Sterpka v. The Upper Deck CA4/1 ( 2013 )

Filed 11/27/13 Sterpka v. The Upper Deck CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
STEVEN STERPKA, D060056
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2009-00100230-
CU-BT-CTL)
THE UPPER DECK COMPANY et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Diego County,
Lisa A. Foster, Judge. (Retired judge of the San Diego Sup. Ct.) Affirmed.
Law Offices of Douglas Jaffe and Douglas Jaffe for Plaintiff and Appellant.
The Upper Deck Company and Brittany A. Hysni for Defendant and
Respondent The Upper Deck Company.
Attlesey | Storm, LLP, Keith A. Attlesey and Suzanne S. Storm for Defendant
and Respondent Collectors Universe, Inc.
Steven Sterpka appeals the summary judgment against him in his lawsuit
against The Upper Deck Company (Upper Deck) and Collectors Universe, Inc.
(Collectors). The action arises from a dispute concerning the authenticity of a Charles
Lindbergh signature which Sterpka obtained when he purchased a case of trading cards
from Upper Deck and Collectors authenticated the signature. Sterpka contends the
trial court erred in granting summary judgment because there are triable issues of fact
as to all causes of action. We disagree and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In early 2008, Sterpka read an article in Beckett Magazine that contained
elements from an Upper Deck press release. That article was about ten rare cards that
Upper Deck produced which included a signature from a notable personality with a
strand of their hair. Exchange vouchers for these "Hair Cuts Signature" cards were
randomly inserted into packs of Upper Deck's SP Legendary Cuts. In June 2008, after
reading the article, Sterpka purchased a case of the SP Legendary Cuts for
approximately $1,500 in hopes of obtaining one of the rare cards.
Sterpka's case included a card that instructed him to contact Upper Deck to get
a Charles Lindbergh Hair Cuts Signature card. Sterpka contacted Upper Deck and
obtained the Charles Lindbergh card. The back of the card stated, "Congratulations!
You have received a trading card with an historical strand of Charles Lindbergh's hair,
that includes an autograph of Charles Lindbergh. The memorabilia was certified to us
as belonging to Charles Lindbergh. The cut autograph was independently
authenticated by a third party authenticator. We hope you enjoy this piece of history,
as we continue to keep you as close as you can get! Enjoy your memorabilia card!"
According to Upper Deck, it obtained a letter of authenticity in May 2008 from
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PSA/DNA Authentication Services (PSA/DNA), a division of Collectors,
authenticating the signature on the Charles Lindbergh Hair Cuts Signature card. The
letter stated it served as a "certificate of authenticity for a/an Charles A. Lindbergh
signed index card, which [Collectors] thoroughly examined. [¶] Inscription reads
'Sept. 10, 1928'[.]"
Sterpka contacted Beckett to sell the Charles Lindbergh card through Beckett
Select Auctions, a service that lists notable cards on eBay. As part of Beckett's
procedure to list the card, Sterpka paid Beckett $200 to obtain a letter of authenticity
from James Spence Authentication who opined that the signature was genuine.
Sterpka valued the card at $10,000, and Beckett listed it for that price on eBay.
Sterpka believed $10,000 was an appropriate value because an Abraham Lincoln Hair
Cuts Signature card had recently sold for nearly $20,000.
After the card was listed on eBay, Daniel Clemons, an autograph authenticator
and consultant to Charles Lindbergh's daughter, Reeve Lindbergh, contacted Sterpka
and eBay and informed them that the sale of the Charles Lindbergh Hair Cuts
Signature card would violate intellectual property rights because the signature was a
forgery. eBay cancelled Sterpka's multiple attempts to list the card.
Sterpka sent the card to RR Auction (RR) to authenticate the signature. In July
2009, RR returned the card to Sterpka with a letter from PSA/DNA disputing the
authenticity of the signature. PSA/DNA later revoked the opinion in that letter.
Sterpka sued Upper Deck and Collectors asserting claims against each for
fraud, negligent misrepresentation, negligence, and violation of the Consumers Legal
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Remedies Act (CLRA; Civ. Code, § 1750 et seq.). Upper Deck and Collectors moved
for summary judgment or in the alternative summary adjudication, arguing that
Sterpka could not establish at least one element of each cause of action. The trial court
agreed and entered judgment in favor of Upper Deck and Collectors.
DISCUSSION
I. General Legal Principles and Standard of Review
Summary judgment is properly granted when there is no triable issue of
material fact and the moving party is entitled to judgment as a matter of law. (Code
Civ. Proc., § 437c, subd. (c).) Where the defendant is the moving party, it must show
that a cause of action has no merit by putting forth evidence to show that either one or
more elements of the cause of action, even if separately pleaded, cannot be established,
or that a complete defense exists thereto. (Id., subd. (o).) If the defendant meets this
burden, the burden shifts to the plaintiff to establish that a triable issue of material fact
exists. (Id., subd. (p)(2).) On appeal, we review de novo the trial court's decision to
grant summary judgment. We independently determine whether the record supports
the trial court's conclusion that the asserted claims fail as a matter of law, and we are
not bound by the trial court's stated reasoning or rationales. (Prilliman v. United Air
Lines, Inc. (1997) 53 Cal. App. 4th 935, 951.)
