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Ellig v. Molina

United States District Court, S.D. New York

February 10, 2014

JANICE ELLIG and BRUCE ELLIG, Plaintiffs,
v.
ALFRED MOLINA and MOLINA, INC. d/b/a MOLINA FINE JEWELERS, Defendants

Page 237

For Janice Ellig, Bruce Ellig, Plaintiffs: David B. Newman, Day Pitney, L.L.P. (Times Square), New York, NY.

For Alfred Molina, Molina Inc., doing business as Molina Fine Jewelers, Defendants: Howard L. Cogan, LEAD ATTORNEY, Gallo Vitucci Klar, LLP, New York, NY.

Page 238

OPINION & ORDER

KATHERINE B. FORREST, United States District Judge.

Diamonds are not always a girl's best friend, Here, the particular diamond ring at issue--a 10-carat center stone in a platinum setting that included dozens of baguettes--drove friends apart.

The story starts with a cruise around the world, and ends in a courtroom in Manhattan. The cast of characters includes a jet-setting jeweler from Arizona; a financially conservative husband who is intent on investing wisely and who wants to (and does) buy his wife a special ring for a significant birthday, trusting in the ring's value; and a wife appreciative of the gesture, but concerned about the ring's cost and actual value. Buyer's and receiver's remorse set in; that might have been the end of the story, if it were not for the fact that the jeweler had promised that plaintiffs could return the ring within one year and that he would buy it back. In fact, plaintiffs claim that said jeweler, Alfred Molina himself, had also agreed to pay them 10% in addition to the purchase price--in effect, guaranteeing the price of the ring and a 1.0% return on the investment if returned within a year.

Unfortunately, this promise was not in writing. The parties generally agree that there was a promise of some sort; but, rather unsurprisingly, disagree as to important details. This lawsuit followed; a bench trial was held on January 10, 2014. At that trial, the now former friends testified as to their version of events. This Opinion & Order constitutes the Court's findings of fact and conclusions of law.

In summary, the Court finds that, in exchange for plaintiffs' purchase of the ring, defendants agreed to buy it back at full price plus 10% if tendered within one year. By failing to hold up their end of the bargain, defendants have breached the contract.

I. FINDINGS OF FACT

At trial, the Elligs and Mr. Molina provided direct testimony by written declaration and were subject to live cross-examination and re-direct.[1] The Court found

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both of the Elligs very credible. Mrs. Ellig is an articulate and sophisticated businesswoman; her answers were consistent and direct. She was never evasive. The Court credits her testimony in toto. Mr. Ellig is also a sophisticated businessperson who is clearly very detail-oriented and careful. He was clear, consistent and articulate in Court. He was never evasive. The Court similarly credits his testimony in toto. In contrast, the Court found Mr. Molina lacking in credibility; he was evasive, argumentative and inconsistent. The Court does not believe his version of the agreement between the parties.

Plaintiffs and defendant Molina met on an around-the-world trip in 2007. (Decl. of Janice Ellig (" JE Decl." ) ¶ 4, ECF No. 74.) He introduced himself as a world-renowned jeweler. (Decl. of Bruce R. Ellig (" BE Decl." ) ¶ 5, ECF No. 75.) Mr. Molina is the sole shareholder in Molina, Inc., which operates two jewelry stores under the name Molina Fine Jewelers (" MFJ" ). (Trial Decl. of Alfred Molina (" Molina Decl." ) ¶ 3, ECF No. 77.) The Elligs and Mr. Molina became close friends and socialized together with Mr. Molina's then wife. (JE Decl. ¶ ¶ 5-6.) Mr. Molina was a regular guest in the Elligs' home when he came to New York for business. (Id. ¶ 8.) Mr. Molina would use the word " brother" when he contacted Mr. Ellig regarding a prospective visit--stating, for instance, " Hey, brother, I am coming to visit you and will arrive on ." (BE Decl. ¶ 7.) The Elligs and Molinas also travelled together to Eastern Europe, Sicily and the Caribbean. (JE Decl. ¶ 9.)

During the time the Elligs and Molinas spent together, Mr. Molina spoke about diamonds as an investment. (BE Decl. ¶ 9.) Mr. Ellig considers himself fiscally conservative. (Id.) He has invested primarily in municipal bonds. (Id.) He conveyed this to Mr. Molina on a number of occasions. (Id.)

Mrs. Ellig's 65th birthday was in 2011. In December 2010, Mr. Ellig told Mr. Molina that Mrs. Ellig's 65th birthday was approaching, as was their 17th wedding anniversary, and that he wanted to do something special to mark those occasions. (BE Decl. ¶ 10.) Mr. Molina suggested that Mr. Ellig buy her a large diamond ring. (Id.) Mr. Molina stated that diamonds appreciate and therefore were a safe investment. (Id.) Mr. Ellig was initially skeptical: he was contemplating a gift in the range of a couple of hundred thousand dollars, and Mr. Molina told him that a large diamond befitting his wife would cost three times that amount. (BE Decl. ¶ 11.) Mr. Ellig told Mr. Molina that if he were even to consider spending that kind of money, the purchase would have to be not only a gift but also an investment. (Id.)

Mr. Ellig stated that, as much as he wanted to do something special for his wife, the appropriateness of the investment depended on his ability to get his money back. (BE Decl. ¶ 12.) In that very first conversation in December 2010, Mr. Molina stated that, if the Elligs purchased the ring and were unhappy with it for any reason at all, he would buy it back within a year for the full purchase price plus a guaranteed 10%. (Id. ¶ 13.) The agreement was not: reduced to writing. Mr. Ellig and Mr. Molina had a number of conversations about the ring following this first one, and in each, Mr. Molina repeated the benefits of investing in diamonds and the guarantee he was providing. (Id. ¶ ¶ 15-16.) In each of these conversations,

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the terms of the guarantee remained the same. (Id. ¶ 16.)

At no time prior to the Elligs' purchase of the ring--and indeed not until July 2012--did Mr. Molina mention a consignment arrangement or a waiting period before their money would be returned. (See BE Decl. ¶ ¶ 16-17.)

As her birthday approached, the Elligs discussed the possibility of Mr. Ellig buying his wife a diamond ring. (JE Decl. ¶ ¶ 15; BE Decl. ¶ 19.) The Elligs never discussed purchasing a loose diamond (that is, a diamond not yet set into a ring or other piece of jewelry); their discussions always related to a wearable diamond ring. (JE Decl. ¶ 21.)

Mrs. Ellig then spoke with Mr. Molina about acquiring a ring with a diamond in the 8-to-10 carat range. (JE Decl. ¶ 16.) Mrs. Ellig informed Mr. Molina that their budget was $300,000 to $350,000. (Id.) During April to ...


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