La. R.S. 37:3132 is not Violated when an Auctioneer does not Knowingly Misrepresent the facts or the Quality of the Products Offered for Sale at Auction

In Slaughter v. Guinn, 571 So. 2d 876, 879 (La.App. 3 Cir. 1990), the Third Circuit Court of Appeals of Louisiana held that an auctioneer has not violated La. R.S. 37:3132 when s/he does not deliberately misrepresent the facts or quality of any merchandise offered for auction sale.  

This case involved an auction sale in which the Plaintiff buyer, Steve Slaughter (“Plaintiff”) purchased three trucks in an auction conducted by Guinn Brothers Auctioneers, Incorporated (“Guinn Brother”). Auctioneer John E. Guinn (“Auctioneer”) sold the auctioned property on behalf of the corporation. Shortly after the sale, the buyer discovered that the trucks were not models as advertised in the brochure and listed in buyer’s guide. The buyer first acknowledged he had a problem four days after the sale. The next day, the buyer received the titles in the mail from auctioneer and discovered the discrepancy in the model years. The three trucks were advertised for sale as 1983 models but one was a 1980 model and the other two were 1981 models. 

Consequently, the Plaintiff filed a suit in the trial court to rescind the sale and order the auctioneer to return to him the price he paid for the trucks; together with interest, certain damages, and attorney's fees. The trial court ruled in favor of the auctioneer. On appeal, the court affirmed the trial court’s judgment. The appellate court found that an auctioneer was not a broker, as he did not negotiate a sale between two parties, but rather was an agent, as he offered for sale to the highest bidder on behalf of the seller. Further, there was no evidence in the record to support a finding that the auctioneer deliberately misrepresented the model year of the trucks.

Plaintiffs in this case argued that the Auctioneer violated the provisions of La. R.S. 37:3132 because it did not verify the information provided by Tideland (consignor of the property) on their descriptive list against the titles in its possession and, as a result, is responsible for the loss occasioned by its neglect. Id. at 879. The court did not find merits in the argument. Id

The court observed that La. R.S. 37:3132 appears in Chapter 42 of the Revised Statutes governing the licensing and conduct of auctioneers. Id. The section specifically reads as below:

37:3132. Representation as to quality and price 

At all such sales by auction any licensee shall at all times truly and correctly represent to the public attending the auction the actual facts in respect to the quality and manufacture of the items being offered for auction. It shall be a violation of this Chapter for any licensee hereunder to place what is popularly known in the trade as fictitious price tags on items sold at any such auction.

The Court of Appeals observed that La. R.S. 37:3132 establishes a rule of conduct for auctioneers, the violation of which rule subjects the auctioneer to punishment under another provision of Chapter 42, i.e., La. R.S. 37:3123. Id. However, La. R.S. 37:3132 does not establish a separate cause of action for redress in favor of the public against auctioneers. Id. Rather, an aggrieved party must still seek relief under theories of fraud or negligence. Id. 

The Court of Appeals found that there was no violation of La. R.S. 37:3132 because Guinn did not knowingly misrepresent the facts or the quality of the merchandise offered for sale. Id. Additionally, Guinn expressly cautioned prospective purchasers of the possibility of inaccuracies in the description of items found in the advance brochure and buyer's guide and made clear that all sales would be made without guarantee or warranty and at the buyer's risk. Id.