PHILADELPHIA – A six-figure financial dispute between collectors of rare Magic: The Gathering playing cards resulted in a federal judge handing down a split verdict after a three-day bench trial in April, with the plaintiff being awarded more than $36,000.
Michael Ruggiero of Morganville, N.J., first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on July 20, 2018 versus Brian Nocenti of Kennett Square and John Does 1-5, 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
On Aug. 25, U.S. District Court for the Eastern District of Pennsylvania Judge Joel H. Slomsky handed down a split verdict, finding that Ruggiero prevailed on his breach of contract claim and would be awarded $36,190 – while Nocenti successfully defended him from claims for fraud in the inducement and violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.
“Plaintiff has established with reasonable certainty that the cards’ values on the date of defendant’s breach – May 29, 2018 – were higher than the parties’ agreed upon purchase price. Calculating plaintiff’s damages for defendant’s breach requires first determining which Magic cards were included in the agreement. Next, the Court must determine the cards’ values in May 2018 and compare the values with the purchase price,” Slomsky said.
“In late May 2018, defendant breached his agreement with plaintiff for the sale of three groups of Magic cards: (1) all defendant’s Beta cards with BGS grades of 9.5 and higher; (2) all defendant’s BGS cards with grades of 9 that defendant was appealing to BGS for a higher grade; and (3) all defendant’s incorrectly graded BGS cards that met the previous criteria. Thereafter, the parties maintained a list of defendant’s cards that met the criteria, eventually agreeing that 143 of defendant’s Magic cards were in the three categories and settling on $177,415 as the purchase price.”
At trial, both parties presented testimony from experts who dealt primarily in valuing, buying, and selling trading cards. While Ruggiero’s expert opined that the cards’ fair market values totaled $305,547 in May 2018, Nocenti’s expert testified, however, that his cards in total were worth only $121,663 in May 2018.
Therefore, Slomsky decided on the average price between both values, $213,605, as a fair market value for the cards in May 2018.
“In sum, plaintiff is entitled to expectation damages equaling the difference between the cards’ May 2018 market price of $213,605 and the contract price of $177,415, which is $36,190,” Slomsky said.
But, Slomsky added, Ruggiero did not show convincingly that Nocenti committed fraud in the inducement or violated the UTPCPL.
“Here, plaintiff has not shown through clear and convincing evidence that defendant fraudulently or deceptively induced him to enter into their agreement. Plaintiff does not take issue with defendant’s actions in forming their agreement; instead, he argues that after the agreement’s formation, defendant breached it based on his false claim as to when plaintiff’s payments were due,” Slomsky stated.
“There is no evidence, however, that defendant contemplated breaching the agreement – the allegedly fraudulent and deceptive act – until May 29, 2018, over one year after the contract’s formation. Therefore, there is no evidence that defendant acted fraudulently or deceptively in forming the agreement, and judgment will be entered in favor of defendant and against plaintiff on his claims of fraud in the inducement and violation of the Pennsylvania UTPCPL.”
The plaintiff was represented by Alexandra S. Jacobs, Michael Justin Fekete and John J. Levy of Montgomery McCracken Walker & Rhoads, in Cherry Hill, N.J.
The defendants were 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