Pursuant to Ind.Appellate Rule 65(D), this 

Memorandum Decision shall not be 

regarded as precedent or cited before any 

court except for the purpose of establishing 

the defense of res judicata, collateral 

estoppel, or the law of the case.

ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES: 

JAY L. LAVENDER WILLIAM N. HOWARD 

Lavender & Bauer, P.C. Freeborn & Peters LLP 

Warsaw, Indiana Chicago, Illinois 

STEPHEN R. SNYDER 

 Snyder Morgan LLP 

 Syracuse, Indiana 

IN THE 

COURT OF APPEALS OF INDIANA

KENNETH WATSON, ) 

 ) 

Appellant, ) 

) 

vs. ) No. 43A04-1202-PL-55 

 ) 

P.C. OPERATING, LLC, d/b/a MENTONE MINI ) 

MART, PALADIN GLOBAL DEVELOPMENT, ) 

PALADIN COMMERCIAL, LLC, and ) 

SCIENTIFIC GAMES INTERNATIONAL, INC., ) 

 ) 

Appellees. ) 

APPEAL FROM THE KOSCIUSKO SUPERIOR COURT 

The Honorable Duane G. Huffer, Judge 

Cause No. 43D01-1106-PL-55 

June 19, 2012 

MEMORANDUM DECISION - NOT FOR PUBLICATION 

FRIEDLANDER, Judge
 Kenneth Watson1

 appeals from the trial court’s order dismissing his complaint against 

P.C. Operating, LLC d/b/a Mentone Mini Mart (Mini Mart), Paladin Global Development 

and Paladin Commercial, LLC (collectively, Paladin), and Scientific Games International, 

Inc. (SGI), for lack of subject matter jurisdiction. Watson presents several issues for our 

review the following of which is dispositive of this appeal: Did the trial court err by 

dismissing Watson’s complaint for lack of subject matter jurisdiction based upon collateral 

estoppel? 

 We affirm. 

 Mini Mart owns and operates a gas station and convenience store in Mentone, Indiana. 

Watson claimed that on Tuesday, May 18, 2010, he went to Mini Mart at approximately 

12:50 p.m. with completed play slips intending to play that day’s Daily4 Midday lottery 

drawing. All sales of the Daily3 and Daily4 Midday lottery tickets are cut off at 1:10 p.m., 

and any sales occurring after that time are automatically allocated to the next day’s lottery 

drawing. 

 On that day, Watson presented completed play slips for the Daily3, Daily4, Lucky 

Five, and Mega Million lottery games to the clerk at the Mini Mart. Watson claimed that the 

clerk had trouble processing the play slips, but did sell Watson the requested tickets. Watson 

claims that at the time, he believed the slips had been timely processed. The tickets 

themselves, however, show that they were processed for the next day. The numbers Watson 

had marked on the slips were the winning numbers for the May 18, 2010 Daily4 drawing. 

 

1

 Ind. Appellate Rule 46(A)(6)(c) provides that the statement of facts “shall be in narrative form and shall not 

be a witness by witness summary of the testimony.” We remind counsel that bullet point presentation of the 

facts is not the narrative form contemplated by the rule. 
3 

 Watson submitted the claim forms to the Indiana Lottery Commission (Lottery 

Commission) contending that he presented the Daily4 play slips with sufficient time for the 

clerk at the Mini Mart to process them prior to the May 18, 2010 cutoff. He alleged that the 

Mini Mart clerk was negligent, or the lottery machine failed, either of which caused the 

tickets to bear the date of May 19, 2010 instead. The Lottery Commission denied Watson’s 

claims. 

 Watson contested the Lottery Commission’s determination and the matter was set for 

an evidentiary hearing before an administrative law judge (ALJ). Watson agreed in advance 

of the hearing date to submit the matter to the ALJ by way of stipulations and briefing. On 

March 1, 2011, the ALJ issued his written order affirming the Lottery Commission’s decision 

not to award a prize to Watson for the May 18, 2010 Daily4 lottery game. 

