A Legal Win for Mastro -- As Reported By O'Keefe!

[Archive]

Posted By: Jeff Lichtman

http://www.nydailynews.com/sports/more_sports/2007/07/15/2007-07-15_lack_of_intent_seen_in_flubs_at_auctions.html



If you'll all recall, Mastro was sued by memorabilia dealer Bill Daniels who had won a lot of 2000 photos from Mastro in 2004 only to discover upon receipt of the lot that some of the pictures were not as described and perhaps fake. An Indiana judge ordered Mastro to pay Daniels 9K for the photos Daniels purchased that did not match the description in Mastro's catalogue; however, the judge ruled that Mastro did not intend to defraud Daniels and the 9K award was a fraction of what Daniels was seeking. In addition, the judge ordered Daniels to pay Mastro 1K for making defamatory statements about the company to the media and 2K in sanctions for failing to produce documents during the discovery phase of the case. Finally, the judge rejected the conclusions of the experts hired by Daniels to prove that some of the photos were fakes.

edited to get rid of the blue lines.....didn't change a word (leon)

[Archive]

Posted By: barrysloate

This is an example of why I responded to Joann's thread the way I did. Despite all the finger pointing in the hobby, very little legal action is pursued because it is so hard to prove anything or win a judgment.

[Archive]

Posted By: Richard Simon

Just to clarify - I was one (of two people) hired by Bill Daniels to examine the lot.
I was asked to render an opinion on the condition of the lot and the accuracy of the description in the Mastro catalog. I did not, nor was I asked to, render any opinions regarding authenticity of any autographs in the lot.
The autographs, in this lot, were of modern day players and everyone who knows me knows that I only render opinions of vintage items.
--

I refuse to engage in a battle of wits with an unarmed opponent.
Unknown author
--
We made a promise. We swore we'd always remember.
No retreat baby, no surrender.
The Boss

[Archive]

Posted By: P Spaeth

Question answered by above post.

[Archive]

Posted By: PSpaeth

Maybe there was nothing to prove here.

[Archive]

Posted By: barrysloate

There clearly was no case here, and my comment was not directed specifically to it. I just think it is either very difficult to prove some of the accusations levelled against sellers, or the damages are often too small to be worth pursuing. Somebody rips off somebody else for a couple of hundred dollars, and the parties live a few thousand miles apart. Both sides are likely to write it off.

[Archive]

Posted By: PSpaeth

Barry that is true of course in numerous contexts not just sports cards. And a good thing too, our society is already too contentious.

I think, though, that the day will come when there is litigation over allegedly altered cards. It is inevitable in any area of commerce where so much money is spent.

[Archive]

Posted By: barrysloate

Yes Peter, that is inevitable. It just hasn't quite gotten there yet. But when it does, head for the hills!

[Archive]

Posted By: PSpaeth

Does Brooklyn have hills?

[Archive]

Posted By: bruce Dorskind

We were delighted to read that Mastro Auctions was vindicated,

We have worked with Bill Mastro and Mastro Auctions for more than
a quarter century and never had an issue. Whilst we may not have
agreed about the value of an item or condition (before grading),
Bill, Doug and the staff have always been helpful

Our experience with Hunt Auctions, Robert Edwards Auctions
and Sothebys (and various partners) has, in fact, been 100%
positive. This, over the course of 25 years and hundreds of
thousands of dollars in transactions.

Each auctioneer has his/her own policy with regard to grading,
bidding and refunds. In the case of the auctioneers mentioned
above, their policies have been clearly delineated in their catalogs
and/or by members of their senior management.

It is unforunate when a problem occurs that a select group of
collectors, many of whom never actually buy anything from
these auction houses, attempt to stir the pot.

Barry Slotate, who has also always acted with unquestioned integrity
raised a very important issue... that is that is very difficult to prove
intentional fraud.

It would be helpful to everyone, if all bidders and potential bidders
read an auctioneer's catalog and inquired about any policy with regard
to grading or house bidding. Then we could avoid spending time and
money with lawyers rather than on baseball cards.

