IN RE PETITION OF BOFI FEDERAL BANK TO ASSIGN LOTTERY PRIZE PAYMENT RIGHTS OF MICHELLE A. GLOVER PURSUANT TO N.J.S.A. 5:9-13. IN RE PETITION OF BOFI FEDERAL BANK TO ASSIGN LOTTERY PRIZE PAYMENT RIGHTS OF RACHAEL ELMORE PURSUANT TO N.J.S.A. 5:9-13. IN RE PETITION OF BOFI FEDERAL BANK TO ASSIGN LOTTERY PRIZE PAYMENT RIGHTS OF RICHARD HAAS PURSUANT TO N.J.S.A. 5:9-13. IN RE PETITION OF BOFI FEDERAL BANK TO ASSIGN LOTTERY PRIZE PAYMENT RIGHTS OF DEANNE MCMILLION PURSUANT TO N.J.S.A. 5:9-13
Argued September 9, 2014.
Approved for Publication October 3, 2014
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket Nos. L-2122-12, L-2405-12, L-1793-12 and L-2406-12.
Douglas K. Eisenstein of the New York bar, admitted pro hac vice, argued the cause for appellant BofI Federal Bank ( Bressler, Amery & Ross, P.C., attorneys; Heather A. Novison, on the briefs).
Jonathan B. Peitz, Deputy Attorney General, argued the cause for respondent State of New Jersey, Division of State Lottery ( John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Peitz, on the brief).
Before Judges REISNER, KOBLITZ and HIGBEE. The opinion of the court was delivered by HIGBEE, J.S.C. (temporarily assigned).
[437 N.J.Super. 550] HIGBEE, J.S.C. (temporarily assigned).
BofI Federal Bank (BofI) filed petitions seeking approval of the assignment of certain New Jersey State Lottery payments from four separate prize winners. The four petitions were heard and denied by three different judges pursuant to N.J.A.C. 17:20-7.9(j), which states that " no one shall have the right to assign prize payments due during the last two years of the annuity term." BofI argued in each case, and now contends in this consolidated [437 N.J.Super. 551] appeal, that N.J.A.C. 17:20-7.9(j) is invalid because it is in conflict with and impermissibly enlarges the controlling statute N.J.S.A. 5:9-13, which regulates the assignment of the final two years of prize payments.
We find N.J.A.C. 17:20-7.9(j), as promulgated by the New Jersey Division of State Lottery, is valid, and effectuates the legislative intent of N.J.S.A. 5:9-13. We therefore affirm all four decisions of the Law Division judges.
The relevant facts of each of the four cases are similar. Richard Haas won the Win for Life instant game on March 5, 1998. Under the rules of the game, he became entitled to a guaranteed prize of $1,000,000 payable in quarterly installments through the year 2016. Following the guaranteed portion of the annuity, he will receive quarterly payments for his lifetime.
Michelle Glover, Rachael Elmore, and Deanne McMillion were also winners of the Win for Life game and received the same type of payments. BofI unsuccessfully petitioned the court in each case to obtain assignment of the last two years of guaranteed quarterly payments. Each of these petitions were denied by the trial judges.
Legislative history sets the framework for our decision. The New Jersey State Lottery was established by N.J.S.A. 5:9-4 on February 16, 1970, and is governed by N.J.S.A. 5:9-1 to -25. When the legislation was first enacted, a State Lottery Division was created in the Department of Treasury. A State Lottery Commission was also created within the Department as defined by N.J.S.A. 5:9-3. Instead of establishing specific games of chance with set rules and prizes, the Legislature gave this power to the Commission. See N.J.S.A. 5:9-7. The purpose for creating the [437 N.J.Super. 552] lottery was to provide economic benefit to State institutions and provide State aid for education. N.J.S.A. 5:9-2. Particularly relevant here, the statutes did not initially allow for assignment of lottery prizes. However, the law was amended in 1998.
The controlling statute states a lottery prize " shall not be assignable except as permitted by this section." N.J.S.A. 5:9-13(a), as amended. There are numerous requirements before an assignment can be approved. Moreover, under N.J.S.A. 5:9-13(d), a court order necessitating compliance with those requirements is a prerequisite to assignment. Ibid. Clearly, the Legislature ...