Was Buyer’s Claim Barred by “Caveat Emptor”?

Bethany Ralph (an attorney representing herself) sued George Cole and George Cole Auctions, Inc. (represented by counsel) for $655.00 (cost of urns purchased online at auction) and $200.00 (cost of pick-up and delivery of the urns), for a total of $855.00. Suit was filed, and the action went to trial in the Justice Court of the Village of Red Hook.

Ralph alleged that Cole/Auctions offered two urns for sale at an online auction. Ralph participated in the online auction rather than going in person, due to the danger of infection by the Coronavirus. In evidence was a photo from the auction offering of the two urns, sitting on bases, without noticeable cracks or damage. In the photograph, the urns were apparently placed directly in the corner formed by two walls touching at a 90-degree angle. Ralph was the successful bidder on the urns, for a cost of $655.00 and, given the weight of the urns, hired a truck and driver for $200.00 to pick up and deliver the urns.

Upon receipt of the urns, Ralph discovered that they were severely damaged as shown in other photographs in evidence. One urn was badly broken and rusted through at the bottom. That urn was held together with boards and screws and detached from the base. Ralph called Cole/Auctions to complain about the condition of the urns. At first, they agreed to take the urns back and refund the money, then offered 60% of the purchase price, then 50% of the purchase price, and then refused to refund any money.

In a defense characterized by the Court as “probably unique in the annals of small claims proceedings”, Cole/Auctions position was, in essence, that Ralph should not have trusted them. Caveat emptor was the cry heard from their counsel on more than one occasion during the trial.

Cole/Auctions offered in evidence what they claimed was their auction sales policy. That document was alleged to be a download of the policies found on their website. Among other conditions, the merchandise was sold “as is.”

It was significant that there was not a screen shot of the actual website content offered into evidence, nor was there any written evidence that Ralph accepted these conditions. It was also significant that Cole/Auctions offered no bill of sale into evidence to show that the sale was “as is.” Finally, the way the offering photograph was taken, apparently in the corner of a room, could lead one to believe that the urn was propped up to conceal that failure of the broken base to support the rest of the urn.

The Court found the credible testimony at trial was that the actual condition of the urns was dramatically different when sold than what was shown in the online auction offering. Given the dangers of congregating during the Covid pandemic, it was only natural that Ralph participated in the auction online. It was not unreasonable for her to rely on the photographic representation on the auction site.

New York adheres to the doctrine of caveat emptor and imposes no duty on the seller or the seller’s agent to disclose any information concerning the object being sold when the parties deal at arm’s length-unless there is some conduct on the part of the seller or the seller’s agent which constitutes active concealment. However, if some conduct, more than mere silence, on the part of the seller rises to the level of active concealment, a seller may have a duty to disclose information concerning the object.

The urns were not as advertised, and were photographed in such a way as to hide the true condition of the urns (that being active concealment). The Court ruled that substantial justice demanded that the purchase price of $655.00 be refunded to Ralph. As transportation of the urns was a natural outgrowth of the sale, and the Court also ordered that the $200.00 cost of transportation of the urns be paid to Ralph, for a total of $855.00, which was to be paid to her within 30 days.