Amir Massihzadeh v. Tom Seaver

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
June 20, 2019
2019COA92
No. 18CA0578, Amir Massihzadeh v. Tom Seaver, in his
official capacity as the Colorado Lottery Director; Colorado
State Lottery Division, an agency of the State of Colorado —
Administrative Law — State Lottery Division — Prizes
A division of the court of appeals considers whether, after the
Colorado State Lottery Division discovered that two out of three
winning lottery tickets were fraudulent, the plaintiff — the only
innocent winner — is entitled to payment of the entire jackpot. In
so doing, it considers whether the trial court properly dismissed the
plaintiff’s claim that he is entitled to the full jackpot because it is
barred by section 44-40-113(4), C.R.S. 2018, which discharges the
Colorado State Lottery Division of “all liability upon the payment of
any prize . . .”
Based on the statute’s plain language, the division concludes
that the trial court properly dismissed the complaint because the
payment of one-third of the jackpot and the defendant’s acceptance
thereof constituted “any prize,” sufficient to discharge the Division
of liability.
COLORADO COURT OF APPEALS 2019COA92
Court of Appeals No. 18CA0578
City and County of Denver District Court No. 17CV33699
Honorable Brian R. Whitney, Judge
Amir Massihzadeh,
Plaintiff-Appellant,
v.
Tom Seaver, in his official capacity as the Colorado Lottery Director, and
Colorado State Lottery Division, an agency of the State of Colorado,
Defendants-Appellees.
JUDGMENT AFFIRMED
Division I
Opinion by JUDGE TAUBMAN
Berger and Tow, JJ., concur
Announced June 20, 2019
Recht Kornfeld, P.C., Thomas M. Rogers III, Denver, Colorado; Lewis Roca
Rothgerber Christie LLP, Hermine Kallman, Denver, Colorado; The Law Offices
of Robert R. Duncan, LLC, Robert R. Duncan, Denver, Colorado, for Plaintiff-
Appellant
Philip J. Weiser, Attorney General, Robert H. Dodd, First Assistant Attorney
General, Cynthia P. Delaney, Assistant Attorney General, Robert Padjen,
Assistant Attorney General, Denver, Colorado, for Defendants-Appellees
¶1 What transpires when a person, who was one of three lottery
winners, turns out to be the only true lottery winner following the
discovery of fraud that invalidated the other two tickets? Is the
innocent winner entitled to the full jackpot?
¶2 Plaintiff, Amir Massihzadeh, seeks to resolve this question in
appealing the district court’s judgment granting the motion to
dismiss of defendants, the Colorado State Lottery Division (the
Division) and Tom Seaver, in his official capacity as Colorado
Lottery Director. 1 We agree with the district court that
Massihzadeh’s claims are barred by statute.
I. Background
¶3 Massihzadeh held one of three lottery tickets containing the
combination of numbers matching those drawn in the November
23, 2005 Lotto for a $4.8 million jackpot. After the Division director
certified the results and all three tickets became “winning tickets,”
1 Though Massihzadeh named Laura Solano, in her official capacity
as Colorado Lottery Director, as a defendant, we note that Solano
retired in 2018. Tom Seaver was appointed to replace her during
the pendency of this appeal. See C.A.R. 43(c).
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the Division distributed one-third of the jackpot to each winning
ticket holder.
¶4 Tommy Tipton transferred the second winning ticket to
another individual, and a third party, Cuestion de Suerte, LLC,
redeemed the third winning ticket. Thus, Massihzadeh, the other
individual, and Cuestion de Suerte each received a lump sum of
$568,990 — one-third of the jackpot prize after taxes. This was the
reduced amount based on the winners’ elections to receive a lump
sum payout rather than installments paid over the course of several
years.
¶5 According to the 2005 Lottery Division Rules, the Division was
required to hold a random drawing of six numbers, certify the
drawing and announce the winning combination, and pay the prize.
Lottery Rules 10.A.4, 10.A.5, 1 Code Colo. Regs. 206-1 (effective
until Dec. 31, 2006). The Division held what it believed was a
random drawing, certified and announced the winning combination,
and paid the prize it believed was due.
¶6 A decade later, the Division learned that the tickets redeemed
by the other individual and Cuestion de Suerte were procured with
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advance knowledge of the likely winning numbers as part of a
scheme to defraud lotteries in multiple states.
¶7 Colorado contracts with the Multi-State Lottery Association
(MUSL) to procure services for the state lottery, and it used these
services to execute the November 2005 drawing. The MUSL
provides computer software to facilitate lottery drawings to the
lottery departments in its thirty-three member states.
¶8 In 2015, the Iowa Bureau of Investigation contacted the
Division with information about its prosecution of Eddie Tipton, the
Director of Information Security for MUSL, who manipulated a 2014
Iowa lottery drawing. As Director of Information Security, Tipton
had unfettered access to the computer software used to conduct
lottery drawings. Before the November 2005 drawing in Colorado,
Tipton manipulated the software to defraud the lottery. He then
accessed the software for the November 23, 2005 Colorado drawing
and transferred what he forecasted to be the winning combination
to his brother, Tommy Tipton, who supplied them to a third party.
