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03/22/90 HAROLD PEARSALL v. JOE ALEXANDER

March 22, 1990

HAROLD PEARSALL, APPELLANT
v.
JOE ALEXANDER, APPELLEE



Appeal from the Superior Court of the District of Columbia; Hon. Rufus G. King, III, Trial Judge

Before Newman, Ferren, and Farrell, Associate Judges.

The opinion of the court was delivered by: Newman

NEWMAN, Associate Judge: In what must be a common development wherever there are state-sponsored lotteries, this is the story of two friends who split the price of a ticket only to have the ticket win and split their friendship.

Harold Pearsall appeals from the dismissal of his complaint against Joe Alexander, in which Pearsall claimed breach of an agreement to share the proceeds of a winning D.C. Lottery ticket worth $20,000. The trial court found that such an agreement did, in fact, exist, but determined that the agreement was invalid under § 1 of the Statute of Anne, as enacted in D.C. Code § 16-1701 (1989 Repl.). We conclude that the trial court erred in applying § 16-1701 to the Pearsall-Alexander agreement and, therefore, we reverse and remand with instructions to enter judgment for the appellant.

I.

Harold Pearsall and Joe Alexander were friends for over twenty-five years. About twice a week they would get together after work, when Alexander would meet Pearsall at the Takoma Metro station in his car. The pair would then proceed to a liquor store, where they would purchase what the two liked to refer to as a "package"--a half-pint of vodka, orange juice, two cups, and two lottery tickets--before repairing to Alexander's home. There they would "scratch" the lottery tickets, drink screwdrivers, and watch television. On occasion these lottery tickets would yield modest rewards of two or three dollars, which the pair would then "plow back" into the purchase of additional lottery tickets. According to Pearsall, the two had been sharing D.C. Lottery tickets in this fashion since the Lottery began.

On the evening of December 16, 1982, Pearsall and Alexander visited the liquor store twice, buying their normal "package" on each occasion. The first package was purchased when the pair stopped at the liquor store on the way to Alexander's home from the Metro station. Pearsall went into the store alone, and when he returned to the car, he said to Alexander, in reference to the tickets, "Are you in on it?" Alexander said "Yes." When Pearsall asked Alexander for his half of the purchase price of the tickets, Alexander replied that he had no money. When they reached Alexander's home, Alexander, expressing his anxiety that Pearsall might lose the tickets, demanded that Pearsall produce them, snatched them from Pearsall's hand, and "scratched" them, only to find that both were worthless.

At about 8:00 p.m. that same evening, Alexander, who apparently had come by some funds of his own, returned to the liquor store and bought a second "package". This time Pearsall, who had been offended by Alexander's conduct earlier in taking both tickets, snatched the two tickets from Alexander and announced that he would be the one to "scratch" them. Intending only to bring what he regarded as Alexander's childish behavior to Alexander's attention, Pearsall immediately relented and gave over one of the tickets to Alexander. Each man then "scratched" one of the tickets. Pearsall's ticket proved worthless; Alexander's was a $20,000 winner.

Alexander became very excited about the ticket and began calling friends to announce the good news. Fearing that Alexander might lose the ticket, Pearsall told Alexander to sign his name on the back of the ticket. Subsequently, Alexander cashed in the ticket and received the winnings; but, when Pearsall asked for his share, Alexander refused to give Pearsall anything.

Pearsall brought suit against Alexander, claiming breach of an agreement to share the proceeds of the winning ticket. Alexander denied that there was any agreement between the two to share the winnings of the ticket and further claimed, inter alia, that any such agreement was unenforceable because it was not in writing and contravened public policy.

The trial court dismissed Pearsall's complaint on the public policy grounds raised by Alexander, finding that the enforcement of contracts arising from gaming transactions is barred by the Statute of Anne, as enacted in D.C. Code § 16-1701, even when such contracts concern legalized gambling. Citing Hamilton v. Blankenship, 190 A.2d 904 (D.C. 1963), for this latter proposition, the trial court went on to determine that § 16-1701 applies to bets placed legally within the District pursuant to D.C. Code § 2-2501 to 2537, which authorizes the D.C. Lottery. The court did not reach the issue of whether such an agreement must be in writing pursuant to the Statute of Frauds, as enacted in D.C. Code § 28:1-206 (1981).

II.

A.

The Statute of 9 Anne, ch. 14, § 1 (1970), as enacted in the District of Columbia, *fn1 provides, ...


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