Michael Sever Obtains Summary Judgment for Auto Auctioneer

Partner Michael Sever obtained a summary judgment order on behalf of an auto auctioneer client in a recent Wisconsin case concerning five vintage motorcycles.

In the case, a Danish citizen consigned five motorcycles for sale at auction and claimed that the motorcycles’ certificates of title were en route to the auction. The auctioneer relied on the consignor’s misrepresentation and presented the five motorcycles for bidding. However, the title certificates were never produced, and even after the auction concluded, the consignor was unable to produce any records proving that he actually owned any of the motorcycles. Absent evidence of ownership, the five winning bidders were unable to register the motorcycles to secure title in their own names.

Post-auction, the auctioneer took possession of the motorcycles and made various goodwill concessions, including refunding the buyers’ purchase prices. However, the auctioneer found itself unable to return the motorcycles to the consignor, because there was no proof that he owned any of the motorcycles. The auctioneer had not only missed out on revenue from the aborted sales, but also found itself saddled with five motorcycles that it did not want, could not title, could not sell, could not return or give away, and that were taking up valuable storage space that could have been devoted to revenue-generating consignments.

After moving the motorcycles to the auctioneer’s storage facility in Wisconsin, Michael filed a Declaratory Judgment and Bill to Quiet Title action in Wisconsin, naming the five motorcycles as defendants and citing the court’s in rem jurisdiction. The auctioneer argued that because it exercised exclusive possession over the motorcycles, and there were no other title claimants who could substantiate their ownership claims with proof (including the consignor), the auctioneer was entitled to ownership of the motorcycles.

Michael notified the Danish consignor of the pending lawsuit and welcomed him to intervene, if he thought he had any ownership rights to the motorcycles that could be proven in court. The Danish consignor thereafter intervened but subsequently broke off all contact and declined to engage in discovery.

In order to “encourage” the Danish consignor to participate in the proceedings, Michael filed Requests for Admission, including five requests to “Admit that you are not the owner” of any of the motorcycles. If the consignor failed to respond to the Requests for Admission within the time prescribed by statute and the court, the Requests would be deemed admitted. The consignor eventually responded to the Requests for Admission, but Michael argued that because the consignor’s responses were both unsigned and did not directly address the facts stated in each request, the responses were deemed admissions by operation of statute.

Accordingly, the Wisconsin court struck the responses from the record and granted summary judgment in favor of the auctioneer – finding that there was no genuine issue of fact that the consignor was not the owner of any motorcycle, and in the absence of any other title claimants, awarded ownership of the five motorcycles to the auctioneer. The auctioneer plans to sell the motorcycles in a future sale to offset the losses occasioned by the consignor’s actions.

Michael concentrates his practice in commercial litigation, construction litigation, casualty litigation, subrogation, products liability and professional liability defense. He has drafted, argued and won numerous dispositive motions in jurisdictions across the Midwest.