Bruce Dorskind
America's Toughest Want List

[Archive]

Posted By: peter chao

Guys,

It is a practical matter, we are in a boom era. Somebody has ripped you off and the item wasn't as described. However, it may very well be more valuable than when you bought it. So you will let it slide.

You heard about the dot.com crash in Silicon Valley, well I was in the middle of the mess. For those that don't know I'm Chinese-American. At any rate, Chinese don't really care much for stocks but they are big on real property. When the dot.coms crashed, both officers of companies and shareholders lost money.

So many Chinese suddenly saw a lot of their savings go down the drain. This led to real estate partnership disputes. The Bay Area's real estate market was flying high for about 10 years. Then all of sudden people couldn't pay their mortgages and people started suing each other over land.

I made a lot of money because of the litigation but still I didn't like the havoc it created.

Peter

[Archive]

Posted By: PSpaeth

It is certainly difficult to prove "intentional" fraud in the sense Bruce means, but if a court were to impose a duty of independent authentication, there could be a claim for fraud based on recklessness, or negligent misrepresentation, without proof of "intentional" fraud in the sense Bruce means. As per the prior thread, I don't think such a duty would be imposed particularly with appropriate disclaimers by the auction house, although Corey made some excellent points in favor of imposing such a duty.

[Archive]

Posted By: barrysloate

Peter- I live in Cobble Hill, Brooklyn, and the park across the street has a small knoll. I will head there!

I agree with Bruce that most people's experiences with auctions houses are positive, including my own with the various major ones. But I am really a small player and admit that I am not privy to everything that goes on, whatever that may be.

Egad, that was a sorry state of affairs. Thanks for pointing that out.

[Archive]

Posted By: leon

I think "is" should be "are"...."experiences" is plural, no?

[Archive]

Posted By: peter chao

Guys,

Do we agree that the boom period cannot last forever and there is more litigation during a downturn?

Peter

[Archive]

Posted By: Jeff Lichtman

Mastro was vindicated in the sense that it was not proven that they intentionally defrauded Daniels. However, I did find it interesting that although Daniels only complained about 123 of 2000 pictures he bought from Mastro (6 percent), the court ordered Mastro to pay him back 9K of the 20K purchase price for the whole lot (45%). So, while Mastro was vindicated in the sense that it was not found to have intentionally defrauded Daniels, the court did make Mastro pay back an inordinate amount of the purchase price for advertising something that was not ultimately included in the lot.

If Doug does not mind, I would love to know how much Daniels ultimately sued Mastro for -- no doubt it was for much more than 9K. This was one of those cases that cried out for settlement, no doubt, but stubborn litigants refused to give in and they both lost out when legal fees are factored in. At the very least, I applaud Mastro for not settling a claim that it intentionally defrauded one of its customers (and coming out on top on this issue). As it would appear that both sides agreed that Daniels did not receive what he won based on the auction description, I wonder why this case couldn't have been settled right at the beginning when Daniels received his package.

[Archive]

Posted By: jay behrens

So is this still considered more Mastro vendetta reporting by O'Keefe?

Jay

I love pinatas. You get to beat the crap of something and get rewarded with candy.

[Archive]

Posted By: Jim Dale

plaintiff should have gotten the FBI to testify so all these long posts here on the board could have been answered....dang (yes I'm kidding - sorry wanting to make light of things).

[Archive]

Posted By: PSpaeth

There are many reasons cases do not settle, ranging from bad legal advice to stubborn litigants to views (sometimes justified) that the principle is more important than the money involved.

[Archive]

Posted By: barrysloate

When people say it's the principle and not the money- it's the money.

[Archive]

Posted By: Cobby33

People are too hung up on Fraud. Simple Breach of Contract and/or Negligence and/or Negligent Misrep. are sufficient to get your money back. People who rely on Fraud do so out of greed for general and punitive damages and in doing so, usually lose credibility on the merits of their case.

[Archive]

Posted By: leon

I was glad to see this article by O'keefe and he should be applauded for it....

