Court Opinion

ID: 4417894
Source: CourtListenerOpinion
Date Created: 2019-07-18 15:02:46.025025+00
Date Added: 2024-06-11T14:51:21.810543
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                   SUMMARY
                                                                June 20, 2019
                                2019COA92

No. 18CA0578, Amir Massihzadeh v. Tom Seaver, in his
official capacity as the Colorado Lottery Director; Colorado
State Lottery Division, an agency of the State of Colorado —
Administrative Law — State Lottery Division — Prizes

      A division of the court of appeals considers whether, after the

Colorado State Lottery Division discovered that two out of three

winning lottery tickets were fraudulent, the plaintiff — the only

innocent winner — is entitled to payment of the entire jackpot. In

so doing, it considers whether the trial court properly dismissed the

plaintiff’s claim that he is entitled to the full jackpot because it is

barred by section 44-40-113(4), C.R.S. 2018, which discharges the

Colorado State Lottery Division of “all liability upon the payment of

any prize . . .”

      Based on the statute’s plain language, the division concludes

that the trial court properly dismissed the complaint because the
payment of one-third of the jackpot and the defendant’s acceptance

thereof constituted “any prize,” sufficient to discharge the Division

of liability.
COLORADO COURT OF APPEALS                                        2019COA92

Court of Appeals No. 18CA0578
City and County of Denver District Court No. 17CV33699
Honorable Brian R. Whitney, Judge

Amir Massihzadeh,

Plaintiff-Appellant,

v.

Tom Seaver, in his official capacity as the Colorado Lottery Director, and
Colorado State Lottery Division, an agency of the State of Colorado,

Defendants-Appellees.

                            JUDGMENT AFFIRMED

                                   Division I
                         Opinion by JUDGE TAUBMAN
                          Berger and Tow, JJ., concur

                           Announced June 20, 2019

Recht Kornfeld, P.C., Thomas M. Rogers III, Denver, Colorado; Lewis Roca
Rothgerber Christie LLP, Hermine Kallman, Denver, Colorado; The Law Offices
of Robert R. Duncan, LLC, Robert R. Duncan, Denver, Colorado, for Plaintiff-
Appellant

Philip J. Weiser, Attorney General, Robert H. Dodd, First Assistant Attorney
General, Cynthia P. Delaney, Assistant Attorney General, Robert Padjen,
Assistant Attorney General, Denver, Colorado, for Defendants-Appellees
¶1    What transpires when a person, who was one of three lottery

 winners, turns out to be the only true lottery winner following the

 discovery of fraud that invalidated the other two tickets? Is the

 innocent winner entitled to the full jackpot?

¶2    Plaintiff, Amir Massihzadeh, seeks to resolve this question in

 appealing the district court’s judgment granting the motion to

 dismiss of defendants, the Colorado State Lottery Division (the

 Division) and Tom Seaver, in his official capacity as Colorado

 Lottery Director. 1 We agree with the district court that

 Massihzadeh’s claims are barred by statute.

                          I.    Background

¶3    Massihzadeh held one of three lottery tickets containing the

 combination of numbers matching those drawn in the November

 23, 2005 Lotto for a $4.8 million jackpot. After the Division director

 certified the results and all three tickets became “winning tickets,”

 1 Though Massihzadeh named Laura Solano, in her official capacity
 as Colorado Lottery Director, as a defendant, we note that Solano
 retired in 2018. Tom Seaver was appointed to replace her during
 the pendency of this appeal. See C.A.R. 43(c).

                                   1
 the Division distributed one-third of the jackpot to each winning

 ticket holder.

¶4    Tommy Tipton transferred the second winning ticket to

 another individual, and a third party, Cuestion de Suerte, LLC,

 redeemed the third winning ticket. Thus, Massihzadeh, the other

 individual, and Cuestion de Suerte each received a lump sum of

 $568,990 — one-third of the jackpot prize after taxes. This was the

 reduced amount based on the winners’ elections to receive a lump

 sum payout rather than installments paid over the course of several

 years.

