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In re BofI Federal Bank
Citations: 437 N.J. Super. 549; 101 A.3d 619; 2014 N.J. Super. LEXIS 134
Court: New Jersey Superior Court Appellate Division; October 3, 2014; New Jersey; State Appellate Court
The court, with Justice Higbee temporarily assigned, addressed Bofl Federal Bank's petitions for the assignment of New Jersey State Lottery payments from four prize winners. All petitions were denied by three judges based on N.J.A.C. 17:20-7.9(j), which prohibits assignment of prize payments due in the last two years of the annuity term. Bofl contended this regulation was invalid as it conflicted with N.J.S.A. 5:9-13, the controlling statute governing such assignments. The court upheld the validity of N.J.A.C. 17:20-7.9(j), affirming the lower court's decisions. The cases involved four winners of the Win for Life game, including Richard Haas, who won $1,000,000 payable in quarterly installments until 2016, followed by lifetime payments. Each winner's request for assignment of the final two years of guaranteed payments was denied. Legislative history indicates that the New Jersey State Lottery was established to benefit state institutions and education, with initial laws prohibiting prize assignments. An amendment in 1998 allowed for controlled assignments, requiring court orders and compliance with stringent regulations. Bofl argued that the payments in question were quarterly, not annual, and thus not subject to the statutory prohibition against assignment of the last two annual payments. The court disagreed, stating that payments structured as quarterly installments fall under the regulation prohibiting assignment in the last two years of any annuity, regardless of payment frequency. The court ultimately found the regulation to be a valid interpretation of the statute, reinforcing the legislative intent to closely regulate lottery winnings. Evaluation of agency regulations involves two steps: first, analyzing the plain language of the statute; if clear, no further action is needed. If ambiguous, courts may consider extrinsic evidence. Agency regulations receive substantial deference when consistent with statutory terms and objectives. The New Jersey Supreme Court has indicated that seemingly clear statutes can be ambiguous when viewed in context. The term "annual" can refer both to events occurring once a year and to calculations over a year, as seen in several legal precedents. In the case of the "Win for Life" payments, the courts have found that "annual" does not strictly mean a single payment each year. The legislative intent of N.J.S.A. 5:9-13(h) is to ensure the State can collect debts owed by a winner before payments are made, particularly protecting the last two years of payments. This interpretation aligns with the statute’s purpose of addressing delinquent child support and other debts. The regulation N.J.A.C. 17:20-7.9(j) is deemed a valid clarification that supports the enabling statute. The court affirms the denial of petitions in four cases, including Richard Haas’s, where the trial judge’s initial grant of the petition was overturned upon reconsideration. An appeal regarding the reconsideration is deemed without sufficient merit.