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Lombardi Law Firm

Lottery, Lotto and Games of Chance

Gaming and the LotteryIowa LotteryWinning the Lottery is more than Just Dumb Luck

You can’t win a lottery without turning in a ticket.

*As much as you may want to think this is about fairness, it’s not; it’s about playing by the rules you agreed to when you bought a lottery ticket that is later picked as having the winning numbers.

Don’t fool yourself into thinking you won the lottery when you can’t produce the winning ticket. To win the lottery you have to do several things.

  1. Be old enough to legally play the game.
  2. Buy the winning ticket.
  3. Buy the ticket during the time period when the game is active.
  4. Possess the winning ticket. (Can be by gift or other legitimate means. Just not stolen.)
  5. Sign the winning ticket.
  6. Turn the ticket in by the deadline for validation.
  7. Actually turn the ticket into the Iowa lottery.
  8. Have the ticket be validated by the lottery’s machinery.
  9. Don’t engage in fraud or theft to possess the winning ticket.
  10. Don’t wait to turn in the winning ticket if the economy is in down market because the value of the winning prize will probably decline.

The Iowa Lottery recently had a drawing named Hot Lotto that was sold at a Des Moines convenience store with the winning number being drawn on December 29, 2010. That meant the winning number had to be turned in on or before December 29, 2011. It was, but barely.

Since December 29, 2010 the hunt has been one to locate the winner of what was then $16.5 million. I got involved in the matter in early December 2011, although I’m not able to say just how I was involved since attorney-client privilege attaches. What I would like to share with you is the outcome of some research I did at Drake Law School’s library. It was good to get back in the stacks at the law school I called home for three short years. The smell of law books has left a distinct impression in my memory. Law students today are different than we were back in the late 1970’s. They have laptop computers that add and subtract from the experience. Many were online, it’s free for them, checking their Facebook pages (a huge time waster), most were studying but the one thing I noted was how loudly they talked as they either came in or left the confines of the inner sanctum of what should be more like a monastery. Back in the day, I hate that phrase; if we saw a practicing attorney in our library we respectfully hushed up not wanting to annoy a possible employer. That’s not the case today, practicing attorneys in the sanctum have become invisible and the talking goes on unabated. That’s too bad because it leaves a negative impression on the licensed and practicing lawyers who need to concentrate on real-life problems for paying clients or those not paying and where we earn a fee only if we win (contingent fees). If as a law student, you haven’t developed the knowledge or intuition to respect those who may hire you, why would we as potential employers waste our firm’s resources teaching you what your mothers’ and fathers’ were not able to impress upon you? It’s a lesson in basic common sense and manners – not higher more skilled level thinking involved. But enough said about that because today we are here to discuss winning lottery tickets and how to be a winner.

Above you have the 9 basic requirements (#10 is only a suggestion) to take that winning ticket and turn it into cold hard cash. The issues I researched had to do with lost, stolen or mangled lottery tickets or tickets mishandled by the salesclerk at the convenience store where the ticket was turned in to see if it was a winner. In each instance no matter what the cause you have to have the winning ticket and do what’s listed above or else you can’t win. You can buy the winning ticket, someone can steal it from you, the clerk can mishandle it and unless you turn in a signed ticket that validates by the lottery’s electronic terminals you can’t be declared the winner.

My research focused on missing, lost, stolen or voided tickets. For the lawyers reading this I’ll give you the winning ticket to your research by referring you to 48 A.L.R.6th 243, Lotteries – Actions Against State, specifically subsection 19, Sal of Ticket – Missing, lost, stolen, or void ticket – Recovery not allowed. At the end of this series I’ll include a list of citations for your cases. Please don’t expect me to follow strict BlueBook citation guidelines, after all this is a blog and earns me little or nothing. This is an exciting area to research because in my case (but for one wrong assumption) it could have resulted in a windfall to my client of $16.5 million. If that’s not motivation to plug away, I don’t know what would be.

See also Iowa Administrative Code 531-11.1(4) An original ticket or share must be presented before payment of any prize will occur. No reproduction, facsimile or copies of any kind will be allowed.

I.A.C., Chapter 11 Prizes. 531-11.1(99G) Claiming Prizes - 11.4 makes the lottery ticket a “bearer instrument” and section 11.11 makes void tickets that are stolen or lost tickets. 99.G.9(3) along with 21(2). Although I find the “lost ticket” concept not congruent with the idea of a bearer instrument and rather difficult to prove.

CJS Lotteries sections 14-18.

Keynote: Lotteries section 10.

