Zientara v. Lottery Control Bd.

• Decision Date: 03 June 1991
• Docket Number: No. 1-89-2474,1-89-2474
• Citation: 214 Ill.App.3d 961,574 N.E.2d 747,158 Ill.Dec. 634
• Parties: , 158 Ill.Dec. 634 Richard ZIENTARA, Plaintiff-Appellee, v. The LOTTERY CONTROL BOARD, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 747

574 N.E.2d 747

214 Ill.App.3d 961, 158 Ill.Dec. 634

Richard ZIENTARA, Plaintiff-Appellee, v. The LOTTERY CONTROL BOARD, Defendant-Appellant.

No. 1-89-2474.

Appellate Court of Illinois First District, First Division.

June 3, 1991.

Atty. Gen. of the State of Ill., Robert Ruiz, Sol. Gen., Chicago (Robert G. Toews, Asst. Atty. Gen., of counsel), for defendant-appellant.

Beermann, Swerdlove, Woloshin & Barezky, Chicago (Alvin R. Becker, Howard A. London, of counsel), for plaintiff-appellee.

Justice BUCKLEY delivered the opinion of the court:

The Illinois Lottery Control Board (the Board) appeals from an order of the circuit court of Cook County on administrative review which reversed its decision to deny Richard Zientara (plaintiff) accrued interest as a result of a delay in payment on the first installment of a winning Lotto ticket. The Board contends that (1) the circuit court lacked subject-matter jurisdiction over the matter because plaintiff failed to name and serve summons upon Sharon Sharp, the Director of the Department of the Lottery (the Director); (2) no statutory authority exists to permit an award of interest on the lottery winnings; and (3) any payment of interest would violate the doctrine of sovereign immunity.

Following the announcement of the April 7, 1984, Illinois Lotto prize of $1,696,800, plaintiff, an Indiana resident, commenced litigation in the Porter Superior Court of Indiana against Chester and Bernice Kaszuba, the individuals in possession of the winning ticket. During the course of the Indiana proceedings, the Department of the Lottery (the Department) retained possession of the $84,844 first installment payment on the winning ticket, despite an order from the Indiana Superior Court directing the "State of Illinois Lottery Division" to pay the proceeds to the Clerk of its court. Great-West Life Assurance Company, the company contracting with the Illinois Lottery Commission (the Commission) to make installments subsequent to the Department's payment of the initial installment, paid the second and third past-due installments without interest into the Registry of the Clerk of the Indiana Court, whereupon the Indiana Court absolved it from any further liability. At the culmination of the litigation in the Indiana Supreme Court on April 6, 1987, plaintiff was declared the rightful owner of the proceeds.

Plaintiff thereafter made a claim to the Department for the first installment of the Lotto prize. The Department notified plaintiff's attorney by letter that it would not process the lottery payment until registration of the Indiana judgment in Illinois and until receipt of an order dismissing an action which had been filed by the Kaszubas in the circuit court of Cook County. The letter further indicated that no interest would be paid on the installment. The Department paid plaintiff the first lottery installment after the Kaszuba action was dismissed and the Indiana judgment was registered in Cook County.

In response to plaintiff's requests for interest on the principal sum of the first installment, the General Counsel for the Department informed plaintiff in another letter, dated August 17, 1987, that he was not entitled to interest. Plaintiff then filed a complaint for administrative review of "a decision of the Illinois Lottery Control Board of August 17, 1987," in the circuit court of Cook County, naming as defendant, and serving summons upon, the Board. The circuit court entered an order retaining jurisdiction over the matter but remanding the case to the Board for a formal administrative hearing.

A Department hearing officer, following an administrative hearing, recommended that plaintiff's request for interest be denied. Plaintiff pursued an appeal to the Board, and the Board recommended that the Director adopt the hearing officer's decision. On October 25, 1988, the Director adopted the decision of the hearing officer and the Board.

Plaintiff filed an amended complaint for administrative review in the circuit court on November 10, 1988, naming only the Board as defendant. The complaint stated that "[o]n October 25, 1988, the Director of the State of Illinois, Department of the Lottery, entered her final administrative decision denying the claim of plaintiff" and requested that the "order and decision of the Illinois Lottery Control Board be reversed and that an order be entered directing an award of interest to be paid to [p]laintiff to compensate him for delay in payment from April 7, 1984, to August 27, 1987."

