Clark v. Mo. Lottery Comm'n - 463 S.W.3d 843 (Mo. Ct. App. 2015)

Rule:

Pursuant to Mo. Rev. Stat. § 400.9-406(f), any statute that prohibits or restricts the assignment of an account, which includes lottery winnings, is ineffective. Mo. Rev. Stat. § 400.9-406(f), therefore, renders Mo. Rev. Stat. § 313.285.1 ineffective to the extent that it prohibits or restricts the assignment of lottery prizes.

Facts:

Appellant Gary Clark won the Missouri Lottery "Lifetime Riches" prize. The prize entailed Appellant receiving $50,000.00 per year for the rest of his life with a minimum payout of thirty years. Subsequently, appellant entered into a loan agreement with Community Bank in which Appellant granted Community Bank a security interest in the "Assignment of all Missouri Lottery Payments". In 2013, appellant filed a petition for declaratory judgment against Community Bank, alleging that the "Missouri Lottery Payments" agreement constituted an unlawful assignment of lottery proceeds and, therefore, was void. Upon motion of Community Bank, the circuit court entered summary judgment in favor of the Bank. Appellant challenged the decision. 

Issue:

Was the assignment of appellant’s lottery prizes invalid, thereby making the grant of summary judgment in favor of the Bank an error? 

Answer:

No.

Conclusion:

The court affirmed the grant of summary judgment in favor of the Bank. Pursuant to Mo. Rev. Stat. § 400.9-406(f), any statute that prohibited or restricted the assignment of an account, which included lottery winnings, was ineffective; therefore, to the extent that Mo. Rev. Stat. § 313.285.1 prohibited the assignment of lottery prizes, it was ineffective, and a winner's assignment of winnings to a bank was valid.