Memory Lane sold cards they didn't have per SCD

rjackson44 · #1 05-08-2024, 12:54 PM

Quote:

Originally Posted by Rhotchkiss

I do not have firsthand knowledge that ML received legal advice specifically to keep the auction running. Nor do I have firsthand knowledge of their insurance policy or what the insurance company may or may not have said. I have been told that ML has spoken with counsel, has spoken with their insurance carrier (who apparently ML believes will cover at least some of this), and is listening to the police who are overseeing an open and ongoing investigation. This is exactly how I think a rational person/business would proceed under these circumstances.

Here is what I would do... The minute I learned that my customers' property was stolen (the consignors are the true customer of an AH), I would have called the police. I also would have called my lawyer, and, given the size of the potential loss, I would have called my insurance carrier. Considering all the moving parts here, I would have taken strongly the advice of those advising me, including the advice, if any, of potential stakeholders (i.e., this is what an insurance company would become if they pay out a claim). At the same time, I would have done damage control by reaching out to all consignors and affected bidders, giving them whatever assurances I could and giving them as much facts as I was able to give considering the ongoing investigation.

Is there a perfect answer here? Hell no. Its a shit show -- $$ Millions of cards were stolen from a box delivered to, and accepted by, a Best Western Plus. These cards were part of an auction that had already started. Plus, from what I have been told, the police were optimistic they could find the thief and the cards before the auction ended, or even still today. So what does one do in this situation? Personally, I would listen to and act on the advice of others, most specifically my counsel (who I would trust over Adam W's message board legal advice/conclusions), and that is what I believe (but do not know) ML has done and is doing.

Its very easy to sit here, after the fact, judging from the safety of one's keyboard, the actions taken and difficult decisions made by the auction house under these circumstances. Time will tell how this all shakes out, but using simple logic, I think most would conclude that any rational business would solicit and act on the advice of counsel, listen the police investigating the crime, and seek guidance from their insurance provider. It follows, letting the auction play out must have been done for a purpose and, at least somewhat, at the recommendation of others. Perhaps it was done under bad advice, or because they thought they would have the cards, or for insurance purposes, or some other reason(s). But they made the business decision to continue the auction, and I bet dollars to dimes that decision was made after many conversations and hours of consultation.

What I think is most interesting/telling is that Powell (a litigator) and Darryl, both of whom won cards that were stolen, and me, one of the larger consignors to the auctions whose cards were stolen -- so both sides of the coin (bidders and consignors) -- dont take issue with how ML has handled this thus far, Nor does Scott, who runs an auction house, nor Howard, who is a dealer, nor Jeff nor Peter, both litigators and very knowledgeable and vocal in this industry/hobby.

Opinions are like assholes, and I have (maybe am) one just like the rest of us. And we are all entitled to them. So that's mine.

Ryan Hotchkiss

hope it works out for ryan i have a lot of resdpect for this gentleman .whole issue stinks

BeanTown · #2 05-08-2024, 01:21 PM

Couple things that haven’t been mentioned yet. This could be the second largest theft behind the Met Museum theft, which took place over decades.

Very sad for Memory Lane, and all customers involved both as buyers and sellers.

If FedEx was used to ship the cards, what service did ML use? Overnight and 2 day air service only uses FEDEx employees and are ten times more secure. Ground service is outsourced and not all FEDEx employees are involved which makes a lot more riskier. Yes, I know the package was delivered to the hotel, but my point here is did ML take reasonable responsibility in shipping the box worth 2 million dollars and maybe there could be a percentage of fault going on here. When I read the packaged arrived early, how come it wasn’t timed to be delivered on the same day arrival by ML employees?

Another example would be if ML shipped the package directly to the show venue, a restaurant or even a friends house, would that change the scenario for responsibility?

I have no issue with the business decision ML made to run the auction and I’m pretty sure the insurance company, law enforcement and counsel all rendered their opinions and ML made the final call on how to proceed.

I would like to see the list of all items that were stolen by the scumbag perp(s) as items could start showing up on eBay, pawn shops, and even newspapers (if folks still sell cards in the want ads). I hope all the smaller card shops in the area are on high alert for items that were stolen.

I’m curious as to how the bidding played out, on all the ghost lots since insurance hopefully was involved. How many folks actually knew what was going on, or knew they were ghost lots.

As a buyer, many times I sell or consign items to pay for another auction winnings. So, this does effect folks as mentioned earlier about tapping 401ks or something along those lines.

Lastly, if insurance is paid out and the perps are found and court is done. The insurance company owns the cards, and they would do what with them? Offer back to ML for what the payout was? Use another auction company to recoup what they could from the payout? If this was the case… I hope we would all be posted as to when and where the auction was. I know many times I see some treasures found from the US marshals and other agencies and I wished I would have known about the sale.

I’ve read many great posts on this thread, it’s all speculation as we likely don’t know half the facts. As of now, I think Memory Lane, consigners, and buyers are all victims and I hope ML was prepared for the unthinkable to happen. Hopefully the hobby will be able to recoup everything stolen, and my hunch is over time that will occur. These cards do leave finger prints, as each one is unique.

