If you have ever watched the Academy Awards, you have probably noticed the expensive jewelry worn by celebrities as they stroll down the red carpet. In many cases, the jewelry is not their own but loaned on consignment from a dealer who wants to advertise their merchandise in front of a worldwide audience. Recently, a federal appeals court in New York examined a case where a jewelry dealer never got some of their merchandise back.
Fashion Stylist Was Not “In the Business of” Selling Diamonds
The plaintiff in this case is a well-known American jewelry manufacturer specializing in diamonds. In 2003, the manufacturer consigned a 7.44-carat diamond pendant to a New York-based fashion stylist who worked with a number of celebrity clients. Under the consignment agreement, the stylist had no right to sell or otherwise dispose of the pendant on his own.
When the stylist failed to return the pendant at the agreed-upon time, the plaintiff filed a police report and hired a private investigator to locate the item. It was not until approximately nine years later that the manufacturer found its missing diamond. It turned out the stylist transferred the pendant to a diamond supplier, who in turn sold it to a jeweler who sold it to a customer. The customer gave the pendant to his wife as a gift. The wife later gave the pendant to her daughter, and when she had it appraised in 2012, the plaintiff finally learned of its whereabouts.
The plaintiff sued the daughter claiming it still held legal title to the diamond. A Manhattan judge granted summary judgment to the defendant, holding that the stylist “qualified as a merchant” under New York’s Uniform Commercial Code, and therefore had the authority to make the initial transfer of the pendant, which set off the entire chain of title leading to the defendant.
But on appeal, the U.S. Second Circuit Court of Appeals disagreed and granted summary judgment to the plaintiff. The New York UCC states that “[a]ny entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.” The Second Circuit concluded that the stylist was not someone who “regularly sells” diamonds as part of his business. Indeed, according to the evidence presented to the trial court, the stylist “never sold any of the diamonds [the plaintiff] consigned to him.” There was therefore no reason for the plaintiff to think the stylist would have sold the pendant in this case.
Get Help from a Long Island Business Attorney
If you have been deprived of your rightful property due to the unlawful actions of another, you understandably want to seek justice against the wrongdoers. A qualified New York civil litigation attorney can assist you with many types of civil matters, including fraud and breach of contract. Contact the offices of Mahir Nisar Attorney at Law. today if you need to speak with an attorney today.