Would this court case set a precedance for comics as well?

[Forbush-Man]

If nothing else, this just tells me if you have an extremely pricey item ( say, $5,000.00 up) the seller & buyer would be wise to come to an arangement where the overall sale of the item depends on the sucessful submission to a third parrty grading system (non-restored label), or at least the offer to split the cost and do so. If the buyer were to decline this offer, then "buyer beware" takes over.

[Jeffreykli]

It sounds like this case might have snuck through on the basis of evidence alone and been decided by what the judge believed to be right...

 

The opinion stated "Strek was represented by counsel but did not appear or offer any evidence." So, I'm not sure what kind of defense he put on, but clearly, it wasn't very good. I don't understand why he'd pay for a minimal defense, but then pursue appeals up to the Nebraska Supreme Court.

 

So, a couple of observations about why this may not apply to comic books:

 

1. No lifetime guarantee against restoration.

2. Restored comics still have value, just not as much as unrestored.

 

FWIW, the card show is a very large, 3 day show in San Francisco, similar to Wondercon, so it wasn't a local con.

[tth2]

It would suck if the dealer didn't even do the work and didn't know about it.

 

Doesn't matter. If he's a dealer, he's deemed to be an expert in what he's selling and therefore responsible for doing proper due diligence.

 

I think this is a great case and sets a good precedent, to the extent one doesn't already exist for restored/altered collectibles in other jurisdictions.

[tth2]

After briefly reading the opinion, I don't think that this case will be applied to comic book dealers in Nebraska. The trial court relied on the testimony of Steve Orand, apparently as an expert witness.

 

Orand testified that "the standard for sports memorabilia was a lifetime guarantee and that a reputable collector would stand behind what he sold and refund the money if an item were fake or had been altered."

 

Comic book dealers don't give a lifetime warranty against restoration (they might with fakes), so the dealer wouldn't be liable beyond a reaonable period of time.

 

I don't think comic dealers get off that easily. I seriously doubt whether card or sports memorabilia dealers give an express lifetime guarantee either, they probably use the same 5-day refund or similar language for their sales that comic dealers do. It is not a hobby that is renowned for either high standards of ethics or generosity of dealers.

 

I don't think the fact that most comic dealers set a time limit on refunds/returns would be fatal at all for a restoration claim. I think the provisions of the UCC in most states would allow a plaintiff to blow through that part of the dealer's defense in no time flat.

[clobberintime]

Again as the other site lawyers said, this was a Nebraska case and they probably have a case history for dealing with fraud such as this so if you shepardize the case or search Lexis, I bet the decision was based on prior precedent in fraud cases. The problem with comparing this to comics purchased on ebay is that you have buyers and sellers in different states so the forum could likely be the federal district court where the buyer resides. Or the buyer could bring suit in his state's courts. I would prefer federal court as cases move faster there and in my opinion, federal judges are much better. But generally speaking, the case would turn on the state's legal precedents regarding general fraud.

[Foolkiller]

federal judges are certainly much smarter, but it depends on what you measure by what makes a "good judge". Some lawyers just want a judge who will be advantageous to them, and for that, state court is many times a more favorable jurisdiction.

 

but if you want a bright, hardworking and intellectually honest judge, you're more likely to find them on the federal bench.

[shadroch]

Sounds like the seller didn't take the first court all that serious and then couldn't appeal the judges ruling,since it wasn't clearly in error.

It also appears that the card was considered as fake,rather than restored.If you sold a fake Action #1 as real,it might be very different than selling a restored one.

I'm also curious how a dated sales contract giving an exact refund policy and how long the buyer had to return the card might have affected the case.

Most sellers state in their contracts that disputes must be settled in their home states under the rules of their state,don't they?

[tth2]

It also appears that the card was considered as fake,rather than restored.If you sold a fake Action #1 as real,it might be very different than selling a restored one.

 

I don't think this is why the court ruled the way it did. Put another way, if you bought an undisclosed restored Action #1, and then were able to show the court the difference in value between an unrestored and restored copy of the same grade, I think that would be sufficient evidence that the goods are not what you believed you were buying. I don't think you'd have to prove that the restoration somehow made the book fake.

 

I'm also curious how a dated sales contract giving an exact refund policy and how long the buyer had to return the card might have affected the case.

 

Again, in my opinion, even if the contract stated in 18 point bold type that the refund was only good for some specified period of time, a good plaintiffs lawyer would get that part of the defense dismissed pretty quickly. The reason is that the underlying premise for enforceability of the refund policy is that the refund period gives the buyer sufficient time to inspect the purchased good and either identify an obvious defect or notice something that should reasonably have caused him to suspect there might be a defect and thus investigate further. Here, there was nothing that should reasonably have triggered the buyer's suspicion. In the absence of such indicators, he would not need to consult with an expert because by definition he should be able to rely on the dealer as an expert that the book was not restored.

 

Most sellers state in their contracts that disputes must be settled in their home states under the rules of their state,don't they?

 

Assuming there was a sales contract, then it might contain a so-called jurisdiction clause. If no sales contract or no jurisdiction clause, then normal rules for determining jurisdiction, which I believe FFB or one of the other lawyers on these boards has already covered, would apply.

