I guess this would only make any kind of sense to people in competition with each other. It would be hard for me to look at a high grade card in my collection and know it's really a trimmed card that I extremely overpaid for. I don't think there is a right or wrong way to collect cards, but I do think it's wrong if a TPG is giving cards extremely high grades knowing they are trimmed- like the 8 Wagner.

Sincerely, Clayton

I just hope Bill is spending some quality time with his priest today.

I don't think we'll know if Kendrick cares about the card being trimmed for sure until after he sells. Think about it, if you were him would you say anything negative like the card is now garbage or should be re-slabbed as an "A"? Certainly his offering an opinion like that could negatively impact it's value when his time to sell arrives. If I was him I'd say the same things he's now saying - because I would not want to loose my ass on my $2.8 million investment. My guess is he's not sleeping very soundly when it comes to thoughts of selling the card. It may or may not sell for more, but IMO this information certainly increases the chance that it will sell for less. Kind of rambling here but my point is: Kendricks opinion about how this information will not have negative impact on the card is certainly not an unbiased reflection on how the hobby will respond in the next sale so those who are using his opinion as a barometer of the hobbies pulse are slightly misguided.

[QUOTE=Kenny Cole;1116889][QUOTE] The real question is will Kendrick, the only person with standing to bring a claim, sue the company. The article seems to indicate that he will not.
I disagree with you 100%. Every purchaser of the card sold it for a profit. They haven't suffered any harm and thus have no standing to bring a claim. The only person who did suffer harm is Kendrick.

First, be careful using the term standing. They may not have an ultimately successful claim for which relief may be granted, but as prior owners of the card who would in some fashion argue that they were impacted by the fraud, they would likely have standing. True they would have to prove damage to sustain the claim, but depending on how they framed their pleadings they should beat any standing claim as such.

As for your assertion that only Mr. Kendrick suffered harm, how is that so unless and until he can show it is worth less than what he paid for it--otherwise he too has a profit (or net zero), and what evidence would you propose he use to show that?

As stated in my post #80, I see this more as a no damages issue than a technical standing issue, but I think we are all on the same page and it comes out to the same thing. The point is that any past owner may have paid a price inflated due to fraud but also sold at a price inflated due to fraud, so they suffered no harm. Put another way, on the front end they were the victim of fraud but on the back end they were the beneficiary.

Even then, if the card DID sell for less, wouldn't he still have to show it was due to an inaccurate grade? The other side could argue market conditions (among other things) and it would be up to both sides to make their case. Personally, I believe the owner of the card has the better of the case, but it would still have to be "made", and not a "given" that it was mainly due to being "misgraded".

I do recall reading that Mr. Kendrick put the Wagner on display at Cooperstown and later at the Diamondback's stadium for the 2011 All-Star Game. If he now continues to publicly display it - especially where money is paid to view it, in my opinion he legally has an obligation to either have the card re-labeled by PSA as AUTH or put an obvious disclaimer on the exhibit stating the card has been trimmed. Of course and even more so the same is true if he decides to resell the card.

If deep down Kendrick no longer wants the card and intends to sell it, he instead should give it to PSA and have them reimburse him as per their policy and take the card out of circulation.

If they chose not to pay for whatever reason, it would be huge egg on their face, so to speak.

I wonder what would happen to it in that event...my understanding is that trimmed cards bought back by PSA are destroyed. No doubt this particular trimmed card would still be worth quite a bundle to some. Very interesting scenario.

Or perhaps he could negotiate with PSA, who seeking to avoid a huge payout, might agree to make him whole on his purchase when sold as "trimmed" at auction.

It would seem to me PSA would have the same obligation. If auditors, for example, find their prior work was tainted by internal "happenstance", their obligation to disclose is clearly defined. It would seem to me the same in this situation.

One would think that at some point psa has to take a position in light of mastro and his admission. I know they tend to play ostrich but with david hall having publicly stated that he examined the card and it was good, it seems eventually they have to deal with this. Then again they have not dealt with the Doyle, right?

Nor have they dealt with the cello pack fiasco.

from article last year
 

PSA has not publicly commented on the allegations in the indictment or in our book and newspaper articles. Orlando and David Hall, the president of Collectors Universe, PSA’s parent company, have not responded to requests for interviews.

But a mole who attended PSA’s invitation-only lunch at the National says the indictment and the allegations about the card were the main topic of discussion. Also, our spy tells us, the chicken Marsala was quite good.

Our mole says about 150 collectors and dealers attended the lunch, held Friday at the convention center. Hall, he says, got up and said he had to address the “800-pound gorilla in the room” – the indictment.

“He asked for a show of hands and said, ‘Anyone here see the Wagner?’ A bunch of hands go up. Then he asked, ‘Has anyone seen it outside its holder?’ And he is the only one with his hand up.

“He takes out a magnifying glass and says ‘I have examined every aspect of that card. The only question we had was if it should be a PSA 7 or a PSA 8. We never considered that it had been altered,” our spy says.