¶5    According to the 2005 Lottery Division Rules, the Division was

 required to hold a random drawing of six numbers, certify the

 drawing and announce the winning combination, and pay the prize.

 Lottery Rules 10.A.4, 10.A.5, 1 Code Colo. Regs. 206-1 (effective

 until Dec. 31, 2006). The Division held what it believed was a

 random drawing, certified and announced the winning combination,

 and paid the prize it believed was due.

¶6    A decade later, the Division learned that the tickets redeemed

 by the other individual and Cuestion de Suerte were procured with

                                   2
 advance knowledge of the likely winning numbers as part of a

 scheme to defraud lotteries in multiple states.

¶7    Colorado contracts with the Multi-State Lottery Association

 (MUSL) to procure services for the state lottery, and it used these

 services to execute the November 2005 drawing. The MUSL

 provides computer software to facilitate lottery drawings to the

 lottery departments in its thirty-three member states.

¶8    In 2015, the Iowa Bureau of Investigation contacted the

 Division with information about its prosecution of Eddie Tipton, the

 Director of Information Security for MUSL, who manipulated a 2014

 Iowa lottery drawing. As Director of Information Security, Tipton

 had unfettered access to the computer software used to conduct

 lottery drawings. Before the November 2005 drawing in Colorado,

 Tipton manipulated the software to defraud the lottery. He then

 accessed the software for the November 23, 2005 Colorado drawing

 and transferred what he forecasted to be the winning combination

 to his brother, Tommy Tipton, who supplied them to a third party.

 Both Tommy and the third party purchased “manual play” tickets

 with the numbers provided by Tipton for the Colorado Lottery

 drawing in November 2005.

                                   3
¶9       Iowa prosecutors filed two criminal complaints against Tipton

  — one for manipulation of the 2014 Iowa drawing and a second for

  engaging in an ongoing criminal enterprise to influence other state

  lotteries. They also charged Tommy with aiding and abetting thefts.

  The Tipton brothers pleaded guilty to the Iowa charges in June

  2017. The State of Colorado agreed not to prosecute the brothers in

  exchange for a restitution agreement from Tipton to pay $1,137,980

  (the total amount paid out to the two holders of the fraudulent

  tickets) and another agreement with Tommy to be jointly and

  severally liable for $568,990 of that amount.

¶ 10     Massihzadeh filed suit in September 2017 after learning of the

  manipulation of the November 2005 lottery drawing. He alleged

  breach of contract by the Division, seeking the other two-thirds of

  the jackpot, with interest. As noted, the Division successfully

  moved to dismiss the complaint for failure to state a claim for

  relief. 2

  2The Division also moved to dismiss the complaint under the
  Colorado Governmental Immunity Act, section 24-10-106, C.R.S.
  2018, because the claim allegedly sounded, or could sound, in tort.
  The district court rejected that argument, and that ruling was not
  appealed.

                                     4
                      II.    Statutory Interpretation

¶ 11     Massihzadeh contends, among other things, that the district

  court erred in granting the motion to dismiss because section 44-

  40-113(4), C.R.S. 2018, 3 does not preclude his claim against the

  Division; it only pertains to claims against the Division by third

  parties. We disagree.

                            A.        Standard of Review

¶ 12     We review de novo questions of statutory interpretation.

  Goodman v. Heritage Builders, Inc., 2017 CO 13, ¶ 5, 390 P.3d 398,

  401.

                                 B.     Applicable Law

¶ 13     Questions of statutory interpretation necessitate, first and

  foremost, consideration of the statutory text as a whole, giving

  “consistent, harmonious, and sensible effect to all of its parts and

  avoiding constructions that would render any words or phrases

  3Prior to 2018, the statute at issue was located in section 24-35-
  212(3), C.R.S. 2017, and contained substantially the same text as
  contained in the current version. See Ch. 31, sec. 1, 2018 Colo.
  Sess. Laws 354. Thus, the district court’s order and the parties’
  briefs refer to section 24-35-212(3); however, we will refer to the
  current statute for purposes of this opinion.

