Alteration vs. Conservation Defined

[benjulmag]

It's an interesting issue. Continuing with the same example, suppose I waited 15 years before submitting the card for forensic testing, during which time the spread between an 8 Cobb and an "A" Cobb increased from, say, $20k to $125k. Could PSA argue I had a duty to undertake the testing years earlier (assuming the forensic testing method was commercially available during the entire 15-year period) and accordingly their exposure should be limited to $20k? By this line of reasoning, could they argue the statute of limitations has expired such that I am barred from collecting damages altogether?

[Peter_Spaeth]

Originally Posted by benjulmag

It's an interesting issue. Continuing with the same example, suppose I waited 15 years before submitting the card for forensic testing, during which time the spread between an 8 Cobb and an "A" Cobb increased from, say, $20k to $125k. Could PSA argue I had a duty to undertake the testing years earlier (assuming the forensic testing method was commercially was available during the entire 15-year period) and accordingly their exposure should be limited to $20k. By this line of reasoning, could they argue the statute of limitations has expired such that I am barred from collecting damages altogether?

They really should have promised to reimburse for out of pocket cost, not current market value. The buyer gets a huge windfall this way in a rising market. As to your question, who knows, it would depend on what the cause of action is and what triggers the statute of limitations I guess. I'd have to think about that. But as it's likely to run from when you did or could have discovered your claim in the exercise of reasonable diligence, you likely would be out.

[irv]

Originally Posted by benjulmag

It's an interesting issue. Continuing with the same example, suppose I waited 15 years before submitting the card for forensic testing, during which time the spread between an 8 Cobb and an "A" Cobb increased from, say, $20k to $125k. Could PSA argue I had a duty to undertake the testing years earlier (assuming the forensic testing method was commercially was available during the entire 15-year period) and accordingly their exposure should be limited to $20k. By this line of reasoning, could they argue the statute of limitations has expired such that I am barred from collecting damages altogether?

Originally Posted by Peter_Spaeth

They really should have promised to reimburse for out of pocket cost, not current market value. The buyer gets a huge windfall this way in a rising market. As to your question, who knows, it would depend on what the cause of action is and what triggers the statute of limitations I guess. I'd have to think about that. But as it's likely to run from when you did or could have discovered your claim in the exercise of reasonable diligence, you likely would be out.

Is a statute of limitations something that a seller can declare or is it the law that dictates what that period of time is?

[barrysloate]

In Corey's example, what if PSA refused to agree with the forensic determination? What if they responded that they've reviewed the card several times and that in their opinion their grade of an 8 was completely justified. After all, it's an opinion, not a fact. It might be really hard to prove that they got it wrong.

[Peter_Spaeth]

Originally Posted by barrysloate

In Corey's example, what if PSA refused to agree with the forensic determination? What if they responded that they've reviewed the card several times and that in their opinion their grade of an 8 was completely justified. After all, it's an opinion, not a fact. It might be really hard to prove that they got it wrong.

That's the problem. Think David Hall and Wagner. Then you litigate, I guess.

[benjulmag]

Originally Posted by Peter_Spaeth

That's the problem. Think David Hall and Wagner. Then you litigate, I guess.

That one IMO would be a turkey shoot. If it is not enough the person who trimmed the card admitted such, which contributed to him being sentenced to prison, you have (i) existent before and after photos of the card, and (ii) physical characteristics of the borders than when enlarged would be substantially identical to countless cards slabbed "A".

[Peter_Spaeth]

Originally Posted by benjulmag

That one would be a turkey shoot. If it is not enough the person who trimmed the card admitted such, which contributed to him being sentenced to prison, you have (i) existent before and after photos of the card, and (ii) physical characteristics of the borders than when enlarged would be substantially identical to countless cards slabbed "A".

What I don't get is that it already was sheet cut, right? It was never issued in a pack. So even if Mastro didn't trim it it's still an AUTH? PS I've seen those Alan Ray photos I thought they were pretty grainy but maybe they can be enhanced, but again, if it's sheet cut already..

