Opinion
Claim No. 138335
09-14-2023
Andrew Piraino, Claimant, v. The State of New York, Defendant.
For Claimant: Aaron Zimmerman, Esq For Defendant: LETITIA JAMES, New York State Attorney General By: Gigi E. Meyers, Assistant Attorney General
For Claimant: Aaron Zimmerman, Esq
For Defendant: LETITIA JAMES, New York State Attorney General By: Gigi E. Meyers, Assistant Attorney General
Zainab A. Chaudhry, J.
Claimant Andrew Piraino brings this action alleging that defendant, through the conduct of the New York State Gaming Commission's Division of the Lottery, violated an implied contractual obligation when it did not immediately pay out to him the winnings from a jackpot-prize instant lottery ticket worth over $2.3 million, and that there was no basis to delay payment of the prize. Defendant moves to dismiss the claim pursuant to CPLR 3211, contending that (1) the claim is moot because the prize was fully paid out to claimant approximately a month and a half after his submission of the winning ticket, once the ticket and identity of the winner were verified by the Lottery Division; (2) the Court of Claims lacks subject matter jurisdiction over this dispute; and (3) the claim fails to state a cause of action. Claimant opposes the motion. For the reasons stated below, the motion is granted.
The question of the Court's jurisdiction is paramount and must be considered before any other issue. The threshold inquiry in determining whether the Court of Claims has subject matter jurisdiction is whether the "essential nature of the claim" is to recover money damages against the State (Matter of Gross v Perales, 72 N.Y.2d 231, 236 [1988]; see Court of Claims Act § 9 [2]; Psaty v Duryea, 306 NY 413, 416-417 [1954]; Madura v State of New York, 12 A.D.3d 759, 760 [3d Dept 2004], lv denied 4 N.Y.3d 704 [2005]). In addition-and without regard to a claimant's characterization of the nature of the action as seeking only such damages-the Court must determine "whether the claim would require review of an administrative agency's determination" (City of New York v State of New York, 46 A.D.3d 1168, 1169 [3d Dept 2007], lv denied 10 N.Y.3d 705 [2008]; see also Buonanotte v New York State Off. of Alcoholism & Substance Abuse Servs., 60 A.D.3d 1142, 1143-1144 [3d Dept 2009], lv denied 12 N.Y.3d 712 [2009]). If so, subject matter jurisdiction does not exist because challenges to such determinations are governed exclusively by CPLR article 78 proceedings commenced in Supreme Court and cannot be entertained in the Court of Claims (see Nasca v New York State Dept. of Taxation & Fin., 205 A.D.3d 1169, 1170 [3d Dept 2022], lv denied 39 N.Y.3d 905 [2022]; Hoffman v State of New York, 42 A.D.3d 641, 642 [3d Dept 2007]).
The claim alleges that claimant purchased a winning scratch-off lottery ticket awarding a prize worth the lump sum of $2,380,000 and, despite demands for payment, the Lottery Division "refused to pay claimant his... prize" without any "legitimate [or] valid basis" (Claim, ¶¶ 14-15). Although claimant characterizes the claim as a breach of contract action seeking monetary damages, the essential nature of the claim is a "demand[ ] that [the] agency take particular action"-namely, that it immediately turn over claimant's prize-and such redress must be sought in a CPLR article 78 proceeding (Graham v State of New York, 212 A.D.3d 955, 956 [3d Dept 2023]; see Carver v State of New York, UID No. 2009-015-160 [Ct Cl, May 4, 2009] [Collins, J.] [challenge to the legality "of an administrative determination to withhold [a claimant's] lottery prize winnings" was equitable in nature and should have been raised in article 78 proceeding]). In circumstances such as those at issue here, the determination of the Lottery Division to delay payment pending verification of the prize ticket and the winner is appropriately the subject of "judicial review in a proceeding in the nature of mandamus to compel and because any monetary recovery would be incidental to the mandamus proceeding" (Berrian v State of New York, 45 A.D.3d 995, 996 [3d Dept 2007] [involving claim seeking return of filing fees after a Supreme Court clerk's denial of request for fee refund]; cf. Matter of Caplan v New York State Dept. of Taxation & Fin., Div. of Lottery, 32 N.Y.2d 134 [1973] [article 78 proceeding to compel Lottery Division to accept petitioner's ticket number and include it in a final bonus drawing]).
