Lemieux v. Tri-State Lotto Com'n, TRI-STATE

• Decision Date: 11 August 1995
• Docket Number: TRI-STATE,No. 94-590,94-590
• Citation: 164 Vt. 110,666 A.2d 1170
• Parties: Joseph LEMIEUX, Jr., et al. v.LOTTO COMMISSION.
• Court: Vermont Supreme Court

Page 1170

666 A.2d 1170

164 Vt. 110

Joseph LEMIEUX, Jr., et al. v. TRI-STATE LOTTO COMMISSION.

No. 94-590.

Supreme Court of Vermont.

Aug. 11, 1995.

Colin R. Benjamin of Benjamin & Kazmarski, P.C., Newport, and Richard H. Saudek of Cheney, Brock, Saudek & Mullett, P.C., Montpelier, for plaintiffs-appellants.

Jeffrey L. Amestoy, Attorney General, and Mark J. Di Stefano, Assistant Attorney General, Montpelier, for defendant-appellee.

M. Jerome Diamond and Joshua R. Diamond of Diamond & Associates, P.C., Montpelier, for amici curiae Allen and Bach Investment Co.

Before GIBSON, DOOLEY, MORSE and JOHNSON, JJ., and BRYAN, Supr. J., Specially Assigned.

DOOLEY, Justice.

Plaintiffs Joseph Lemieux and Singer Freidlander Corp. appeal from the Washington Superior Court's grant of summary judgment to defendant Tri-State Lotto Commission, holding that defendant does not have to honor an assignment of lottery winnings between the plaintiffs. Plaintiffs argue on appeal that a rule promulgated by defendant barring assignment of lottery winnings is invalid because it (1) directly contravenes the intent of the Legislature, (2) violates the Vermont Constitution's separation of powers requirement, and (3) results in an improper retroactive application of law. We conclude that the Legislature did not intend to preclude the assignment of lottery prizes with court approval, and therefore, reverse and remand. This disposition renders consideration of plaintiffs' other grounds of appeal unnecessary.

On March 17, 1987, plaintiff Joseph Lemieux of Jay, Maine, won an aggregate prize in the Tri-State Megabucks lottery of $373,000. This lottery is run for the three northern New England states and is administered in Vermont. Per its usual payment plan, defendant disbursed the prize to Lemieux through a twenty-year annuity to be paid in equal, annual installments of $18,650. According to his affidavit, Lemieux originally dedicated the proceeds to payments on a new house, but his wife lost her job, and Lemieux ended up deep in debt. On October 26, 1993, after negotiations through his lawyer, Lemieux entered into a written agreement with plaintiff Singer Freidlander Corp. assigning to the corporation his entire right, title, and interest in the lottery-prize installments for the years 1996-2006 for the sum of $80,000. Plaintiffs sought a declaratory judgment from the Washington Superior Court authorizing the assignment agreement between them despite defendant's regulation barring such agreements. The trial court granted defendant's motion for summary judgment, and this appeal followed.

The Tri-State Lotto Compact establishes a lottery game to be maintained and operated throughout Maine, New Hampshire, and Vermont. See generally Me.Rev.Stat.Ann. tit. 8, §§ 401-422 (West 1994); N.H.Rev.Stat.Ann. § 287-F (1987); 31 V.S.A. §§ 671-678. The member states enacted the legislation to raise additional revenue , see, e.g., 31 V.S.A. § 673, and to compete more effectively with the large grand prizes offered in the Massachusetts and New York lottery games. The game is administered by a commission comprised of one member from each of the party states, 31 V.S.A. § 674(C), and this commission has the power to promulgate the rules and regulations that govern the game, including the manner of selecting the winning tickets and paying the prizes. Id. § 674(E)(1)(d).

The Tri-State Lotto Compact also specifically describes the manner in which winners of the game are to be certified and paid. Id. § 674(L)(1). The legislation states that

Payment of prizes shall be made ... to holders of the tickets ... except that payment of any prize drawn may be paid to the estate of a deceased prize winner, and except that any person pursuant to an appropriate judicial order may be paid the prize to which the winner is entitled.

Id. By rule, the commission has defined "appropriate judicial order" as a court order "in a proceeding principally based upon an issue other than the assignment or conveyance of a lottery prize in which the court makes a disposition of the lottery prize as a remedy." Tri-State Lottery Commission Rule 11(d). ^* The issue is whether a court can order defendant to pay an assignee of a ticketholder, other than in the circumstances authorized by the rule. Resolution of this issue necessitates that we decide whether Rule 11(d) is valid.

This Court has been traditionally reluctant to substitute our judgment for the experience and expertise of an agency. See In re Agency of Admin., 141 Vt. 68, 74, 444 A.2d 1349, 1351 (1982). Absent a compelling indication that an agency has misinterpreted the statute it has been charged to execute, we will defer to the agency's judgment. Id. at 74-75, 444 A.2d at 1351-52; Vermont Ass'n of Realtors v. State, 156 Vt. 525, 530, 593 A.2d 462, 465 (1991). Accordingly, we have consistently held that agency actions, including the promulgation of rules, enjoy a presumption of validity. Id. at 530, 593 A.2d at 465.

