A Lottery Ticket Is an Express Written Contract and the General Assembly Waived Their Own Instrumentality from Sovereign Immunity!
| Publication year | 2020 |
A Lottery Ticket is an Express Written Contract and the General Assembly Waived Their Own Instrumentality from Sovereign Immunity!
Forrest F. Schrum IV
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The creation of an express written contract occurs every day. These are contracts documented on an instrument where two parties agree to performing certain actions or preventing a party from performing, and they allow these parties to be liable to the other if one were to breach the contract. For an express written contract, the right to sue for breach of contract is so vital that when the General Assembly created the Georgia Constitution, a clause was added that precludes Georgia and all entities/instrumentalities within, to use sovereign immunity to avoid litigation.1 If Georgia or the entities/instrumentalities of the state could use sovereign immunity to avoid liability for breaching a contract, the entire purpose of an express written contract would be destroyed.
Generally, parties understand when they enter into these express written contracts, but that is not always the case, especially for the Georgia Lottery Corporation in the case at hand. In Georgia Lottery Corporation v. Patel,2 Patel won $5,000,000 on a scratch off lottery ticket. When Patel requested the money, the Georgia Lottery Corporation (GLC) denied her ticket and refused to give the money
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over. In frustration, Patel sued GLC for breach of contract. GLC, as a government instrumentality, raised sovereign immunity to deny Patel's claim. All hope seemed lost that Patel would never recover her life changing $5,000,000.3 However, the Court of Appeals found, on first impression, that a lottery ticket is an express written contract, which means GLC may not implement sovereign immunity.4 Thankfully, Patel's dreams, like many Georgia citizens who play the lottery, are still alive and Patel can have a proper trial in pursuit of recovering the $5,000,000 won from the lottery ticket.
On June 12, 2016, a large number of lottery tickets were purchased at the Neighborhood Food Mart in Dublin, Georgia. Specifically, 34 packs or 460 lottery tickets were bought within a two-minute time frame. Over the next three days, the tickets were scanned in multiple areas including: Decatur; Scottdale; Clarkston; Lilburn; Macon; and Dublin. A camera at one of the gas stations showed that Patel's son, who is not old enough to play the lottery, was scanning some tickets at the Neighborhood Food Mart. However, Patel's son denies scanning the ticket that held the $5,000,000 cash prize.5
Patel's daughter, of legal age to play the lottery, testified that she had drove down to Dublin on June 12, 2016 and bought seven packs of lottery tickets. The daughter's reasoning for buying the excessive amount of tickets was to give the tickets as a gift to Patel for her birthday. The whole family drove to Atlanta on June 13, 2016 to celebrate Patel's birthday. On the way to Atlanta, Patel's daughter gave Patel five packs of lottery tickets and Patel's daughter testified that she gave the remaining two packs to Patel at the actual birthday dinner.6 The lottery tickets contained GLC as the party to contact. In addition, each ticket contained the price of $20 to buy the ticket, a statement of how to play the ticket, instructions for certain bonuses that could be won, the odds of winning prizes, a disclaimer for ticket purchasers to be at least 18 years old, and how to claim a winning ticket over $600.7
After Patel had allegedly scanned the ticket, Patel submitted the ticket on June 28, 2016. Since the reward of $5,000,000 is of significant weight, GLC conducted an investigation to validate the ticket. GLC
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found the surveillance video of the camera that showed Patel's son was scanning lottery tickets. Since Patel's son is not of legal age to play the lottery, Joseph J. Kim, senior vice president of the Georgia Lottery Commission, sent a letter informing Patel that GLC's Prize Valuation Department invalidated the ticket and declined to pay the $5,000,000.8 Since Patel claims scanning the winning ticket, herself, this ultimately led Patel to take action against GLC for breach of contract because Patel claims she was the holder of the lottery ticket.9
To further understand the significance of Georgia Lottery Corporation v. Patel, it is important to review the history of prior cases, statutes, and the Georgia Constitution. These historical cases shed light on the Court of Appeal's reasoning and the overall paradox that elaborately unfolds.