[Foolkiller]

Also, forum selection clauses aren't always binding. Most are written into contracts, but many times in law suits involving civilians (and not corporations or public entities) there's many ways to end run those clauses.

[FFB]

After briefly reading the opinion, I don't think that this case will be applied to comic book dealers in Nebraska. The trial court relied on the testimony of Steve Orand, apparently as an expert witness.

 

Orand testified that "the standard for sports memorabilia was a lifetime guarantee and that a reputable collector would stand behind what he sold and refund the money if an item were fake or had been altered."

 

Comic book dealers don't give a lifetime warranty against restoration (they might with fakes), so the dealer wouldn't be liable beyond a reaonable period of time.

 

I think the rules from this case will be applied to comic dealers, although the evidence presented could result in a different ruling on the "reasonable time" issue.

 

As I read it, this case presents two main issues:

 

1) Was it reasonable for the buyer to delay two years before giving notice to the seller?

 

2) Did the buyer have a duty to investigate and find out if there was anything wrong with the card when he bought it?

 

The first issue is a factual issue, and the second one is a legal issue. Because the second issue is a legal issue that derives from the general law regarding a buyer's ability to rely on a seller's representations, it is a rule of general applicability that will apply in Nebraska whether the buyer is buying cards, coins, comics, chickens, or tractor-trailers.

 

The rule from the first issue will also apply in other contexts, because it is a UCC (Uniform Commercial Code) rule and therefore applies to sales of "goods" generally. Because the first issue involves a UCC issue, this case will probably have far more persuasive impact in other states than I originally thought before I realized it was a UCC case. It still isn't "binding," but in UCC cases, states more freely borrow from out-of-state opinions than in non-UCC cases.

 

The important thing to remember from the result on the first issue in this case was that the evidence was uncontested and was overwhelmingly in favor of the plaintiff AND (most importantly) the lower court agreed with the plaintiff. The appellate court was ruling on the issue of whether the lower court's decision was "clearly erroneous." Even if the appellate court might have ruled the other way based on the evidence it saw, it wasn't allowed to. It had to decide whether the lower court was clearly wrong based on the evidence, and that no reasonable court could have come to the result that it did based on the evidence before it. That's a pretty tough standard to meet on appeal, especially when the other side didn't present any evidence at trial. When reading this case, I think it is important to recognize that this is the prism through which the appellate court ruled. It did not set down a bright line rule that it's ok to wait two years or more if someone sells you a bum card.

[FFB]

After briefly reading the opinion, I don't think that this case will be applied to comic book dealers in Nebraska. The trial court relied on the testimony of Steve Orand, apparently as an expert witness.

 

Orand testified that "the standard for sports memorabilia was a lifetime guarantee and that a reputable collector would stand behind what he sold and refund the money if an item were fake or had been altered."

 

Comic book dealers don't give a lifetime warranty against restoration (they might with fakes), so the dealer wouldn't be liable beyond a reaonable period of time.

 

I don't think comic dealers get off that easily. I seriously doubt whether card or sports memorabilia dealers give an express lifetime guarantee either, they probably use the same 5-day refund or similar language for their sales that comic dealers do. It is not a hobby that is renowned for either high standards of ethics or generosity of dealers.

 

I don't think the fact that most comic dealers set a time limit on refunds/returns would be fatal at all for a restoration claim. I think the provisions of the UCC in most states would allow a plaintiff to blow through that part of the dealer's defense in no time flat.

 

Also, if the buyer can show fraud or mistake (the legal standard for "mistake," not just that the buyer was "mistaken"), he can avoid any clause in a contract regarding a 5-day refund policy because fraud and mistake would vitiate his consent to the contract terms, including the refund policy.

[jordanscott]

it would suck for the dealer if s/he was selling it in good faith.....

would be interesting to see if there's a follow-up case with the seller now trying to go after whoever they bought it from....

 

but i think this is just basic fraud.....if i go to a store and get a good deal on a tag heuer with papers and then take it to a tag dealer for verification and they say no.....well then....back it goes or the police i go....

[FFB]

Again as the other site lawyers said, this was a Nebraska case and they probably have a case history for dealing with fraud such as this so if you shepardize the case or search Lexis, I bet the decision was based on prior precedent in fraud cases. The problem with comparing this to comics purchased on ebay is that you have buyers and sellers in different states so the forum could likely be the federal district court where the buyer resides. Or the buyer could bring suit in his state's courts. I would prefer federal court as cases move faster there and in my opinion, federal judges are much better. But generally speaking, the case would turn on the state's legal precedents regarding general fraud.

 

Even if the parties are from different states, you don't get into federal court unless the property is worth at least $75,000. The most likely venue for a case like this would be the state small claims court or municipal court/limited jurisdiction superior court.

[FFB]

Sounds like the seller didn't take the first court all that serious and then couldn't appeal the judges ruling,since it wasn't clearly in error.

It also appears that the card was considered as fake,rather than restored.If you sold a fake Action #1 as real,it might be very different than selling a restored one.

