Lottery Ticket Dispute Turns South Dakota Town Into `Sue City'

GREGORY, S.D. - For three days it lay there on the cash register, a mistakenly printed-out $5 Lotto America ticket worth $12.47 million - and as unwanted as yesterday's doughnuts.

Then Ionia Klein, 32 and money poor, came along and lived out the time-warp fantasy yearned for by honest gamblers everywhere: to just once know the outcome of something before betting on it.

On Sunday, April 7, the morning after the winning Lotto number was announced on the nightly news, Klein made the five-minute trip from nearby Dallas to her part-time clerk's job at Mr. G's convenience store. She saw the ticket, bought it, signed it and called state lottery officials. Two days later they declared her South Dakota's first Lotto jackpot winner.

"It was just like finding a ticket on the street, except that I paid for it," Klein said.

But Mr. G's owners, Scott and Julie Anshutz and Mike and Diane Dacy, said the ticket was rightfully theirs because they must pay the lottery for all unsold printed tickets.

Lawyers in Gregory (pop. 1,432) suddenly found fresh work, and Gregory residents joked that they now lived in "Sue City."

Last week, Klein agreed to an out-of-court settlement with the Anshutzes and Dacys. But two other lawsuits are pending. One is a class action suit by a Sioux Falls man demanding the money be returned to the jackpot. The other is by the clerk at Mr. G's who printed out the winning ticket and says she should get a share.

Meanwhile, Gregory and Dallas remain divided over who was right and who was wrong.

"You can't bet on a horse after the race is over," Dallas resident W.W. Opperman said as his big cowboy fist landed on the bar at Sportsman's Bar and Lounge. Dallas is the dusty former railroad town (pop. 142) where Klein, her husband, Bob, a cement worker, and four children live in a mobile home.

Others see Ionia Klein, who with her husband earned $7,200 last year, as the underdog, the impoverished employee whom luck smiled upon, who did what many others might have done in her place and was set upon by her bosses.

"Ionia and her family had absolutely nothing. For them to end up like this put a lot of people in their corner," said Nels Miller, editor of the Gregory Times-Advocate.

Business fell off at Mr. G's. And a kind of class consciousness came to Gregory and Dallas, towns with long traditions of prairie egalitarianism and no country clubs.

"We're not a cliquish town. We all socialize together, and we don't pick our friends by how much money they have," said Joe Duling, vice president of Gregory's First Fidelity Bank.

Klein's good fortune began April 4 when clerk Robin Parsons waited on a customer at Mr. G's who wanted to buy five $1 lottery tickets. Parsons misunderstood the order and gave him one $5 ticket instead.

The customer rejected it, so the $5 ticket, which becomes valid the minute it is printed, sat by the register for three days while Parsons and succeeding clerks tried to sell it. There were no takers.

Until Sunday morning, 10 hours and 30 minutes after the winning number was announced, when Bob Klein drove Ionia to work. She hadn't worked since early in the week.

Bob Klein checked his ticket against the list of winning numbers. His wife glanced at the list, then at the ticket on the cash register.

Ionia Klein realized she had the winning ticket in her hands, money to radically reverse a lifetime of desperate finances. She said she checked her purse and found she had exactly $5.37. She put $5 in the lottery cash box and signed the ticket.

A few days later, the owners of Mr. G's claimed the ticket was rightfully theirs. Their lawyers pretty much called Klein a thief and a liar. Klein at first told lottery officials she bought the ticket before Saturday night's drawing.

A flurry of litigation followed that went all the way to the Nebraska Supreme Court. But Mr. G's lawyers were unable to stop Klein from getting her first payment of $503,936 last month.

For lottery officials, there was no question who they should pay off: the person who presents the ticket and whose name is on it. The court dispute, they reasoned, was a separate civil matter of contended ownership.

But Klein, weary of the media limelight and court appearances, last week agreed to settle her employers' suit. Anshutz and Dacy each got $125,000 after taxes and legal fees, with annual payments of about $151,000 for 19 years.

Klein will get $209,328 for each of the next 19 years. The split was roughly 58 percent for Mr. G's and 42 percent for her.

"It worked out pretty good," she said.

Iona and Bob Klein have bought a 160-acre farm south of Gregory, new clothes for themselves and the children, some furniture, a 30-inch TV and a satellite dish, a 1987 car, a 1980 pickup and a 1984 motor home.

The Dacys also are happy with the settlement, but Scott Anshutz says he feels betrayed.

"I feel what she did was wrong. She should have put the ticket back in the cash box. Your employees are supposed to be looking out for you," he said.