Monday, January 17, 2005

Schauer v. Mandarin Gems (Cal. App. - January 12, 2005)

Anyone who's ever bought or received a diamond engagement ring -- and I definitely include myself in this category -- should find interesting this opinion by Justice Ikola, which holds that, even after a divorce, the spouse who received the diamond ring may indeed have standing to sue as a third party beneficiary to the contract if the ring is not of the quality that the seller has claimed.

The facts of the opinion -- as well as the caveats in the underlying bill of sale (which I imagine are fairly typical) -- definitely make me wonder whether those all-important diamond quality ratings aren't a total crock. But at least it's neat to know that, apparently, both the recipient as well as the buyer may potentially have standing to sue. Even though Justice Ikola bounces most of the plaintiff's claims for lack of standing, the third party beneficiary contract claim stands. At least for now; who knows who'll prevail on remand.

The rock in this case was a three carat giant purchased for $43,000 in 1999. No small chunk of change. Justice Ikola reversed the granting of a demurrer by Judge Dunning of -- where else? -- the Orange County Superior Court. Here's where the ring apparently came from: Black, Starr & Frost, which is in the South Coast Plaza in Costa Mesa. I'm pretty sure I won't be plunking down $50K for a ring there anytime soon.