ILNews

COA reverses judgment on contract-rescission claim against lottery

Back to TopE-mailPrintBookmark and Share

The Indiana Court of Appeals will allow lottery scratch-off game players’ claim of contract rescission against the state’s lottery commission to proceed to trial, but the court affirmed summary judgment in favor of the commission on the other claims filed by the players in a class-action suit.

In Jeff Koehlinger, et al. v. State Lottery Commission of Indiana, No. 49A02-1003-CT-247, Jeff Koehlinger and other plaintiffs sued the State Lottery Commission of Indiana for contract rescission, false advertisement, negligence, negligent misrepresentation, unjust enrichment, restitution, and money had and received. They sued because of misrepresentations on the lottery’s website regarding the odds of winning when purchasing “Cash Blast” tickets. More than 2.5 million tickets had to be replaced before they went on sale because of a manufacturing defect; this caused the lottery’s computer system to overstate the number of unclaimed prizes on the website. After 14 months, lottery officials noticed the error and adjusted for the actual number of unclaimed prizes, which resulted in a 1,260 percent decrease in the number of unclaimed prizes.

Players were upset and wanted the lottery commission to make it right, although the commission never informed players how to initiate an administrative process nor provided information about it.

The trial court denied the class’s motion for summary judgment and granted summary judgment for the commission.

The appellate judges affirmed summary judgment in favor of the lottery commission that it has immunity under the Deceptive Consumer Sales Act, and on the quasi-contractual claims for unjust enrichment, money had and received, and restitution. They also affirmed not granting summary judgment for the commission on the basis that the class had failed to exhaust their administrative remedies.

The majority affirmed summary judgment on the negligence and negligent misrepresentation claims. Judge Patricia Riley dissented on this issue because the designated evidence supported a genuine issue of material fact. The commission had a duty to exercise reasonable care not to misinform its customers about the remaining prizes in the Cash Blast game, she wrote. It breached that duty when it didn’t accurately represent those numbers and it even admitted it was a mistake not to catch this reporting for 14 months.

Judge Riley also concurred in result with her colleagues on reversing summary judgment for the lottery commission on the contract-rescission claim and remanding for trial. Some class members had designated evidence that establishes they relied on the misinformation on the lottery’s website when deciding to buy the tickets. The majority also concluded it was reasonable to infer that many of those players suffered prejudice as a result of detrimental reliance.

“If a player can prove to the trial court that he or she relied on the Lottery’s misinformation to his or her detriment, that player will be entitled to rescission,” wrote Judge Cale Bradford.
 

ADVERTISEMENT

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

ADVERTISEMENT