A Mislaid Winning Lottery Ticket and the One-Year-Validation Period – In Madara vs Commonwealth of Pennsylvania, 323 A.2d 401 (Pa.Cmwlth. 1974) William Madara on June 14, 1972 purchased what turned out to be the winning lottery ticket for $0.50. The winning jackpot totaled $1,000,000 and was drawn on June 14, 1972. Shortly after he bought the ticket the 1972 Atlantic hurricane season brought Hurricane Agnes to his doorstep and his family’s escaping the resulting flooding caused him to mislay the wallet containing… you guessed it, the winning million dollar lottery ticket. He didn’t find the wallet and turn in the winning ticket until June 16, 1973, what the Court describes as one day late. But rules are rules in the lottery the one-year validation period is in place for a pretty good reason. At some point unclaimed prize money needs to be reinvested into other games to increase participation and to encourage winners to come forward to claim their prize. Although sympathetic the Pennsylvania court ruled against Mr. Madara and for the lottery. There is a dissent, but like all lawyers who lose the case but are awarded a dissenting opinion, you can’t spend what dissenting opinion provides.

Ticket Inadvertently Destroyed - Karafa vs New Jersey State Lottery – 324 A.2d 97 (New Jersey, 1974) – Here we have John Karafa as plaintiff who the facts in the opinion state claimed to be the June 24, 1971 $50,000 winner, but was unable to produce the winning ticket. What happened in this case is a lesson in why you turn in the winning ticket a.s.a.p. No ifs, ands or buts about it. There was little question that Mr. Karafa had purchased the winning ticket. There were six or seven independent witnesses that saw the winning ticket when the waitress processed the ticket and announced it was the winning ticket. Where the rub came in was when Karafa’s mother inadvertently threw out the ticket with some old tickets; preventing Mr. Karafa from being able to sign the ticket, turn it in and have it authenticated. Generally it’s a well-recognized rule of law that the accidental or unintentional loss or destruction of a written instrument does not change or impair the obligation of the parties thereto. And a lottery ticket is a bearer instrument similar to a bearer bond. But unlike a bearer bond a lottery ticket is sold as a game with its own set of rules that all participants agree to follower when they purchase the chance. In this instance the Court sided with the lottery commission and put the winner’s mother in the penalty box for an extra long period of time.

And in Palese vs Delaware State Lottery Office, 2006 WL 1875915(Del.Ch.), No. Civ.A. 1546-N the Court of Chancery of Delaware dismissed the complaint by a patron who sued after presenting the pay slip following his lottery ticket being inadvertently destroyed in the laundry finding the State is not unjustly enriched. After all you agreed to the rules when you purchased the ticket.

See also Brown vs Calif. State Lottery Comm’n., 232 Cal. App. 3d 1335, 284 Cal. Rptr. 108 (1991); Ramirez vs Bureau of State Lottery, 186 Mich. App. 275, 282, 463 N.W.2d 245 (1990), rev. denied 439 Mich. App. 861, 475 N.W.2d 819 (1991)

Ticket Mislaid, Destroyed and Unable to be Presented - In Fowles vs State of Kansas, 867 P.2d 357 (Kan. 1994) the winner’s daughter was a clerk in the convenience store where the ticket was purchased and then lost after being laid on the counter where it disappeared. The buyer had asked his daughter to take the ticket to work with her to determine if it was a winner. She did and placed it on the counter where it disappeared. The winning ticket was worth $117,037. In this case the buyer lost because he could not present the winning ticket, could not sign the ticket and it therefore could not be validated.

The Draw Break Problem - Granton vs Washington State Lottery Commission, 143 Wash. App. 225, 177 P.3d 745, 48 A.L.R.6th 659. This is sort of a weird set of facts; the kind of facts that led to the McDonald’s spilled coffee industry wide marketing campaign. In this case Mr. Granton is described in the opinion as not having bought a ticket, although he attempted to buy a ticket with the winning numbers. The “pay slip” he filled out did have the winning numbers and the clerk prior to the drawing did try to accept his pay slip by processing it through the automated ticket terminal. The pay slip was rejected because that particular game was in what they call a “draw break” and the machine refused his game entry. A draw break is a period of time before games become active where the lottery is distributing tickets and is an administrative period where although being advertised is yet to be opened for betting. Finding for the Commission the Court notes Granton did not purchase a ticket and was not entitled to a jackpot prize. The Court was somewhat ticked off and suggested to the Commission it ask for fees and investigative costs using the phrase “patently meritless claims.”