[Archive]

Posted By: Richard Simon

Jeff - to clarify the O Keeffe article, though 123 pics were black and white and smaller than 8x10, another much larger group of pics had smeared signatures and signatures in the dark part of the photo, making them difficult to read. That is in my deposition.

--

I refuse to engage in a battle of wits with an unarmed opponent.
Unknown author
--
We made a promise. We swore we'd always remember.
No retreat baby, no surrender.
The Boss

[Archive]

Posted By: Joe Pelaez

He's the one that has caused this problem.
The suspicions, the illusions, the lies.

To think, NOW we have to secretly suspect that every slabbed graded card is doctored, colored, pressed, recornered, and not under one of the auctioneers bedpost for pressing.
It's an outrage what this pretender to journalism has done.
But you and I know different.
The business part of the hobby, is as clean as a new born babe.
They couldn't possibly do any of that low life stuff.

Thank God, that O'Keefe has been exposed.

Go out there, and continue as you were.

It's safe to go back into the water.

[Archive]

Posted By: davidcycleback

Backing up Richard, I read the original suit and it was over condition not the authenticity of the autographs. I didn't know why PSA/DNA was named in the suit (beyond legal formality), as they didn't grade the lot but offered the opinion on the autographs authenticity. Beyond that I had no opinion on the validity of the suit, as I wasn't knowledgeable about the extent of condition problems.

I know of cases where Mastro has agreed they made a catalog description error and politely allowed return/refund. So it is not a case where Mastro has a track record of never giving refund no matter what the complaint.

[Archive]

Posted By: JimB

According to a recent e-mail from Doug Allen (presumably sent in mass), he was awarded $608.85, not $6,000+.
JimB

[Archive]

Posted By: barrysloate

I just got the email too. Daniels was assessed two fines amounting to $3000, so including attorney fees he is out probably about what he paid for the lot. What a fiasco!

[Archive]

Posted By: Steve Murray

"Dear Customer:


As a firm, we have always preferred to handle disputes with professionalism and discretion, even in the infrequent occasion that it is necessary to resolve them in court. Recently, we had what became a very public dispute with a former customer, autograph dealer Bill Daniels. Due to the public nature of this dispute, a number of you have asked about the legitimacy of his claims. Last week, the Honorable Matthew C. Kincaid from the Boone (Indiana) Superior Court issued a 46-page ruling. We thought it appropriate to communicate his findings, and resolution of this dispute, to our customers. Following is a synopsis of the judgment that the Court issued.


The Court found that Daniels’ statements that Mastro Auctions defrauded him, and conspired with PSA/DNA to do so, were defamatory. The Court also found that Daniels “affirmatively sought republication of defamatory statements in national media outlets such as Barron’s and New York Daily News.� In particular, the Court characterized Daniels’ conduct as “picayune, foolish, errant, resultant from a lack of understanding of his rights to publicly declare his complaints outside of a judicial proceeding and overzealous.� As a result, the court held Daniels liable for damages to Mastro Auctions’ reputation in the amount of $1,000.


The Court found that the proposed experts Daniels produced at trial – Richard Simon and Stephen Koschal (whom Daniels had testify that Mastro Auctions sold him forgeries) – were not qualified to render expert opinions. In particular, the Court found that Simon had undergone a “wholesale demolition in his deposition� and that Koschal was “not qualified to render an opinion on anything having to do with autographs.� Simon and Koschal were offered as witnesses after five other proposed experts “all refused to testify on [Daniels’] behalf.�


The Court sanctioned Daniels for his conduct of the litigation during discovery, specifically citing Daniels’ failure to disclose relevant documents timely and to “represent his claimed harm accurately.� As a result, Daniels was fined $2,000.


The Court found that Daniels presented “no evidence� of fraud and that Daniels’ claims that Mastro Auctions defrauded him—and conspired with PSA/DNA to do so--were “false.� The Court entered judgment against Daniels on those claims and awarded no damages.


