PHILADELPHIA – Expert testimony in a six-figure financial dispute between collectors of rare Magic: The Gathering playing cards is at odds, with a recent filing from a plaintiff’s expert appraisers suggesting that breach of contract damages in the action come to just shy of $500,000.
Michael Ruggiero of Morganville, N.J., first filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania on July 20, 2018, versus Brian Nocenti of Kennett Square and a John Doe, alleging that they breached their duty of good faith and fair dealings.
Ruggiero argued that on May 29, 2018, he suffered from significant financial loss and the loss of irreplaceable collection of “Magic: The Gathering” playing cards, as a result of the wrongful conduct of the defendant.
Ruggiero alleged Nocenti agreed to sell his rare card collection at a total contract price of $177,415 payable in three years, with request for $70,000 due on the first year.
The plaintiff further alleged that the defendant schemed to sell the cards at a higher price to another buyer even though they had a valid contract, according to the complaint.
In so doing, Ruggiero alleged that Nocenti both reneged on the contract and refunded the plaintiff the amount of $40,000 that he had paid to date.
The plaintiff holds Nocenti and Doe responsible, because the defendants allegedly caused plaintiff to sell his own irreplaceable collection to finance the agreement.
Further, the defendant alleged that the plaintiff failed to meet the timeline to pay $70,000, despite evidence of exchange of messages with defendant confirming June 26, 2018 as the deadline for initial payment, according to the complaint.
However, the plaintiff countered that in a showing of good faith and having already paid $40,000 to date, Ruggiero sent Nocenti the remaining $30,000 (plus transaction fees – paid by Ruggiero), totaling $70,000 paid by May 29, 2018, over one month prior to actual expiration of the first $70,000 being due.
Nocenti asserted he refunded Ruggiero the $70,000 that same day.
On June 8, 2018, Ruggiero’s counsel sent defendant a letter directing Nocenti not to sell the cards that are the subject of this case as same would constitute the spoliation of evidence.
Nocenti testified that he received this letter, but nonetheless, after receiving the letter he decided to sell a large portion of the subject cards for about $135,000.
UPDATE
Among other statements, the plaintiff’s findings of fact, filed post-trial on May 13, alleged that the defendant’s trial testimony stating this $135,000 transaction took place in a Whole Foods parking lot, with unknown buyers and no records or receipts, was not credible.
“Defendant’s testimony that he re-sold the collection to buyers in a Whole Foods parking lot for $135,000 cash in July 2018 and has no record of this sale, is not credible. Defendant’s story runs counter to what he told Mr. [Adam] Cai [another buyer of Magic: The Gathering cards] and defendant’s claim that he re-sold the collection for $30,000 less than plaintiff was willing to pay, is not credible,” per the plaintiff’s filing.
The document also featured information regarding the plaintiff’s experts, Nick Coss and Travis Landry, who provided valuations of the cards with a reasonable degree of certainty, according to the plaintiff.
“Coss estimated that he has set prices for ‘millions’ of Magic: The Gathering cards. Coss applied a sound methodology to reach his valuations. Coss’s methodology includes consideration of the professional grade of the card, review of the population of that grade of card in the world, and comparison of actual sales of comparable cards,” the filing stated.
“Coss valued the collection of Magic: The Gathering cards the defendant agreed to sell to plaintiff at approximately $305,000 in May 2018, $479,000 in July 2019 and $668,000 in February 2021. According to Coss, the value of the six most valuable cards in the collection (Ancestral Recall, Black Lotus, Mox Sapphire, Time Walk, Time Twister and Volcanic Island, collectively referred to herein as the “Best Six”) increased by approximately 133 percent from May 2018 to February 2021.”
According to Coss, the approximate value of 136 cards in the middle of 2020 was approximately 10 percent less than his 2021 valuation based on his observation of the market over that time. 10 percent less than Coss’s February 2021 valuation of $668,000 is a June 2020 value of $601,200.
“Coss came to his valuations within a reasonable degree of professional certainty. Subtracting $668,000, Mr. Coss’s February 2021 valuation, from the contract price of $177,415 sets the expectation damages for the breach of contract at $490,585,” according to the filing.
Landry, an appraiser for PBS’s television program “Antiques Roadshow”, valued the 136 cards were approximately $250,000 in May 2018 and approximately $622,000 in January 2021.
“According to Landry, the approximate value of 136 cards in the middle of 2020 was approximately 10 percent less than his 2021 valuation based on his observation of the market over that time. 10 percent less than Landry’s January 2021 valuation of $622,000 is a June 2020 value of $559,800,” the filing said.
“Both Landry and defendant’s expert, Mr. Bruso, agreed that the pandemic was not a substantial factor in the increase of the value of the collection. Landry came to his valuations within a reasonable degree of professional certainty. Subtracting $622,000 (Mr. Landry’s January 2021 valuation) from the contract price of $177,415 sets the expectation damages for the breach of contract at $444,585.”
The defense’s expert, Bruso, is the owner of Graded Power, a company that deals in collectible trading cards – with an emphasis on Magic: The Gathering cards.
However, according to the plaintiff and his counsel, Bruso based a considerable amount of his valuations on his own memory and other non-verifiable data – i.e. his own non-public archive.
Bruso improperly valued the rare cards in question, the plaintiff’s counsel asserts.
“Bruso opined that the Six Rare Cards experienced a 338 percent increase in value between May 2018 and February 2021. Bruso acknowledged that the reason his increases were so much higher was because his 2018 valuations of the Six Best Cards were significantly lower than Mr. Landry and Mr. Coss’s valuations. Bruso’s appraised values reflect his own personal pricing, not the pricing of the public market at large,” the filing said.
The plaintiff is represented by Alexandra S. Jacobs, Michael Justin Fekete and John J. Levy of Montgomery McCracken Walker & Rhoads, in Cherry Hill, N.J.
The defendants are represented by Christopher James Amentas of Armstrong & Carosella, in West Chester.
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-03047
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com