                                            5
  superfluous or lead to illogical or absurd results.” Pineda-Liberato

  v. People, 2017 CO 95, ¶ 22, 403 P.3d 160, 164. Therefore, if the

  statutory language is clear and unambiguous, we do not engage in

  further interpretive analysis. Snyder Oil Co. v. Embree, 862 P.2d
259, 262 (Colo. 1993).

¶ 14   Section 44-40-113(4) provides, “The [D]ivision shall be

  discharged of all liability upon the payment of any prize pursuant to

  this article 40.” The related rules in the Code of Colorado

  Regulations provide that “[t]he Director’s decision shall be final and

  binding with respect to the payment of all [p]rizes.” Lottery Rule

  10.9(I), 1 Code Colo. Regs. 206-1. 4 Other regulations state that the

  “[p]ayment of any [p]rize shall be made to the holder of the [j]ackpot

  [t]icket. All liability of the State, its officers and employees, and the

  Commission shall terminate upon payment.” Id. at 10.9(L). 5

  4 Formerly, Lottery Rule 10.4(j) provided, “[t]he Director’s decision
  with respect to the validation and payment of any prize, whether
  during an On-Line game or any drawing related thereto, shall be
  final and binding upon all participants in the lottery.” 1 Code Colo.
  Regs 206-1 (effective until Aug. 30, 2010). Because the language in
  the current regulation is substantially similar, we refer to the
  current regulation for purposes of this opinion.
  5 Formerly, Lottery Rule 10.4(m) provided, “[p]ayment of any prize

  may be made to the holder of the Lottery On-Line ticket, and all

                                      6
                               C.   Analysis

¶ 15     The statute provides that the payment of any prize to

  Massihzadeh released the Division from any liability associated with

  the payment of the prize. See § 44-40-113(4); Lottery Rule 10.9(I), 1

  Code Colo. Regs. 206-1.

¶ 16     “Payment” is not defined in the statute. Accordingly, we look

  to dictionary definitions to ascertain its meaning. See Stoesz v.

  State Farm Mut. Auto. Ins. Co., 2015 COA 86, ¶ 11, 410 P.3d 583,

  586.

¶ 17     Black’s Law Dictionary 1309 (10th ed. 2014) defines

  “payment” as “[p]erformance of an obligation by the delivery of

  money or some other valuable thing accepted in partial or full

  discharge of the obligation.” See Stoesz, ¶ 11, 410 P.3d at 586.

  Consequently, the term “payment” necessarily includes acceptance

  by the prizewinner. Thus, implicit in the statutory language is the

  prizewinner’s ability to reject payment if the amount tendered by

  liability of the State, its officers and employees, and the
  Commission terminates upon such payment.” 1 Code Colo. Regs
  206-1 (effective until Aug. 30, 2010). We conclude that the
  language in the current regulation is substantially similar and refer
  to the current regulation for purposes of this opinion.

                                     7
  the Division is incorrect. Application of this definition prevents the

  absurd result that if the Division tenders a check for $10 on a

  multi-million-dollar prize, the Division is statutorily released from

  liability. Only when the prizewinner accepts the tendered prize has

  payment been made, and only then does the statute discharge the

  Division of liability.

¶ 18    It is uncontested that the Division tendered the prize to

  Massihzadeh — computed based on everyone’s then understanding

  that there were three winning tickets. It is also uncontested that

  Massihzadeh accepted the tendered prize.

¶ 19    These facts inexorably lead to the conclusion that the Division

  was released from all further liability to Massihzadeh. Accordingly,

  it is of no consequence that the other winning tickets were later

  deemed invalid because Massihzadeh’s acceptance of one-third of

  the prize, without challenging it, discharged the Division’s liability.