The circuit court entered an order on February 10, 1989, reversing the decision of the Board as contrary to the law and remanding the case to the Board to award plaintiff interest on the $84,844 installment from the date the Kaszubas first asserted their claim to the winnings until August 27, 1987. The court retained jurisdiction and also found no just reason to delay enforcement of the appeal under Supreme Court Rule 304(a) (134 Ill.2d R. 304(a)). The appellate court dismissed the Board's appeal on the ground that the circuit court's order was not a final and appealable order.

Pursuant to the circuit court's February 10, 1989, order, a hearing was held before the Board. On May 19, 1989, the Board issued a recommended decision that $21,890.17 represented the earnings on the installment from the date of the claim on April 9, 1984, until August 27, 1987. The Director issued her decision on June 30, 1989, stating:

"Although I believe the findings of the Lottery Control Board to be incorrect, to comply with the Circuit Court's Order of February 10, 1989, I am attaching the Lottery Control Board's findings to this decision so as to provide the requisite finality in this matter for purposes of appeal."

Plaintiff subsequently moved for the entry of the $21,890.17 judgment in the circuit court, naming "the Department of the Lottery" as defendant. On August 11, 1989, the circuit court entered an order confirming the Board's decision of May 19, 1989, adopted by the Director on June 30, 1989, and ordering the Department to pay plaintiff $21,890.17.

Thereafter, "[d]efendant SHARON SHARP, Director of the Illinois Department of Lottery, move[d] [the circuit] court for clarification" of its August 11, 1989, order. The motion asserted that the circuit court had actually reversed the Director's decision and adopted the Board's decision. On August 25, 1989, the court entered an order, under the caption "Zientara v. Sharon Sharp, Director, Illinois State Lottery," reversing the decision of the Director as follows:

"[T]his court, being fully advised in the premises, orders that the decision of Sharon Sharp, defendant, is reversed because it is against the manifest weight of the evidence. Judgment is entered against defendant directing payment to plaintiff in the amount of $21,890.17."

Initially, this court is compelled to admonish the Commission for its bad faith. "Many people, who may not otherwise spend their hard-earned money, trust that a State-run lottery will be fair. The State should be beyond reproach in something like this because it is important for people to have faith in their government." (Smith v. Jones (1986), 113 Ill.2d 126, 136, 100 Ill.Dec. 560, 497 N.E.2d 738, 742 (Clark, J., dissenting, joined by Simon, J.) Although under Illinois case and statutory law we find that the Commission prevails, this protracted litigation could have been avoided by the Commission through the performance of one simple act. Had the Commission deposited the first installment payment with the Clerk of the Court Registry in Indiana as the July 17, 1985 order of the Porter County Superior Court authorized or in the alternative, filed an interpleader action in the circuit court of Cook County, depositing the disputed installment with the court, this litigation would have been unnecessary.

On appeal, the Board contends that the circuit court never acquired its special statutory jurisdiction on administrative review of plaintiff's action because plaintiff failed to meet the procedural requirements of the Administrative Review Law (Ill.Rev.Stat.1987, ch. 110, par. 3-101 et seq.) by omitting to name the Director as a defendant and to serve summons upon her. Specifically, the Board asserts that plaintiff, by his omission, failed to comply with section 3-107 of the Administrative Review Law, which provides:

"In any action to review any final decision of an administrative agency, the administrative agency and all persons, other than the plaintiff, who were parties of record to the proceedings before the administrative agency shall be made defendants." (Ill.Rev.Stat.1987, ch. 110, par. 3-107.)

Plaintiff responds that he satisfied section 3-107 by naming the Board as the sole defendant because the Director was not a necessary defendant since she reviewed the Board's determination as supervisor of the independent Board, rather than a "part[y] of record to the proceedings before the administrative agency."

We preliminarily note that plaintiff improperly focuses on whether the Director is a "part[y] of record" to the administrative proceedings instead of whether she is the "administrative agency" required to be made a defendant under section 3-107. Section 3-101 of the Administrative Review Law defines "Administrative Agency" as "a person, body of persons, group, officer, board, bureau, commission or department * * * of the State * * * having power under law to make administrative decisions." [Emphasis added.] (Ill.Rev.Stat.1987, ch. 110, par. 3-101.) Inasmuch as the Director entered a decision in the administrative proceedings, in issue here is whether she is the "administrative agency" contemplated in section 3-107. In contrast, the case relied on by plaintiff as analogous to the situation at hand, Lockett v. Chicago Police Board (1990), 133 Ill.2d 349, 140 Ill.Dec. 394, 549 N.E.2d 1266, involved the question of whether the Chicago police superintendent who filed the...