An auction company denies liability in a suit alleging shill or ghost bidding was used to raise prices, arguing that the buyers didn’t have to bid on the land if they thought the prices were too high.
The Dennis M. Kleinschmidt and Diana K. Kleinschmidt Joint Revocable Trust #1, by trustee Dennis Kleinschmidt, and The Mary Kim Fuller Living Trust, by trustee Mark Furrer, filed the complaint on Nov. 14 against Brad Schaller, individually, and Schaller Auction Services.
In their complaint, the plaintiffs allege they participated in a land auction performed by Schaller Auction Services at the Millstadt Quail Club on Nov. 18, 2014. They claim Schaller unlawfully engaged in shill or ghost bidding to raise the price of the land.
They allege the defendants intentionally failed to register and approve all bidders present and failed to record all biddings.
Schaller filed a motion to dismiss the complaint on Dec. 16 through attorney James Mendillo of Freeark Harvey & Mendillo in Belleville.
In regards to count I brought on behalf of Dennis Kleinschmidt, Schaller argues that while he “denies the allegation of intentionally or deceptively increasing the bidding level, the simple fact is that Plaintiff Kleinschmidt, by his own admission, authorized a higher bid and in his words ‘won the auction.’”
Schaller alleges Kleinschmidt himself chose to increase and authorize the bid of $11,000 per acre “of his own free will.”
“If Kleinschmidt believed the land was not worth $11,000.00 per acre, then he did not have to and should not have authorized such a bid. Kleinschmidt then consummated the sale without objection,” the motion states.
Count II was brought by trustee Mark Furrer and alleges that on a separate tract, Schaller “opened the bidding through the unauthorized use of another person’s bidding number in order to induce him to bid higher, which Plaintiff-Trustee Mark Furrer did.”
The defendant argues that if Furrer did not believe the property was worth the price, he should not have made the bid regardless of whether the bid by the defendant was legitimate.
Count III was also brought by Furrer and alleges that the real estate was to be auctioned in multiple tracts according to advertisements, but tracts two and three were offered in combination in a bidder’s or buyer’s option.
Schaller argues that the terms of the auction were announced before the auction began, and it was clearly stated that the two tracts would be offered individually and as a unit.
“The law and the rules of auctions is that the terms of sale may be changed by an announcement made prior to property being auctioned, and that purchaser shall be bound by any such announcement,” the motion states.
Schaller also filed a motion to strike the plaintiff’s jury demand, arguing that the plaintiff is not entitled to a jury trial under the Illinois Consumer Fraud Statute, “as it is a not a creature of the common law and no jury option is provided for in the statute (sic).”
The plaintiffs are represented by Donald K. Schoemaker and James A. Bock of Greensfelder, Hemker & Gale PC in Belleville.
St. Clair County Circuit Court case number 16-L-601