  Thus, the plain language of section 44-40-113(4) precludes

  Massihzadeh’s claim against the Division.

¶ 20    Nevertheless, Massihzadeh attempts to avoid this result by

  arguing that he had not been paid the “prize.” However, the statute

  prescribes that, upon payment of “any prize,” the Division’s liability

                                     8
  is discharged. § 44-40-113(4) (emphasis added). Since the phrase

  “any prize” is undefined, we accord “any” its meaning when used as

  an adjective in a statute — “all.” See Stamp v. Vail Corp., 172 P.3d
437, 447 (Colo. 2007). Therefore, we conclude that the acceptance

  of payment of one-third of the jackpot to by Massihzadeh

  constituted a payment of “any prize,” sufficient to trigger the

  Division’s immunity.

¶ 21   Notwithstanding the language of the statute, Massihzadeh

  finally contends that the statute only applies to claims by third

  parties. Although the statute prescribes procedures to address

  claims to a portion of a prize by third parties, it also unambiguously

  addresses payments to the winner of a prize. For instance,

  subsections 44-40-113(1) and (2) discuss assignment of a prize to

  third parties. However, section 44-40-113(5) pertains to winning

  ticket holders under eighteen who are ineligible to claim a prize —

  this does not concern third parties, nor does section 44-40-113(4).

  To the extent that Massihzadeh relies on Dawson v. Multi-State

  Lottery Ass’n & Iowa Lottery Authority, No. 05771 LACL134527

  (Iowa Dist. Ct., Polk Cty. Oct. 12, 2016), to assert that he is entitled

  to the full jackpot, we reject his argument. In Dawson, the plaintiff

                                     9
sued MUSL and the Iowa Lottery Authority (ILA) to recover

unclaimed prize money from a previous drawing that was supposed

to be paid into the jackpot to be awarded for the drawing he won.

Id. He based his claim on the language of Iowa Code section

99G.31(1) (2018), which stated, in pertinent part, “The chief

executive officer shall award the designated prize to the holder of

the ticket.” Id. The plaintiff withstood the ILA’s motion to dismiss

based on immunity because the court determined that the

“designated prize” may include fraudulently “won” but unclaimed

funds, and the statute discharged the ILA from liability “upon

payment of a prize.” Iowa Code § 99G.31(2)(f). The ILA had failed to

return an unclaimed prize to the jackpot, and as the sole winner of

the lottery, the plaintiff was entitled to the entire jackpot as his

“designated prize.” Iowa Code § 99G.31(1). Here, the statutory

language reads differently. The Division is discharged from all

liability upon payment of any prize — not a “designated prize,” and

                                   10
  Massihzadeh’s receipt of one-third of the jackpot was clearly “any

  prize.” 6

¶ 22    Because we resolve the appeal based on the plain language of

  section 44-40-113(4),7 we need not address Massihzadeh’s contract

  claim.

                           III.   Conclusion

¶ 23    Accordingly, the judgment is affirmed.

        JUDGE BERGER and JUDGE TOW concur.

  6 The Division also argues that the prize is based on the number of
  matching tickets, regardless of whether any of those tickets is later
  invalidated. We need not address that argument because we
  resolve the dispute based on the plain language of the statute.
  7 Massihzadeh argues that the district court erroneously ruled that

  he waived his claim against the Division by accepting one-third of
  the jackpot. However, we disagree with that characterization. The
  district court stated in its order that “upon acceptance and
  appropriating a prize without challenging the propriety of that prize,
  [Massihzadeh’s] own actions resulted in the waiver of liability
  against the [Division] as it related to his contract.” As we
  understand it, the district court intended to equate “waiver” with
  the discharge of liability associated with section 44-40-113(4),
  C.R.S. 2018.

                                    11