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Negligent Misrepresentation, Revisiting Misrepresentation Claims in Blumstein v. Sports Immortals, Inc.

November 15, 2017

Previously, I discussed intentional and negligent misrepresentation, a cause of action under Florida Law.  In this article, we revisit the issue with an interesting case from the District Court of Appeal of the State of Florida, Fourth District.  Decided during the July Term 2011, Blumstein v. Sports Immortals, Inc., presents an interesting case demonstrating the application of negligent misrepresentation.

In Blumstein, two associates approached a lender for a $203,000 loan .  To secure the loan, they offered a collection of baseball memorabilia as collateral.  Before issuing the loan and accepting the collateral, the lender required an appraisal of the baseball memorabilia at a value of $300,000 or more.  For the appraisal, the two associates and the lender obtained the services of Sports Immortals.  Sports Immortals advertised “as experts at authenticating and appraising sports memorabilia.”  While engaging Sports Immortals, the two associates and the lender made known “that the appraisal was being done for the specific purpose of Phillips relying on it to make a loan against the memorabilia.”  A key fact in the case that meant Sports Immortals was on notice that the associates and the lender were “relying upon the appraisal/evaluation to make complete the loan.

Sports Immortals appraised the baseball memorabilia at $350,000-$400,000.  The specific piece of memorabilia was a Hall of Fame Baseball Montage depicting the original inductees into the Baseball Hall of Fame.  Signatures include those of Babe Ruth, Grover Alexander, Connie Mack, Tris Speaker, George Sisler, Walter Johnson, Ty Cobb, Nap Lajoie, Honus Wagner, Cy Young, and Eddie Collins.  Sports Immortals provided a written appraisal on letterhead and described the piece in detail and the potential auction price.

The lender issued the loan, and the associates defaulted in October of 2007.  The lender, in an effort to recoup his losses, took the baseball memorabilia that was used as collateral to another appraiser “to ascertain the current value of the memorabilia.”  To the lender’s dismay, the second appraisal was not as generous.

According to the second appraiser, Sports Immortals estimation was invalid “because the autographs on the montage ‘were not authentic.’”  In February of 2009, the lender returned to Sports Immortals for a reappraisal.   Sports Immortals consulted an autograph authenticator at an auction house who determined the signatures were no authentic and refused to place the montage at auction.  Sports Immortals therefore gave the montage no value but made a modest offer on the remaining memorabilia.

Blumstein, by way of assignment, took on a claim against Sports Immortals.  Blumstein argued that Sports Immortals “owed [] a duty of case to conduct the appraisal/evaluation in a reasonable manner consistent with the requirements of a ‘memorabilia appraiser/evaluator/authenticator in the community.’”  Blumstein maintained that Sports Immortals breached this standard when it issued the original appraisal of $350,000-$400,000.  This breach, Blumstein further argued, was the proximate cause of damages.

The appellate court concluded that Sports Immortals owed “a duty of reasonable care to insure the accuracy and validity of the information they provided.”  Sports Immortals was in the business “of appraising sports memorabilia and [the parties] travelled to their place of business to obtain an opinion, after fully disclosing the reason for the inquiry.”  To succeed on his claim of negligent misrepresentation, Blumstein was required to show that Sports Immortals had a pecuniary interest in the matter.  This was a critical point in the lawsuit because Sports Immortals did not charge for their appraisal.  However, the appellate court concluded that this “transaction was an opportunity for appellees to establish a relationship with [the parties] that might have led to future business.”

If you have suffered a financial loss due to negligent misrepresentation, contact Bryan W. Crews today.  With his expertise, and dedicated staff, you can rest assured that Bryan W. Crews, your Orlando personal injury attorney will handle your claim with the utmost care.



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