Yoda · #3 05-08-2024, 01:55 PM

Just a couple of insurance points; first, as this appears to be an inside job, who at BW signed for the package, where was the package stored after delivery and who, if any, was told that something important looking was now being held, second, if there are no visible signs of forcible entry or break-in, then any employees involved with the package would become immediate suspects. I assume the police have investigated all this already.
Most transit policies are covered by an inland marine floater cover, normally on an all risk basis, including theft. I somehow doubt that ML has high enough limits for cover, unless they arranged a higher limit for this dumb shipment.
If the insurance company pays and the cards are recovered, then they take possession of them. That is a standard clause in virtually all property policies.
If the cards are not recovered then the carrier will subrogate against BW due to their negligence. The small statutory innkeepers liability limit will not protect BW in this case.
It will be fascinating to see how it all plays out. Of course, I have to wonder if ML can survive all of this; a bad hit to their rep, financial considerations and disgusted consignors, some of whom may take judicial action against ML.

Exhibitman · #4 05-08-2024, 02:02 PM

Quote:

Originally Posted by Yoda

If the cards are not recovered then the carrier will subrogate against BW due to their negligence. The small statutory innkeepers liability limit will not protect BW in this case.

Explain how you come to this conclusion, please. My understanding is that subrogees are subject to all the same defenses as their subrogors. If there is an innkeepers' law that protects the hotel against a theft claim from the guest (subrogor), it also protects against the insurer (subrogee) who assumes the claim under an insurance contract.

Peter_Spaeth · #5 05-08-2024, 02:12 PM

2011 Ohio Revised Code
Title [47] XLVII OCCUPATIONS - PROFESSIONS
Chapter 4721: INNKEEPERS
4721.03 Limit of liability as to certain property.

Universal Citation: OH Rev Code � 4721.03
The liability of an innkeeper whether person, partnership, or corporation, for loss of or injury to personal property placed in his care by his guests other than that described in sections 4721.01 and 4721.02 of the Revised Code, shall be that of a depositary for hire. Liability shall not exceed one hundred fifty dollars for each trunk and its contents, fifty dollars for each valise and its contents, and ten dollars for each box, bundle, or package, and contents, so placed in his care, unless he has consented in writing with such guest to assume a greater liability.

Lorewalker · #6 05-08-2024, 02:16 PM

Quote:

Originally Posted by Peter_Spaeth

2011 Ohio Revised Code
Title [47] XLVII OCCUPATIONS - PROFESSIONS
Chapter 4721: INNKEEPERS
4721.03 Limit of liability as to certain property.

Universal Citation: OH Rev Code � 4721.03
The liability of an innkeeper whether person, partnership, or corporation, for loss of or injury to personal property placed in his care by his guests other than that described in sections 4721.01 and 4721.02 of the Revised Code, shall be that of a depositary for hire. Liability shall not exceed one hundred fifty dollars for each trunk and its contents, fifty dollars for each valise and its contents, and ten dollars for each box, bundle, or package, and contents, so placed in his care, unless he has consented in writing with such guest to assume a greater liability.

I am no data scientist or nothing but if I do the math on that one...hang on a sec...Well anyway that is not much coverage but every dollar counts.

Based on the info that we have, this really sounds like liability to the consignors is with ML, the company, and not anyone else.

Exhibitman · #7 05-08-2024, 02:16 PM

Unless there is a baseball card exception or a written agreement between ML and BW to take on a $2mm liability, I am guessing that the hotel owners are not losing sleep over the possibility of being sued. Holding on to their wallets because they have a damn thief in the house, but still sleeping.

Oh, and I think it has gotten a bit lost in all of this, so let's say it again: whoever stole this stuff should be tossed in the can and forced to sort 1989 Donruss sets until he, she or they go blind.

steve B · #8 05-09-2024, 08:02 AM

Quote:

Originally Posted by Peter_Spaeth

2011 Ohio Revised Code
Title [47] XLVII OCCUPATIONS - PROFESSIONS
Chapter 4721: INNKEEPERS
4721.03 Limit of liability as to certain property.

Universal Citation: OH Rev Code � 4721.03
The liability of an innkeeper whether person, partnership, or corporation, for loss of or injury to personal property placed in his care by his guests other than that described in sections 4721.01 and 4721.02 of the Revised Code, shall be that of a depositary for hire. Liability shall not exceed one hundred fifty dollars for each trunk and its contents, fifty dollars for each valise and its contents, and ten dollars for each box, bundle, or package, and contents, so placed in his care, unless he has consented in writing with such guest to assume a greater liability.

You can tell that one hasn't been updated since the early 1900s.

Yoda · #9 05-08-2024, 02:27 PM

What you say is right, but what I was try to say is that the insurer will subrogate if if can be proven in a court of law that BW was legally negligent by not providing the due diligence necessary in their legal duty to protect guests and their property.
What I wonder, as I keep wandering around this scenario, is if the cards are recovered, after all the legal entanglements are settled, will the cards be returned to the consignors or will ML start a new auction? Maybe I need a new hobby.

Yoda · #10 05-08-2024, 02:33 PM

Inland marine or transit policies always provide coverage not only while in transit but also in storage for a limited period of time, usually 60 days.

