Mastro Auctions: Looking for Former Employees

[Peter_Spaeth]

Not at all to defend, but just on the question of dollar loss, in any given case I would think it's difficult to truly know the effect of the shill bids, because unless they were placed at the very end, you don't know what the course of legitimate bidding would have been but for the shills. Just by way of example, suppose the high bidder wins for 1000, but if you take out the shills his bid would have been 800. You can't really say that's a loss of 200, because if the high bid had showed at 800, not 1000, someone else might have bid 900.

Indeed, the government did not pursue restitution, perhaps because of difficulties of calculation.

[Kenny Cole]

Originally Posted by Peter_Spaeth

Not at all to defend, but just on the question of dollar loss, in any given case I would think it's difficult to truly know the effect of the shill bids, because unless they were placed at the very end, you don't know what the course of legitimate bidding would have been but for the shills. Just by way of example, suppose the high bidder wins for 1000, but if you take out the shills his bid would have been 800. You can't really say that's a loss of 200, because if the high bid had showed at 800, not 1000, someone else might have bid 900.

Indeed, the government did not pursue restitution, perhaps because of difficulties of calculation.

But "someone else" didn't have the opportunity, or the ability, to bid at that level because a fraudulent bid took that ability away. Mastro, et al., created whatever uncertainty exists regarding the number. So, IMO, they get to eat it.

Civilly, that would not not be a defense at all, at least not where I practice. I encounter similar claims pretty frequently. Once the fact of damage is shown, if the defendant's actions created the uncertainty as to the amount, the jury decides what the number is based upon the best evidence available. The "speculation" defense goes away. The bad guys don't get to benefit from the uncertainty they created by their own fraud. I don't know how it works in the criminal arena, but that is an issue -- probably one of the few -- that I have never lost either in state or federal court, in 32 years of practice.

[Peter_Spaeth]

Maybe Kenny, I'd have to think about that although my general understanding is that the plaintiff who has the burden of proof has to have a non-speculative damages theory and simply assuming there wouldn't have been any other bids in the but-for world of no shill bids seems awfully speculative to me. In any event, mine was less an observation about the mechanics of an actual trial than an observation that just academically speaking it's not an accurate measure of loss just to take the high bid and remove the shills.

[Kenny Cole]

Peter,

"Viewing this evidence in the light most favorable to the plaintiff, we find that there was substantial evidence reasonably tending to support the jury's verdict. Mr. Musgrove had extensive experience in the travel business and a foundation was properly laid for his testimony relating to the value of Rainbow's good will. Indeed, appellants did not object to Mr. Musgrove's testimony and conceded that he was qualified to express an opinion on the issue of good will. Appellants argue nonetheless that the amount of damages to good will was so uncertain as to be speculative. The rule in Oklahoma, however, is that the prohibition against recovery of damages because the loss is uncertain or too speculative in nature applies to the fact of damages, not to the amount. Martin v. Griffin Television, Inc., 549 P.2d 85, 92 (Okla.1976). “Where it is made to appear that some loss has been suffered, it is proper to let the jury determine what the loss is from the best evidence the nature of the case admits.” Hardesty v. Andro Corporation–Webster Division, 555 P.2d 1030 (Okla.1976). Given the nature of good will, which is an intangible asset dependant upon a business' reputation, it was proper for the district court in this case to submit the question of damages to good will to the jury. See Westric Battery Co. v. Standard Electric Co., Inc., 522 F.2d 986, 987 n. 2 (10th Cir.1975) (“The amount cannot and hence need not be proven with absolute certainty.”). See also Kestenbaum v. Falstaff Brewing Corp., 514 F.2d 690, 698 (5th Cir.1975), cert. denied, 424 U.S. 943, 96 S.Ct. 1412, 47 L.Ed.2d 349 (“The wrongdoer may not complain of inexactness where his actions preclude precise computation to the extent of the injury.”)."

Rainbow Travel Serv., Inc. v. Hilton Hotels Corp., 896 F.2d 1233, 1239–40 (10th Cir. 1990) (emphasis added).

[mantlefan]

Impressive post, Kenny. The Law is a very interesting field and I respect your ability to clarify this issue. Some compensation should have been given to the victims. Lacking that, we have no recourse except to seek out Mr. Theotakis and advise him of our displeasure with his confessed crimes.

[Leon]

Originally Posted by mantlefan

Impressive post, Kenny. The Law is a very interesting field and I respect your ability to clarify this issue. Some compensation should have been given to the victims. Lacking that, we have no recourse except to seek out Mr. Theotakis and advise him of our displeasure with his confessed crimes.

Dude, you keep saying you want to meet Theo to tell him off, but you might want to just leave it alone.

[Peter_Spaeth]

Kenny fine but I bet I could find lots of cases citing this or similar principles too and not just in a contract context:

Restatement (Second) of Contracts § 352 (1981) states: “Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty.”

Anyhow, we have strayed I think from the topic. I have no doubt that however calculated a substantial aggregate loss was involved here.

[mantlefan]

Originally Posted by Leon

Dude, you keep saying you want to meet Theo to tell him off, but you might want to just leave it alone.

Leon, not sure why you seem to be defending this scumbag. And last time I checked, I don’t need your permission to speak to someone in Cleveland, dude.

If he were out of sight, I would never go looking for him.

But, if he’s sitting at HA accepting consignments, well yeah then me and a few of my buds are going to ask him about the money he stole from us. If someone who admitted cheating you and stealing from you, is prancing around in front of you, Leon, wouldn’t you want a few words with him..... ??