Chapter Four - Long and Scary Thread!

MrEureka

To recap:

CHAPTER ONE

Long Beach Coin Show, 1989

Guy, a PNG dealer and "Pretty Nice Guy" (hence, his fictitious name) shows a raw uncirculated 1813 half eagle to Mark, a very sharp coin dealer. (It will later become clear how our second character got his fictitious name.) He explains that he has the coin on consignment and wants a second opinion on the coin before offering it to a good retail customer "back home".

Mark looks very closely at the coin, loves it, and rather than giving his free opinion he tries to buy it. Under some pressure from Mark, Guy reveals that the coin is on consignment to him at 25K and that he was going to charge his customer 30K. Mark convinces Guy to sell him the coin instead, at the same 30K, which at the time was about an MS64 price. A deal is consummated. Mark is thrilled because he thinks it's a 65 worth 100K. Guy pays the consignor 25K and both he and the consignor are happy.


CHAPTER TWO

Several weeks have passed. Mark has sent his 1813 half eagle to both major grading services. Both have bodybagged the coin for "Altered Surfaces". (In fact, the entire coin was probably very lightly whizzed.) Although Mark still thinks the coin looks great, he realizes that he made a big mistake paying 30K for the coin.

CHAPTER THREE

Mark confronts Guy and asks for a refund. Guy says "Sorry, a deal's a deal. Besides, I've alread paid my consignor and he's not going to give me a refund. Why should I have to give you a refund?" Under pressure from Mark, Guy reveals the name of the consignor - "Doc", a well known coin dealer and major league doctor. Mark confronts Doc, again asking for a refund, and gets nowhere. In fact, Doc refuses to acknowledge that the coin has been whizzed. (Doc's refusal may be sincere. We don't know if he whizzed the coin himself, and the coin is obviously very deceptive.)

CHAPTER FOUR (Posted Saturday, April 26 at 3:45 PM)

Mark decides that his best chance at getting his money back is to take Guy to PNG arbitration. (As you recall, Guy is a PNG dealer. PNG is an exclusive dealer organization that purports to hold its members to the highest standards.)

Mark makes two claims:

1. There is a set of unwritten rules among honest coin dealers, and those rules allow for the return of whizzed and/or repaired coins.

2. He was defrauded. He concedes that Guy may not have known that the coin was whizzed, but even so it would still be his responsibility to refund Mark's money and go after Doc.

Guy makes one lone claim in his own defense:

1. All dealer-to-dealer transactions are final and without recourse.


Three arbitrators are selected. They are deeply divided. Two strongly support Mark. One strongly supports Guy. The process by which they ultimately reach a unanimous decision will make for the most interesting chapter yet.

But first, what do YOU think about Mark's two claims and Guy's defense?

MS68

Guns or swords?

wondercoin

ttt

Andy: I assume a PNG hearing, while fact driven, is ultimately based upon the PHG rules. Was there a PNG charter rule on this subject at the time of the hearing, or were the 3 judges acting without a rule in place?

Wondercoin

Julian

As for the unwritten rules, if the coin was in inventory, I would try to make some sort of settlement. Since the coin was consigned and the consignor did not wish to refund, the only thing that I would do is try to remarket the coin.

For the most part, Guy is correct. It all depends on their relationship. He may refund his profit, if necessary, but in my humble opinion, he does not NEED to do anything.

Nic

Mark should get another job. K

MrEureka

Mark should get another job.

Mark is making boatloads of money in the coin business. You don't have to bat 1000 to stay in the majors.

DCAMFranklin

The defrauded claim won't hold water. You would have to prove that Guy new the coin was lightly whizzed. Unless Mark can provide a witness that can substantiate Guy's knowledge of the cleaning, then there is no fraud. People don't have to pay damages for unwritten rules.

If Mark had time enough to send the coin to both PCGS and NGC, then any reasonable return privilege period would certainly have run. Though Guy's defense about dealer-to-dealer transactions doesn't even require a return privilege. I believe Guy wins the arbitration.

keets

Mark

1. i've always said that someone needs to write down all these unwritten rules. sorry Mark.
2. another case of Slick Willie getting caught in his own net. take a deep breath and swallow hard.