Despite this deferential standard of review, this Court has never been hesitant to intervene if an administrative agency uses its rulemaking power to exceed its legislative grant of authority. Agency of Admin., 141 Vt. at 75, 444 A.2d at 1352. The wide discretion afforded agency actions will not stand if this discretion is exercised in an unrestrained manner. State v. Auclair, 110 Vt. 147, 163, 4 A.2d 107, 114 (1939); see also Trybulski v. Bellows Falls Hydro-Electric Corp., 112 Vt. 1, 7, 20 A.2d 117, 120 (1941) (agency has only such powers as are expressly conferred by Legislature). Therefore, an agency rule or regulation that compromises the intent of the authorizing statute is void. In re Club 107, 152 Vt. 320, 322, 566 A.2d 966, 967 (1989); Agency of Admin., 141 Vt. at 74-75, 444 A.2d at 1351-52.

In construing a statute, our overall objective is to give effect to the intent of the Legislature. See Massachusetts Mun. Wholesale Elec. Co. v. State, 161 Vt. 346, 355, 639 A.2d 995, 1001 (1994). We look to the whole of the statute and every part of it, its subject matter, the effect and consequences, and the reason and spirit of the law. See Winey v. William E. Dailey, Inc., 161 Vt. 129, 136, 636 A.2d 744, 749 (1993). If the statute is unambiguous, we look first to the plain, ordinary meaning of the statutory language. See Massachusetts Mun. Wholesale Elec. Co., 161 Vt. at 355, 639 A.2d at 1001.

At the center of this dispute is the statutory language that allows payment to other than a ticketholder pursuant to an "appropriate judicial order." Defendant interprets the statutory language narrowly, so as not to undercut a policy of nonassignment of lottery proceeds which it finds in the statutory scheme. It argues, moreover, that its rulemaking power is broad enough to allow it to define the term and that we must uphold its definition. Plaintiffs take the other side of these arguments, stressing that the language does not limit the court's authority to act in a proceeding where the purpose is to validate an assignment.

We concede that the meaning of the statutory language is far from plain. Although the wording appears to require that the judicial order be "appropriate," both sides agree that it is the circumstances giving rise to the order that must be "appropriate." See McCabe v. Director of N.J. Lottery Comm'n, 143 N.J.Super. 443, 363 A.2d 387, 388 (Ch.Div.1976) (identical language in New Jersey statute means that judiciary can authorize assignment in "suitable or appropriate circumstances"). We conclude, however, that the wording supports plaintiffs' argument.

The statutory language "appropriate judicial order" is present in virtually every lottery statute in the United States. As defendant points out, numerous appellate courts have interpreted this language, usually in disputes similar to this one. In each instance, the court has adopted a narrow interpretation of the language, much like that adopted by defendant here, or has enforced rules of the lottery agency embodying a narrow construction. See In re Dalton, 146 B.R. 460, 463 (Bankr.D.Ariz.1992); R & P Capital Resources v. California State Lottery, 31 Cal.App.4th 1033, 37 Cal.Rptr.2d 436, 440 (1995); Walker v. Rogers, 272 Ill.App.3d 86, 208 Ill.Dec. 815, 819, 650 N.E.2d 272, 276 (1995); In re La. Lottery Corp. Grand Prize Drawing, 643 So.2d 843, 846 (La.Ct.App.1994); McCabe v. Director of N.J. Lottery Comm'n, 363 A.2d at 390; Lotto Jackpot Won by Marianov, 533 Pa. 402, 625 A.2d 637, 640 (1993); Converse v. Lottery Comm'n, 56 Wash.App. 431, 783 P.2d 1116, 1118 (1989); see also Meyers v. Ohio State Lottery Comm'n, 34 Ohio App.3d 232, 236, 517 N.E.2d 1029, 1034 (1986) (language does not permit either voluntary assignment or attachment by creditors pursuant to judicial order).

In each of these cases, however, the statutory scheme contains an express statutory prohibition on voluntary assignment. This is a "clear and unambiguous statement of legislative intent." In re La. Lottery Corp. Grand Prize Drawing, 643 So.2d at 845. Thus, if the "appropriate judicial order" language were interpreted to allow voluntary assignment in such a system, "the exception would swallow the rule of no assignment." R & P Capital Resources, 37 Cal.Rptr.2d at 439. The language can be harmonized with the legislative intent by not allowing a judicial order to validate a voluntary assignment. See Walker, 208 Ill.Dec. at 819, 650 N.E.2d at 276.

The Tri-State Lotto Compact contains no express prohibition on voluntary assignment. Thus, there is no inherent tension in the statutory scheme that requires us to narrow the authorization for payment to persons other than the ticketholder. Our statute provides that "any person pursuant to an appropriate judicial order may be paid the prize to which the winner is entitled." 31 V.S.A. § 674(L)(1) (emphasis added). The words convey a broad power, not a limited one, as defendant urges. We will apply it according to the wording the...