Both Tommy and the third party purchased “manual play” tickets
with the numbers provided by Tipton for the Colorado Lottery
drawing in November 2005.
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¶9 Iowa prosecutors filed two criminal complaints against Tipton
— one for manipulation of the 2014 Iowa drawing and a second for
engaging in an ongoing criminal enterprise to influence other state
lotteries. They also charged Tommy with aiding and abetting thefts.
The Tipton brothers pleaded guilty to the Iowa charges in June
2017. The State of Colorado agreed not to prosecute the brothers in
exchange for a restitution agreement from Tipton to pay $1,137,980
(the total amount paid out to the two holders of the fraudulent
tickets) and another agreement with Tommy to be jointly and
severally liable for $568,990 of that amount.
¶ 10 Massihzadeh filed suit in September 2017 after learning of the
manipulation of the November 2005 lottery drawing. He alleged
breach of contract by the Division, seeking the other two-thirds of
the jackpot, with interest. As noted, the Division successfully
moved to dismiss the complaint for failure to state a claim for
relief. 2
2The Division also moved to dismiss the complaint under the
Colorado Governmental Immunity Act, section 24-10-106, C.R.S.
2018, because the claim allegedly sounded, or could sound, in tort.
The district court rejected that argument, and that ruling was not
appealed.
4
II. Statutory Interpretation
¶ 11 Massihzadeh contends, among other things, that the district
court erred in granting the motion to dismiss because section 44-
40-113(4), C.R.S. 2018, 3 does not preclude his claim against the
Division; it only pertains to claims against the Division by third
parties. We disagree.
A. Standard of Review
¶ 12 We review de novo questions of statutory interpretation.
Goodman v. Heritage Builders, Inc., 2017 CO 13, ¶ 5, 390 P.3d 398,
401.
B. Applicable Law
¶ 13 Questions of statutory interpretation necessitate, first and
foremost, consideration of the statutory text as a whole, giving
“consistent, harmonious, and sensible effect to all of its parts and
avoiding constructions that would render any words or phrases
3Prior to 2018, the statute at issue was located in section 24-35-
212(3), C.R.S. 2017, and contained substantially the same text as
contained in the current version. See Ch. 31, sec. 1, 2018 Colo.
Sess. Laws 354. Thus, the district court’s order and the parties’
briefs refer to section 24-35-212(3); however, we will refer to the
current statute for purposes of this opinion.
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superfluous or lead to illogical or absurd results.” Pineda-Liberato
v. People, 2017 CO 95, ¶ 22, 403 P.3d 160, 164. Therefore, if the
statutory language is clear and unambiguous, we do not engage in
further interpretive analysis. Snyder Oil Co. v. Embree, 862 P.2d
259, 262 (Colo. 1993).
¶ 14 Section 44-40-113(4) provides, “The [D]ivision shall be
discharged of all liability upon the payment of any prize pursuant to
this article 40.” The related rules in the Code of Colorado
Regulations provide that “[t]he Director’s decision shall be final and
binding with respect to the payment of all [p]rizes.” Lottery Rule
10.9(I), 1 Code Colo. Regs. 206-1. 4 Other regulations state that the
“[p]ayment of any [p]rize shall be made to the holder of the [j]ackpot
[t]icket. All liability of the State, its officers and employees, and the
Commission shall terminate upon payment.” Id. at 10.9(L). 5
4 Formerly, Lottery Rule 10.4(j) provided, “[t]he Director’s decision
with respect to the validation and payment of any prize, whether
during an On-Line game or any drawing related thereto, shall be
final and binding upon all participants in the lottery.” 1 Code Colo.
Regs 206-1 (effective until Aug. 30, 2010). Because the language in
the current regulation is substantially similar, we refer to the
current regulation for purposes of this opinion.
5 Formerly, Lottery Rule 10.4(m) provided, “[p]ayment of any prize
may be made to the holder of the Lottery On-Line ticket, and all
6
C. Analysis
¶ 15 The statute provides that the payment of any prize to
Massihzadeh released the Division from any liability associated with
the payment of the prize. See § 44-40-113(4); Lottery Rule 10.9(I), 1
Code Colo. Regs. 206-1.
¶ 16 “Payment” is not defined in the statute. Accordingly, we look
to dictionary definitions to ascertain its meaning. See Stoesz v.
State Farm Mut. Auto. Ins. Co., 2015 COA 86, ¶ 11, 410 P.3d 583,
586.
¶ 17 Black’s Law Dictionary 1309 (10th ed. 2014) defines
“payment” as “[p]erformance of an obligation by the delivery of
money or some other valuable thing accepted in partial or full
discharge of the obligation.” See Stoesz, ¶ 11, 410 P.3d at 586.
