Meyer v. Hawkinson

• Decision Date: 01 May 2001
• Docket Number: No. 20000093.,20000093.
• Citation: 2001 ND 78,626 N.W.2d 262
• Parties: Clyde and Dorothy MEYER, Plaintiffs and Appellants, v. Donald M. HAWKINSON and Marilyn F. Hawkinson, Defendants and Appellees.
• Court: North Dakota Supreme Court

626 N.W.2d 262

2001 ND 78

Clyde and Dorothy MEYER, Plaintiffs and Appellants, v. Donald M. HAWKINSON and Marilyn F. Hawkinson, Defendants and Appellees.

No. 20000093.

Supreme Court of North Dakota.

May 1, 2001.

John T. Goff (argued), Montgomery, Goff and Bullis, Fargo, ND, and Thomas R. Olson (on brief), Jeffries, Olson & Flom, PA, Moorhead, MN, for plaintiffs and appellants.

Daylen D. Ramstad, Wegner, Fraase, Nordeng, Johnson & Ramstad, Fargo, ND, for defendants and appellees.

KAPSNER, Justice.

[¶ 1] Clyde and Dorothy Meyer appeal from the district court's grant of summary judgment for Donald M. and Marilyn F. Hawkinson, dismissing Meyers' claim for enforcement of an alleged contract to share proceeds of the Western Canadian Lottery. The district court found there was a genuine issue as to the existence of a contract between the parties, but granted summary judgment because the alleged contract had an unlawful object and would be unenforceable as contrary to North Dakota's public policy against gambling. We hold the public policy of the state of North Dakota would not allow our courts to enforce an alleged contract to share proceeds of a winning lottery ticket. We affirm.

I

[¶ 2] On August 16, 1997, Clyde Meyer drove his wife, Dorothy Meyer, and their friends, Donald and Marilyn Hawkinson, from Fargo, North Dakota to Winnipeg, Canada to attend the horse races. They planned to split the cost of gas for the trip, as was their custom. After checking into the hotel, Donald Hawkinson purchased a lottery ticket with three quick pick numbers at the hotel gift shop, and then he returned to the lounge to tell Marilyn Hawkinson and the Meyers about his purchase. Clyde Meyer claims Donald Hawkinson said to Clyde, "Go buy three lottery tickets and we'll split." According to Dorothy Meyer, Donald Hawkinson said, "I just bought three tickets for the lottery, and you go in and buy three, and if we win, we'll split." Hawkinson claims he said he felt "pretty lucky" and suggested to Meyer, "Why don't you go buy some," not mentioning any split. [¶ 3] Dorothy Meyer claims Clyde Meyer said, "Okay," and left the lounge. Clyde Meyer testified he directly turned around, walked to the gift stand, and bought three lottery tickets. Donald Hawkinson testified that when Clyde Meyer returned to the lounge, Meyer may have said he got some lottery tickets. However, according to both of the Meyers and Marilyn Hawkinson, Clyde Meyer said nothing about the lottery or tickets when he returned to the table. It is undisputed that when Meyer returned, he said nothing about the number of tickets he had purchased, and he did not show anyone any lottery tickets.

[¶ 4] The following day Donald Hawkinson discovered that one of his lottery ticket numbers was a winner of $1.6 million Canadian ($1.2 million U.S.). Clyde claims he went to meet his wife in the restaurant and thought he told her, "We won the lottery, Don's ticket."

[¶ 5] The parties had been friends for over forty years, often gambling together. Donald frequently bought lottery tickets, but the parties never pooled their funds to purchase lottery tickets. During their stay in Winnipeg, the parties did not pool their money to bet on horses or to gamble in the casinos. They did have a custom of pooling their money before buying pull tabs, and they would open their pull tabs together and split any proceeds immediately. They also had a custom of splitting the cost of drinks. On this occasion, after Donald won the lottery, he paid for all the Meyers' drinks and meals.

[¶ 6] The Hawkinsons called their children with the news and invited them to come to Winnipeg to celebrate. Clyde Meyer never telephoned anyone to tell them he had won the lottery. Dorothy Meyer testified she talked on the telephone to one of the Hawkinsons' children and may have said Donald Hawkinson won the lottery and was now a millionaire. Dorothy called her own son and thought she said, "Don had won the lottery." She also called her friend and thought she told her, "Don won the lottery."