[tschock]

"If PSA, in fact, concludes that the card in question no longer merits the PSA grade assigned or fails PSA’s authenticity standards, PSA will either:... "

Isn't this really their 'out' here? The card could easily be deemed authentic (or not), but PSA still could 'conclude' it 'merits' the grade given, right?

[benjulmag]

Originally Posted by barrysloate

In Corey's example, what if PSA refused to agree with the forensic determination? What if they responded that they've reviewed the card several times and that in their opinion their grade of an 8 was completely justified. After all, it's an opinion, not a fact. It might be really hard to prove that they got it wrong.

Good question. However...certain kinds of forensic testing can be legally conclusive (e.g., color was added by a substance not commercially available at the time the issue came out).

[benjulmag]

Originally Posted by Peter_Spaeth

They really should have promised to reimburse for out of pocket cost, not current market value. The buyer gets a huge windfall this way in a rising market. As to your question, who knows, it would depend on what the cause of action is and what triggers the statute of limitations I guess. I'd have to think about that. But as it's likely to run from when you did or could have discovered your claim in the exercise of reasonable diligence, you likely would be out.

I agree with your point about exercise of reasonable diligence, unless I could fashion an argument that it was only recently that I was reasonably put on notice about the likelihood of alteration. I would think the action would be breach of contract, though there could be a lack of privity problem if I was not the person who submitted the card for grading. If I bought it from an auction house, they probably had a disclaimer that they are not responsible for the accuracy of graded cards. So they would be protected. However, they probably would have a duty to reveal the consignor, and that would be the person I would have to go after. That person in turn would assign me his right to sue the grading company (assuming he was the person who had the card graded). If he in turn bought it from someone else and it was that other person who had the card graded, then he would have to go after that person. This potentially could go on down the chain until I reached the person who had the card graded.

What a mess.

[Peter_Spaeth]

Originally Posted by benjulmag

I agree with your point about exercise of reasonable diligence, unless I could fashion an argument that it was only recently that I was reasonably put on notice about the likelihood of alteration. I would think the action would be breach of contract, though there could be a lack of privity problem if I was not the person who submitted the card for grading. If I bought it from an auction house, they probably had a disclaimer that they are not responsible for the accuracy of graded cards. So they would be protected. However, they probably would have a duty to reveal the consignor, and that would be the person I would have to go after. That person in turn would assign me his right to sue the grading company (assuming he was the person who had the card graded). If he in turn bought it from someone else and it was that other person who had the card graded, then he would have to go after that person. This potentially could go on down the chain until I reached the person who had the card graded.

What a mess.

It's probably like claiming on a manufacturer's warranty I would think off the top of my head.

[benjulmag]

Originally Posted by Peter_Spaeth

It's probably like claiming on a manufacturer's warranty I would think off the top of my head.

Makes sense.

[Peter_Spaeth]

Originally Posted by benjulmag

Makes sense.

Recall though that I am not a "well-reasoned lawyer."

[benjulmag]

Originally Posted by Peter_Spaeth

Recall though that I am not a "well-reasoned lawyer."

You're from Boston. I'm a Yankees fan. Case closed.

[Kenny Cole]

Originally Posted by benjulmag

I agree with your point about exercise of reasonable diligence, unless I could fashion an argument that it was only recently that I was reasonably put on notice about the likelihood of alteration. I would think the action would be breach of contract, though there could be a lack of privity problem if I was not the person who submitted the card for grading. If I bought it from an auction house, they probably had a disclaimer that they are not responsible for the accuracy of graded cards. So they would be protected. However, they probably would have a duty to reveal the consignor, and that would be the person I would have to go after. That person in turn would assign me his right to sue the grading company (assuming he was the person who had the card graded). If he in turn bought it from someone else and it was that other person who had the card graded, then he would have to go after that person. This potentially could go on down the chain until I reached the person who had the card graded.

What a mess.