Consequently, the term “payment” necessarily includes acceptance
by the prizewinner. Thus, implicit in the statutory language is the
prizewinner’s ability to reject payment if the amount tendered by
liability of the State, its officers and employees, and the
Commission terminates upon such payment.” 1 Code Colo. Regs
206-1 (effective until Aug. 30, 2010). We conclude that the
language in the current regulation is substantially similar and refer
to the current regulation for purposes of this opinion.
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the Division is incorrect. Application of this definition prevents the
absurd result that if the Division tenders a check for $10 on a
multi-million-dollar prize, the Division is statutorily released from
liability. Only when the prizewinner accepts the tendered prize has
payment been made, and only then does the statute discharge the
Division of liability.
¶ 18 It is uncontested that the Division tendered the prize to
Massihzadeh — computed based on everyone’s then understanding
that there were three winning tickets. It is also uncontested that
Massihzadeh accepted the tendered prize.
¶ 19 These facts inexorably lead to the conclusion that the Division
was released from all further liability to Massihzadeh. Accordingly,
it is of no consequence that the other winning tickets were later
deemed invalid because Massihzadeh’s acceptance of one-third of
the prize, without challenging it, discharged the Division’s liability.
Thus, the plain language of section 44-40-113(4) precludes
Massihzadeh’s claim against the Division.
¶ 20 Nevertheless, Massihzadeh attempts to avoid this result by
arguing that he had not been paid the “prize.” However, the statute
prescribes that, upon payment of “any prize,” the Division’s liability
8
is discharged. § 44-40-113(4) (emphasis added). Since the phrase
“any prize” is undefined, we accord “any” its meaning when used as
an adjective in a statute — “all.” See Stamp v. Vail Corp., 172 P.3d
437, 447 (Colo. 2007). Therefore, we conclude that the acceptance
of payment of one-third of the jackpot to by Massihzadeh
constituted a payment of “any prize,” sufficient to trigger the
Division’s immunity.
¶ 21 Notwithstanding the language of the statute, Massihzadeh
finally contends that the statute only applies to claims by third
parties. Although the statute prescribes procedures to address
claims to a portion of a prize by third parties, it also unambiguously
addresses payments to the winner of a prize. For instance,
subsections 44-40-113(1) and (2) discuss assignment of a prize to
third parties. However, section 44-40-113(5) pertains to winning
ticket holders under eighteen who are ineligible to claim a prize —
this does not concern third parties, nor does section 44-40-113(4).
To the extent that Massihzadeh relies on Dawson v. Multi-State
Lottery Ass’n & Iowa Lottery Authority, No. 05771 LACL134527
(Iowa Dist. Ct., Polk Cty. Oct. 12, 2016), to assert that he is entitled
to the full jackpot, we reject his argument. In Dawson, the plaintiff
9
sued MUSL and the Iowa Lottery Authority (ILA) to recover
unclaimed prize money from a previous drawing that was supposed
to be paid into the jackpot to be awarded for the drawing he won.
Id. He based his claim on the language of Iowa Code section
99G.31(1) (2018), which stated, in pertinent part, “The chief
executive officer shall award the designated prize to the holder of
the ticket.” Id. The plaintiff withstood the ILA’s motion to dismiss
based on immunity because the court determined that the
“designated prize” may include fraudulently “won” but unclaimed
funds, and the statute discharged the ILA from liability “upon
payment of a prize.” Iowa Code § 99G.31(2)(f). The ILA had failed to
return an unclaimed prize to the jackpot, and as the sole winner of
the lottery, the plaintiff was entitled to the entire jackpot as his
“designated prize.” Iowa Code § 99G.31(1). Here, the statutory
language reads differently. The Division is discharged from all
liability upon payment of any prize — not a “designated prize,” and
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Massihzadeh’s receipt of one-third of the jackpot was clearly “any
prize.” 6
¶ 22 Because we resolve the appeal based on the plain language of
section 44-40-113(4),7 we need not address Massihzadeh’s contract
claim.
III. Conclusion
¶ 23 Accordingly, the judgment is affirmed.
JUDGE BERGER and JUDGE TOW concur.
6 The Division also argues that the prize is based on the number of
matching tickets, regardless of whether any of those tickets is later
invalidated. We need not address that argument because we
resolve the dispute based on the plain language of the statute.
7 Massihzadeh argues that the district court erroneously ruled that
he waived his claim against the Division by accepting one-third of
the jackpot. However, we disagree with that characterization. The
district court stated in its order that “upon acceptance and
appropriating a prize without challenging the propriety of that prize,
[Massihzadeh’s] own actions resulted in the waiver of liability
against the [Division] as it related to his contract.” As we
understand it, the district court intended to equate “waiver” with
the discharge of liability associated with section 44-40-113(4),
C.R.S. 2018.
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