Collins v. Kentucky Lottery Corp.
399 S.W.3d 449
Ky. Ct. App.2012Background
- Collins and Land sued the Kentucky Lottery Corporation after playing Kentucky Millionaire, a 2005–2006 scratch-off game, alleging fraud, misrepresentation, contract, unjust enrichment, and KCPA violations.
- A call-out advertised Over $10 Million in cash prizes from $25 to $1000, while Collins and Land each received $20 winnings and pursued $25 prizes.
- Litigation commenced September 8, 2005; KLC moved for summary judgment and plaintiffs moved for partial summary judgment in 2009; trial court granted KLC’s summary judgment in 2011.
- The trial court did not rule on the class certification motion; Collins and Land appealed challenging several claims and certification.
- The court analyzed whether lottery tickets are goods or services under KRS and concluded they are intangible, thus not within KCPA; it treated the lottery relationship as contractual in nature per precedent.
- The court affirmed summary judgment for KLC on fraud, negligent misrepresentation, breach of contract, and unjust enrichment, and dismissed the class certification issue for lack of a final appealable order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| KCPA applicability to lottery transactions | Collins/ Land contend lottery trades are trade or commerce under KRS 367.170(1). | KLC argues purchase of lottery goods/services does not meet KRS 367.220(1) threshold. | KCPA claims barred; lottery transactions not within KCPA. |
| Fraudulent misrepresentation elements | There were false statements regarding minimum prizes and deceptive call-out. | No false representation; variance was de minimis and no misrepresentation proven. | No genuine issue; summary judgment for KLC on fraud. |
| Negligent misrepresentation elements | Call-out omissions constitute negligent misrepresentation. | Omission cannot support negligent misrepresentation; no affirmative false statement. | Fails as a matter of law; summary judgment for KLC on negligent misrepresentation. |
| Contractual relationship and breach | Lottery tickets create contract between winner and KLC; minimum prize mis-stated. | Terms governed by Rules and Regulations; no contract ambiguity; purchase constitutes acceptance. | KLC entitled to summary judgment; contract terms unambiguous; no breach established. |
| Unjust enrichment | KLC profited by not paying $25 minimum prizes. | Ticket price was $20; winnings paid accordingly; no enrichment. | No unjust enrichment; affirmed summary judgment for KLC. |
| Class certification | Motion for class certification should be adjudicated. | Class certification decision not ripe; final order required for jurisdiction. | No jurisdiction to decide class certification; affirmed only on other issues; class ruling not reached due to lack of final order. |
Key Cases Cited
- Ross v. Powell, 206 S.W.3d 327 (Ky. 2006) (summary judgment standard and role in expediting litigation)
- Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment is a delicate matter)
- City of Florence v. Chipman, 38 S.W.3d 387 (Ky. 2001) (materials about burden on movant and non-movant evidence)
- Scifres v. Kraft, 916 S.W.2d 779 (Ky. App. 1996) (standard on appeal of summary judgment decisions)
- Pinkston v. Audubon Area Community Services, Inc., 210 S.W.3d 188 (Ky. App. 2006) (de novo review for summary judgments)
- Commonwealth v. Allen, 404 S.W.2d 464 (Ky. 1966) (lottery ticket represents a chance to win; intangible)
- Kentucky Lottery Corp. v. Casey, 862 S.W.2d 888 (Ky. 1993) (contractual nature of lottery-winner relationship)
- Giddings & Lewis, Inc. v. Industrial Risk Insurers, 348 S.W.3d 729 (Ky. 2011) (negligent misrepresentation requires actual false statement)
- Hidden Hills, Inc. v. Parrish, 28 S.W.3d 864 (Ky. App. 2000) (inquiry duty in contract/fraud cases and evidence steps)
- Kinnard v. Circle K Stores Inc., 966 S.W.2d 613 (Tex. Ct. App. 1998) (right to participate in lottery is intangible; not a good or service)