Bob Morris, Auctioneer has an online auction scheduled to start Tuesday.
Over 300 lots of glassware, china, figurines and other somewhat delicate collectibles are scheduled to sell to the highest bidders on Sunday night at 6:00 p.m.
Wednesday, one day into his online auction, Tiffany Belmonte arrives at Bob’s auction house and asks if she can preview the items he is offering in his online auction. Bob says, “Sure, take a look around,” and Tiffany begins to inspect Bob’s inventory — most notably the Hummel figurines.
Not more than fifteen minutes pass when Bob hears a disturbing sound, and turns to see that Tiffany has dropped one of the Hummel figurines on the floor — breaking it into many pieces.
Bob discusses with Tiffany that this Hummel figurine is listed in his online auction, and described as “perfect” with no cracks or other imperfections — hardly the current condition after falling from Tiffany’s hand.
Tiffany expresses her sincere regret and asks if she can pay for the Hummel figurine. Bob thinks a minute, and says:
“Well, Tiffany, those bidding still think it’s perfect, so why don’t you agree to pay one bid (one increment) over the highest bid on Sunday night, and we’ll accept that as fair compensation?”
Tiffany agrees to Bob’s suggestion, and plans to contact Bob Monday morning after the auction to pay for the Hummel figurine.
Bob registers Tiffany for the online auction and enters a bid of $1,000 on the Hummel figurine in question. Her bid will be executed competitively and since this Hummel figurine has never sold for any more than $300, he feels certain her bid will not exceed $325 or so.
Yet, this $1,000 bid nearly ensures her winning even if some other bidder bids well beyond what Bob feels is current market value.
The online auction continues on Thursday … Friday … Saturday and into Sunday and Bob watches as bidders from throughout the United States and around the world place bids. Bob pays particular attention to “Tiffany’s” Hummel figurine — which by Sunday at 5:00 p.m. was only bid up to $125.
Bob and his wife Florence go to dinner around 5:30 p.m. and watch the auction from Bob’s smartphone. As the bids begin to close around 6:00 p.m., Bob’s phone shows that with 30 seconds left, “Tiffany’s” Hummel figurine is still at $125.
Bob and Florence order dessert and plan to review the auction results after they get back home. They arrive home at about 7:30 p.m. and Bob sits in his office to do just that.
As the screen loads on his laptop, Bob is speechless as “Tiffany’s” Hummel shows a final selling price of $1,050 and a buyer in North Korea.
Unbeknownst to Bob, Tiffany is also watching the auction and sees that she isn’t the buyer on the Hummel figurine she broke. She calls Bob at home to ask what they are to do now?
Bob thinks possibly the best solution will be to contact the buyer in North Korea and inform him that the Hummel is broken and then have Tiffany pay $1,100 for the Hummel, since that would be one bid more than the highest bid.
Tiffany reluctantly agrees, noting that she expected to pay about $200 for the broken Hummel. Nevertheless, Bob calls his client (Tim Summers) to inform him as to what has happened. Bob gets Tim’s voice mail and leaves the following message:“Tim, Bob Morris, Auctioneer here. Your auction went great with just one hiccup. Lot 127 of the Hummels was broken the Wednesday prior to the close of the auction. The person who broke it agreed to pay one bid more than the highest bid, and we’re going to tell the South Korean online buyer that the Hummel was broken following the auction’s close — no big deal — just wanted to keep you in the loop and we’ll take care of everything; you have a good one!”
About 10 minutes later, Bob’s phone rings but he misses the call. A few minutes later, Bob checks his voice mail:“Bob, it’s Tim Summers. Say, I got your message, and that Hummel Lot 127 was won by a South Korean bidder? I think that was my brother Gary who lives over there. He always wanted that Hummel and it had our mom’s initials on the bottom of it, where she signed it back in 1949. You say it was broken back on Wednesday? I’m a bit unclear as to why I’m just finding this out … give me a call when you get a chance.”
One can easily see that this auction has evolved into a difficult situation for the seller and Tiffany Belmonte — and a more difficult situation for Bob Morris, Auctioneer. What’s the cause of this difficulty? Bob Morris forgot his fiduciary responsibilities.
As we wrote about several years ago, auctioneers owe their clients certain duties: http://mikebrandlyauctioneer.wordpress.com/2009/11/18/what-do-auctioneers-owe-their-clients/. The particular duty violated here is “Disclosure.”
The instant Tiffany broke that Hummel figurine, she was breaking Tim Summer’s Hummel figurine. Bob had a duty to inform Tim about the damage, and ask (not tell nor mandate) what steps should be taken for Tiffany to compensate Tim. Instead, Bob acted unilaterally and without authority and now has a mess on his hands — a mess he brought on himself.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Greater Columbus Auctions and Goodwill Columbus Car Auction and. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
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