Guy

1. the best offense is a good defense. with the lapse of time involved and nothing expressed about a guarantee, coupled with Mark's high pressure buy, what else needs to be said.

assuming all the facts are, well, facts. i bet the ending will be a surprise!!

al h.

MrEureka

Throughout the discussion of these four chapters, most participants have been of the cutthroat "caveat emptor" philosophy.

I am truly, truly shocked! How can you flame dippers and AT artists and then side with a PNG dealer selling 30K whizzed coins?

DCAMFranklin

So far, I have not read anything that says Guy KNEW he was selling a whizzed coin.

I have read that Mark is a knowledgeable dealer that is making "boatloads" of money buying and selling coins. I have read the Mark had a good long opportunity to assess the coin and decided on his own, without any proding from Guy, that the coin was actually a MS-65. He was strong and assertive and convinced Guy to sell him the coin, right then, for the $30,000 Guy hoped to receive from the buyer back home. That is IF the $30,000 buyer back home really existed.

When you swing for the fences, you have to be prepared to strike out once in awhile. He did.

boiler78

Andy- You stated that Mark was a sharp coin dealer yet he could not tell that the coin was wizzed. Are we to assume that Guy is sharper than Mark and was aware of the doctoring?

MrEureka

Are we to assume that Guy is sharper than Mark and was aware of the doctoring?

Guy denied knowing that the coin was whizzed and you have no reason to doubt him. Also, you can assume that Mark is sharper than Guy.

TheNumish

Mark sounds like one of those spoiled people that wants to have his cake and eat it too.

Mark is the one that pushed Guy to sell him the coin when he relly didn't intend to sell him the coin. If the coin came back MS-65 Mark would have patted himself on the back and told himself clever he was to outsmart Guy. Since the coin didn't make the grade Mark is unwilling to take it like a man and wants to get out of it. I say Mark should eat the coin and enjoy it like a piece of humble pie.

If Guy knew the coin was worked and didn't tell Mark than Mark should get his money back. Since this isn't the case I don't think Guy should be forced to give it back.

MrEureka

Numish -

We're not trying to figure out if Guy is a good guy. We're trying to figure out if Guy should be forced to give a refund. So, does it really matter if Guy knew it was whizzed?

MrEureka

As for the unwritten rules, if the coin was in inventory, I would try to make some sort of settlement. Since the coin was consigned and the consignor did not wish to refund, the only thing that I would do is try to remarket the coin.

Julian -

Are those your unwritten rules, or do you they apply to everyone? (Edited to also ask: In this type of scenario, would it be reasonable for you to expect another dealer to treat you as you say you would treat them?)

Askari

<< <i>Andy- You stated that Mark was a sharp coin dealer yet he could not tell that the coin was wizzed. Are we to assume that Guy is sharper than Mark and was aware of the doctoring? >>

I tend to agree with Boiler. I have a problem with this scenario, where Guy approaches Mark for an opinion because he [Mark] is highly respected for his grading skills ... and yet Mark can't detect even slight whizzing? (I presume he had his loupe available at need.) What's Guy's rep?

kranky

I would dismiss Mark's claim of the "unwritten rule" because unwritten rules can't be enforced, can they? Perhaps many dealers would willingly take the coin back (I doubt it, being as it was consigned), but this claim wouldn't cut it with me in an arbitration.

I don't buy the claim of being defrauded, either. For sure the coin wasn't what he thought it was, but I don't think that falls into the category of being defrauded, especially in a sight-seen deal. Had it been a counterfeit, or altered date, then different story.

I would agree with Guy's position that dealer-to-dealer transactions are final (unless agreed otherwise). I would expect Mark to understand that the coin was on consignment, the consignor was paid already, and why that would make it very difficult to unwind the deal. Mark could have made the deal contingent on getting it slabbed, or at least could have asked for that option, in order to protect himself. Unless Mark started in the coin business that very day, he should have been well aware of the implications of a "done deal".

