City
and County of Denver District Court No. 17CV33699 Honorable
Brian R. Whitney, Judge
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
OPINION
TAUBMAN, JUDGE.
¶
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," 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 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.
¶
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 ...