Daniels was given $608.85 because a small portion of the 2,012 photos Daniels purchased in December 2004 were not as described in the lot description. Mastro Auctions offered to replace those photos shortly after the auction, but Daniels refused.


The only negative of the judgment was that an additional award to Daniels was made on the basis that our catalog stated “LOA from James Spence & Steve Grad / PSA DNA,� but Steve Grad was the only one to physically sign the LOA on behalf of the PSA/DNA team. Our attorneys will ask the judge to reconsider that portion of the ruling.


Overall, Mastro Auctions is very happy with this result. Although it is unfortunate that this dispute had to go all the way to trial, we are pleased that the judge sent what we believe to be a resounding message against Mr. Daniels’ exaggerated claims and conduct of his lawsuit.


Sincerely,
Doug Allen
President
Mastro Auctions"

[Archive]

Posted By: Tim Newcomb

Note the following sentence from Doug Allen's email note:

"The only negative of the judgment was that an additional award to Daniels was made on the basis that our catalog stated LOA from James Spence & Steve Grad / PSA DNA, but Steve Grad was the only one to physically sign the LOA on behalf of the PSA/DNA team."

It's easy to miss mention of this "additional award" because it's worded rather vaguely, but without more specific info from Mastro, we have to assume that is what the $9K figure in O'Keeffe's article refers to. Mastro makes this other award sound like a mere technicality, which it very well may have been.

Edited for clarity.

[Archive]

Posted By: Jeff Lichtman

What surprises me the most is that one can find lawyers to prosecute a 20K claim all the way to trial.

[Archive]

Posted By: barrysloate

Don't the lawyers get more than that?

[Archive]

Posted By: Jeff Lichtman

Depends. Often the plaintiff's attorney will take the case on contingency, other times they will bill by the hour. But rarely do you find a case in which the plaintiff will pay his lawyers more than the amount in dispute -- after all, what would be the point? But as someone said here previously, occasionally a litigant feels the need to make a point with the litigation and money is not a factor. Presumably, that is what occurred here.

[Archive]

Posted By: barrysloate

Don't litigants often overestimate what their case is worth, and expecting a big payday run up a large tab along the way?

[Archive]

Posted By: Jeff Lichtman

Well, sure. But in a case in which you've only paid out 20K you're going to have to prove some pretty bad conduct to get more than your money back because, after all, what are the damages other than your 20K you are out? I find that in cases like this often the lawyers are either idiots or dishonest and will tell their clients that the case is worth much more than it is. Litigants obviously trust their lawyers and are unpleasantly surprised to find out that the lawyers were full of it. I'm not suggesting that is what occurred here but that sort of thing happens all the time. Look, there is a reason people generally dislike attorneys; it's not by accident.

[Archive]

Posted By: davidcycleback

Barry and Jeff, understand that this is Indiana. There's not much to do. Doug told the judge they shouldn't have to pay any money, as having to spend a day in Indiana should be considered punishment enough. At which the judge responded, "Mr Allen, realize it is within the powers of this court to compel you to attend a University of Indiana football game-- all four quarters."

[Archive]

Posted By: Cobby33

There are plenty of plaintiffs who will pay more in attorney's fees than their net recovery- simply out of "principle" or to prove a point. Other times, their attorneys give their clients false hopes of recovery.

[Archive]

Posted By: sean

This was interesting to see the outcome. I actually talked to bill on the phone a few months ago. I remember he told me what he was suing for but I dont remember the amount only that it was A LOT. I have heard seedy stories about mastro but nothing that has been substantiated so I dont know what to believe.

[Archive]

Posted By: DJ

...it's a rather sad day in the autograph business IMO as the following statement:

"Richard Simon and Stephen Koschal (whom Daniels had testify that Mastro Auctions sold him forgeries) – were not qualified to render expert opinions" makes it official that these two men are in the same level as some of those scumbag authenticators that pass anything.

That in a court of law, Richard Simon's opinion is as good as theirs, while the hobby courtroom (a fictional court room where educated consumers buy their items), this could not be farther from the truth.

