## Facts

- Gary Michael Clark won the Missouri Lottery’s “Lifetime Riches” prize, entitling him to $50,000 per year for life, with a minimum payout of 30 years.
- In October 2007, Clark borrowed $100,000 from Community Bank of El Dorado Springs.
- As part of that borrowing, Clark granted the bank a security interest tied to an “assignment of all Missouri Lottery payments.”
- Clark also signed a document titled “Missouri Lottery Payments,” directing that all lottery funds payable to him be deposited into an account at Community Bank to secure any present or future debt he owed the bank.
- The “Missouri Lottery Payments” document stated that Community Bank had full authority and withdrawal rights over the account and that Clark could not revoke the arrangement.
- The Missouri Lottery acknowledged the payment-direction document.
- In July 2010, Clark executed a consolidated loan agreement with Community Bank for $713,670.96, again granting a security interest in the lottery-payment arrangement.
- The consolidated agreement included a payment plan with small installment payments and a large balloon payment due in July 2011.
- Clark defaulted.
- Clark filed a petition for declaratory judgment against the Missouri Lottery Commission and Community Bank, alleging the loan/assignment arrangements were void and unenforceable because Missouri’s lottery statute restricts assignment of lottery prizes and prize payments.
- The circuit court granted summary judgment for Community Bank, and Clark appealed.

## Issues

1. Whether Missouri’s lottery anti-assignment statute (Mo. Rev. Stat. § 313.285) invalidates Clark’s grant of a security interest and related payment-direction arrangement involving his lottery payment rights.
2. Whether Missouri’s UCC Article 9 provisions—treating state lottery winnings as an “account” and rendering statutory anti-assignment limits ineffective for security interests—permit Community Bank to take and enforce its interest in Clark’s lottery payments.

## Decision

- The Missouri Court of Appeals affirmed summary judgment for Community Bank.
- The court held the bank’s security interest in Clark’s lottery payment rights was valid and enforceable even though the lottery statute contains anti-assignment language.
- The court reasoned that Missouri’s later-enacted Article 9 amendments control where they conflict with the earlier lottery statute, because Article 9 expressly includes state lottery winnings within the definition of “account.”
- The court further relied on Article 9’s rule that statutory restrictions requiring an account debtor’s consent, or otherwise restricting assignment or the creation of a security interest in an account, are ineffective as to a security interest.
- As a result, Clark was not entitled to a declaration that the bank’s documents were void under § 313.285.

## Legal Principles

- Under Missouri’s UCC, “accounts” include “winnings in a lottery or other games of chance operated or sponsored by a state,” bringing lottery payment rights within Article 9’s secured-transactions rules.
- A statute that prohibits or restricts assignment of an “account,” or requires the account debtor’s consent to assignment, does not defeat the creation or enforcement of a security interest in that account when Article 9 renders such limits ineffective.
- When two statutes conflict, later-enacted and more specific provisions addressing the subject matter may control over earlier, more general restrictions.
- A borrower may grant a lender a security interest in the right to payment from a lottery stream, and the existence of lottery-law anti-assignment language does not, by itself, void the security interest governed by Article 9.
- A deposit-direction arrangement acknowledging where payments should be sent, combined with a security interest, can operate as part of an enforceable secured-lending transaction involving payment rights treated as an Article 9 “account.”

## Conclusion

The court affirmed summary judgment for Community Bank, holding that Clark’s lottery payment rights fell within Article 9 as an “account” and that Article 9’s anti-assignment override made the lottery statute’s assignment restriction ineffective against the bank’s security interest, so Clark could not void the loan and payment arrangements on that basis.


Clark v. Missouri Lottery Commission, 463 S.W.3d 843 (2015)