Question

On June 18, 1987 Caroline Barreca won a share in a prize of over two million dollars in the New Jersey Lottery. As such she became entitled to receive $63,500 each June for twenty years, i.e., until June 22, 2006. On November 7, 1996 Ms. Barreca entered into an agreement with petitioner Singer Asset Finance Company, L.L.C. in which she agreed to assign to Singer $50,000 of the payments due June 22, 1999 and June 22, 2000 in return for a present payment to her of $72,000. The agreement was conditioned upon the entry of a court order “directing the State Lottery to recognize [the agreement] and to make the Assigned Payments, without reduction or set off (other than income tax withholding), directly to [Singer]” and a “written acknowledgement from the State Lottery * * * confirming that [Ms. Barreca] is the winner of [the assigned prize] and acknowledging the State Lottery's unqualified agreement to make all of the Assigned Payments to [Singer].”

Singer filed a petition in the Law Division in which it sought to proceed summarily for an order to allow the turnover of the assigned portion of Ms. Barreca's prize, an order which it characterized as an “appropriate judicial order." Should it be successful?

Answer 1

 It is apparently undenied that the Law Division has entered a substantial number of orders, perhaps as many as 200, permitting assignments such as that made by Ms. Barreca, and that the Division, while opposing those applications, has until now not appealed.  

Singer contends that the entry of these orders without appeal has established its legal right to obtain such assignments.   It seeks to apply the principle of offensive collateral estoppel to bar the Division from contending that N.J.S.A. 5:9-13 forbids voluntary assignments.  

We are satisfied this contention should be rejected substantially for the reasons given by the trial judge in a written opinion of May 21, 1997, incorporated by reference in his oral opinion of June 13, 1997.³  As the trial judge correctly noted,

the Division never acquiesced but consistently opposed the applications;  the determinations permitting the assignments were inconsistent with the determination made in McCabe v. Director N.J. Lottery Commission, supra;  and the issue is purely one of law which must be subject to reconsideration  by an appellate court.  

See Kortenhaus v. Eli Lilly & Co., 228 N.J.Super. 162, 165-166, 549 A.2d 437 (App.Div.1988).   Moreover, we are satisfied that even if the Division had failed to oppose the earlier applications, it could not have thereby nullified a legislative enactment by acquiescence in its violation.   See Township of Fairfield v. Likanchuk's, 274 N.J.Super. 320, 331-332, 644 A.2d 120 (App.Div.1994).

It is important to note at this juncture that although the Division is not precluded by the prior orders from asserting its position that lottery winnings are non-assignable as to new applications, as to past orders its failure to appeal makes those orders final and enforceable by the assignee against the Division.   This is analogous to the “intermediate situation” discussed by Justice (then Judge) Weintraub in Jantausch v. Borough of Verona, 41 N.J.Super. 89, 94-95, 124 A.2d 14 (Law Div.1956), aff'd, 24 N.J. 326, 131 A.2d 881 (1957).

Reversed.

FOOTNOTES

1.   Singer assigned its right to receive the moneys to an entity entitled Lottery Receivables Trust I.

2.   In passing on a lottery statute that did not contain an express prohibition on voluntary assignment, the Vermont Supreme Court noted that where a statute, like New Jersey's, bars such assignment, “[i]n each instance, the [numerous appellate courts interpreting the language have] adopted a narrow interpretation of the [appropriate judicial order] language.”  Lemieux v. Tri-State Lotto Com'n, 164 Vt. 110, 666 A.2d 1170, 1173 (1995).

3.   In an oral opinion of June 13, 1997, the trial judge incorporated by reference a more exhaustive written opinion of May 21, 1997, filed in a matter entitled “IN THE MATTER OF THE CONSOLIDATED PETITIONS FOR AN ORDER ALLOWING THE TURNOVER OF A PORTION OF THE LOTTERY WINNINGS OF VARIOUS LOTTERY WINNERS.”