However, I will reiterate what I said in a thread from one of the earlier chapters - if Mark was a collector, I would be on his side. But as a dealer, it is too easy to exploit others. Buy a raw coin from another dealer when you think you can rip it, and then ask for a refund if you're wrong? You get to return all your mistakes but keep your winners? If a dealer is willing to unwind a deal for whatever reason, fine. But dealer-to-dealer, you can't expect a return privilege unless the coin is a fake.

Coinosaurus

Not sure I have a lot of sympathy for Mark. Ya know, when I started collecting I bought some bad coins, too. I don't see any "unwritten rules" that protect me, or any dealers lining up to make me whole. Mind you, I'm not complaining, that's just part of getting educated about the market. This is why slabs are good - they offer a lot of protection for such situations. You buy a PCGS/NGC coin, and they will make good on it if it is a bad coin (OK, no flames here, I understand that this may not be a trivial process). Mark, in this case, chose NOT to rely on the services, chose NOT to insure himself against a bad decision, and now somehow thinks he is entitled to compensation for his gambling losses. Where do I sign up for this risk free business proposition - I wanna get a piece of that action. I can buy everyone's raw coins, or crack 'em out, and then when they don't get higher grades, or worse yet get BBed, I can still get all my dough back.

OK, here's a "what if" scenario - suppose Mark gets his upgrade and makes a huge profit. How much dough is he gonna give back the seller? What if the seller claimed that he was entitled to compensation for his "loss"? This ain't communism folks, it's a free market. You take the risk alone, and the reward (or loss) goes to you alone.

sinin1

Obviously the 2 major services misdiagnosed the whizzed coin because Guy seems to know what he is doing and did not see or know of any whizzing. Guy has a nice raw coin and should be happy.

Julian

Yes, I would expect to be treated in the same manner as I conduct my business.

MS68

Andy- Why did Mark take Guy to PNG arbitration when it is apparent that he was nothing more than a broker in this transaction? Why was Doc not taken to arbitration instead? To me this would be like buying a house and holding the real estate broker liable for a problem with the house instead of the seller.

relayer

Seems if you are in the business of buying and selling $30k coins, you should know what you are doing.

Mark and Guy should file fraud charges against Doc

Deadhorse

As I said after chapter 3, Mark isn't a very nice guy. Still, I smell a set up. Mark got stung. I'm betting he stays stung and is out the $$.

In the background there are 2-3 or more dealers silently enjoying their revenge. Wonder how many people Mark had royally pissed off in the past??

Trime

Andy,
Great tale but time to wrap this up.

MrEureka

Why did Mark take Guy to PNG arbitration when it is apparent that he was nothing more than a broker in this transaction? Why was Doc not taken to arbitration instead?

Two reasons:

1. Mark bought the coin from Guy, not Doc.

2. Doc is not a PNG dealer. To go after Doc, Mark would need to sue him, a much more expensive and time consuming option.

roadrunner

Interesting that I experienced a similar situation with one of the PNG dealers on this forum. A coin was bought raw and when submitted came back AT. When I went back to the seller to discuss the coin they wanted nothing to do with it. I was told that I knew what I was doing and that was that. But it's slightly bothersome to me that they state a different philosophy in public when their money is on the line. Evolution I guess.

I side with the majority that Mark is out the money. We are all accountable for our mistakes. But that doesn't mean Guy and Doc shouldn't be taken out to the woodshed either.

roadrunner

fishcooker

The deal wasn't contingent on 3rd party grading. Coin was traded for money, and at that moment both were happy.

Everything in life is not subject to "Do Overs."

oreville

PNG rules in favor of Guy. No question about it. Not even close!!!

Why? I think you all missed the boat on this one.

Why? Guy asked Mark his opinion on grading the coin and when Mark was asked only to evaluate the coin but bought the coin instead then he waived all of his rights that he might have had otherwise.

Coulport

I take it we are not there yet.

Some people like soap operas, some don't.

MrEureka

Chapter Five has been posted!

morgannut2

TTT: By the way I remain astonished that Guy would not want to instantly refund the entire profit on the coin. Does he really think part of his business (making money) is to sell damaged coins that are not accurately represented? He sould want nothing to do with this bad coin, any profits, and certainly Mr. Doc ever again.

This is still a good thread, even if it's 3 years old.