Clark v. Mo. Lottery Comm'n

Decision Date23 June 2015
Docket NumberWD 78060
Citation463 S.W.3d 843
PartiesGary Michael Clark, Appellant, v. Missouri Lottery Commission and Community Bank of El Dorado Springs, Respondents.
CourtMissouri Court of Appeals

Kendall R. Vickers, Nevada, for Appellant.

Matthew J. Laudan, for Respondent Missouri State Lottery Commission.

John S. Pletz, Jefferson City, for Respondent Community Bank of El Dorado Springs.

Before Division Four: Alok Ahuja, Chief Judge, Joseph M. Ellis, Judge and Janet Sutton, Special Judge

Opinion

Joseph M. Ellis, Judge

Appellant Gary Clark appeals from the Circuit Court of Cole County's grant of summary judgment in favor of Respondent Community Bank of El Dorado Springs (“Community Bank”).1 Appellant contends that the circuit court erroneously granted summary judgment because § 313.285.12 of the State Lottery Law prohibits the assignment of lottery prizes, thereby making the assignment of his lottery payments, which he used to secure two loans from Community Bank, invalid. For the following reasons, the judgment is affirmed.

The following facts are undisputed. In 2006, Appellant won the Missouri Lottery “Lifetime Riches” prize. The prize entails Appellant receiving $50,000.00 per year for the rest of his life with a minimum payout of thirty years. On October 3, 2007, Appellant entered into a loan agreement with Community Bank in which Appellant granted Community Bank a security interest in the “Assignment of all Missouri Lottery Payments” in exchange for a $100,000.00 loan.

On October 16, 2007, Appellant executed a document titled “Missouri Lottery Payments” in which he agreed “to have all funds from the Missouri Lottery payable to [him] to be deposited in an account” at Community Bank. The document further states that the payments would be deposited into that account “for the purpose of securing payment of each and every debt, liability or obligation of every type or description which [he] may now, or at any time hereafter owe to” Community Bank. The document then states that Appellant understands Community Bank “has full authority and withdrawal rights on this account” and that Appellant “may not revoke this agreement.” Attached to the bottom of the document is an acknowledgement of the agreement by the Missouri Lottery.

On July 13, 2010, Appellant executed a consolidated loan agreement with Community Bank in which he granted a security interest in the “Missouri Lottery Payment Assignment” in exchange for a $713,670.96 loan. Under the 2010 loan agreement, Appellant agreed to make twelve installment payments of $500.00 and one final balloon payment of $708,170.96 on July 15, 2011.

On September 3, 2013, Appellant filed a petition for declaratory judgment against Community Bank and the Missouri Lottery Commission. In his petition, Appellant alleged that the “Missouri Lottery Payments” agreement constituted an unlawful assignment of lottery proceeds and, therefore, was void. Appellant requested that the circuit court declare the “Missouri Lottery Payments” agreement void and unenforceable and that the Missouri Lottery Commission be directed to make all future payments to Appellant.

In answering Appellant's petition, Community Bank denied that the assignment was unlawful and filed a counterclaim for declaratory judgment. In its counterclaim, Community Bank alleged that the agreement was a lawful assignment under § 400.9–406 of Missouri's Uniform Commercial Code (“UCC”). Community Bank requested that the circuit court declare the “Missouri Lottery Payments” agreement binding on the parties and that the Missouri Lottery Commission continue to pay all lottery proceeds to the designated bank account as long as Appellant owes money to Community Bank.

On January 21, 2014, Community Bank filed a motion for summary judgment in which it contended that it was entitled to judgment as a matter of law because the lottery payments were validly assigned pursuant to § 400.9–406. Community Bank alternatively argued that, even if the assignment was void, Appellant should be estopped from claiming the agreement was invalid. In his response to Community Bank's statement of uncontroverted facts, Appellant did not “refute or contest,” inter alia that he was “in default in payments under the 2010 loan agreement.” However, Appellant filed a counter-motion for summary judgment asserting that he was entitled to judgment as a matter of law because § 313.285 prohibits the assignment of lottery proceeds thereby making the assignment void.

On September 15, 2014, the circuit court entered summary judgment in favor of Community Bank.3 In doing so, the circuit court concluded that the loan agreements between Appellant and Community Bank are valid and enforceable and that the Missouri Lottery Commission should continue to pay all prize monies to the designated account.

