Cie next argues that loans for legalized gambling are void and unenforceable under section 28-7(a) of the Gambling Act as a matter of public policy. In support of his contention, Cie argues that all loans for the purpose of gambling were held to be void and unenforceable under section 28-7(a)'s predecessor statute, Ill. Rev, Stat. 1961, ch. 38, par. 329 (repealed as of Jan. 1, ...


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