Acme Markets, Inc. v. Seltzer

244 A.3d 469

ACME MARKETS, INC.

v.Beverlie R. SELTZER and Pennsylvania Lottery Department of Revenue, Commonwealth of Pennsylvania

Appeal of: Beverlie R. Seltzer

No. 3331 EDA 2019

Superior Court of Pennsylvania.

Argued July 14, 2020

Filed December 15, 2020

Timothy James Ford, Philadelphia, for appellant.

Robert L. Byer, Pittsburgh, for appellee.

BEFORE: BOWES, J., McCAFFERY, J., and FORD ELLIOTT, P.J.E.

OPINION BY BOWES, J.:

Beverlie R. Seltzer ("Ms. Seltzer") appeals from the order granting summary judgment in favor of Acme Markets, Inc. ("Acme"), and denying her cross-motion for summary judgment in this conversion action. We affirm.

The following facts are not in dispute. Acme is a retailer licensed by the Pennsylvania Lottery ("the Lottery") to sell terminal-based tickets at its Doylestown, Pennsylvania store. In accordance with the license agreement, the Lottery placed a WAVE terminal in the Acme store through which lottery tickets are generated via connection to the Lottery's computer system. The terminal generates tickets for the next upcoming drawing, and automatically begins printing tickets for the next drawing as soon as one occurs. The Lottery keeps tally of each "play" issued through Acme's WAVE terminal and issues daily and weekly reports of the totals. Rather than pay the Lottery for each ticket when it is generated, Acme maintains a back account from which the Lottery withdraws each Tuesday the total amount Acme owes for the prior week's transactions, less Acme's five-percent commission. Of importance to the case at bar, Acme must pay for all tickets that it prints from the WAVE terminal, less the commission, even if the ticket was printed by mistake and Acme was unable to sell it. Acme cannot return these "mistake tickets" to the Lottery, and thus it keeps these tickets near the WAVE terminal and attempts to sell them to other customers prior to the drawing. Each morning Acme's office coordinator scans any unsold mistake tickets to determine whether any are winners for which Acme may collect the prize money.¹ The remaining mistake tickets are discarded.

With this background information, we turn to the facts concerning ownership of the mistake ticket that is the subject of the instant litigation. The trial court summarized those facts as follows:

At about 2:20 p.m. on March 21, 2019, a customer came into the Doylestown Acme and requested that the customer service representative print or sell five PA Match 6 tickets to him. The customer service representative used the lottery terminal to print one ticket with five sets of numbers on it. Each set of numbers costs a customer $2.00. After reviewing the ticket, the customer rejected it and asked the Acme clerk to print five separate tickets for him. [The rejected ticket was added to a pile of mistake tickets.] ...

Later in the day, [Ms.] Seltzer, a longtime Acme employee, came in for her shift at the customer service desk. The Match 6 drawing occurred at 7:00 p.m. Shortly after the drawing, at about 8:04 p.m., [Ms.] Seltzer began scanning the pile of mistake tickets[, a practice she had engaged in in the past, when she had discarded losing tickets and left winning tickets for the office coordinator to process the next morning² ]. As she scanned through them, she discovered that one of the mistake tickets was a winning ticket, in the amount of $4,150,000.00. At this point, after learning the ticket was a winner, [instead of leaving the ticket for the coordinator to process the next day,] [Ms.] Seltzer took $10.00 in cash out of her purse, rang up her own transaction, and put the $10.00 in the register in an attempt to purchase the ticket. She was still on the clock at the time.

[Ms.] Seltzer never consulted with anyone at Acme before attempting to purchase the mistake ticket. [Ms.] Seltzer proceeded to tell other employees, including a supervisor, that she had won the lottery, though claiming that she could not remember the time when she purchased the ticket. No one at Acme authorized or approved [Ms.] Seltzer's taking possession of the ticket. She did not tell anyone at Acme the value [of] the ticket or the situation surrounding her "purchase" of the ticket. At some point thereafter Seltzer signed the back of the winning ticket and proceeded to contact the ... Lottery about claiming her winnings. It is not the ... Lottery's practice to investigate the bearer of winning tickets. Acme received a $10,000 bonus check as a result of selling the winning ticket. It would have received this bonus whether it had sold the ticket to a customer or retained the ticket for itself.

Upon reviewing the security tapes, Acme discovered that [Ms.] Seltzer had attempted to purchase the ticket after the Match 6 drawing and after she had known it was a winner. Upon confronting [Ms.] Seltzer as to this revelation, [she] stated that it was her ticket and proceeded to contact the ... Lottery about claiming the reward.

