We previously wrote about Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020) the Court held in part that “Fundamental principles of fairness required the defendant to treat the [original] plaintiff and [other bidder] equally.” here: https://mikebrandlyauctioneer.wordpress.com/2020/10/02/terms-conditions-fairness/.
Since this ruling, certain people are apparently on the warpath arguing this ruling is grossly incorrect. The reason? Because they gave [horrible] advice prior to this ruling, counter to this Court’s view — and want to continue to argue they are right (when they aren’t) and this Supreme Court of Appeals of West Virginia is wrong (when it isn’t.)
Conversely, I and many attorneys I work with say this ruling is correct, and is supported by the Supreme Court of the United States which said in Erie Cole & Coke Corporation v. U.S. 266 U.S. 518 (1925) that “The terms and conditions of the sale as set forth in the advertisement were binding alike upon the United States and the bidders.” Binding alike? In other words, the advertising noting “10% and a bank letter” are binding upon both the bidders and the auctioneer?
Binding upon suggests unchangeable — so the advice that your auction can be advertised requiring 10% down and a bank letter gives you the unilateral right to register bidders lacking the 10% and bank letter … is incorrect. It appears to us that even if West Virginia created new law which countered this ruling, it may be held invalid citing Erie Cole & Coke Corporation v. U.S. 266 U.S. 518 (1925).
The other point here that is often left out — is when bidders feel discriminated against or treated unfairly, they tend to take note. Treating any bidders with different terms than the advertised registration policy is inviting someone to be upset and take legal action. As we continually say, better to stay out of court than win or lose in court: https://mikebrandlyauctioneer.wordpress.com/2018/07/26/auctioneers-you-want-win-in-court-or-stay-out-of-court/.
We gave an simple example at the Texas Auctioneers Association Convention & State Championship of different treatment at a McDonald’s Restaurant, and how that might relate to the auction business: https://mikebrandlyauctioneer.wordpress.com/2021/06/03/unnecessary-risk-really-bad-advice/. Apparently this tendency to get sued — where “fair dealing” is clearly a foreign concept — is lost on those in opposition to the highest court in West Virginia.
Worse yet, some of these outraged fans of disparate treatment now claim the auctioneer should reserve in advance with the seller to unilaterally choose bidders (continued disparate treatment) who do not meet or exceed the otherwise pre-determined registration requirements, unnecessarily assuming risk of a lawsuit by the seller in addition to other bidders. Why not spend all day, every day in court, I suppose?
It may go without saying that you as an auctioneer need to be very careful choosing attorney counsel. It may be this stark — your attorney should protect you and keep you out of court, not put you at unnecessary risk and invite lawsuits putting you in court … regarding, for example, reopening the bid, Coronavirus disclaimers, treating bidders differently, denying pre-auction inspection, and the like.
We previously wrote about different types of attorneys for auctioneers: https://mikebrandlyauctioneer.wordpress.com/2020/06/30/how-different-attorneys-can-and-shouldnt-help-auctioneers/. Kurt Bachman is an attorney and auctioneer in Indiana who is a long-time contributor to the National Auctioneers Association. He can help you, or direct you to alternate competent legal counsel when needed.
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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