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Interlotto, Inc. v. National Lottery Admin.

February 20, 1997

INTERLOTTO, INC., PLAINTIFF-RESPONDENT, AND INVESTCO, LTD., PLAINTIFF/INTERVENOR-RESPONDENT,
v.
THE NATIONAL LOTTERY ADMINISTRATION, A BODY POLITIC OF THE DOMINICAN REPUBLIC AND THE GOVERNMENT OF THE DOMINICAN REPUBLIC, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County.

Approved for Publication February 24, 1997. As Corrected.

Before Judges King, Keefe and Loftus. The opinion of the court was delivered by Keefe, J.A.D.

The opinion of the court was delivered by: Keefe

The opinion of the court was delivered by

KEEFE, J.A.D.

In these two appeals that have been consolidated for the purpose of this opinion, defendants The Dominican Republic and its national lottery administration, Loteria National (Loteria), improperly impleaded as The National Lottery Administration, appeal from a default judgment in excess of six million dollars entered on a breach of contract suit brought by plaintiff, Interlotto, Inc. (Interlotto), an American corporation that set up an instant lottery for them.

The issues presented on appeal are:

I. DOES THE COURT LACK PERSONAL JURISDICTION ?

II. DOES THE COURT LACK SUBJECT MATTER JURISDICTION OR DOES INTERLOTTO LACK STANDING TO SUE?

III. SHOULD THE DEFAULT JUDGMENT BE VACATED PURSUANT TO R. 4:50-1?

We conclude for the reasons expressed that the Law Division lacked personal jurisdiction over both defendants, and vacate the judgment entered against them. We need not address the other issues presented.

The contract, written and executed in the Dominican Republic, is between the Loteria and Interlotto and calls for the latter to assist in the design of an instant lottery; secure the services of a printer of "international reputation" to print the tickets and, once printed, to ship them to the Dominican Republic; to supply the technology necessary to implement the lottery and to contract with and manage all personnel necessary to implement it. Interlotto was to develop a network of vendors for ticket sales, handle advertising, and obtain insurance against errors in printing.

In return for these services, Interlotto was to receive fifteen percent of the face value of each ticket. The contract called for the parties to be bound by procedures established by an internationally renowned accounting firm. It also outlined a yearly audit of Interlotto's books by the government to determine the actual return on investment. On the basis of this accounting, the parties were to "determine the reduction in the percentage on the face value of the ticket which is paid to Interlotto, to transfer it to the percentage destined to be returned to the public in prizes."

The contract, governed by Dominican Republic law, provides for termination if the Loteria contracted with another company for a similar game; if the tax situation changed; or if ...


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