Civil Litigation

Legal disputes over lottery wins are becoming more common: O'Connor

By Staff

It was a good move for a Nova Scotia woman to settle a lawsuit she launched against her nephew to recover half of a $1.2-million lottery-ticket win that was awarded to him because she would have had an uphill battle to win the case, says Toronto civil litigator Sarah O’Connor.

According to media reports, the woman sent her nephew money to buy the tickets at a store, and told the 19-year-old he could put his name on them “for luck.” But she maintained she agreed to split the consolation prize, not the jackpot. Her nephew begged to differ.

”It looks as if the aunt bought the ticket and put his name on it as joint owners,” says O’Connor, principal of O’Connor Richardson Professional Corporation. “That created a contract. The fact that she put his name on the ticket, if she had not reached an agreement, she might have had a difficult time getting out of that.”

According to the Canadian Press, the woman sued her nephew after the grand prize was split between them, leaving $611,319.50 for each.

The Canadian Press reports the two sides have settled over the disputed amount with the nephew getting $350,000 and the aunt $261,319.50 for a total $872,639 in winnings.

A judge had recently frozen the payout on the ticket until the lawsuit was resolved, something O’Connor describes as simply a matter of due diligence.

"Reaching an out-of-court settlement was a prudent move," says O'Connor. "It saves on legal fees, an uphill battle, and the stresses of litigation; but also, the potential to salvage their relationship."

For the woman to have ended up with the full $1.2-million she would have had to have proven that both their names on the ticket did not constitute a contract to share any winnings. “She would have had to have shown there was no partnership agreement, no meeting of minds.”

As for the nephew, he would have had to have argued that their agreement for him to put his name on the tickets was not made under duress or coercion. If this was a frequent arrangement it would have helped his case, O’Connor says.

If the parties hadn’t come to an agreement, the case would have worked its way through the court as just another lawsuit and could have taken years, she says, noting, “A lot of these cases go to trial because the parties don’t generally want to settle for less than what they feel they’re entitled to.”

While the nature of this family feud is unusual, legal disputes over lottery winnings are increasingly common, O’Connor tells Her firm has several on the go.

“Most of these lottery disputes happen with group tickets in a workplace or with friends.”

In one of O’Connor’s cases, her client believes that her contributions to a group lottery-ticket pool were not properly tracked. “She thinks she put into the pot and the other members said she wasn’t part of the group when the ticket was bought. But she remained part of the group after, and throughout there is evidence showing that people would put in (money) after the fact.”

Another case O’Connor cites is one in which several couples agreed to buy tickets together for a New Year’s draw. One couple bought the tickets, then held them out to the others saying “pick your ticket.” As it happened, one of the couples won the jackpot and the other two couples are arguing that it was a joint venture so they are entitled to share in the winnings.

“These are really interesting cases,” O’Connor says. “The court looks at whether there was a core group, for example, if you’re part of four people, you play every week for months and then others say, 'You didn’t put any money in this week,' and you say, 'Well, I give you $10 to cover tickets and you tell me when I need to top up.'

“They look at if there were written rules and if there were accurate records. All of those things will more likely go in favour of someone claiming a prize.”

With lottery draws becoming larger, there are more and more lawsuits, O’Connor says. As a result, provincial lottery agencies are publishing sample group-play forms that pool captains are supposed to fill out — contracts to sign before you start playing. However, few people bother.

Perhaps they are more careless about this kind of contract than others because they don’t expect to win big, she says

“You win $100 and no one cares, you just buy more lottery tickets," O’Connor says. "But if it’s a big amount and you’re supposed to get $50,000, you say, 'Wait a second ...'”

Lottery wins seem to bring out the worst in people because “I think it’s the concept of the windfall,” she says.

It’s always on the plaintiff to show that a contract was formed, O’Connor says.

“It’s a simple meeting of the minds. Normally, the courts look at how the enterprise was moving forward, whether it was a one-off participation versus an enterprise per se that was happening for months, whether there’s some form of informal agreement or formal agreement about people chipping in, absent players, or if you can chip in after the fact.”

O’Connor is unaware of any precedents that applied to the Nova Scotia case, but she recalls one recent lottery dispute involving close family members.

“They were a couple. One of the spouses won and waited until the divorce was final before claiming their winnings. The spouse found out and the judge said, 'No, the ticket was won during the marriage and should be split.'”

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