Who's got the guts to numerically grade a raw coin?

topstuf

I see them all the time. I also know a dealer who got his gonads sued off and LOST for doing just that. Now, it was BEFORE 3rd party grading was popular, but it DID exist. It was also during the time when they changed the grading standards to suit the industry and keep the public from knowing that coins fell off the roof.

But....I will NOT numerically grade a raw coin without some qualifying statement such as: "In my opinion" or "looks to me, but you decide" or something like that.

Any opinions on liability for misgrading raw coins?

dragon

You should have been around last year for the famous dragon vs. Coinmonger bet on grading raw coins.

K6AZ

Do you have a reference for this dealer who was sued?

Believe it or not, there are those of us who specialize in a certain series who have no trouble pinning a numerical grade on raw coins. I do it on every raw coin I sell.

coinrookie

I do not know if you could assign actual liabilty or not. It is the dealers opinion and he is not a proffessional grader as such. It is his opinion. So you should be paying for the coin not relying solely on his opinion. There should always atleast be picture or sight seen deal or if neither of these two atleast a clear return policy.

Barry

This isn't an April Fool's joke? Sure sounds like one.

topstuf

K6AZ..... The dealer is/was also an attorney. Well known and respected. A very good friend at the time. He left coins and is now doing well in another field altogether. I won't divulge his name. Midwest.

The incident is well known and actually sad. He was using the same grading we all used back then in 1979-81.

But the court found that if the customer paid 65 price and "65' was on the coin and the "new" grading service wouldn't put "65" on the plastic, then the buyer suffered damages.

In fact, when one of the absolute WORST coin scammers went out of bizz, their "investment advisor" who was on their .......TV SHOW...... came to me with a proposition. He would pay me $200 per coin to put HIS coins in MY flips with HIS grading on the flip. I passed.

The dealer in this post was not a scammer. He used ACCEPTED standards at the time.

I, too, can and DO put numbers on the coins. It is just that I will not ADVERTISE them without the disclaimer that it is my OPINION.

kranky

I'm really shocked to hear there was ever such a verdict. I thought I had read before that on more than one occasion, courts have ruled that a grade is not a statement of fact but one person's (or one company's) opinion. The people who got into trouble were the ones who touted an investment angle.

I think I read that in one of Scott Travers' books.

topstuf

That could be it. I believe he (and all of us) were caught up in the "investment" angle of those times.

The one scammer who wanted to pay me to change the grades also sold "investment" packages. One particular one comes to mind when a guy came in for his annual mandatory audit of his employee pension plan which he had put in coins through them.

I bid $11,000 on the lot and he said I was the high bidder.

His cost?

$247,000 !!!!! Yep........247k by his own admission.

Every AU saint in California jumped to a 65 through this outfit.

They GUARANTEED 20% per annum..........FOREVER.........or grey sheet.......WHICHEVER WAS HIGHER! (in writing)

I had customers ask my price for coins and then tell me they would pay more to "store x" because of the guarantee. It was a kick the first day they were gone. MY phone rang off the hook.

"What do I do???????"

ALSO nice was the call from the guy who I refused to store 77 Krugerrands for. THEY did that service. Until they took em.

vega1

Maybe I'm misunderstanding, but is this not what Bowers and Merena and other dealers do now? If you go to their website you can purchase either slabbed or raw coins at the grade B+M specify.

MrEureka

Nobody's getting sued just for grading a coin. They're getting sued for buying and selling coins at fraudulent prices. Sometimes, the fraud involves misrepresenting the grade of the coin. But nobody is realistically going to sue you just for voicing your opinion as to the grade of a coin.

Bottom line is that I will grade anything for anyone in any situation, and without fear of lawsuits.

K6AZ

topstuf- By the sounds of your original post, it made it appear as if an honest seller assigning a numerical grade to a raw coin could be held liable if in the eyes of another grader, the coin did not meet his grade. This is simply not true, and there is no caselaw references from 1976-2002 where this has happened. There have been cases where the people running "coin investment firms" have been nailed in court, and these cases usually involve buying mid range MS coins and selling them as gems. Here is one such case. In this case, the defendants bought coins as MS63, and sold them as MS65 "investment" coins.

