Henderson ordered to reconsider its decision on casino expansion

Tuesday, April 27, 1999 | 10:46 a.m.

CARSON CITY -- The Nevada Supreme Court on Monday ordered the Henderson City Council to reconsider its decision not to allow a tavern called Thirstbusters to expand its 40 slot machines to compete with other clubs in the area.

The court said this limitation may be an "inequitable and oppressive restriction" on the owners' use of their property.

Tavern owners Ronald Coury and Daniel Hughes gained a city license in 1989 for 15 slot machines. Thirstbusters applied to expand its gaming operation in 1991 but was denied. A court fight with the city ensued and a settlement was reached in 1992 for an added 25 slot machines if Coury and Hughes agreed to not seek another increase for as long as they owned the bar.

From June 1992 through December 1995, the City Council approved at least 18 applications for limited or more extensive gaming licenses for competing businesses in the same area as Thirstbusters. Coury and Hughes went back to the council again to void the agreement.

The city refused and the owners went to court again to void the settlement. The City Council filed a countersuit, seeking to force Thirstbusters to give up its income and profits from the additional 25 slot machines it gained under 1992 settlement. The city claimed it was entitled to the money because the bar owners received an "unjust enrichment."

District Judge Joseph Bonaventure ordered the city to put the issue on the council agenda. The council again refused to consider the application. The case bounced back into court.

Bonaventure ruled for the city on the request for more slot machines. But he rejected the city's counter suit to force Coury and Hughes to give up their profits earned from the additional slots.

Both sides appealed to the Supreme Court, which held the city had the right to impose restrictions on the license.

But the court said conditions have changed in Henderson and these must be considered.

The unanimous decision directed Bonaventure to send the issue to the City Council, which must find whether the "changed conditions, if any, have thwarted the original purpose of the 40-machine restriction -- to limit gaming in the general area.

"If the geographical limitation on gaming is no longer in effect, the application for removal of the restriction in the agreement must be granted," the court said. If the city refuses to change its mind, the court said Bonaventure should consider the case in light of its opinion.

The court also rejected Henderson's attempt to take away the profits of Coury and Hughes. The owners, the court said, "were not unjustly enriched as a result of their operation of the 25 additional gaming machines." The court said the profits from those machines do not belong to the city.

"Unjust enrichment occurs whenever a person has and retains a benefit which in equity and good conscience belongs to another," said the court, quoting from a prior case.