Auction Companies

Civil Code Division 3, Part 4, Title 2.95 deals with auctioneers and auction companies in California.

Section 1812.600 requires every auctioneer and auction company to maintain a bond issued by a surety company admitted to do business in this state. The principal sum of the bond has to be $20,000. A copy of the bond is filed with the Secretary of State. The bond must be payable to the State of California.

No auctioneer or auction company is allowed to conduct any business without having a current surety bond in the amount prescribed by this section and without filing a copy of the bond with the Secretary of State. Thirty days prior to the cancellation or termination of any surety bond required by this section, the surety is required to send a written notice of that cancellation or termination to both the auctioneer or auction company and the Secretary of State, identifying the bond and the date of cancellation or termination.

When a claimant has established the claim with the Secretary of State, the Secretary of State is required to review and approve the claim and enter the date of approval on the claim. The claim is designated an “approved claim.”

When the first claim against a particular deposit has been approved, it is not to be paid until the expiration of a period of 240 days after the date of its approval by the Secretary of State. Subsequent claims that are approved by the Secretary of State within the same 240-day period must similarly not be paid until the expiration of the 240-day period.

Upon expiration of the 240-day period, the Secretary of State is required to pay all approved claims from that 240-day period in full unless the deposit is insufficient, in which case each approved claim must be paid a pro rata share of the deposit.

If an auctioneer or auction company fails to perform any of the duties specifically imposed upon him or her pursuant to this title, any person may maintain an action for enforcement of those duties or to recover a civil penalty in the amount of $1,000, or for both enforcement and recovery.

In any action to enforce these duties or to recover civil penalties, or for both enforcement and recovery, the prevailing plaintiff must be entitled to reasonable attorney’s fees and costs, in addition to the civil penalties provided.

The Secretary of State is required to charge and collect a filing fee not to exceed the cost of filing the bond or deposit filed in lieu of a bond. The Secretary of State is required to enforce the provisions of this chapter that govern the filing and maintenance of bonds and deposits in lieu of bonds.

Section 1812.601 defines the terms “advertisement,” “auction,” “auction company,” “auctioneer,” “employee,” “employer,” “goods,” and “person.”

Section 1812.603 states that the superior court for the county in which any person has engaged or is about to engage in any act that constitutes a violation of this title may, upon a petition filed by any person, issue an injunction or other appropriate order restraining the violative conduct.

Section 1812.603 provides that the superior court for the county in which any person has engaged in any act that constitutes a violation of this title may, upon a petition filed by any person, order the person who committed the violation to make restitution to any person injured as a result of the violation.

Section 1812.604 explains that any person who violates any provision of this title is guilty of a misdemeanor, which offense is punishable by a fine not exceeding $1,000, or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment.

Section 1812.605 requires each auctioneer and auction company, and the company’s owners, partners, officers, agents, and employees, to do four specified items.

Section 1812.606 state that every auctioneer who operates his or her own auction company as a sole proprietor, and every auction company, together with its owners, partners, and officers, that employs an auctioneer, is responsible for all violations committed by the auctioneer or by any company employee in the conduct of auction business.

An auctioneer who is employed by an auctioneer or auction company is responsible for all violations committed by him or her in the conduct of auction business. It is a violation of this title for any auctioneer or auction company, or the company’s owners, partners, and officers, to direct or knowingly permit any violation of this title by any auctioneer employed by or under contract with that auctioneer or auction company, or by any owner, partner, officer, agent, or employee of the auction company.

Section 1812.607 requires every auction company and auctioneer to do thirteen specified actions.

Section 1812.608 explains that, in addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of eleven specified acts.

Section 1812.609 states that any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.

Section 1812.610 defines the terms “auction,” “auctioneer,” and “notice.” An auctioneer cannot state at an auction that an increased bid greater than that offered by the last highest bidder has been made when, in fact, no person has made an increased bid. Notwithstanding the foregoing, an auctioneer or another authorized person may place a bid on the seller’s behalf during an auction of real property that would not result in a sale of the real property, if both of the specified circumstances are true.