Wednesday, August 6, 2008

Lottery Lawsuits

I, just like many other people, will pass a Texas Lottery billboard and spend the rest of my car trip imagining the possibilities of receiving a lottery payout. The end of all my problems, right?

In some cases, winning the lottery is just the beginning of problems. Domingo v. Mitchell, filed in the 237th JDC of Lubbock County, is a recent case that shows the problem with oral agreements about lottery pools.

For 2004 to 2006, Betty Domingo and Brenda Mitchell pooled their money together to buy lottery tickets. If either woman was short the money, the other would cover and be reimbursed win or lose.

In March 2006, Mitchell was invited to join LGroup LP, a group of women organized to buy lottery tickets. On March 23, 2006, Mitchell received an email from LGroup setting a meeting on the 30th at a restaurant to collect money and select numbers for the April 2006 lottery drawings. Mitchell invited Domingo to be part of the group. Domingo asked how much the group would cost her, Mitchell offered to cover Domingo's cost and be reimbursed at a later time.

On March 30, 2006, LGroup, LP met at a restaurant to collect money and pick lottery numbers. Unfortunately, Mitchell did not have enough money to pay for her dinner and both her share and Domingo's share in the LGroup ($17 per person). So she only paid $17 for herself.

Sure enough, the LGroup won a lottery with a cash-value of $20.9 million. Domingo filed a lawsuit against the members of LGroup and the Lottery Commission to stop the distribution of the lottery proceeds, because Domingo was not recognized as a member of the LGroup for the pay-out.

Mitchell won summary judgment in the trial court based on Domingo's claim of breach of contract. On appeal, the decision was reversed and sent back to the trial court for a full trial.


So what can we learn from this case? Those informal agreements to buy lottery tickets might be enforceable as contracts. If that's the case, then maybe it's a good idea to take some of the time day dreaming about spending all that money and use it instead to come to a clear understanding about who is buying the lottery tickets, how to share costs, how to share the proceeds and timing of each.

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