I wonder if a fraud/deceit claim could possibly be asserted. At least here, the elements are:

1. That [Defendant] made a material representation (that the card met the requirements necessary to receive the assigned grade);

2. That it was false (that the grade is inaccurate due to alterations);

3. That [Defendant] made it when [he/she] knew it was false, or made it as a positive assertion recklessly, without any knowledge of its truth (that during the grading process, the grader should have or did have information indicating that the assigned grade was incorrect);

4. That [Defendant] made it with the intention that it should be acted upon by [Plaintiff] (by far the most problematic element IMO, although intent can sometimes be inferred from the circumstances surrounding the transaction);

5. That [Plaintiff] acted in reliance upon it (they purchased the card for the going price in reliance upon the assigned grade); and

6. That [Plaintiff] thereby suffered injury (because the condition of the card was not that portrayed by the assigned grade, the purchaser lost money).

That might possibly work against the grader, assuming you can satisfy the discovery rule for statute of limitations purposes. It would admittedly be difficult. At least here, the discovery rule doesn't generally apply to contract actions so you would likely be out of luck on a contract claim after the statute ran.

A fraud/deceit claim is probably not great against a buyer who then resells it, since the knowing/reckless element will almost never be there. I would guess that's more a breach of contract/warranty issue, with that seller then having a potential indemnity claim against whoever he/she/it got the card from back up the line, subject to any applicable SOL. Yes, what a mess.

[benjulmag]

Originally Posted by Kenny Cole

I wonder if a fraud/deceit claim could possibly be asserted. At least here, the elements are:

1. That [Defendant] made a material representation (that the card met the requirements necessary to receive the assigned grade);

2. That it was false (that the grade is inaccurate due to alterations);

3. That [Defendant] made it when [he/she] knew it was false, or made it as a positive assertion recklessly, without any knowledge of its truth (that during the grading process, the grader should have or did have information indicating that the assigned grade was incorrect);

4. That [Defendant] made it with the intention that it should be acted upon by [Plaintiff] (by far the most problematic element IMO, although intent can sometimes be inferred from the circumstances surrounding the transaction);

5. That [Plaintiff] acted in reliance upon it (they purchased the card for the going price in reliance upon the assigned grade); and

6. That [Plaintiff] thereby suffered injury (because the condition of the card was not that portrayed by the assigned grade, the purchaser lost money).

That might possibly work against the grader, assuming you can satisfy the discovery rule for statute of limitations purposes. It would admittedly be difficult. At least here, the discovery rule doesn't generally apply to contract actions so you would likely be out of luck on a contract claim after the statute ran.

A fraud/deceit claim is probably not great against a buyer who then resells it, since the knowing/reckless element will almost never be there. I would guess that's more a breach of contract/warranty issue, with that seller then having a potential indemnity claim against whoever he/she/it got the card from back up the line, subject to any applicable SOL. Yes, what a mess.

Interesting argument. I would think point 3 would be the tough one to establish, all the more so because since this was the first card PSA purportedly slabbed, it would probably be easier for them to argue that at that stage of card grading graders reasonably did not have the expertise to catch things that now-a-day they do. Adding to that problem is that for actions in fraud, in certain jurisdictions the legal standard is clear and convincing evidence, a higher standard than preponderance of the evidence (at least to the extent a jury would care about the distinction).

In the matter at hand, it has been alleged the person who actually graded the card knew it was trimmed and expressed such. Whether that is true and if it is can be revealed during discovery, that is another question. If though that can be established, then the action for fraud would seem to be viable -- except though for the SOL problem, as the allegations the card was trimmed and PSA always knew that have been out there for a long time.

[Kenny Cole]

I don't think most juries understand or even care about the distinction between preponderance of the evidence and clear and convincing evidence. I've tried some cases with two or three discrete claims (breach of contract, bad faith and fraud), lost some or all of the claims which only required a preponderance, yet still won the fraud claim under a clear and convincing standard. Go figure.

[Peter_Spaeth]

It doesn't feel like a fraud claim to me. It feels more like a warranty claim. I think it would be impossible to prove that PSA graded the Wagner card or any other card intending to harm some unidentified buyer somewhere down the line. The much more straightforward claim is that PSA made an express warranty that its grade was correct, intending subsequent buyers to rely on it if that's even important, and if you can prove it wasn't an accurate grade, that seems a breach of that warranty.

[chalupacollects]

As for statue of limitations applying to PSA's warranty, they do not have a time limit set in their warranty for such claims. So in a court of law would statute of limitations even be a defense?