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Triano v. Division of State Lottery

December 11, 1997

TERESA TRIANO, SUSAN KERLIN, EDWARD PIORKOWSKI, DIANE KELLY, DOREEN HUTCHERSON, RANDOLPH TURNER, JOYCE THOMAS, FRANCES BAVARO, PATRICIA D'ELIA, AND RAYMOND RAYHON, PLAINTIFFS-APPELLANTS,
v.
DIVISION OF STATE LOTTERY, ITS EMPLOYEES, AGENTS AND/OR SERVANTS, VIRGINIA E. HAINES, EXECUTIVE DIRECTOR, JOHN GALLAGHER, CONTROLLER, AND JOHN DOE (1-5), DEFENDANTS-RESPONDENTS.



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

Approved for Publication December 13, 1997.

Before Judges Shebell, D'Annunzio and A.a. Rodriguez. The opinion of the court was delivered by Shebell, P.j.a.d.

The opinion of the court was delivered by: Shebell

The opinion of the court was delivered by

SHEBELL, P.J.A.D.

On March 20, 1996, Teresa Triano and Susan Kerlin filed a complaint in the Law Division against defendants, Division of State Lottery ("State Lottery"), Virginia E. Haines, its Executive Director, and John Gallagher, its controller. On May 24, 1996, the complaint was amended to add as plaintiffs, Edward Piorkowski, Diane Kelly, Doreen Hutcherson, Randolph Turner, Joyce Thomas, Frances Bavaro, Patricia D'Elia, and Raymond Rayhon. In their complaints, plaintiffs alleged they were winners of the New Jersey Lottery Lucky Anniversary game, but that

the defendant State Lottery breached its agreement with [each plaintiff] when it advertised and offered [them] and other members of the public the opportunity to win various amounts up to and including $250,000.00, with the purchase of the Lucky Anniversary Lottery Ticket and when it thereafter failed to pay [them] the [amount] which [was] revealed on [the ticket].

Plaintiffs also alleged that defendants, Haines and Gallagher, "failed to properly manage, direct or oversee the Lucky Anniversary Lottery game to ensure that false and misleading information was [not] presented to the public as an inducement to purchase lottery tickets."

On December 26, 1996, defendants moved for summary judgment seeking dismissal because the Law Division was not the proper forum to review the matter; plaintiffs failed to exhaust their administrative remedies; plaintiffs failed to file notices of claim as required under the Tort Claims Act and Contractual Liability Act; and plaintiffs' claim for negligent misrepresentation against Haines and Gallagher must fail under N.J.S.A. 59:3-10. Defendants asserted that to exhaust their administrative remedies, plaintiffs were required to bring their claims to the Executive Director of the State Lottery for a final review, and that only after obtaining a final decision, could plaintiffs appeal to this court.

On February 7, 1997, the Law Division Judge granted defendants' motion holding that the plaintiff failed to exhaust all administrative remedies prior to filing their complaint. The motion Judge observed:

I think it requires, the . . . head of the Lottery Commission, to make a ruling . . . . In that way the expertise of the Commission, which is substantial, they're the ones that devise all the rules for these games . . . . And it's an important function here because not only are we dealing with these people who claim to be winners, but a lot of other people . . . . So it's an important issue. And I think the Lottery Commissioner should deal with it first. And then there's an appeal to the Appellate Division. There is no stop at the Law Division. The Law Division doesn't get involved. It's straight Commission decision and then to the Appellate Division. The Appellate Division can then deal on the legal issue that the Lottery Commission may or may not decide. I can't say that this [is] a foregone Conclusion. There may be enough . . . confusion about this ticket so that the Director might make an exception or might decide that certain people were misled by the rules. It doesn't seem that way. But . . . I don't think it's inconceivable.

The Judge also held that plaintiffs' claim was not cognizable under the Tort Claims Act and the Contractual Liability Act, and that Haines and Gallagher had immunity from plaintiffs' negligent misrepresentation claim. Plaintiffs appeal and we affirm.

Between January 1995 and April 1995, plaintiffs purchased Lucky Anniversary tickets from the State Lottery for five dollars each. Among the rules contained on each ticket, it was provided that "all winners, tickets and transactions are subject to New Jersey Lottery rules and regulations and State Law. All prize awards are subject to claim procedures, validation tests, and other applicable requirements of the New Jersey Lottery." After purchasing a ticket, the player had to scratch off an opaque material to reveal certain hidden symbols and dollar amounts. Each ticket contained three games, one of which was the bonus game. The following appeared on the tickets:

"Scratch off Bonus area, reveal a 25th symbol and win prize shown below automatically."

[Emphasis added.]

Plaintiffs claim that defendants issued an advertising brochure which stated, "Find our Anniversary symbol and win prize shown instantly." Plaintiffs claim that as a result of the brochure they were "induced to purchase the ticket."

When plaintiffs scratched off the bonus section, their tickets revealed a symbol (present, candle, cake, hat) and the amount of their prize ($5000 to $250,000). Plaintiffs claimed that in accordance with the rules, they won the amount revealed in the bonus section, but when they went to the State Lottery to claim their winnings, defendants claimed they did not possess winning tickets because none revealed the "25th" symbol. Plaintiffs argued that since the wording on the ticket ...


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