Quote:
Originally Posted by Peter_Spaeth
Corey -- consider this. In AJ's case, if he sued, could PSA argue he has a duty to mitigate damages by selling the card for what likely would be a big profit even if he fully disclosed? If so, no damages, no lawsuit. If not, tell me why not.
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Peter,
This is how the guaranty reads in regard to what PSA is obligated to do under the guaranty:
Buy the card from the submitter at the current market value if the card can no longer receive a numerical grade under PSA's standards or,
Refund the difference in value between the original PSA grade and the current PSA grade if the grade is lowered. In this case, the card will also be returned to the customer along with the refund for the difference in value.
The first part implies the card has no value (
e.g., is a counterfeit), in which case AJ would be entitled to receive the current value of the card. If the card is trimmed and therefore is graded A (the case at issue), the guaranty says AJ is entitled to receive the current value as A is not a numerical grade, and the duty to mitigate (implied in the second part where PSA has the option to refund only the reduction in value caused by the downgrade) would by the terms of the guaranty be inapplicable.
I will add as a practical matter I'm not sure why a duty to mitigate would impact AJ's outcome from an economic perspective. Let's call the current value of the card to be X. And let's call its disclosed value to be Y. If AJ had a duty to mitigate, his damages from PSA would be X - Y. And since he would receive Y from the purchaser, he ends up netting X. This is the same amount he would end up with if he had no duty to mitigate and instead received X from PSA and handed them the card.
BTW, AJ would still suffer damages under the terms of the guaranty even if the card as valued as an A in 2021 is more than he bought the card for. Damages here are measured based on the appreciation AJ would have realized had the card been accurately graded. IMO this is a proper result since such damages are measurable and were incurred by AJ via opportunity cost. Had he known the card was altered, he would have spent his money on an unaltered card, and by not doing so lost the opportunity to realize the appreciation of the substitute card.