II. Fraud and Negligent Misrepresentation Causes of Action
Sterpka argues the trial court erred in granting summary judgment because
Upper Deck knew or should have known the signature on the Charles Lindbergh card
was not authentic and unreasonably relied on Collectors's letter of authenticity. In
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regard to Collectors, Sterpka argues Collectors committed fraud and negligent
misrepresentation by improperly providing a letter of authenticity to Upper Deck, later
finding the signature was not authentic, and failing to disclose to Sterpka that it had
issued a letter of authenticity to Upper Deck regarding the same signature. As we shall
explain, we reject Sterpka's arguments.
" 'The necessary elements of fraud are: (1) misrepresentation (false
representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter);
(3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting
damage.' [Citations.]" (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal. 4th 1226,
1239, capitalization and fn. omitted.) "The tort of negligent misrepresentation does
not require scienter or intent to defraud. [Citation.] It encompasses '[t]he assertion, as
a fact, of that which is not true, by one who has no reasonable ground for believing it
to be true' [citation], and '[t]he positive assertion, in a manner not warranted by the
information of the person making it, of that which is not true, though he believes it to
be true' . . . ." (Small v. Fritz Companies, Inc. (2003) 30 Cal. 4th 167, 173–174.) In
both causes of action, the plaintiff must prove actual reliance on the misrepresentation.
(Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal. App. 4th 513, 519.) "[T]he truth or
falsity of the representations must and can only be determined as of the time when
they were relied and acted upon by the [plaintiff]." (United States Nat'l Bank v. Stiller
(1931) 119 Cal. App. 442, 444.)
Here, Upper Deck submitted facts showing that before it put the Charles
Lindbergh Hair Cuts Signature card in the marketplace and sent it to Sterpka,
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Collectors authenticated the signature on it. Upper Deck believed Collectors was one
of the largest authenticators in the trading card industry. This evidence negated the
intent element of Sterpka's fraud cause of action and showed Upper Deck's reasonable
reliance on the authenticity of the signature. Thus, the burden shifted to Sterpka to
show a triable issue of fact. (Quintilliani v. Mannerino (1998) 62 Cal. App. 4th 54, 59.)
Sterpka argues fraudulent intent and unreasonable reliance can be inferred
because Upper Deck initially did not produce documents showing how it obtained the
Charles Lindbergh signature and later provided a purchase order for the signature
which resembles an Upper Deck invoice; Collectors's authenticity letter was issued
prior to Upper Deck's alleged purchase of the signature; and Collectors's letter
purported to authenticate a signature with a date whereas the Hair Cuts Signature card
did not have a date. Fraudulent intent must often be inferred from underlying
circumstances as direct evidence is rarely available. (Continental Airlines, Inc. v.
McDonnell Douglas Corp. (1989) 216 Cal. App. 3d 388, 411–412.) However,
" ' "[w]hen opposition to a motion for summary judgment is based on inferences, those
inferences must be reasonably deducible from the evidence, and not such as are
derived from speculation, conjecture, imagination, or guesswork." [Citation.]' "
(Annod Corp. v. Hamilton & Samuels (2002) 100 Cal. App. 4th 1286, 1298.) We
cannot agree that fraudulent intent in this case may be inferred from the facts Sterpka
presented. Sterpka's arguments are mere conjecture and do not permit a reasonable
inference of fraudulent intent. Thus, Sterpka's fraud cause of action against Upper
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Deck fails. Similarly, Sterpka's negligent misrepresentation claim fails because he has
failed to show Upper Deck acted unreasonably.
Sterpka's fraud and negligent misrepresentation claims against Collectors also
fail. Although Sterpka argues that genuine issues of material fact exist on these causes
of action, Sterpka failed to show he relied on any statement by Collectors. Indeed,
Sterpka admitted in his deposition that he did not rely on any statements or documents
from anyone at Collectors in deciding whether to purchase the case of SP Legendary
Cuts cards. Sterpka's claims against Collectors are largely based on Collectors's letter
of authenticity to Upper Deck, the later letter finding the same signature was not
authentic, and its failure to disclose to Sterpka that it had issued a letter of authenticity
to Upper Deck. These facts, even if true, do not support the necessary element of
reliance. Generally, reliance "exists when the misrepresentation . . . was an immediate
cause of the plaintiff's conduct which altered his or her legal relations, and when
without such misrepresentation or nondisclosure he or she would not, in all reasonable
probability, have entered into the contract or other transaction." (Alliance Mortgage
Co. v. Rothwell, supra, 10 Cal.4th at p. 1239.) Sterpka has not met his burden to show
a triable issue of fact regarding reliance because none of his arguments demonstrate
that he purchased the case of SP Legendary Cuts cards based on Collectors's
statements.
