Alawsuit has been filed against Jerry Seinfeld, alleging that the 1958 Porsche Speedster he sold for $1,540,000 at the March 2016 Gooding & Company Amelia Island Auction is a fake. Seinfeld politely and sensibly declined to comment on the litigation, as one would expect, so we have to rely upon the complaint filed in the lawsuit and reports in the press for the story. Special car and occasion The Speedster was one of 16 cars Seinfeld sold at the auction. It was described as an ultra-rare 1958 Porsche 356A 1500 GS/GT Carrera Speedster, one of only 151 Carrera Speedsters. Fewer than […]
Alawsuit has been filed against Jerry Seinfeld, alleging that the 1958 Porsche Speedster he sold for $1,540,000 at the March 2016 Gooding & Company Amelia Island Auction is a fake.
Seinfeld politely and sensibly declined to comment on the litigation, as one would expect, so we have to rely upon the complaint filed in the lawsuit and reports in the press for the story.
Special car and occasion
The Speedster was one of 16 cars Seinfeld sold at the auction.
It was described as an ultra-rare 1958 Porsche 356A 1500 GS/GT Carrera Speedster, one of only 151 Carrera Speedsters. Fewer than 90 were built in GS/GT trim, and only 56 carried lightweight aluminum panels.
This was also stated to be the only Carrera Speedster finished at the factory in Auratium Green. Seinfeld acquired the Speedster in 2012, and it was said to have undergone an extensive restoration at Porsche specialist European Collectibles.
Seinfeld did his part to promote the sale. He attended the auction and addressed the crowd before the bidding began, quoted by The New York Times as saying, “Let me be honest with you. I could have gotten rid of every one of these in one day with no problem. But I wanted to be here with you all, who see these things the way I do and enjoy it the way I do. I want to see your face and feel your enthusiasm.”
The personal touch had its effect. The New York Times quoted a collector as saying, “There’s a certain attraction to this particular collection all coming out in one go…especially since he’s chosen to go this way rather than selling them off privately.”
Happy at the time
The winning bidder was Fica Frio Limited, a business entity organized in Jersey. (Fica Frio is Portuguese for “chill out,” an observation that may have prophetic qualities.) It was pleased with the purchase, and sent the Speedster to the U.K. When it decided to sell the Speedster about a year later, it sent it to Maxted-Page Limited in Essex for inspection and sale. Maxted-Page became concerned about the authenticity due to a lack of documentary history and photographic evidence of the restoration work. They declined to market the Speedster.
Part of their concern appears to have arisen from a document in the Speedster’s “history file” that had been provided to Fica Frio. It included a statement believed to have been written by the person who sold the Speedster to Seinfeld, stating, “Unfortunately, we do not have a lot of information on the 1958 Porsche 356A 1500 Carrera GT Speedster VIN 84908. We purchased the car from a broker who would not take me to the cars [sic] original location to meet the family that owned it originally. I tried very hard to find out more but never could.”
Deal unwinds
Fica Frio claims to have contacted Gooding & Co. to negotiate an unwinding of the sale. Fica Frio also claims to have a recorded voicemail left by Seinfeld, stating that he had heard from Gooding about the “counterfeit car,” that he wanted to “offer my apology for this nuisance and assure you that you will be completely indemnified in full and not have to keep the car and get all your money back,” and “I did want to apologize to you personally for that happening.” Seinfeld is also said to have said he “would also love to know how your guys figured it out, because I find that to be interesting because that’s impressive; my guys did not, I guess, see anything amiss with the car when I bought it.”
So why the lawsuit?
So far, this all sounds like an unfortunate situation that has all been worked out. Why do we have a lawsuit? Fica Frio claims that Seinfeld never followed through on his commitment to buy the car back, so they had to sue.
Seinfeld’s attorney, Orin Snyder, told TMZ, “Jerry has been working in good faith to get to the bottom of this matter. He asked Fica Frio for evidence to substantiate the allegations. Fica Frio ignored Jerry and instead filed this frivolous lawsuit.”
Snyder added, “Jerry consigned the car to Gooding & Co., an auction house, which is responsible for the sale. Nevertheless, Jerry is willing to do what’s right and fair, and we are confident the court will support the need for an outside evaluator to examine the provenance of the car.”