I'm also curious how a dated sales contract giving an exact refund policy and how long the buyer had to return the card might have affected the case.

Most sellers state in their contracts that disputes must be settled in their home states under the rules of their state,don't they?

 

If the contract is in writing, yes. But along the same lines as my prior post, if the buyer can show fraud or mistake, he can vitiate his consent to the contract and none of the contract terms will apply (including the forum selection clause or any limitation on time for filing a lawsuit). In such a case, the buyer's right to sue would be limited only by the statute of limitations in the state where the tort/sale occurred (three years in California for loss relating to property or fraud) and the UCC's notice requirement, assuming the state has adopted the UCC.

[uclapeterg]

FFB, isn't it true that you really can't have a "no refunds" policy when buying over the internet? One of the components of a "sale" according to the UCC code was an acceptance of goods by the buyer (and also, that the seller has not "misrepresented" an item). I think a buyer doesn't "accept" the goods in question just by receiving it. What are your thoughts? I also want to distinguish between Joe Bloe and a comic dealer because I read the UCC code as being tougher on "dealers" (as in the case I mentioned).

[FFB]

FFB, isn't it true that you really can't have a "no refunds" policy when buying over the internet? One of the components of a "sale" according to the UCC code was an acceptance of goods by the buyer (and also, that the seller has not "misrepresented" an item). I think a buyer doesn't "accept" the goods in question just by receiving it. What are your thoughts? I also want to distinguish between Joe Bloe and a comic dealer because I read the UCC code as being tougher on "dealers" (as in the case I mentioned).

 

If the seller has materially misrepresented an item, it doesn't matter whether there is a no-refunds policy or not. The buyer's consent was mistakenly or fraudulently obtained and is therefore vitiated -- which is a fancy schmancy way of saying that the contract of sale is voidable at the option of the buyer and the buyer is entitled to rescission and restitution of his money if he wants to do that.

 

The answer to your general question about whether it's possible to have a no-refunds policy probably depends on whether both the buyer's and seller's states have adopted the UCC. If they haven't adopted the UCC, then the general rules applicable to waiving implied warranties would apply and the " 'as-is' sale" rules would allow a seller to use a no-refund policy. Assuming that the UCC places limits on the right to a no-refund policy, it would also depend on what parts of the UCC each state has adopted, because different states have adopted different parts of the code and have rejected other parts.

 

In California's version of the UCC (which follows the UCC word-for-word on this particular section), the buyer is entitled to a refund if he rejects the goods. Although the UCC allows parties to limit contractually the remedies that are allowed, the statute authorizing the limitation of remedies states that the parties can limit the buyer's remedies to the return of goods and repayment of the purchase price, or repair and replacement of nonconforming goods or parts. The comments to the section state that even though the parties are entitled to limit remedies, it is the essence of a sales contract that at least limited remedies be available. This will be the rule in any state that has adopted the UCC unless that state's legislature has specifically excluded or rewritten the limitation of remedies section.

 

Long story short, a no-refunds policy would probably not hold up under California's version of the UCC or most other states' versions. Keep in mind that I have not done any specific case research on this issue before, so there's always the possibility that I've missed something.

[shadroch]

Just out of curiousity,how would one handle the tax ramifications of giving back such a large refund?

Suppose a dealer sells a book for $200,000.

Being the typical law-abiding credit to society,he cheerfully reports this on his taxes and pays the proper tributes to all involved. Two years later,he loses a case and is ordered to give a full refund. He has now paid income tax on what is no longer income. What is his remedy?

[Norrin_Radd]

Just out of curiousity,how would one handle the tax ramifications of giving back such a large refund?

Suppose a dealer sells a book for $200,000.

Being the typical law-abiding credit to society,he cheerfully reports this on his taxes and pays the proper tributes to all involved. Two years later,he loses a case and is ordered to give a full refund. He has now paid income tax on what is no longer income. What is his remedy?

 

 

[FFB]

Just out of curiousity,how would one handle the tax ramifications of giving back such a large refund?

Suppose a dealer sells a book for $200,000.

Being the typical law-abiding credit to society,he cheerfully reports this on his taxes and pays the proper tributes to all involved. Two years later,he loses a case and is ordered to give a full refund. He has now paid income tax on what is no longer income. What is his remedy?

 

Ask a tax attorney or CPA (Peter? That's your cue). I don't know whether he'd get credit for it in the year he claimed it as income (meaning he'd have to amend his return from the prior year) or whether he'd get a credit in the year he gave the refund.

[Jeffreykli]

Just out of curiousity,how would one handle the tax ramifications of giving back such a large refund?

Suppose a dealer sells a book for $200,000.

Being the typical law-abiding credit to society, he cheerfully reports this on his taxes and pays the proper tributes to all involved. Two years later,he loses a case and is ordered to give a full refund. He has now paid income tax on what is no longer income. What is his remedy?

 

He'd deduct the $200,000 from his income in the year in which he gave the refund. So, unless he's making a hefty profit that year, he wouldn't have to pay income taxes because he wouldn't show any income.