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Sales Keyed to Keating
Zaretsky v. William Goldberg Diamond Corp.
Citation:
820 F.3d 513 (2016)Facts
William Goldberg Diamond Corporation, a wholesale dealer of high-end diamonds and jewelry, consigned millions of dollars worth of jewelry to Derek Khan, a celebrity fashion stylist, between June 2002 and February 2003. WGDC hoped that celebrities wearing its jewelry would enhance its prestige and profits. In February 2003, WGDC consigned to Khan a pear-shaped diamond weighing approximately 7.44 carats pursuant to a Consignment Agreement that explicitly stated Khan acquired no right to sell, pledge, or dispose of the merchandise and that any sale would require a separate invoice from WGDC. Khan never received such an invoice. When Khan failed to return the Diamond, WGDC reported it stolen to police, hired a private investigator, and reported the theft to the Gemological Institute of America. Khan was subsequently convicted of theft. Meanwhile, the Diamond passed through Louis E. Newman, Inc., to Stanley & Son Jewelers, who sold it to the Walshes, who later gifted it to their daughter Suzanne Zaretsky and her husband Steven. When the Zaretskys attempted to insure the Diamond, its stolen status was discovered, leading to this litigation.
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