Here, payment of the prize winnings to claimant following any successful judicial review-despite the astronomical amount-would be "directly dependent upon" (City of New York v State of New York, 46 A.D.3d at 1169) and, thus, incidental to, a determination that the Lottery Division erred in its administrative determination that a delay in immediate payment of the prize was justified (see Guy v State of New York, 18 A.D.3d 936, 937 [3d Dept 2005] [affirming dismissal upon "plain reading of the claim," gravamen of which sought annulment of Tax Department determination issuing a tax compliance levy and review of agency's refusal to return substantial monies that had previously been paid]; Hoffman v State of New York, 42 A.D.3d at 642 [affirming dismissal of claim that essentially sought to annul determination of State Comptroller issuing check for back pay owed to a claimant which deducted amount of unemployment insurance benefits she had received during suspension]; Madura v State of New York, 12 A.D.3d at 761 [affirming dismissal of alleged implied breach of contract claim which essentially sought annulment of an agency's determination disqualifying a claimant from obtaining disbursement of federal grant money funds]). Indeed, claimant's own theory of the case depends upon the review of an agency's administrative determinations, including whether and when the Lottery Division was satisfied as to the validity of the prize ticket and claimant's identity under the applicable regulations (see Zimmerman Affirm in Opp to Mot, ¶ 8, citing 9 NYCRR 5002.3; see also Claim, Exh G [email from claimant's attorney to the Gaming Commission dated five days before this claim was filed, threatening to commence a proceeding "seeking a Writ of Mandamus and Judgment compelling the Lottery to pay the prize money"]). Thus, the claim must be dismissed for lack of subject matter jurisdiction (see Ozanam Hall of Queens Nursing Home v State of New York, 241 A.D.2d 670, 671 [3d Dept 1997] [Court of Claims has "no jurisdiction to grant strictly equitable relief... with the return of the money to follow as a consequence of the equitable relief, if granted"], quoting Psaty v Duryea, 306 NY at 416-417).
Even assuming the Court could entertain this claim, it would nevertheless be dismissed as moot. In support of its motion, defendant submitted the affidavit of Scott Trzaskos, the Lottery Prize Payment and Customer Service Center Manager for the Gaming Commission. The affidavit establishes that the Lottery Division remitted the prize in full to claimant by electronic deposit on November 2, 2022, approximately 47 days after the submission of his winning ticket, following a routine investigation into the legitimacy of such a large jackpot ticket and verification of claimant's identity. Claimant acknowledges he received payment on that date (see Zimmerman Affirm in Opp to Mot, at ¶ 17), and his meager filings do not otherwise contest the issue of mootness. As defendant correctly argues, claimant has obtained the relief requested in the claim, and this change in circumstances prevents the Court from "rendering a decision which would effectually determine an actual controversy between the parties involved" (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 N.Y.2d 801, 811 [2003]). Indeed, as explained below, the payment of the prize has left defendant "with no further liability exposure" (Wisholek v Douglas, 97 N.Y.2d 740, 742 [2002]). Claimant's suggestion that the claim is not moot because he alleges entitlement to prejudgment interest pursuant to CPLR 5001 is unavailing, as there is no predicate for statutory interest in the absence of a "sum" to be "awarded" by the Court against defendant for breach of contract (CPLR 5001 [a]; see generally Manufacturer's & Traders Trust Co. v Reliance Ins. Co., 8 N.Y.3d 583, 589 [2007]).
S ee e.g. 9 NYCRR 5002.2, 5002.3, 5006.5, 5006.8.
The evidence establishing that claimant received payment is thus properly considered on this motion to dismiss, as there is "no significant dispute" about it (Guggenheimer v Ginzburg, 43 N.Y.2d 268, 275 [1977]; see Thaw v North Shore Univ. Hosp., 129 A.D.3d 937, 938 [2d Dept 2015]).
Finally, beyond these dispositive procedural impediments, defendant correctly argues that the claim fails to state a cause of action as a matter of law in any event. Regulations pertaining to gambling are strictly construed and binding on lottery players (see Molina v Games Mgt. Servs., 58 N.Y.2d 523, 529 [1983]), and knowledge of the regulations is presumed (see Ramesar v State of New York, 224 A.D.2d 757, 759 [3d Dept 1996], lv denied 88 N.Y.2d 811 [1996]). The relevant regulations provide that the State "shall... be discharged of any and all liability upon payment of a prize to a ticket holder" (9 NYCRR 5002.6; see Tax Law § 1613 [a]). Thus, by accepting the award, claimant "lost his capacity to sue and discharged defendant of liability" (Craft v Capital Dist. Regional Off Track Betting Corp., 107 A.D.2d 952, 954 [3d Dept 1985]). As the Court of Appeals has explained, rules limiting the State's liability with respect to the lottery "were reasonably enacted to prevent fraud, dissipation of funds by excessive and protracted litigation, and to insure prompt payment of prizes" (Molina, 58 N.Y.2d at 529; see also Ramesar v State of New York, 162 Misc.2d 420, 424 [Ct Cl 1994], affd 224 A.D.2d 757). Accordingly, it is hereby
ORDERED that Motion No. M-98813 is GRANTED, and Claim No. 138335 is DISMISSED in its entirety.
September 14, 2023 Albany, New York ZAINAB A. CHAUDHRY Judge of the Court of Claims
Papers Considered:
1) Claim, filed October 24, 2022;
2) Notice of Motion;
3) Affirmation of Assistant Attorney General Gigi E. Meyers in Support of Motion, with exhibits;
4) Affirmation of Aaron Zimmerman, Esq., in Opposition to Motion, with exhibits;
5) Reply Affirmation of Assistant Attorney General Gigi E. Meyers;
Contrary to claimant's assertion, defendant's reply affirmation was timely served one day before the return date of this motion (see CPLR 2214 [b]).
6) Surreply Letter of Aaron Zimmerman, Esq.