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Russ Pritchard III Loses Lawsuit over Auction House Start-Up

On August 2, a judgment was entered against Russ Pritchard III and the Bryn Mawr Auction Company, LLC, a start-up auction firm, in a lawsuit filed by Rueben Tehrani. Judge Jacob P. Hart ordered Pritchard and the auction company to pay $124,350 in compensatory damages, $50,000 in exemplary damages, and $10,000 in legal fees.

According to court papers, in October 2003 Tehrani and Pritchard agreed to start Main Line Auction, Inc., and both were officers of the company. Tehrani contributed office space in Bryn Mawr, Pennsylvania, where he and his brothers sell Oriental rugs. Tehrani claims that he introduced "Pritchard to his business and professional contacts." From these contacts, Main Line Auction rounded up inventory for auctions. Tehrani kicked in approximately $12,000 to get the company off the ground. The business hired employees and consultants and for 15 months acquired items to sell. Pritchard was to run the day-to-day operations.

During the 15 months, Tehrani claimed, he became aware of an estate that "possessed a large amount of merchantable items. He and Pritchard made arrangements with the executor to sell items belonging to the estate. Because the executor could not wait until the January 2005 auction, the operation was handled separately from Main Line Auction under the trade name of Main Line Clean Out. This end of the business earned at least $50,000." Tehrani claims none of the money was accounted for or distributed.

Tehrani claimed Pritchard kept him out of the loop when it came to the fledgling company's finances. "Tehrani repeatedly requested financial and bank records for Main Line Auction and Main Line Cleanout, and Pritchard repeatedly promised to provide full information, but in fact refused to turn them over during the period of time they were associated in business."

Pritchard, without Tehrani's knowledge or approval, the suit claimed, moved the business, transferred the phone lines, and moved the company's mailing address to 311 Millbank Road in Bryn Mawr, Pritchard's home. On January 22, 2005, Main Line Auction held its first sale.

The first sale was a success. A press release issued by the firm stated that the Passmore family Chester County spice box, circa 1760, sold for $92,000, and the Passmore family Bible box, circa 1730, which still held the Passmore family Bible and numerous documents, including Enoch Passmore's temperance lectures, sold for $37,375. A Chester County sampler, circa 1807, brought $28,750, and the Captain Samuel Rixey tall-case clock manufactured in 1817 by Aaron Willard Jr. brought $34,500. Tehrani's suit claimed the auction generated at least $330,000.

After the auction, "without accounting for any of the sale proceeds or distributing any of the net profits, Pritchard, along with certain third parties, surreptitiously removed all of the property belonging to the business from 650 West Lancaster Avenue," court papers charged.

Tehrani then learned that Pritchard and former employees of Main Line Auction had established and incorporated a new business, Bryn Mawr Auction Company, LLC. That company's first sale was scheduled for June 25, 2005.

Pritchard acknowledged the name change in the catalog for the June 2005 sale. "Since our Inaugural Sale of five months ago, we have undergone a name change, added new faces to our staff, and leased more space...Our Inaugural Sale was a tremendous success setting two world records and coming one bid shy of a third. Our previous name was similar to the name of another auction company that existed in Chester County approximately 25 years ago. This led to some confusion and thus the change. Our new name is The Bryn Mawr Auction Company, LLC."

Tehrani claimed that much of the merchandise came from the inventory of Main Line Auction and its consignors and other sources.

Pritchard, a former militaria appraiser on Antiques Roadshow, pleaded guilty in 2001 to wire fraud, mail fraud, theft from a museum, and interstate transportation of stolen property.

Pritchard is also a defendant in a lawsuit filed in the Court of Common Pleas in Philadelphia County filed by Sandra Udinson of Doylestown, Pennsylvania. The suit also names the Bryn Mawr Auction Company, LLC and Main Line Auction, Inc. Pritchard is accused of fraud, unfair trade practices, breach of contract, breach of fiduciary duty, professional negligence, and conversion.

Udinson, a widow, claims in her suit that Pritchard and the two auction firms sold antiques for her in 2005, and that, despite assurances from Pritchard, she was not allowed to set a reserve for the items. As a result, she "suffered a loss of over $150,000," court papers allege. Furthermore, the suit claims, Pritchard said he would take other artifacts and restore them and then return them to Udinson. "Pritchard converted these items to his own use," she charges. Udinson claims Pritchard sold her items "well below their value" and has refused to pay Udinson any money.

Pritchard didn't return M.A.D.'s requests for comment. His attorney released a statement in January that read, in part, "Russ Pritchard of Bryn Mawr Auction Co. LLC has asserted his complete lack of wrongdoing and will vigorously defend himself against the false accusations made by Sandra Udinson."