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MORREALE v. Sheriff of the County of Schenectady, etc., et al., Respondents. (1999)

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Supreme Court, Appellate Division, First Department, New York.

Leonard MORREALE, et al., Petitioners-Appellants, v. Jeff PERLEE, as Director of the New York Lottery, Also Known as New York State Division of Lottery, et al., Respondents-Respondents, Met Lottery Trust 1997-4P, Respondent/Intervenor-Respondent, Sheriff of the County of Schenectady, etc., et al., Respondents.

Decided: November 23, 1999

ELLERIN, P.J., ROSENBERGER, TOM, ANDRIAS and BUCKLEY, JJ. John P. Amato & Eric A. Lidman, for Petitioners-Appellants. Ellen Fitzgerald, Douglas A. Foss, for Respondents-Respondents. Todd D. Muhlstock, for Respondent/Intervenor-Respondent.

Judgment, Supreme Court, New York County (William Davis, J.), entered March 30, 1999, which, in a proceeding pursuant to CPLR 5239, declared that petitioners' judgment creditors' right to future payments of respondent judgment debtor's New York State lottery prize are subordinate to respondents assignees' right to such payments, unanimously affirmed, without costs.

 The IAS court correctly held that Tax Law § 1613(a) and 21 NYCRR 2803.11 unambiguously allow for voluntary assignment of lottery prizes “pursuant to an appropriate judicial order” (see, Matter of Guri, 247 A.D.2d 388, 668 N.Y.S.2d 661;  cf., Wolf v. Brach, 241 A.D.2d 417, 660 N.Y.S.2d 430, lv. dismissed 90 N.Y.2d 1008, 666 N.Y.S.2d 102, 688 N.E.2d 1384, 91 N.Y.2d 866, 668 N.Y.S.2d 562, 691 N.E.2d 634), that the question of whether a particular assignment was made pursuant to an appropriate judicial order is to be decided initially by respondent Lottery Division (see, Matter of Howard v. Wyman, 28 N.Y.2d 434, 438, 322 N.Y.S.2d 683, 271 N.E.2d 528), and that the Lottery Division's acceptance of the challenged assignments as having been made pursuant to appropriate judicial orders was not arbitrary and capricious.   Petitioners having levied upon their judgment after the challenged assignments were made, and there being no issue raised as to whether fair consideration was given for the assignments, the IAS court correctly declared that petitioners' rights in the prize are subordinate to respondents assignees' rights.   We have considered petitioners' other arguments and find them unavailing.


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