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Contracts Keyed to Blum
Zaretsky v. William Goldberg Diamond Corp.
Citation:
69 F. Supp. 3d 386 (2014)Facts
WDGC owned a 7.44 carat diamond. WDGC consigned it, along with other items, to Derek Khan, a celebrity stylist, for him to use for events and fashion shoots. Their arrangement was governed by a Consignment Agreement which stated that Kahn could not “sell, pledge, hypothecate, or otherwise dispose of the [diamond]”, but that he could sell the diamond if WDGC approved the sale and gave him a separate invoice. Khan failed to return the diamond in the usual time frame. The next month, the diamond was found to be in the possession of Louis Newman, a diamond merchant. The diamond was then purchased by a different diamond merchant on behalf of the Walshes. The Walshes then conveyed the diamond to their children, the plaintiffs in this suit. WGDC claims that Khan stole the diamond and therefore could not legally transfer the title of the diamond, so WGDC is still the lawful owner of the diamond. Plaintiffs argue that Khan was an “entrusted merchant” who had “voidable title” and was therefore capable of transferring title of the diamond.
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