Lorewalker · #11 05-08-2024, 02:44 PM

Quote:

Originally Posted by Yoda

Inland marine or transit policies always provide coverage not only while in transit but also in storage for a limited period of time, usually 60 days.

Not familiar with an Inland Marine policies but have seen a transit policy or two and none provided for coverage after the item was signed for. Interesting info however on the Inland Marine coverage that they will cover for up to 60 days after delivery.

Aquarian Sports Cards · #12 05-08-2024, 02:34 PM

Quote:

Originally Posted by Yoda

What you say is right, but what I was try to say is that the insurer will subrogate if if can be proven in a court of law that BW was legally negligent by not providing the due diligence necessary in their legal duty to protect guests and their property.
What I wonder, as I keep wandering around this scenario, is if the cards are recovered, after all the legal entanglements are settled, will the cards be returned to the consignors or will ML start a new auction? Maybe I need a new hobby.

ML has already said that they will basically give winning bidders right of first refusal at their winning price.

parkplace33 · #13 05-08-2024, 02:36 PM

Quote:

Originally Posted by Aquarian Sports Cards

ML has already said that they will basically give winning bidders right of first refusal at their winning price.

I also wonder if ML will remove the "sale" price from the auction of these cards in the future. As of now, they have not.

Lorewalker · #14 05-08-2024, 02:11 PM

Quote:

Originally Posted by Yoda

Most transit policies are covered by an inland marine floater cover, normally on an all risk basis, including theft.

And please explain this. It was not stolen in transit. Item was signed for and delivered. That is not in dispute per the article. Insurer is off the hook under the transit coverage.

Dunno about the rest of what you posted but like every big company in the hobby, this will be forgotten about and ML will be just fine. They are one of the best auction houses.

Aquarian Sports Cards · #15 05-08-2024, 02:15 PM

Quote:

Originally Posted by Lorewalker

And please explain this. It was not stolen in transit. Item was signed for and delivered. That is not in dispute per the article. Insurer is off the hook under the transit coverage.

Dunno about the rest of what you posted but like every big company in the hobby, this will be forgotten about and ML will be just fine. They are one of the best auction houses.

My policy doesn't cover merely "in transit" it basically covers anything that's not at our physical offices.

If I was in a car accident going to a show and the car burned to the tires. If I got distracted at a show and someone opened a showcase and lifted something. If I left something in a hotel room while going out for dinner. These are all scenarios I proposed and made sure were covered by my policy. Basically any time the cards are "off premises."

Now that coverage is a fraction of my total coverage, but I'm small potatoes compared to ML and my off premises coverage is $600k, I can't imagine ML isn't covered for over $2m even off premises.

Peter_Spaeth · #16 05-08-2024, 02:19 PM

Quote:

Originally Posted by Aquarian Sports Cards

My policy doesn't cover merely "in transit" it basically covers anything that's not at our physical offices.

If I was in a car accident going to a show and the car burned to the tires. If I got distracted at a show and someone opened a showcase and lifted something. If I left something in a hotel room while going out for dinner. These are all scenarios I proposed and made sure were covered by my policy. Basically any time the cards are "off premises."

Now that coverage is a fraction of my total coverage, but I'm small potatoes compared to ML and my off premises coverage is $600k, I can't imagine ML isn't covered for over $2m even off premises.

Is it similar to the policy Lorewalker posted?

Aquarian Sports Cards · #17 05-08-2024, 02:22 PM

Quote:

Originally Posted by Peter_Spaeth

Is it similar to the policy Lorewalker posted?

Similar.

Lorewalker · #18 05-08-2024, 02:20 PM

Quote:

Originally Posted by Aquarian Sports Cards

My policy doesn't cover merely "in transit" it basically covers anything that's not at our physical offices.

If I was in a car accident going to a show and the car burned to the tires. If I got distracted at a show and someone opened a showcase and lifted something. If I left something in a hotel room while going out for dinner. These are all scenarios I proposed and made sure were covered by my policy. Basically any time the cards are "off premises."

Now that coverage is a fraction of my total coverage, but I'm small potatoes compared to ML and my off premises coverage is $600k, I can't imagine ML isn't covered for over $2m even off premises.

Right I get that but this box was left with the hotel, who is not part of ML. Your example is not the same. In your example, as the insured, you are in custody/possession or at least assumed responsibility for the valuables. The valuables were off premises but so was a ML representative. Nobody from ML was there for 3 days while the box sat there.

Aquarian Sports Cards · #19 05-08-2024, 02:22 PM

Quote:

Originally Posted by Lorewalker

Right I get that but this box was left with the hotel, who is not part of ML. Your example is not the same. In your example, as the insured, you are in custody/possession or at least assumed responsibility for the valuables. The valuables were off premises but so was a ML representative. Nobody from ML was there for 3 days while the box sat there.

overnight at a show, or in my empty hotel room seem at least somewhat similar.

parkplace33 · #20 05-08-2024, 02:27 PM

I still can't get over the fact that ML sent over $2 million dollars worth of cards to a Best Western and held it there for 3 days before they picked them up.

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