US vs. KAYNE

topstuf

My original post could be wrong. ..........A first!

Anyhow, that is the story from everyone who knew the guy. It could have been a civil action. It may have been a "settlement" but it busted him. He was not (as far as I knew) a huge player and from what I knew of him, he was not a fraud.

What I ...am...saying is that when I advertise a coin, I make my grading very clear that it is my OPINION and I cite strengths and weaknesses that support it.

I am gunshy on lawsuits. I haven't been sued, but I don't intend to be either. When we had the pawn shop open, I had ....addenda.....papers for auto pawns. Just because the pawn contracts don't cover the bases on cars.

Sorry to stir the pot so vigorously, but my information was that he was sued because his grades were not confirmed by 3rd party.

This was the period when I sold my (graded) 65 Morgans. I think they were around $500 or so.

Ahh the days of wine and roses....

K6AZ

topstuf, I have been served with a lawsuit seven times, four of those times were for voicing my opinions on BBS boards before the explosion of the internet. There is a very effective legal response to these types of lawsuits, and any good civil law attorney should be able to explain them to you. None of the four lawsuits relating to my BBS activity ever made it to discovery, let alone dispositions and further court hearings.

It is your choice to use disclaimers if you choose, but to me as a buyer, it makes me think the seller doesn't know what he is doing. I assign a numerical grade to my raw coins, and stand behind it. I also offer a no questions asked return policy, so my grading has never been an issue, even though no one has ever returned one of my coins.

1956Quarter

I don't own nor never will a SLAB coin so all of my coins are graded by ME and are raw. If I put an MS-64 grade on a coin, thats what it is based on my professional experience. If someone bought it without looking at it and determining that they agreed with or disagreed with my grade then thats THEIR peril not mine. That law suit should have been thrown out before it hit a court room. Grading is subjective wheither its done by a so called professional grading service, or an experienced individual, there is no need to include "in my opinion" in any description. If this dealer lost that suit that was an injustice to the N'th degree, and I'd be looking at changing attorneys as they should have never lost that one.

topstuf

K6AZ......Glad to hear you have had experience and successful outcomes.

My real purpose in using the "in my opinion" disclaimer isn't SOLELY for the buyer.

Here's an example: 1529 State quarter of Calihoma. (picture) I grade it MS63. The surface marks on the left in the image are too numerous for 64 in my opinion. The reverse is much cleaner and is consistent with a 65 (if it is) The coin is raw so the grade is my opinion. In any event, you have a 7 day return privilege if it doesn't suit your needs.

That's it. I archive all sales. One of my considerations is an ..........heir. Heirs can find attorneys who will work on contingency and I just feel (my opinion only) that I am safer to put it up front just to be able to say that I was not GUARANTEEING my grade. It's just for the BUYER and me and I want buyers to be satisfied. I figure if he keeps the coin, we are copascetic and the deal is done. But I also know that the future can be full of surprises.

I met (?) said dealer in 1983 or so on the coin teletype. We communicated and bantered back and forth and generally had fun on the teletype. Suddenly he was gone. I inquired and was told that he had been sued and lost and was completely OUT of coins and licking his wounds. In later years I found him and attempted to contact him. I talked to another dealer and asked where he was and was told that his wife had threatened divorce if he ever resumed contact with coin people.

So there it stands. I know where he is, but he won't respond even to promises of just BS'ing and leaving coins out of it.

I didn't mean to cause a ruckus and start a legal search. I was just curious if any of you out there are also very careful in stating grades on raw coins.

So, thanks for responses and views and we can all move on.

K6AZ

One thing though- you mention heirs. The problem is, to bring suit against you, it must be in the allocated time frame. This varies from state to state, but in most cases is 3-4 years.

Since this seems to be a big issue for you, I would really advise paying for a one hour meeting with an experienced civil law attorney. It may be worth it for you to put your mind at ease. Don't listen to what people think they know, or even those who claim to be attorneys online. See a real live attorney who practices civil law in your state.