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Saturday, August 24, 2013
When Nancy Wilson hired Phillip Morgan to conduct an estate sale in 2012, she never imagined the problems she would have getting her hands on the proceeds.
The retired Roanoke schoolteacher and former member of the Radford University Board of Visitors had hired Morgan three or four years ago for another estate sale. There was a minor hiccup with that one, she recalled. Morgan’s bank refused to cash the first check he wrote her from the sale. There were insufficient funds in the account, she said.
But Morgan made good with cash the next day. Because of that, “I trusted him,” Wilson told me. She has even recommended him to others.
No longer. She still hasn’t seen the money from the estate sale for James Saunders, her boyfriend, who lived in Roanoke County’s North Lakes subdivision.
Saunders, a truck driver, died in February 2012. Morgan, who told me he has conducted more than 400 sales since 1997 and is well known in the estate sales industry, held the sale about a month later.
It was to run for three days; Morgan shut it down after a day and a half, Wilson said. Afterward, he told her it didn’t bring as much money as he had thought it would. He never presented records of the sale to her. He ignored letters demanding payment from two different lawyers she hired. Wilson said she hasn’t seen a dime.
Finally, she sued him and won a judgment for $2,960, according to court records. That was this past April. She’s still waiting for the money.
A bit later she discovered she was the latest in a long line of ex-customers who have sued Phillip Morgan.
n Records in Roanoke General District Court show that in the past six years, eight people have secured judgments against Morgan totaling more than $46,000. There is one case pending.
n Morgan has also been sued in Roanoke Circuit Court and Roanoke County Circuit Court. According to court papers, the former case involved bounced checks from a 2011 estate sale. Morgan settled this past July for $9,500.
n In the past three years, eight customers have reported Morgan to the Western Virginia Better Business Bureau, said agency President Julie Wheeler. The BBB has rated Morgan’s estate sales business an “F” — its worst-possible designation — because Morgan has until recently ignored the agency’s letters. About 8.3 percent of businesses the agency has rated get an “F,” she said.
n Roanoke Circuit Court records also list tens of thousands of dollars in IRS tax liens against Morgan.
One customer in Craig County took a $40,000 beef with Morgan to the authorities. Virginia State Police investigated; Craig County Commonwealth’s Attorney Thaddeus Cox responded by indicting Morgan.
“That was resolved and dismissed,” Morgan told me last week. That’s true, but there’s more to the story.
The customer was Stephen Seifert. He’s a collector who lives in Newport. He told me he hired Morgan to conduct a sale in 2010 because he was familiar with Morgan from other estate sales he’s attended.
Seifert called Morgan “an extremely good salesman,” whose pricing, research and staging of estate sales are “extraordinary.” In terms of executing sales, “he’s really that good,” Seifert said. Morgan has “a crowd” that follows him from sale to sale and he’s known to get high prices for merchandise, Seifert added.
But “not receiving my money was a big issue,” Seifert said. He told me the first check Morgan wrote him, for $20,000, bounced. Then the excuses began.
Morgan told Seifert that he didn’t have the money because it was “between places.”
“Then he said he bought a piece of art in Europe,” Seifert recalled. “And he used my money to buy that and when he sells the art I would get paid. And I was like, ‘I don’t want to do that.’ ”
Craig County Circuit Court records show that prosecutor Cox indicted Morgan on March 2, 2011, on a felony charge of obtaining money under false pretenses.
Morgan was arrested.
Cox recalled that Morgan didn’t contest the charge. Instead, his attorney admitted in court that Morgan was a pretty much a mess when it came to the record-keeping end of his business, Cox said.
The investigation turned up “a couple of other people where there were similar circumstances,” Cox told me. But they were outside his jurisdiction.
Morgan entered into a plea agreement in August 2011 that got him a year’s probation. Judge Malfourd “Bo” Trumbo ordered Morgan to hire a bookkeeper and to pay Seifert the money he owed, and the judge took the case under advisement. After Morgan did both, Trumbo this past January dismissed the charge.
Cox said the state police investigation suggested Morgan was paying off previous customers with proceeds of current sales, rather than simply a cutting customers a check, minus his commission, right after the sale.
I talked with Morgan last week. He told me a lot of the judgments against him were because he didn’t respond to those lawsuits.
“I do have a tendency to stick my head in the sand about things rather than deal with them,” he said. “I don’t like confrontation.”
He also said he’s straightened out his business, and he handles the bookkeeping end no longer. He told me he’s paid all but two of the judgments.
“Basically, all those are resolved; there’s one or two legitimate ones being addressed,” he said. “Ninety-nine percent of them have been resolved.
“I am not a crook — I may be an airhead,” Morgan added. If the criminal case in Craig County taught him anything it was “I’ve learned not to do the paperwork part. That is not my thing,” he said.
But he still hasn’t paid Wilson for the Saunders estate sale. He conducted that one while he was still on probation for the Craig County case. Morgan told me the net on that sale was $1,400 or $1,500 and that he offered it to her but she refused. Wilson told me that’s not true.
“Would I ever hire him again? Ha, ha,” she told me. “No, I wouldn’t hire him again because I don’t know if I’d get paid.”
Reed Embrey, a restaurateur who lives in Callaway, is wondering the same thing. He sued Morgan and won a $12,300 judgment in Roanoke General District Court in 2010. It stemmed from an estate sale Morgan conducted after Embrey’s aunt died. Like Seifert, Embrey said Morgan’s sales are impressive events.
Morgan showed up in court, admitted he owed the money, and gave Embrey a $2,000 installment that day, Embrey told me. Embrey said Morgan blamed the problem on mixed-up records. Embrey still hasn’t seen an accounting of those.
Nor has he seen any more money. Getting hold of Morgan has been difficult; often he doesn’t return voice-mail messages, Embrey said. Every now and then, Embrey drops by Morgan’s Roanoke home in Old Southwest and leaves him a note on the door. He’s hoping to get some more money.
“I still owe him some,” Morgan told me.
Understandably, Morgan did not want this column to appear in the newspaper. He fears it will kill his company. The cases that ended up in court, and the judgments against him, constitute a tiny slice of his enterprise, he said.
And that’s part of the rub. As Embrey noted: “I’ll never get anything more if he can’t conduct his business.”
Nancy Wilson is in the same boat. But she told me: “I’m not only fighting for Nancy. I’m fighting for all those people who have judgments against him, and all of those people who are going to hire him in the future.”
Morgan was at offices of the Western Virginia Better Business Bureau on Thursday, meeting with an investigator. Julie Wheeler said the agency has an investigation ongoing.
Morgan offered information relating to two of the BBB complaints against him. Most of the complaints were filed by people from out of state, she added.
“Despite the two responses we’ve received, he will remain an ‘F’ as long as the other cases are unanswered,” she said.
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