Tickets Mishandled or Improperly Processed - Convenience Store Malpractice – Yes there is such a fact pattern although I believe the cause of action would be something else that sounds very boring. I read several cases where the convenience store clerks failed to follow the lottery commission rules with registering the purchased tickets, pre-electronic registration, and even those mistakes won’t revive and other-wise winning ticket. The language on the reverse side of the lottery ticket places loss responsibility on the person playing, not the convenience store, which absolves the store of its negligence or malpractice. One store, a liquor store that sold lottery tickets transposed the numbers when the owner handwrote the numbers on a piece of paper that he later posted on the glass door. A patron with the winning ticket read the transposed numbers, and then threw away his ticket thinking he’d lost. When the sequence of the numbers was later corrected he sued the liquor store and lost.

I sense from reading these cases that judges don’t like lottery litigation. It’s almost like the Court believes this is a game and not worth wasting the Court’s precisions resources. To some extent I understand that and will caution those taking on these clients to be aware you could be sanctioned if your case is deemed frivolous. And without a winning ticket you’re walking a fine line between legitimate and frivolous. At the very least you’d better have a copy of the winning ticket to present a legitimate claim. See Granton vs Washington State Lottery Commission, 143 Wash. App. 225, 177 P.3d 745, 48 A.L.R.6th 659.

See also Fowles vs State of Kansas, 867 P.2d 357 (Kan. 1994) noted above. Bottom line is the ticket cannot be validated where there is no ticket to turn in.

Stolen Tickets or Tickets Obtained by Fraud - Lottery tickets are a hybrid of bearer bonds but with many more rules. That ticket is a written contract to participate in a game of chance. As a patron who is playing the lottery you should be protecting your investment in this game of chance. Make a copy of your ticket; although the copy will not validate so don’t expect having a copy to carry the water to a huge pay day. What it can do is become evidence if someone steals your ticket. While proving the ticket is stolen will not help your bank account, stolen tickets are automatically void, it will keep the thieves from profiting on your investment, although I use that term loosely. Don’t’ leave your ticket sitting on the dashboard of your car or in your pants pocket where it can be tossed in the dirty laundry and put through the wash cycle. Have a pouch where you store all tickets, a pouch similar to one stores use to make bank deposits. After all if that $1 can be turned into $16.5 million that’s over sixteen million reasons why you should secure your purchase and to protect the integrity of the ticket.

Mangled Tickets – Tickets that will not pass through the automated validation machine will not properly validate and so mangled tickets (through the washing machine) that will not validate are not valid winners. You can own the winning ticket, have it in your hand, everyone can look at it and say yes you have the winning ticket, but if the machine will not validate it you get your money back but not the winning prize.

Lottery Malpractice and Advertising Misrepresentation – The lottery can advertise the game incorrectly and you still don’t win on a misrepresentation argument. See La Bo J Partnership vs Louisiana Lottery Corp., 6 So.3d 191 (La. Ct. App. 1st Cir. 2009, writ denied, 5 So.3d 168 (La. 2009). See also Triano vs. Division of State Lottery, (1997 N.J.) based on the Lottery Commission’s misleading advertising that induced playing but then failed to pay “winning tickets”.

Damages – What damages can you get for all of the above? A refund of the amount you paid when you purchased the ticket. That is a cheap filing in small claims court. And in Thao vs Control Data Corp., 790 P2d 1239 (Wash. App. 1990) a lottery patron sued the convenience store for transcribing incorrect numbers on a breach of contract theory. In this case the court did not dismiss his case for any reason other than his case did not meet the jurisdictional monetary limit of the court and referred him to small claims court; noting his damages were limited to his cost of purchasing the ticket. See also Coleman vs State, 77 Mich. App 349, 258 N.W.2d 84 (1977)

How to Play the Lottery

  1. Players should know the lottery commission will likely have video of the purchase transaction and when buying a ticket wear clothes that clearly show your facial features and wear clothes that can later be identified.
  2. Secure all tickets you purchase in a money drop locked bag, similar to what stores use to make night deposits at the bank.
  3. After purchasing your ticket immediately sign it.
  4. Maintain a close watch on the drawing.
  5. After the drawing is announced check your ticket to see if you’ve won.
  6. If you win, immediately claim your prize at the lottery headquarters.
  7. Do not allow the clerk to take the ticket out of your plain view.
  8. Never hand an unsigned ticket to a convenience store clerk.
  9. Take back all tickets that are said not to be winners and then review the numbers to confirm their non winning status.
  10. Never place your lottery tickets in the pockets of clothes that will later be washed.
  11. If you do the laundry in your house, check all pockets and if you find unsigned lottery tickets sign them and follow steps 1 through 10. After all this could be your lucky day.

*Thanks to Katrina Schaefer a 3L at the University of Iowa for her assistance in researching the facts of this case.