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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

2 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

3 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

4 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,

5 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

6 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

8 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

9 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

10 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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