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  • Writer's pictureMike Brandly, Auctioneer

Court cases and one important lesson

… in 2015 the Superior Court of the State of California (Orange County) in a jury trial found that the auctioneer was permitted to treat bidders with different terms. However, in 2020, the West Virginia Supreme Court of Appeals decided bidders must be held to the same registration requirements …

I am possibly more familiar with both these aforementioned cases than any auctioneer on earth. That is because I was hired as the expert witness in both.

  1. I spent nearly two weeks in southern California with a team of esteemed attorneys regarding Village at Redlands Group LP v. Inc. Superior Court of the State of California for the County of Orange, Case No.: 30-2015-00777483-CU-FR-CJC.

  2. I spent several days in conversations with the equally esteemed attorney [original plaintiff] defendant in West Virginia regarding Alex Lyon & Son, Sales Managers & Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020).

One reaction to all this is “We need to have a legal discussion” — to determine which verdict is correct and which one is not. I’m all for that, and obviously, have my views from the inside of these two cases. Yet, what good does a “legal argument of sorts” do for the greater auction community? Rather, is there a very simple take-home here? There is.

Both these cases involved treating bidders to different (disparate) terms and conditions, counter to the advertised requirements. Both these cases resulted in significant lawsuits. Both these cases cost all the plaintiffs and defendants lots of money and time to litigate. So, is there an easy solution? How about we treat all bidders to the same advertised registration policy?

While we submit there is no other rational analysis to consider, there are those proposing discussion is better, the argument is better … but none of that specifically acts to advocate to keep auctioneers out of court. Clearly anyone who is coaxing, suggesting, or recommending auctioneers implement the exact same behaviors which have repeatedly landed other auctioneers in court — should cease and desist — as such advice borders on malpractice.

I’m hardly the only one pointing out the obvious. Kurt Bachman, acclaimed Attorney at Law and Auctioneer — prolific writer and supporter of the National Auctioneers Association — wrote (in part) the following regarding this case:

It highlights the importance of setting clear auction terms and conditions that the auctioneer will follow. Auctioneers must exercise caution and make sure they follow the terms of the auction to avoid liability.

Let me rephrase. Let’s say this auction in California treated all bidders to the same terms and conditions (registration policy) and this auction in West Virginia treated all bidders to the same terms and conditions (registration policy.) I would offer I — nor you — would know anything about either of these auctions as there would have been no litigation. Equally, you wouldn’t be reading this as I would have no reason to write about this non-existent litigation.

This same principle applies otherwise:

  1. There have been at least four material cases (litigation) involving reopening the bid after, “Sold!” (1930, 1972, 1985, 2009) but are there any cases where the complaint concerns not reopening the bid?

  2. There have been at least eight material cases (litigation) involving bidders not understanding the terms and conditions (1952, 1976, 1983, 1991, 2001, 2005, 2011, 2013) but are there any cases where the complaint was about understanding the terms and conditions?

  3. There continue to be lawsuits all across the United States as a result of disregarding the 254 words of the UCC § 2-328 but when has a lawsuit been initiated because an auctioneer followed the UCC § 2-328 without reopening the bid?

  4. As we’ve noted above, there have been two rather substantial cases involving inconsistent (capricious) bidder registration policies (2015, 2020) but are there any cases where the complaint was the registration policy was consistent?

For that matter, I wonder how many lawsuits there have been regarding attending an auction and not contracting a virus, or how many lawsuits there have been by people who sue because they have been offered a pre-auction inspection?

Is it that difficult to say, “Sold!” and mean it, write understandable terms and conditions, otherwise follow the UCC § 2-328, maintain a consistent registration policy, implement precautions for dangerous health risks, and offer pre-auction inspection? I can assure you it is not difficult at all, and none of these prudent policies — if managed properly — jeopardize (and rather safeguard) the welfare of the client.

As we’ve said for years — and bears repeating — this form of reckless [legal] advice ignores the substantial risks of litigation evidenced by case after case after case where auctioneers have been sued for like behavior, and glorifies bad policies under the misdirection that a “court-win” is likely when any court decision is very costly, extremely stressful and anything but guaranteed.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.

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