 The ALJ made the following conclusions of law and findings of ultimate fact: 

6. [Watson’s] claim that he was prevented from purchasing the Daily 4 

Midday tickets before 1:10 p.m. because of problems with the terminal that 

printed the tickets has no merit. [Watson] acknowledges that his first ticket 

purchase of the day was of five Daily 3 Midday tickets and that the purchase 

was completed immediately after he presented his play slips. The transaction 

report supports that fact but also shows that he bought the Daily 3 tickets, and 

all the other tickets, after 1:10 p.m. 

7. Watson’s allegation of negligence, which the Koehlinger case tells us is 

not a valid claim to begin with, is belied by the documentary evidence. The 

seller of the tickets acted as Watson’s agent during the purchase and the 

transaction report shows there was no delay in the printing of the Daily 4 

Midday tickets. The Daily 4 Midday tickets were printed within seconds of 

the Daily 3 Midday tickets being printed. 

8. The transaction report only reveals a brief delay in printing some of 

Watson’s later purchases. The reason for the holdup is not clear and may have 

been the result of a paper jam, change in paper or operator error. The operator 
4 

did not call [SGI] and eventually printed all the tickets. Regardless, there was 

no interruption before the Daily 4 Midday tickets were printed. 

9. It was an unfortunate coincidence that Watson did not play his favorite 

numbers a few minutes earlier in the day. But at the time he made his 

purchase he got what he bargained for, a chance to win. Watson could have, 

and should have, cancelled his purchase if he thought there was a mistake with 

the transaction. In the final analysis, though, he had no more expectation of 

his favorite numbers being a winning combination on May 18th, than it would 

be on the 19th or any other day. 

Appellant’s Appendix at 138-39 (emphasis in original). On April 14, 2011, the Lottery 

Commission affirmed the order of the ALJ. Watson did not seek judicial review of the ALJ’s 

order. 

 Watson filed a civil complaint, which was subsequently amended, against Mini Mart, 

Paladin, and SGI for damages incurred as a result of the allegedly improperly processed 

lottery tickets purchased from Mini Mart on May 18, 2010. That complaint was dismissed. 

Watson filed a second amended complaint on September 14, 2011. Mini Mart, Paladin, and 

SGI asserted collateral estoppel as a defense to the complaint. In particular, Mini Mart, 

Paladin, and SGI claimed that Watson was precluded from re-litigating his claims based upon 

claim or issue preclusion because the matter had been decided in the prior administrative 

proceedings. Mini Mart, Paladin, and SGI filed a motion to dismiss the complaint under Ind. 

Trial Rules 12(b)(1) and 12 (b)(6). After holding a hearing on the motion, the trial court 

entered an order dismissing Watson’s complaint under T. R. 12(b)(1). The trial court denied 

Watson’s motion to correct error and this appeal ensued. 

 Watson contends that the trial court erred by finding that his complaint was barred by 

collateral estoppel. In particular, Watson claims that he pursued administrative remedies to 
5 

determine if he could claim the prize winnings despite the error in processing his tickets. He 

asserts that once the Lottery Commission denied his claim, his damages against Mini Mart, 

Paladin, and SGI were certain, and that he could pursue his action against them. He claims 

that the trial court erred by granting the motion to dismiss. 

 In ruling on a motion to dismiss for lack of subject matter jurisdiction, the trial court 

may consider the complaint, motion, and any affidavits or evidence submitted in support. 

GKN Co. v. Magness, 744 N.E.2d 397 (Ind. 2001). The standard of review for Ind. Trial 

Rule 12(B)(1) motions to dismiss is a function of what occurred in the trial court. Id. The 

standard of review is dependent upon whether the trial court resolved disputed facts, and if 

so, whether the trial court held 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. Under those circumstances no 

deference is afforded the trial court’s conclusion because appellate courts 

independently, and without the slightest deference to trial court determinations, 

evaluate those issues they deem to be questions of law. Thus, we review de 

novo a trial court’s ruling on a motion to dismiss under Trial Rule 12(B)(1) 

where the facts before the trial court are undisputed. 

If the facts before the trial court are in dispute, then our standard of review 

focuses on whether the trial court conducted an evidentiary hearing. Under 

those circumstances, the court typically engages in its classic fact-finding 

function, often evaluating the character and credibility of witnesses. Thus, 

where a trial court conducts an evidentiary hearing, we give its factual findings 

and judgment deference. And in reviewing the trial court’s factual findings 

and judgment, we will reverse only if they are clearly erroneous. Factual 

findings are clearly erroneous if the evidence does not support them, and a 

judgment is clearly erroneous if it is unsupported by the factual findings or 

conclusions of law. 