[¶ 7] The Hawkinsons and their children arranged for safekeeping the ticket in the hotel safe and later in a safety deposit box. The Meyers did not take part in these arrangements. Later the parties rode together back to Fargo, but there was no mention of splitting the lottery. Two to three weeks later, Donald told Clyde there would be no equal sharing of the winnings, and Clyde said he understood there would be no equal split, but he thought Donald would share the winnings. On about September 17, 1997, Donald sent each of the Meyers $2,500 as a gesture of friendship. Dorothy Meyer stated Clyde expected Donald to buy him a motor home, and so their friendship ended.

[¶ 8] Clyde and Dorothy Meyer filed a civil action against Donald and Marilyn Hawkinson to enforce a contract to share equally in the lottery winnings. The Hawkinsons moved for summary judgment, arguing no reasonable mind could find from the evidence the existence of an enforceable contract, and even if a contract existed, it would be unenforceable as illegal and against public policy. The district court found there was a genuine issue as to whether a contract existed between the parties, making summary judgment inappropriate on that issue. Nevertheless, the district court granted summary judgment for the Hawkinsons, reasoning even if the alleged contract existed, such an agreement would be contrary to North Dakota's public policy against gambling. The district court concluded the alleged contract would be unenforceable because its object, although lawful in Canada, is unlawful in North Dakota as it violates state anti-gambling statutes. The Meyers appealed.

II

[¶ 9] Summary judgment is a procedural device for properly disposing of a lawsuit without trial if, after viewing the evidence in the light most favorable to the party opposing the summary judgment, there are no genuine issues of material fact or conflicting inferences which reasonably can be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Dan Nelson Const., Inc. v. Nodland & Dickson, 2000 ND 61, ¶ 13, 608 N.W.2d 267. Under N.D.R.Civ.P. 56(c), a court shall render summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law."

III

[¶ 10] The Meyers argue the district court erred in granting Hawkinsons' motion for summary judgment by finding as a matter of law the alleged contract between the parties is unenforceable because it is contrary to the public policy of North Dakota. We disagree.

[¶ 11] Gambling differs from other business transactions, and ordinary remedies usually are not available to enforce gambling debts. Hochhalter v. Dakota Race Mgmt., 524 N.W.2d 582, 584 (N.D.1994). It is essential to the existence of a contract to have a lawful object. N.D.C.C. § 9-01-02. A contract is void if the consideration given for the contract is unlawful. N.D.C.C. § 9-05-04. A contract is unlawful if it is (1) contrary to an express provision of law; (2) contrary to the policy of express law, although not expressly prohibited; or (3) otherwise contrary to good morals. N.D.C.C. § 9-08-01.

A

[¶ 12] The Meyers argue the alleged contract is not contrary to an express provision of law because it was entered into in Canada where the lottery is legal and because the alleged contract does not violate the laws of North Dakota. However, whether the alleged contract is contrary to express provision of law in North Dakota is essential to determining whether the contract is enforceable. The question is whether such a contract is enforceable in the courts of North Dakota or whether our courts will not be used to enforce such contracts because they are contrary to the public policy of this state.

[¶ 13] The Constitution of North Dakota, Article XI, § 25, provides:

The legislative assembly shall not authorize any game of chance, lottery, or gift enterprises, under any pretense, or for any purpose whatever. However, the legislative assembly may authorize by law bona fide nonprofit veterans', charitable, educational, religious, or fraternal organizations, civic and service clubs, or such other public-spirited organizations as it may recognize, to conduct games of chance when the entire net proceeds of such games of chance are to be devoted to educational, charitable, patriotic, fraternal, religious, or other public-spirited uses.

[¶ 14] In 1976, a constitutional amendment gave the legislature limited authority to authorize some forms of gambling. See N.D. Op. Att'y Gen. L-178, L-179 (1993). Under that limited constitutional authorization, the legislature enacted N.D.C.C. ch. 53-06.1 describing which games of chance are authorized in North Dakota, the persons and organizations authorized to hold such games of chance, and a regulatory licensing structure to ensure fairness and to ensure proceeds are devoted to purposes required by the constitution. Id. at L-179-80. Under N.D.C.C. § 53-06.1-11.1(2), a licensed organization shall disburse gambling proceeds only for a specified list of educational, charitable, patriotic, fraternal, religious, or public-spirited uses.

[¶ 15] Under North Dakota law, gambling is defined as risking any money or other thing of value for gain, contingent on a lot, chance, or the happening or outcome of an event over which the person taking the risk has no control. N.D.C.C. § 12.1-28-01(1). In addition, N.D.C.C. § 12.1-28-02(2) makes it a class A misdemeanor to:

a. Sell, purchase, receive, or transfer a chance to participate in a lottery, whether the lottery is drawn in state or out of state, and whether the lottery is lawful in the other state or country;

b. Disseminate information about a lottery with intent to encourage participation in it, except that a...