We conclude the trial court properly granted summary judgment in favor of
Upper Deck and Collectors on the fraud and negligent misrepresentation claims.
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III. Negligence Causes of Action
Sterpka argues the trial court erred in granting summary judgment in favor of
Upper Deck and Collectors on his negligence claims. Those claims were based on
allegations that Upper Deck and Collectors failed to reasonably and properly
authenticate the Charles Lindbergh signature.
The elements of a negligence action are duty, breach of duty, proximate cause
and damages. (Paz v. State of California (2000) 22 Cal. 4th 550, 559.) " '[N]egligence
is conduct which falls below the standard established by law for the protection of
others against unreasonable risk of harm.' [Citation.] Thus, as a general proposition
one 'is required to exercise the care that a person of ordinary prudence would exercise
under the circumstances.' " (Flowers v. Torrance Memorial Hospital Medical Center
(1994) 8 Cal. 4th 992, 997, fn. omitted.)
Here, before Upper Deck put the Charles Lindbergh Hair Cuts Signature card in
the marketplace and sent it to Sterpka, Upper Deck authenticated the signature by
sending it to Collectors. Upper Deck believed Collectors was one of the largest
authenticators in the trading card industry. Based on Collectors's letter of authenticity,
Upper Deck believed the Charles Lindbergh signature was authentic. Sterpka has not
produced evidence demonstrating that Upper Deck's acts were unreasonable. Thus, his
negligence claim against Upper Deck fails.
Similarly, Sterpka has not shown that Collectors failed to exercise the degree of
care and diligence which would be exercised by persons of reasonable prudence under
the same circumstances when it authenticated the signature. The evidence reveals an
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ongoing dispute regarding the authenticity of the signature. At least one authentication
service other than Collectors found the signature was genuine. Evidence that
Collectors issued a second letter stating the signature was not authentic and that
Clemons informed Sterpka the signature was a forgery is not sufficient to show
Collectors was negligent. These facts merely reveal a mistake and dispute regarding
the signature's validity. Without some evidence that Collectors acted unreasonably,
Sterpka cannot prove negligence.
IV. CLRA Causes of Action
Sterpka argues the trial court erred in granting summary judgment because
triable issues of material fact existed on his CLRA claims. Upper Deck and Collectors
contend Sterpka cannot maintain claims under the CLRA because he was not a
"consumer" who purchased "goods" as defined by the CLRA.
"The Legislature enacted the CLRA in 1970 to provide individual consumers
with a remedy against merchants employing certain deceptive practices in connection
with the sale of goods or services, noting the difficult[y] consumers faced proving a
fraud claim. [Citation.] The purpose of the statutory scheme is 'to protect consumers
against unfair and deceptive business practices and to provide efficient and economical
procedures to secure such protection.' [Citation.] The Legislature intended the CLRA
to be 'liberally construed and applied to promote its underlying purposes, which are to
protect consumers against unfair and deceptive business practices and to provide
efficient and economical procedures to secure such protection.' [Citation.] The CLRA
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sets forth 24 proscribed 'unfair methods of competition and unfair or deceptive acts or
practices.' " (Nelson v. Pearson Ford Co. (2010) 186 Cal. App. 4th 983, 1021.)
Under the CLRA, " '[c]onsumer' means an individual who seeks or acquires, by
purchase or lease, any goods or services for personal, family, or household purposes."
(Civ. Code, § 1761, subd. (d), italics added.) Similarly, " '[g]oods' means tangible
chattels bought or leased for use primarily for personal, family, or household
purposes, including certificates or coupons exchangeable for these goods . . . ." (Id.,
subd. (a), italics added.)
Here, Sterpka purchased a case of the SP Legendary Cuts cards in hopes of
obtaining one of the rare Hair Cuts Signature cards. He considered the cards to be
valuable and intended to sell the Hair Cuts Signature card if he obtained one. Shortly
after receiving the Charles Lindbergh card, Sterpka contacted Beckett to sell the card
through Beckett Select Auctions. Sterpka also sold approximately two dozen other
cards from his case of SP Legendary Cuts cards.
Sterpka does not cite to any evidence disputing that he intended to sell the Hair
Cuts Signature card for a profit if he obtained one. Instead, he claims he is a
"consumer" for purposes of the CLRA because "he was not (nor has he even been) in
the business of buying and selling memorabilia" and "[c]ard collecting is [his] hobby."
While Sterpka's claims may be true, they do not change the fact that in this case, he did
not intend to obtain the Hair Cuts Signature card for "personal, family, or household"
purposes. (Civ. Code, § 1761, subd. (d).) Instead, his intent was to obtain the card for
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resale. Thus, the trial court properly granted summary judgment, finding Sterpka was
not a "consumer" under the CLRA.
DISPOSITION
The judgment is affirmed. Upper Deck and Collectors are entitled to their costs
on appeal.
MCINTYRE, J.
WE CONCUR:
BENKE, Acting P. J.
MCDONALD, J.
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