On April 16, 2019[,] Acme filed a complaint in order to determine the proper owner of the lottery ticket.[ ] At that point, after a hearing, [the trial court] ordered that the lottery winnings be placed in escrow pending the resolution of this case. The parties agreed that once the Lottery paid the proceeds into the escrow account, the Lottery would be removed as a party to this case.

Trial Court Opinion (Corrected), 1/24/20, at 1-3 (unnecessary quotation marks and capitalization omitted, emphases in original).

Acme and Ms. Seltzer filed cross-motions for summary judgment. Acme asserted that resolution of the dispute³ hinged upon the answers to the following questions: (a) whether Acme had a property interest in the mistake ticket at the time Ms. Seltzer scanned it, and (b) whether Ms. Seltzer, acting in her capacity as an Acme employee, engaged in an unauthorized sale of the ticket to herself in her individual capacity. See Acme's Motion for Summary Judgment, 916/19, at 33.

Acme posited that it had a valid property interest in the mistake ticket because the moment it was delivered to Acme via the WAVE terminal, Acme became obligated to pay the Lottery for that ticket regardless of whether it sold it to a third party. Id . at 33. As for the second question, Acme contended that two independent bases rendered the sale of the ticket unauthorized, namely: (1) because Ms. Seltzer, who was acting as the agent of Acme when she sold the ticket to herself, did not disclose all pertinent facts to Acme and obtain its informed consent as is required by the principles of agency law; and (2) Acme is not authorized to sell a lottery ticket to a customer after ascertaining whether it is a winning ticket. Id . at 33-34.

Ms. Seltzer, on the other hand, maintained that Acme had failed to adduce sufficient evidence to establish that it had a property right in the ticket. She asserted that provisions of the Pennsylvania Lottery Code establish that a ticket is a bearer instrument deemed to be owned by its possessor, and that the ticket itself is the only valid receipt for claiming a prize. See Ms. Seltzer's Motion for Summary Judgment, 9/16/19, at 14 (citing, inter alia , 61 Pa. Code § 875.9(a) ). She further argued that Acme's interest in mistake tickets is that of a licensee of the Lottery until Acme delivers funds for the unsold tickets as part of its weekly reconciliation each Tuesday. Thus, Ms. Seltzer asserts, since she paid Acme for the ticket before Acme made its weekly reconciliation payment to the Lottery for that ticket, she acquired superior title. Id . at 15-17.

After reading the parties’ filings and entertaining oral argument, the trial court took the matter under advisement. On November 20, 2019,⁴ the court entered an order granting Acme's motion for summary judgment, denying Ms. Seltzer's cross-motion, declaring Acme to be the rightful owner of the mistake ticket, entering judgment in favor of Acme, and directing the escrow agent to pay the full amount of the escrow fund to Acme. See Order, 11/20/19. Seltzer filed a notice of appeal the following day, and both Seltzer and the trial court complied with Pa.R.A.P. 1925.

Ms. Seltzer presents the following questions for this Court's consideration:

1. Did the trial court err in applying the Uniform Commercial Code, not the State Lottery Law and its regulations, to decide ownership of the lottery ticket at issue in this case, when the Commercial Code does not apply to lottery tickets and the State Lottery Law is a specific and complete statute and its regulations offer two different bases to decide ownership of the lottery ticket?

2. Did the trial court determine the impact of Acme's relationship as agent, licensee, and fiduciary of the Pennsylvania Lottery—according to statute and contract—on the question of ownership?

3. Did the trial court err in in [sic ] concluding that Acme had a superior right to the ticket, even though there is no authority prohibiting [Ms.⁵ ]. Seltzer from paying for an unsold mistake ticket left on the counter of the lottery terminal after a drawing and Acme kept her money?

4. Did the trial court err in granting Acme's motion [for] summary judgment when there are genuine disputes of material fact as to the remaining elements of conversion—consent and justification—and [Ms.] Seltzer's estoppel defense?

Ms. Seltzer's brief at 6-7.

We begin with our standard of review.

An appellate court may reverse a grant of summary judgment if there has been an error of law or an abuse of discretion. Summary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. The trial court must take all facts of record and reasonable inferences therefrom in a light most favorable to the non-moving party. In so doing, the trial court must resolve all doubts as to the existence of a genuine issue of material fact against the moving party, and, thus, may only grant summary judgment where the right to such

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