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Bailey v. Kentucky Lottery Corp.

Court of Appeals of Kentucky

February 16, 2018

BRETT BAILEY APPELLANT
v.
KENTUCKY LOTTERY CORPORATION APPELLEE

         APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE ANN BAILEY SMITH, JUDGE ACTION NO. 14-CI-002370

          BRIEF FOR APPELLANT: Robert D. Johnston Louisville, Kentucky

          BRIEF FOR APPELLEE: Jan M. West Prospect, Kentucky

          BEFORE: COMBS, JONES AND NICKELL, JUDGES.

          OPINION

          COMBS, JUDGE:

         Brett Bailey appeals from the order of the Jefferson Circuit Court granting summary judgment to the Kentucky Lottery Corporation ("the lottery"). After our review, we affirm.

         The lottery operates an internet website where individuals may register for an online account and participate in a program referred to as "Fun Club Rewards." A Fun Club Rewards member may register qualifying scratch-off tickets to enter the lottery's second-chance-to-win promotions. In its "$175, 000 Stacks of Cash" game, the lottery operated a second-chance promotion whereby a scratch-off ticket that revealed an "FTP" ("Final Top Prize") symbol could be entered to win $175, 000.00 in a drawing to be conducted in 2014.

         Bailey uncovered an "FTP" symbol on a twenty-dollar, scratch-off lottery ticket that he purchased in May 2013. In July 2013, Bailey joined the lottery's Fun Club Rewards program and entered several eligible scratch-off tickets as chances to win the "Final Top Prize" promotion. He did so by providing information on the lottery's website and by agreeing to the terms of use and to all other rules and regulations that applied to online account holders.

         The online account rules required Bailey to keep his mailing address, telephone number, and other contact information current. The promotion rules provided that "[i]f the winner cannot be reached by phone within a seven (7) business day time period, . . . he or she will be disqualified, and the prize will be awarded to the first eligible alternate selected." The rules also provided that where "the entry is incomplete or does not comply in any other respect to the requirements set forth above, the entry will be disqualified." Bailey changed his telephone number in October 2013. He did not notify the lottery and never updated his Fun Club Rewards account to reflect his new telephone number. Bailey never provided the lottery with a correct mailing address.

         As announced online, the "FTP" drawing was conducted on January 7, 2014. Bailey's ticket was drawn as the winner. However, the lottery could not reach Bailey at the only telephone number that he had provided in his online account.

         On January 8, 2014, the lottery's promotions coordinator, Janice Duvall, mailed a certified letter to Bailey at an address in Winter Haven, Florida. The correspondence explained that Bailey's "FTP" scratch-off ticket had been drawn as the winner in the lottery's Final Top Prize $175, 000 Stacks of Cash game. Duvall explained that Bailey's ticket must be presented to and verified by the lottery. She asked Bailey to contact her and explained that if the lottery had not heard from him within seven business days from his receipt of the letter, his prize would be forfeited.

         Bailey had not resided at the Florida address even when he registered for the Fun Club Rewards program in July 2013. Consequently, the certified letter was undeliverable. However, it was eventually forwarded by the post office to Garden City, Michigan, on January 21, 2014 -- well after expiration of the seven-business-day period provided for in the game's rules and after the lottery had determined that Bailey's entry was disqualified from the drawing.

         Bailey telephoned the lottery immediately after he received Duvall's letter. The lottery told Bailey that he had become disqualified from the second-chance promotion because he could not be reached within seven business days of the drawing as required by the rules of the promotion. The lottery explained that it had already notified an eligible alternate that she was the prize winner. On January 22, 2014, Bailey drove from Michigan to the lottery's headquarters in Louisville to present his scratch-off ticket and to claim his prize. The lottery refused to accept the ticket, however, because it had already awarded the prize to another player.

         On May 21, 2014, Bailey filed a civil action against the lottery. In relevant part, he contended that the language that Duvall had included in her correspondence had created a new contract that extended the seven-business-day period provided by the game's rules. He claimed that the lottery breached its new contract with him by denying him the prize money. Bailey also claimed that the lottery breached an implied covenant of good faith and fair dealing when it did not attempt to contact him by email. He also contended that the lottery was unjustly ...


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