Appellant now appeals from the circuit court's grant of summary judgment. [W]e review the grant of summary judgment de novo. Kershaw v. City of Kansas City, 440 S.W.3d 448, 452 (Mo.App.W.D. 2014) (citing ITT Comm. Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993) ). “Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to summary judgment as a matter of law.” Rapp v. Eagle Plumbing, Inc., 440 S.W.3d 519, 522 (Mo.App.E.D. 2014) (citing Rule 74.04(c)). This Court will review the record and all reasonable inferences therefrom in the light most favorable to the non-movant. Kershaw, 440 S.W.3d at 452.

In his sole point, Appellant contends that the circuit court erred in granting summary judgment because the assignment of his lottery proceeds, and the loan agreements resulting therefrom, were invalid in that § 313.285.1 prohibits the assignment of lottery proceeds. In doing so, Appellant asserts that § 400.9–406 did not impliedly repeal § 313.285.1's prohibition against assigning lottery prizes. Rather, Appellant avers that the two statutory provisions must be read together and, to the extent they conflict, § 313.285.1 prevails, as it is the specific statute with respect to Missouri lottery prizes. Appellant's argument, however, is contradicted by the plain language of § 400.9–406.

Appellant is correct that the State Lottery Law limits the assignment of Missouri lottery prizes. Section 313.285.1 provides, in pertinent part, that [n]o prize, nor any portion of a prize, nor any right of any person to a prize awarded shall be assignable[.] Section 313.285.3 further provides: “Notwithstanding any other provision of this section, any person pursuant to an appropriate judicial order may be paid the prize to which the winner is entitled.” Therefore, under the State Lottery Law, lottery prizes are unassignable without “an appropriate judicial order.”4 Section 313.285 was last amended in 1993.

In 2001, however, Article 9 of the UCC was amended and defined the term “account” as “a right to payment of a monetary obligation,” including “winnings in a lottery or other games of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state.” § 400.9–102(a)(2). More importantly, § 400.9–406(f) provides:

[A] rule of law, statute, or regulation, that prohibits [or] restricts ... the assignment or transfer of, or creation of a security interest in, an account ... is ineffective to the extent that the rule of law, statute or regulation ... [p]rohibits [or] restricts ... the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account[.]

Accordingly, pursuant to § 400.9–406(f), any statute that prohibits or restricts the assignment of an account, which includes lottery winnings, is ineffective. Section 400.9–406(f), therefore, renders § 313.285.1 ineffective to the extent that it prohibits or restricts the assignment of lottery prizes.5

Appellant recognizes that lottery prizes are included in the UCC's definition of an “account” and that § 400.9–406 makes “accounts” assignable. Nevertheless, Appellant contends that § 313.285.1 prevails over § 400.9–406(f) because, to the extent that two statutes relating to the same subject matter conflict and “one statute deals with the subject in general terms and the other deals in a specific way, ... the specific statute prevails over the general statute.” State ex rel. Taylor v. Russell, 449 S.W.3d 380, 382 (Mo. banc 2014) (internal quotation omitted). Appellant asserts that § 313.285 constitutes the more specific statute with respect to Missouri lottery prizes and, thus, prevails over § 400.9–406.6

Appellant's argument relies on a rule of statutory construction. But the plain language of § 400–9.406 is quite clear, and therefore we need not resort to principles of statutory construction. “If the intent of the legislature is clear and unambiguous, by giving the language used in the statute its plain and ordinary meaning, then we are bound by that intent and cannot resort to any statutory construction in interpreting the statute.” Goerlitz v. City of Maryville, 333 S.W.3d 450, 455 (Mo. banc 2011) (internal quotation omitted). Section 400.9–406(j) provides: “This section prevails over any inconsistent provisions of any statutes, rules, and regulations.” The legislature, therefore, expressly provided that § 400.9–406 prevails over any other inconsistent statute. Moreover, the current version of § 313.285.1 was adopted prior to the enactment of the 2001 amendments to Article 9 of the UCC. Accordingly, to the extent that § 313.285.1's prohibition on the assignment lottery prizes is inconsistent with § 400.9–406(f), § 400.9–406(f) prevails.7

Thus, it follows that, despite § 313.285.1, Appellant's assignment of his lottery proceeds to Community Bank in order to secure the two loans constitutes a valid assignment. The circuit court, therefore, did not err in granting summary judgment in Community Bank's favor.8 Point denied.

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