Hall, according to our source, told his audience that they should question Mastro’s motives; Mastro might have agreed to say the card is trimmed as part of a deal with prosecutors. “He was suggesting you can’t believe Mastro, because now he will do anything to save himself,” our spy says.

Hall, according to our mole, also said Bill Hughes, the member of the grading team who told us he knew the card had been trimmed, has denied making those comments. Hall, our spy says, claims Hughes says it is an “out and out lie” that he knew the card had been trimmed.

Hall, our source added, also said PSA stood by its grade and would compensate the owner if it is proved that the card had been trimmed. But he didn’t say if the company would pay $300, the fee it charges to grade cards worth $10,000 or more, or the $2.8 million current owner Ken Kendrick paid for it in 2007.

an agreement could have been made between the owner of the card and the authentication company already with confidentiality and we would never know.

kendrick doesnt seem mad at psa. i would be.

Standing :The legally protectible stake or interest that an individual has in a dispute that entitles him to bring the controversy before the court to obtain judicial relief.

No previous owner has legally protectible stake. Feel free to further develop your argument.

The difference between Kendrick and the other owners is that he has not yet sold the card. The prior owners made a profit. Kendrick's financial fate, on the card, is uncertain. In order to prove a harm Kendrick could probably obtain appraisals from auction houses. He would demonstrate a harm by showing that the appraised value of the trimmed card is below the appraised value of the PSA 8. I am addressing the merits of the claim just how it may be proven.

Thanks for the definition of legal standing. I had no idea--I just like to talk about legal matters with no working understanding of the operative terms.

Your premise is that no past owner of the card can legally sue-- he has no right to a day in court because he no longer owns the card. In my humble opinion, I believe that premise to be false. He can sue, but he likely will not prevail, at least under the facts as we know them, because he cannot prove at least one essential element of his claim (and there also may be affirmative defenses such as SOL). As in virtually any civil action, a Plaintiff must show that a defendant's conduct caused him damage and then attribute some amount to that damage. If you don't you lose, but that doesn't mean you were barred from asking in the first place because you lacked standing. Now if I tried to sue claiming that the whole fraud ordeal negatively impacted me and/or my collection in some measurable way then yes, I would agree that there is insufficient nexus between me and the alleged wrongdoers to provide standing.

A more interesting scenario presents if the buyer of a PSA 5 Wagner were to argue that he overpaid because the market was artificially inflated by the existence of an "8" that turned out to be bogus, or conversely, if the seller of that same PSA 5 argued that he could have sold for more had there been no 8 on the market because his would have been the highest graded. These people would have a colorable claim (if the facts were right and they could prove them) that they had a legally protectible stake or interest and thus have standing. They would probably lose on the standing issue, IMO, but it wouldn't shock me to see a lawyer at least advance the argument.

In sum, current ownership of property does not define exclusive standing in cases like this, again IMO. Had the owner previous to Kendrick sold it to him at a loss and could show that the fraud had something to do with that loss-- a tough row to hoe, no doubt-- then the fact that he no longer owns the card would not prevent him from suing on the basis of standing. Again, we're dealing in hypotheticals and I don;t foresee any lawsuits from past or current players in this melodrama, but stranger things have happened I'm sure.

Sorry to get so heated about this one. I think it is frustration from work bleeding over.

I like the argument about the purchaser of the PSA 5. Who knows.

Another two cents. To the poster who asked whether Kendrick would have to show that any loss or diminished value was not attributed to other market conditions I would answer yes. The Plt must (nearly) always show that the damage he claims was caused by Df's conduct, although the evidence needed and the degree of certainty can be contested issues. However, I think there is a good argument that in this case, the Wagner card lives in its own market--that the hobby generally and the overall economy do not have much impact on driving its sales, for the buyer pool consists largely of people who have no great concern about such factors.

Lawyers are often very creative, although maybe not this one. Even if the card has appreciated, particularly if only by some small amount, I could see someone asserting that Kendrick has suffered damage by the now confirmed statements that his Wagner card was trimmed. The argument could be made that the card historically ALWAYS sells for at least x% more upon resale, and that if it doesn't now: 1) it's because of the fraud and 2) the difference is Kendrick's damages-- he should have made more profit. Don't get me wrong, I see this as a tough one and damages cannot be deemed speculative, but I make the point only to show that the more creative ones out there could probably stir up something. Moreover, I also believe that if he can prove any compensatory damages he could also ask for punitive damages-which greatly expands the stakes.

Granted, Kendrick has expressed no interest in selling or concern about this latest Mastro news, and there may be PR and personal reasons why he will just leave this alone, but it's sometimes fun for us on the outside to ponder the possibilities.:)

No problem. I hear ya, and have been known to be a bit irritable myself (this just in).

I think all previous owners have standing to sue. And here, if you can prove any detriment whatsoever from the fraud, you are entitled to at least nominal damages, even if you can't prove entitlement to compensatory damages. Since its a tort action, nominal damages for fraud gets you to the jury on punis. Viola!!!

the woman who won the psa 8 wagner in the treat entertainment/walmart giveaway paid too much windfall taxes on the card when she won it, when in fact, her tax burden would have been much less had the card been properly graded by the people who purportedly gave it an 8 instead of an A to suit their own greedy interests. that is grounds for a lawsuit.