It simply gives credibility to these bottom feeding authenticators who basically exist to nod when the legitimate authenticators fail something. They are now officially on the same playing field as "the big boys" in the court of law.

So if you ask 100 experts in the business about "AUTOGRAPH A" that was authenticated by the "bottom feeder, blood sucking Authenticating" firm and they all say it's bad, that won't matter?

I still don't understand why Mastro didn't simply settle with Daniels to make things right. EVERY other auction house would have figured someway to please the buyer.

Plus, Richard, why were you called on to authenticate these items if they were current sports athletes and an area you were not all that educated on?

DJ

[Archive]

Posted By: Mike

1. Mastro had to defend this claim in Bill Daniels Jurisdiction.(Indiana)
2. Who were the attorneys in this matter? Mastro atty did nice job against Daniel's experts. Who is he and possibly Daniel's atty is a collector who got paid with trade.

As a collector and atty, in the past, I have been asked to help fellow collectors.

[Archive]

Posted By: P Spaeth

Richard said earlier he was NOT called upon to authenticate any autographs. Seems inconsistent with Doug's letter?

To quote what Richard posted this morning.


Just to clarify - I was one (of two people) hired by Bill Daniels to examine the lot.
I was asked to render an opinion on the condition of the lot and the accuracy of the description in the Mastro catalog. I did not, nor was I asked to, render any opinions regarding authenticity of any autographs in the lot.
The autographs, in this lot, were of modern day players and everyone who knows me knows that I only render opinions of vintage items.

[Archive]

Posted By: P Spaeth

Jeff perhaps Daniels sued under some unfair and deceptive trade practice act that provides for recovery of attorneys' fees, that probably explains his calculus or at least that of his lawyers.

[Archive]

Posted By: Richard Simon

It appears that there is some lack of clarity about what I said in my earlier posts.

I was one (of two people) hired by Bill Daniels to examine the lot.
I was asked to render an opinion on the condition of the lot and the accuracy of the description in the Mastro catalog. I did NOT, nor was I asked to, render any opinions regarding authenticity of any autographs in the lot.
I have been in this business for 22 years, I have worked for several auction houses and I have cataloged my own material for 22 years.
DJ - This is why Mr. Daniels decided to retain me. Authenticating autographs had nothing to do with my testimony in this case. I have testified, as a prosecution witness, in a NY State case against a forger of sports autographs, in the case of Daniel Dubcek.
Mr. Daniels and his attorney were quite pleased with my testimony, but obviously the judge was not. He felt that since I had made two different statements about industry standards for grading photographs, I had not worked for a grading service, and had not taken any educational courses about grading (has anyone ever heard of one?), and had not previously testified in court about grading, that I was not qualified to testify in this matter. These statements are from the judge in his ruling.
--


I refuse to engage in a battle of wits with an unarmed opponent.
Unknown author
--
We made a promise. We swore we'd always remember.
No retreat baby, no surrender.
The Boss

[Archive]

Posted By: P Spaeth

I would prefer to read the actual opinion (unfortunately it can be very difficult to get copies of state court opinions online) before reaching any conclusions about what the Judge may have said about Mr. Simon or his qualifications.

[Archive]

Posted By: DJ

There is only problem Rich, the e-mail (that was probably sent out to tens of thousands) makes it look like you were involved in the authenticating process. If it was only condition he was after, he could have asked anyone in the world. Notary Public. Member of the Spice Girls. Anyone. Hey, I have faith in ye', but that e-mail certainly implies otherwise.

DJ

[Archive]

Posted By: davidcycleback

Scary Spice maybe but I don't think Baby Spice is court approved.

Seriously, I assume Richard has background in autograph appraisal, and I could see how he would be asked to testify concerning damage and value. The case primarily revolved around the valuation of the autograph lot, so it would be common procedure for the plaintiff to introduce an independent expert to testify simply about valuation topics. Independent experts, even Nobel Laureates, are often asked to testify briefly about very narrow subjects.