Mega Millions, Mega Problems?

Publication: The Bar Association of San Francisco Bulletin, Volume 6, Number 3

The recent Mega Millions jackpot may have created more problems than it solved for one winner. Holly Lahti of Rathdrum, Idaho was one of the two winning ticketholders to the $380 million Mega Millions lottery drawing. Holly is married to Joshua Lahti (who has convictions for domestic battery, drug possession, kidnapping, and buying alcohol for a minor), but they are currently separated and have been for a number of years. Their tumultuous relationship included restraining orders and the two of them being arrested for battery of one another.

Under Idaho law, it is unclear whether Joshua is entitled to half of the lottery winnings. Because Idaho is a community property (like California), a married couple living together would equally own the winnings. However in California, any earnings after date of separation would be separate property, including lottery winnings. (Fam. Code §771 (a)). In Idaho, the issue is not as simple. According to Elizabeth Brandt, professor of family law at University of Idaho (quoted in, “The Idaho statute muddles the concept of legal separation, and there is no clear case law on the issue.” This means that Joshua may have a claim to the lottery winnings if Idaho law does not clearly state that living apart is sufficient to presume separate earnings.

While the Idaho situation would be easily dealt with in California, we have faced our own lottery- inspired dissolution litigation. In In re Marriage of Rossi (2001) 90 Cal.App.4th 34, Denise Rossi won 1.3 million dollars from the California lottery. Eleven days later she filed for divorce and kept the winnings a secret for the entire dissolution process. She did claim a date of separation that would have made the winnings her separate property, but the winnings themselves were never disclosed. Two years after judgment, Thomas Rossi received a letter intended for Denise that informed him of the winnings. The trial court and court of appeal agreed that Thomas was entitled to 100% of the lottery winnings because her failure to disclose was a fraud and a breach of fiduciary duty pursuant to Family Code §1101(h).

According to reports, Holly (the Idaho winner), has not been sued thus far for the money. Her husband’s only comment on his wife’s newfound wealth: "That's awesome! I won't have to pay child support!"

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