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TRANSAMERICA INSURANCE CO. v. JUDIE (05/20/77)

decided: May 20, 1977.

TRANSAMERICA INSURANCE CO.
v.
JUDIE, INC., T/D/B/A JACKIE B'S RESTAURANT, APPELLANT V. BUREAU OF STATE LOTTERIES, DEPARTMENT OF REVENUE, COMMONWEALTH OF PENNSYLVANIA



Appeal from the Order of the Court of Common Pleas of York County in case of Transamerica Insurance Co. v. Judie, Inc., t/d/b/a Jackie B's Restaurant v. Bureau of State Lotteries, Department of Revenue, Commonwealth of Pennsylvania, No. 333 August Term, 1975.

COUNSEL

Gerald E. Ruth, for appellant.

G. Alan Kramer, with him Joseph W. McGuire, Deputy Attorney General, J. Justin Blewitt, Jr., Deputy Attorney General, and Robert P. Kane, Attorney General, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Crumlish, Jr.

Author: Crumlish

[ 30 Pa. Commw. Page 260]

This is an appeal from an order of the common pleas court sustaining the preliminary objections of the additional defendant, the Bureau of State Lotteries (Bureau) and dismissing the action of Judie, Inc., t/d/b/a Jackie B's Restaurant (Appellant), a licensed sales agent of the Bureau.

[ 30 Pa. Commw. Page 261]

Appellant reported the theft of 475 lottery tickets from its place of business in June of 1972. Upon learning of the theft, the Bureau invalidated the stolen tickets, withdrawing them from the forthcoming lottery.

Pursuant to a bond executed between the Commonwealth and Transamerica Insurance Company (Plaintiff), the Commonwealth assigned its right to collect the value of these tickets to Plaintiff. In June of 1975, Plaintiff commenced this action in assumpsit against Appellant in the court of common pleas for $237.50, the purchase price of the 475 tickets. Subsequently, Appellant joined the Bureau in the action, naming it as an additional defendant, and alleging that the Bureau, by invalidating the stolen tickets, illegally precluded Appellant's opportunity of winning the lottery and claimed damages of one million dollars. Judgment by default, entered against the Bureau for $1,000,000, was subsequently stricken by the court below on the basis of procedural irregularities. Subsequently, the preliminary objection of the Bureau asserting the doctrine of sovereign immunity was granted and the action against the Bureau dismissed. This appeal followed.

Appellant contends that the court below erred in its application of the doctrine of sovereign immunity. After reviewing the statutory provisions creating the Bureau and the applicable case law, we hold that the Bureau is an integral part of the Commonwealth. Because of the exclusive jurisdiction of the Board of Arbitration of Claims*fn1 over contractual disputes with the Commonwealth,*fn2 we hold that Appellant's action

[ 30 Pa. Commw. Page 262]

    against the Bureau was improperly brought before the court below.

The Bureau was created by the State Lottery Law (Law).*fn3 Section 4 of the Law*fn4 specifically states that the Bureau is created "within the Department of Revenue." (Emphasis added.) Section 6 of the Law*fn5 places upon the Secretary of Revenue the duty of administering the lottery as well as the responsibility for promulgating rules and regulations governing ...


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