Settle Sokaitis v. Bakaysa Jackpot Suit
posted by Lawrence Cunningham
Two octogenarian sisters, once close, remain locked in a 5-year old legal fight over a mere $125,000 won in a Connecticut state Powerball lottery in 2005. Good Morning America and other news outlets parade the saga in today’s media (some erroneously putting the stakes at $5oo million).
Who cares? In one sense, the best advice to the two, aged 84 and 87, is to knock it off and settle, resume their erstwhile friendship. Another appreciates how the two have taken advantage of the opportunity to straighten out some fossilized state law, doing the country some incremental good. But still.
As reported, the two are ardent gamblers, at Connecticut’s famed casinos and lotteries, and many years ago won $160,000 that they seem to have shared roughly amicably. After that winning, they signed a written agreement, declaring they’d share future winnings 50-50. Lo and behold, one of them won $250,000 thereafter, in a Powerball ticket co-purchased with their brother.
Trouble was, the winning sister refused to give the $125,000 share of that to the other sister, who insisted the contract entitled her to it. The two, who have not spoken in those five years, have been duking it out in Connecticut state court ever since.
The shunned sister, the promisee, sued, alleging breach of contract and seeking $125,000. The lucky sister, the promisor, defended saying the purported contract was an illegal bargain under an ancient Connecticut statute making void any contract whose consideration, wholly or partly, consists of “money won . . . at any game.”
A trial court bought the illegality argument, taking the statute at face value and saying any contract that might have been formed was an illegal bargain and unenforceable. The twice-shunned sister promptly appealed, saying the statute can’t mean what it says and, anyway, the bargain wasn’t a wager. A divided intermediate appellate court bought that second argument, reversing.
Dividing the majority and dissent was how to characterize the consideration in the bargain. Both agreed on the standard definition of consideration as a benefit to a promisor and/or detriment to promisee. They disagreed when giving that abstract concept practical content. The majority said consideration includes an exchange of promises, made here, with the “money won” ancillary to that. The dissent took consideration to mean the old-fashioned “motive or inducing cause” of an exchange, which here was pretty clearly the prospect of sharing “money won.”
Not ready to settle, the lucky sister, now rebuked, appealed, objecting to the idea that she had made a potentially legal bargain. The Connecticut Supreme Court affirmed, narrowly focused on whether the state statute rendered the bargain illegal. The Court sensibly eschewed the thicket of what consideration is, generally or in this bargain. Instead, it saw the issue as one of statutory construction—what in the world could be meant by this fossilized statute rendering void contracts whose consideration is “money won?”
After all, numerous Connecticut statutes, including the one authorizing the lottery generating the fight, make it perfectly legal to wager and gamble to win money. Think of Foxwoods and all the jai alai frontons and tribal casinos Connecticut is famous for. Surely the legislature cannot mean all such bargains are illegal.
So the Court, in a unanimous opinion, opted to say that this statute, in light of the many others legalizing gambling, must be taken to proscribe only those contracts whose consideration is for money won that are otherwise not authorized by law. This contract, whether its consideration is for money won or otherwise, involves legal gambling and so is outside the statute’s scope.
Now that the statute does not make the contract an unenforceable illegal bargain, the parties have turned to wrangling over all the more fundamental issues of contract law, which the Connecticut Supreme Court astutely and expressly declined to address.
The two sisters now face a road from the first year law school class of Contracts. The contract, not an illegal bargain, looks to have requisite consideration—whether an exchange of promises or money from gaming winnings. The issue is whether anything the parties did since its formation rendered it unenforceable.
The lucky sister now argues, back in the trial court after several years of litigation, that the two sisters rescinded the contract. Mutual manifested intention to do so is in issue. Can the shunned sister resist such a showing? It appears that their brother, co-buyer of the winning ticket in play, must testify.
Can the lucky sister assert grounds other than mutual intention to rescind? How about breach of contract? Did the shunned sister perform her side of the bargain, as by continuing to gamble jointly, buying tickets, and so on? If not, would that non-performance amount to the non-occurrence of a constructive condition to the lucky sister’s obligation to perform?
How about waiver or estoppel? On waiver, did anything the shunned sister say or do manifest a voluntary relinquishment of known rights to share in future winnings? Would that be the kind of right that can be waived without receiving some consideration in exchange? Was there any? On estoppel, did the shunned sister’s actions induce reliance by the lucky sister, as by later co-purchasing tickets with her brother rather than with her sister?
One could go on. But I have to stop and wonder, why in the world would these two sisters, erstwhile friends now in their 80s, wish to spend the twilight of their lives in such a stupid fight, over $125,000 less considerable legal fees? What is at stake but trivial dollars?
My advice: make up and stop all this. And take a note of thanks: it is nice to have a good Connecticut Supreme Court opinion constructing ancient statutes purporting to make illegal bargains out of recurring contracts. It is a good job of the judicial branch to manage the messes that the legislative branch inevitably causes.
Case citation: Sokaitis v. Bakaysa, 938 A.2d 1278 (Conn. App. 2008) (2-1), aff’d on other grounds,975 A.2d 51 (Conn. 2009).
Hat Tip: Nick Kunz (GW Law School)
March 24, 2010 at 10:51 pm
Posted in: Contract Law & Beyond, Current Events
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Responses (1)
Dave - March 25, 2010 at 10:22 am
This is really interesting. It reminds me of the famous dispute over Barry Bonds’ 73d home run ball, which raised age-old questions of property law, resulted in massive litigation (including a bench trial replete with witnesses), and was eventually sold by forced auction at a price that didn’t even cover attorney’s fees.
One point about this case and the Bonds matter that I don’t agree with is the assertion that the subject matter is trivial (“What is at stake but trivial dollars?”). In each of these cases, hundreds of thousands of dollars are at stake (the Bonds HR ball was supposed to be worth nearly a million dollars by early estimates, though it didn’t auction for nearly that amount), and while that may be a trivial amount to some, it certainly doesn’t seem trivial to me. That could help send a kid to college or pay off a mortgage–life-changing effects. I can see why people would want to litigate over something like this.
That said, I share the instinct that settling is probably the right outcome. It’s somewhat puzzling that the sisters don’t just do this, especially when the litigation costs they face could erase judgment they stand to win. Why make this irrational choice? I suspect it’s a combination of path-dependency (having come down the road this far, it’s hard to turn back), sunk costs (and the temptation to throw good money after bad), and pride (neither party wants to be seen to throw in the towel).
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