And if wishes were horses...

Peter,

I'm not wishing anything. I agree that it would be a difficult case. But I also think that some of the buyers could probably come up with something other than the purchase price which would get you to the jury. Buyer's fee on purchase then private sale, whatever. The capital gains tax issue for the one winner suggested above is an interesting thought.

If you get to the jury on punis then all bets are off. It probably wouldn't cost too much to try either. A couple of depositions and a summary judgment response. Give it to a young lawyer who needs courtroom time and let them run with it.

I dunno Kenny. Given the Dfs I could see a lot of paper thrown around and hurdles tossed in the way, valid or not. Besides, given the upside and potential notoriety, wouldn't you want to tackle it yourself? :)

That transaction took place before it was graded, I believe.

Todd,

Uh, no. I am well past the stage where I care about potential notoriety and have other cases which probably have more potential upside. :) As far as I am concerned this is a theoretical issue only. Thus, the hungry young lawyer angle seems perfect to me.

So Jim Copeland pays 125K, sells for 461K less Sotheby's cut, and he has a fraud claim that gets him to a jury for punitive damages. OK. If you say so. :) Or Brian Siegel who bought for $1M plus and sold for $2M plus. Yeah, he would make an excellent fraud plaintiff.

No it was graded, Gretzky sold it to Walmart who then had a promotion.

But that wasn't the issue. The issue was whether or not you could get a claim to the jury. IMO, you can. Now you are dodging that question and raising a completely different issue. You must be a defense lawyer. :)

And in now saying it is a theoretical issue only you must be backpedaling from your initial post where you were much more enthusiastic. An appropriately chastened plaintiff's lawyer.:)

Peter,

It has always been theoretical to me. Since I disagreed about the standing issue, I started thinking about it. That doesn't mean that I want the case. As I said, that is a case for a younger lawyer who needs trial time to make.

But, since you so adroitly avoided the issue, I assume that you now agree there is at least a "theoretical" possibility that it can get to the jury. I'm sure that is a difficult concession for a defense lawyer to make, even if the concession is only implicit. :)

I concede nothing I cant imagine a colorable harm any prior buyer could establish.

Defense lawyers always acknowledge that a case could get to a jury--they just call it the idiot judge factor :)

Run, run like the wind ...

Barry: That card was graded by 1991 -- and I know this because I was quoted in New York Magazine about what I would think this card would sell for. Trust me, my guess was less than half of what the final selling price was. But the woman who won that card won that card circa 1995-96 and that was after 1991 and thus the card was graded when she won that card. Just an FYI for the timeline.

And that is not because I have such a great memory, instead I was writing one of my rambling columns for Sports Collectors Daily and googled Rich Klein Beckett analyst and that quote popped up.

Regards
Rich

Mastro is a criminal. Doesn't matter one iota if the cards increased in value. He set out with an intent to defraud for personal gain. But he has a lot of money he has swindled people out of. He'll get a great defense and probably wind up at home wearing an ankle bracelet for a year. Some stupid, poor slob who has a bag of weed will rot for 20 years. Justice in this country is what you can afford.

Great post, and unfortunatley probably true.

If he does go to prison,it will be a cushy federal prison where they have tennis courts or golf courses, and have movie nights with popcorn and soft drinks. Maybe even hang out with Bernie.

" Justice in this country is what you can afford" - great way to sum things up!

Sincerely, Clayton

This certainly isn't any kind of surprise to anyone. The card is in fact the best appearing Wagner by a wide margin, and its mystique won't change at all. I believe most of the owners of the card, if not absolutely all of them, already knew what Mastro recently confirmed. My humble prediction is that it will continue to rise in value as it has habitually done, and will change hands for $50 million or more within a quarter century or so (that's in the vicinity of 12% compounded annually, a rate a top flight collectible is easily capable of in most collectible fields).

Best wishes,

Larry

Thanks Peter. After I posted I was thinking maybe I was wrong. I know it sold raw in the Copeland Sale, so it must have been graded right after that. My error.

And thanks Rich also. My memory is not as crisp as it once was.

I agree with your sentiment but really? You think he'll get an ankle bracelet when he is trying to plea for 30 months or less behind bars AND IT'S not being accepted. And now the plea has been turned down twice by the judge. No, I think on that aspect, you are incorrect. He will do some time, we just don't know how much. Personally it would have been nice to see some kind of restitution, somehow. Maybe take monies and use it for charity if the victims can't be identified easily.

it was graded by 1991 because it was exhibited at the 91 national in anaheim and it was in its psa holder. i saw it there behind the velvet rope.

Right, Gretzky and McNall had it graded. Walmart bought it next for a promotion but the woman who won the promotion had to sell because of the taxes and Gidwitz won it at auction.

Kenny, Walmart would be a good client, maybe they are interested in pursuing a fraud claim. :D