Scratch ticket win sends divorce to R.I. high court

Summary

• Rhode Island Supreme Court upheld a divorce judgment involving a dispute over a $4 million winning lottery ticket.
• The court ruled the lottery winnings were not marital property subject to equitable distribution.
• The ex-husband sought to reopen the divorce, arguing the ticket was purchased before the judgment became final.
• The case highlights how procedural mistakes by self-represented parties can complicate otherwise uncontested divorces.

This is a tale of a divorce, a lottery ticket and some bad timing – or not, depending how you look at it.

Ana Varela and Daniel Monteiro married in November 2007, with Varela filing for divorce eight years later on the grounds that the couple was separated and had lived apart for more than three years.

In fact, Monteiro had moved from Rhode Island to Massachusetts years earlier. He filed no response or counterclaim to the proceedings and didn’t even enter his appearance into the record, as directed by the court.

But what began as an uncontested divorce, with both parties making no claims for money, took a turn.

The reason? A scratch ticket, purchased by Varela, which ended up being a $4 million winner. And complicating the issue was that both Varela, 48, and Monteiro, 56, represented themselves in court.

The Rhode Island Supreme Court settled the matter in Varela’s favor in a June 30 ruling, refusing to vacate the couple’s divorce judgment. In doing so, the high court affirmed a decision by Family Court Judge Richard A. Merola that the lottery winnings were not marital property.

Nicholas Hemond, Varela’s lawyer, viewed the travel of the case from cordial to contentious as a cautionary tale.

“Certainly, our client is happy with the ultimate outcome in the case, and we are grateful to the careful attention that the court gave this issue. The important take away … is the importance of counsel — no matter how amicable or simple someone’s divorce may appear. The technical issues that come up in even the simplest of cases are best handled by an attorney who knows how to handle a family court case,” Hemond, Varela’s lawyer, said in an email.

Monteiro’s lawyer, Robert D. Goldberg, questioned the ruling’s reasoning.

“My client is disappointed in the decision and I’m surprised that the court disregarded the statute and changed the law,” Goldberg said in an email.

Now retired Justice Maureen McKenna Goldberg, his wife, did not participate in the ruling.

From uncontested divorce to Supreme Court

According to the Supreme Court ruling, Monteiro left the marital home and moved to Massachusetts five years after the couple married in 2007. Varela filed for divorce in 2020, and the case followed an uncontested track as it made its way through court.

The couple appeared before Family Court Judge Felix E. Gill on June 8, 2020, via WebEx, the judiciary’s platform for remote hearings during the pandemic. Both represented themselves without a lawyer. Gill entered his decision granting Varela’s petition for divorce.

Varela prepared the proposed decision and the proposed final judgment, both of which were entered by the court on Oct. 8, 2020.

The decision reflected that the “defendant was directed to file an entry of appearance with the Family Court via e-mail, but he did not do so” and that the couple had lived “separate and apart from each other” for at least three years. It said that they had divided their personal property to their mutual satisfaction and had no real estate nor joint debts.

The couple were awarded joint custody of their two children, with Varela having primary placement and Monteiro having visitation rights. He would pay $208 in child support each week.

The Supreme Court ruling noted that there were several irregularities in the travel of the case, “no doubt due in large measure to the unfamiliarity of the pro se parties with our court rules.” Varela filed the proposed decision and judgment in September 2020, beyond the 30-day deadline under court rules.

In addition, both certificates showing that Monteiro had been served were, in fact, signed by Varela instead. Both stated that she had “hand-delivered” the documents.

“Thus there was no certification that defendant had been served with either document,” the court said.

Both proposed documents were filed in September 2020 and entered on Oct. 8, 2020. State law, however, requires that 20 days must pass between the entry of the decision and the final judgment, the court said.

The winning lottery ticket

It’s then that the tables began to turn, transforming what had been “an ostensibly amicable divorce into a robustly contested action, necessitating the hiring of counsel and a return to the Family Court.”

While the actual date that Varela purchased the winning scratch ticket remains in dispute, it fell between Oct. 29 and Oct. 31, 2020, both more than 20 days past the date the final judgment was entered, the court said. Varela cashed the ticket in on Nov. 4, 2020. Varela opted to receive a lump sum payment of $2.6 million, amounting to $1.8 million in winnings after taxes, according to a footnote in the ruling written by Chief Justice Paul A. Suttell.

Ten months later, Monteiro filed a motion to vacate the final divorce judgment, arguing that the lottery ticket was purchased prior to the Oct. 8, 2020, final judgment and, as such, constituted a marital asset that is subject to “equitable distribution.”

He argued that the final divorce judgment was induced by fraud because Varela bought the winning ticket before the judgment was entered without disclosing it to him. He questioned the validity of the final judgment because it wasn’t filed 20 days after the decision.

Marital asset or not?

Enter Family Court Magistrate Daniel V. Ballirano. He concluded that the final judgment was entered prematurely due to a “ministerial error” during the pandemic but that it wasn’t void, as Monteiro argued. He noted that Valera had filed the proposed decision and judgment outside of the deadline set by court rules and, as a result, had “substantially prejudiced” her ex-husband. He continued the matter for hearing.

Valera appealed, arguing that Ballirano had exceeded his authority and that a final judgment can only be challenged directly and not through a motion trying to vacate its terms. She asserted that Monteiro failed to present any reason to vacate the judgment based on grounds cited in court rules.

Family Court Judge Merola heard arguments and found that the court acted within its jurisdiction when it entered both the decision and the final judgment the same day, the ruling said. He concluded that Monteiro’s due process rights had not been violated and that the lottery ticket was purchased after the final judgment had been entered.

Merola opined that Valera had tried to abide by court rules “as best she could,” and she “would be penalized if the final judgment were vacated because ‘it would take a nonmarital asset and make it a marital asset.’” This time, Monteiro appealed.

‘Error is merely a procedural defect’

The Supreme Court rejected Monteiro’s arguments that the final judgment was void because it was entered the same day as the decision.

The court concluded that although it was an error to enter Valera’s proposed decision and final judgment on the same day,” that error is merely a procedural defect which does not exceed the scope of the Family Court’s subject-matter jurisdiction. … Therefore, we conclude that the final judgment is not void for want of jurisdiction.”

Similarly, the court struck down arguments that the erroneous timing had “eliminated his right to appeal the decision pending entry of final judgment” and that he had never been served Varela’s court papers, because he had not raised those issues previously.

The high court denied Monteiro’s motion to vacate the final judgment of divorce.

Words of warning

Varela’s lawyer, Hemond, warned that “things can go sideways quickly” when litigants try to navigate the court system on their own, even in an apparently uncontested divorce.

“Obviously, this case started off as pretty straightforward and then the circumstances changed, and what began as a simple divorce was escalated all the way to the Supreme Court all because of procedural issues which would not normally have been an issue had the parties had counsel at the outset of the case, rather than after the divorce was put through,” Hemond said.