A. Sovereign Immunity does not apply to Express Written Contracts
Georgia's General Assembly redrafted and ratified the Georgia Constitution in 1982.10 One section, within the Constitution, provides an outline of the uses and exceptions to sovereign immunity.11 The section, Ga. Consta. Art. I, § II, Para. IX(c),12 provides, "The state's defense of sovereign immunity is hereby waived as to any action ex contractu for the breach of any written contract now existing or hereafter entered into by the state or its departments and agencies."13 Essentially, the Georgia Constitution states that any action against the state regarding a breach of written contract cannot use sovereign immunity.14
In 2008, the Georgia Court of Appeals explained this exception in Watts v. City of Dillard,15 which clarifies the extent of using an immunity for a breach of contract claim. While the Georgia Constitution is clear on the exception to sovereign immunity, some confusion was present between municipals corporations applying sovereign
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immunity.16 The court relied on Precise v. City of Rossville,17 which clarified, "[M]unicipal immunity is not a valid defense to an action for breach of contract."18 "[H]owever, sovereign immunity is waived only as to actions based on written contracts."19 Thus, this clarification shows the exception is only applicable under sovereign immunity for non-municipal corporations.
Regarding Georgia Lottery Corporation v. Patel, this authority demonstrates the broad significance of having sovereign immunity, not being a municipal corporation, and what exceptions apply when the suit involves a breach of contract. The Constitution and the court clearly show that the contract related to the action must be in writing for the state to waive their privilege of sovereign immunity. In other actions, sovereign immunity will still apply, and bar suit related to other matters, like oral contracts or a contract not determined to be an express written contract.
B. The Lottery Tickets initial steps to becoming a binding Express Written Contract
The Georgia Supreme Court decided, Talley v. Mathis,20 to settle a dispute between two individuals that had made a contract centered on the lottery. In 1995, Talley and Mathis (both residents of Georgia) contracted to buy lottery tickets together in Kentucky and to split the winnings between them. Mathis won a large sum of money from one of the tickets and then refused to split the winnings with Talley. Talley then sued for breach of contract against Mathis.21 Under O.C.G.A. § 13-8-3,22 the trial court and the court of appeals decided that the contract was a gambling contract and void, thus dismissing the claim.23
The court ultimately reversed the decision of the lower courts in favor of Talley for two major reasons.24 First, the court reasoned that both Talley and Mathis obtained these lottery tickets lawfully, they
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both agreed to split the cost of tickets and winnings, and that this contract was not a gambling contract.25 "In a gambling contract one of [the parties] is certain to lose," however in this contract both parties would win or lose together because they were splitting the costs.26 Second, the court looked into enforcing the contract based on public policy.27 "Where contracts are not contrary to law, the courts are bound to enforce them as made."28 Since this contract was not contrary or in violation of any law, the court held this contract is enforceable and Mathis must split the winnings with Talley.29
The main idea is that Talley introduces the courts view on lottery tickets and enforcing contracts based on public policy. The contract was about lottery tickets yet not to be considered a gambling contract.30 Often times the lottery is viewed as gambling; however, playing the lottery is legal and is even an exception commonly mentioned in statutes involving gambling.31 In addition, the court, relying on a prior decision, introduced a very broad approach to when a contract should be considered enforceable. If the contract is not contradicting law, then the contract should be enforced. This case creates one of the essential first steppingstones leading to the present case at hand, Georgia Lottery Corporation v. Patel, and shows the significance that the lottery is not contradicting gambling laws in Georgia.
In addition, the Georgia Court of Appeals heard Georgia Lottery Corporation v. Sumner,32 involving another lottery ticket. Sumner had bought a lottery ticket and won $50 a day for the next five years of his life. However, GLC denied Sumner's prize because the ticket contained a printing error and failed the validation and securities test. Ultimately, Sumner sued GLC to recover the denied prize against GLC.33 The court held in favor of GLC on a motion for summary judgement because the ticket had a printing error and the back of the ticket clearly states, "[t]ickets are void if they . . . are irregular in any manner."34 In
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furtherance, the court held that if the ticket was treated as an express written contract, the ticket is void under contract law.35
Sumner shows three critical distinctions that have led to the case at present. First, tickets that are misprinted or have printing...
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