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auctioneer1941Tort law touches nearly every aspect of life in the United States.

It might involve unfair trade practices, unreasonable or damaging conditions of employment or loss suffered from product malfunctions, only to name a few.

Three elements must be established in every tort action. The plaintiff must

      1. Establish that the defendant was under a legal duty to act in a particular fashion.
      2. Demonstrate that the defendant breached this duty by failing to conform his or her behavior accordingly
      3. Prove that he suffered injury or loss as a direct result of the defendant’s breach.

Can valid claims of tortious injury take place at or within the context of an auction? Certainly. Some examples:

    • Talking badly about an auctioneer’s performance while he or she met or exceeded industry standards.
    • A chair in an auction house collapsing, injuring the (formerly seated) attendee.
    • Auctioneer selling and delivering a gun to a buyer who said, “I’m going to kill my neighbor,” with the buyer doing exactly that.
    • Bidders bidding with the sole intent of just raising prices, retracting their bids if they end up the high bidder.
    • A man necessarily mowing his grass each week just as the auction house next door began with their first item up for bid.
    • Bidders talking loudly and conspicuously about the bad condition or poor functionality of items for which they hope others don’t bid against them.
    • A seller consigning items with latent defects without adequate disclosure to auctioneer or the bidders.

There would be 100’s of other examples.

Yet, the largest case involving a tort claim was denied by The Supreme Court of Texas in the case of New Texas Auto Auction Services, L. P. D/B/A Big H Auto Auction, Petitioner v. Graciela Gomez De Hernandez, et al, Respondents.

In the central issue in this “non-disclosure of an automobile recall” claim, the court held, in summary, that the auctioneer wasn’t the seller, and rather merely put products into “the stream of commerce” and “indirectly facilitates sales.”

Would this ruling relieve an auctioneer from disclosing a known material defect? Probably not … but it might help to save an auctioneer from intense research regarding condition and usability and move that liability more so to the seller — that is, the actual “seller” and not the auctioneer.

This is generally good news for auctioneers hoping to avoid liability for tort claims regarding property they are selling. Chances are, regarding personal property for sure, the odds are that the seller is more liable than the auctioneer.

Real property in tort claims is usually handled differently in this regard, as many states mandate in license law that the auctioneer take reasonable steps to learn of latent material defects and disclose such to interested parties — in other words, this would be a license issue in lieu of — and in place of — a tort issue.

How would this Texas decision impact a similar case in Ohio, Florida, Arizona …? Probably in a similar fashion. While a multitude of tort issues could involve an auction and/or auctioneer, claims involving the actual sale of personal property probably favor the auctioneer.

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 Auctions and Goodwill Columbus Car Auction. 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.