Auctioneers sometimes sue sellers and even bidders/buyers. Sellers, bidders and buyers sometimes sue auctioneers. Our topic today is how old can these injuries (damages) be? Is there a limitation in time when a party can no longer file a claim for injury?
While the “statute of limitations” varies around the United States and by circumstance, many states have a general four-year statute of limitations. In other words, if an auctioneer was injured by a seller in June, 2017, he would have essentially until June, 2021 to file a claim — given a four-year statute of limitations.
What initiates the beginning of this time frame? It is held generally around the United States — with exceptions — that a statute of limitations commences when a person has recognized that they have been injured (known as a cognizable event,) even though that person may not know the full extent of the injuries.
While auctioneers must maintain compliance with state law regarding records retention, there is considerable disagreement about whether an auctioneer should keep records for this entire statute of limitations if they extend farther. For example, if an auctioneer has to keep records for two years by state law, should he keep or destroy records thereafter?
There’s no certain answer here … except to say that if the auctioneer has done nothing wrong, keeping records into perpetuity is likely acceptable. Otherwise, it may be prudent to destroy records as soon as legally possible.
A material case in my state of Ohio regarded a real estate broker where the state mandates three years of record retention. Opposing counsel successfully subpoenaing five years of records. The evidence uncovered in four-year-old and five-year-old files was exceptionally damaging to the broker.
I think we’ve all seen when warranted, courts can order a raid on an office or other location to seize records, assuming they might be destroyed otherwise with enough notice. There would be risk storing records, only to claim they didn’t exist when requested …
As a frequent expert witness, I’ve seen attorneys compel production of auction records dating back as much as 10 years. I can say that’s generally not good news for any auctioneer. However, of course I recommend consulting with your attorney to develop a record retention policy, and possibly engaging your attorney to house and/or supervise those records.
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, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.