However, where the facts are in dispute but the trial court rules on a paper 

record without conducting an evidentiary hearing, then no deference is 

afforded the trial court’s factual findings or judgment because under those 

circumstances a court of review is “in as good a position as the trial court to 
6 

determine whether the court has subject matter jurisdiction. Thus, we review 

de novo a trial court’s ruling on a motion to dismiss where the facts before the 

court are disputed and the trial court rules on a paper record. 

GKN Co. v. Magness, 744 N.E.2d 397, 401 (Ind. 2001) (internal quotations and citations 

omitted). 

 The trial judge held a hearing during which he heard the arguments of counsel, but no 

new evidence was admitted. Because the facts were in dispute and the trial court ruled on a 

paper record, we review the trial court’s ruling on the motion to dismiss de novo. 

 We have said the following about collateral estoppel: 

Collateral estoppel—also referred to as issue preclusion—bars the subsequent 

litigation of an issue necessarily adjudicated in a former suit. However, the 

former adjudication will only be conclusive to those issues which were 

actually litigated and determined therein. 

Collateral estoppel does not extend to matters that were not expressly 

adjudicated or to matters that can be inferred from the prior adjudication only 

by argument. There is no estoppel where anything is left to conjecture as to 

what was necessarily involved and decided in the prior adjudication, as where 

the judgment, which might have been based upon one of several grounds, does 

not show which ground it was based upon. 

Collateral estoppel can operate either defensively or offensively. Defensive 

collateral estoppel involves a situation where a defendant seeks to prevent a 

plaintiff from asserting a claim that the plaintiff had previously litigated and 

lost. A prime consideration in the defensive use of collateral estoppel is 

whether the party against whom the prior judgment is asserted had a full and 

fair opportunity to litigate the issue and whether it would be otherwise unfair 

under the circumstances to permit the use of collateral estoppel. 

Conversely, offensive collateral estoppel is where the plaintiff seeks to 

foreclose the defendant from litigating an issue that the defendant had 

previously litigated unsuccessfully in an action with another party. 

Determining the appropriateness of offensive collateral estoppel involves two 

considerations: (1) whether the party to the prior action had a full and fair 
7 

opportunity to litigate the issue, and (2) whether it is otherwise unfair to apply 

collateral estoppel given the facts of a particular case. 

In re Commitment of Heald, 785 N.E.2d 605, 611-12 (Ind. Ct. App. 2003) (internal citations 

and quotations omitted). In this case we are reviewing the defensive use of collateral 

estoppels. 

 Watson pursued his claim of entitlement to the lottery winnings via administrative 

proceedings during which he presented his allegations against Mini Mart, Paladin, and SGI. 

The Lottery Commission affirmed the ALJ’s order not to award a prize to Watson for the 

Daily4 Midday game on May 18, 2010, finding his claim to be without merit. Ind. Code 

Ann. §4-21.5-5-4 (West, Westlaw current through legislation effective May 31, 2012) 

provides that a person who fails to timely petition for review of an administrative order 

waives the person’s right to judicial review. Watson waived his right to judicial review of 

the ALJ and Lottery Commission’s determination by failing to petition for judicial review 

after receiving an adverse determination. 

 In the prior administrative proceeding, Watson presented the evidence relating to his 

purchase of the tickets and his claim that negligence on the part of the Mini Mart clerk, or a 

failure on the part of the lottery ticket machine, caused his ticket purchases to be untimely. 

Although Watson presented his prize claim to the Lottery Commission, which reached a 

determination adverse to Watson, in so doing he presented evidence of the actions of Mini 

Mart, Paladin, and SGI in relation to that claim. We conclude that Watson had a full and fair 

opportunity to litigate the issue in that proceeding. Watson could have pursued judicial 

review of the Lottery Commission’s decision, but waived that review by failing to timely 
8 

petition for judicial review. The trial court did not err by dismissing Watson’s claim for lack 

of subject matter jurisdiction on the theory of collateral estoppel. 

 Because this issue is dispositive of the appeal, we do not address the other issues 

presented by Watson. 

 Judgment affirmed. 

MAY, J., and BARNES, J., concur.