Okay, so there’s the mixed message. Does Seinfeld agree the Speedster is a fake, or is he insisting on proof about it? Is he taking responsibility? Shifting blame to Gooding? Something else? Snyder’s comments were made well after the lawsuit had been filed, so Fica Frio had to have other reasons to be impatient. But this doesn’t make it sound like the parties are close on a deal.
Is it real?
First question — is the car real? We certainly don’t know, but we can give some thought to who has to answer the question.
That is pretty clearly Fica Frio. Its claim is that the car it purchased is not really Speedster 84908, but actually something else.
Fica Frio must prove its claim to win. It isn’t enough to create doubts about the authenticity of the Speedster — the letter from Seinfeld’s seller, if it is as described, may be enough by itself to create doubt. But lacking enough documentation to prove that this car is Speedster 84908 is not the same as proving that the car is not 84908.
“Maybe it is, maybe it isn’t” doesn’t cut it here. Fica Frio must prove that, more likely than not, this is not 84908.
If all Fica Frio can establish is doubt, then it might end up in the worst possible situation — it can’t get its money back from Seinfeld, and it can’t resell the car to someone else for full value.
What did Seinfeld know?
If the Speedster is not authentic, then the question becomes, what did Seinfeld know? To be liable for fraud, he must have known the car was a fake.
Although Fica Frio alleges this is exactly what happened, it is hard to imagine that someone in Seinfeld’s position would intentionally lie about a car’s provenance, particularly in such a public manner. Plus, his voicemail message, as quoted by Fica Frio, suggests he was curious about how they discovered this when his guys were unable to, which suggests he didn’t know.
Fica Frio asserts that Seinfeld must have read the letter from his seller about the lack of history. Based on that, it alleges: “Mr. Seinfeld did not have a good faith belief that the vehicle was…authentic…”
The legal logic is that if Seinfeld had no reason to believe it was authentic, he made a negligent misrepresentation when he said it was.
In plain English: If you don’t know what you’re talking about, keep your mouth shut.
But maybe Seinfeld never read the letter. And the voicemail mentions that Seinfeld’s guy didn’t find anything wrong with the car, suggesting that he did have someone check it out for him, which could eliminate the claimed negligence. You aren’t negligent just because you didn’t investigate the car thoroughly.
It seems that Seinfeld may have been just as surprised as Fico Frio about the issues with the Speedster. If he actually believed the car was Speedster 84908, and just got fooled, then fraud and misrepresentation may not be good claims.
Breach of contract
Fica Frio also claims liability for breach of contract. Under the Uniform Commercial Code, a seller’s statements about the character or qualities of a car generally create a contract warranty that the car actually meets those descriptions. That could be a different approach to a refund.
The bidder agreement signed by Fica Frio at the auction undoubtedly stated that all cars were being sold as-is, with no warranties whatsoever. That certainly conflicts with the contrary legal rule that the statements about the Speedster create a warranty, so which is it?
You aren’t going to like the answer. I’ve seen cases where the as-is provision trumps the express warranty, and I’ve seen them go the other way. It may just depend on what the judge deciding the case thinks is right.
How long on the hook?
So how worried should you be about the last car you sold? Can someone come along years later and claim that you sold them a fake car and demand a refund?
Fraud and misrepresentation statutes of limitations are relatively short, usually two years. But the two years starts from discovery of the fraud, so that could run a number of years. Breach of contract statutes of limitations are longer, more like six years, but the time starts immediately from the date of the sale. So think five or six years from a sale to be clear of claims.
The difficulty is that while we may believe that our collector car is authentic, we didn’t buy it new from the factory, and we can’t realistically know that it is authentic.
So we sell the car in good faith, and then someone down the line discovers a problem.
This case brings up that it can be very difficult for the innocent buyer to recover anything from the innocent seller. And that makes it even more important to thoroughly check out a car you are buying — and not only rely on what the seller believes about the car. ♦
JOHN DRANEAS is an attorney in Oregon. His comments are general in nature and are not intended to substitute for consultation with an attorney. He can be reached through www.draneaslaw.com.