United States District Court, S.D. New York
William I. Strasser, Esq., Gregory D. Emond, Esq., Strasser & Associates, P.C., Paramus, NJ, For Plaintiffs.
Howard Alan Wintner, Esq., Katryna Dikansky, Esq., The Abramson Law Group, New York, NY, For William Goldberg Diamond Corporation.
John A. Schepisi, Esq., Gregory Michael Dexter, Esq., Schepisi & McLaughlin, P.A., Englewood Cliffs, NJ, For Stanley & Sons, Inc.
MEMORANDUM OPINION AND ORDER
SHIRA A. SCHEINDLIN, District Judge.
Steven and Suzanne Zaretsky bring this diversity action to determine the legal ownership of a 7.35 carat, pear-shaped diamond (the "diamond") that plaintiffs' jeweler delivered to the Gemological Institute of America, Inc. ("GIA") for certification and appraisal in December 2012. Suzanne Zaretsky's parents purchased the diamond from Stanley & Sons ("S&S") in 2003, and Suzanne's mother gifted it to Suzanne and her husband, Steven, in August 2012.
GIA is holding the diamond until its ownership can be determined because it believes the same diamond was reported as stolen from the William Goldberg Diamond Corporation ("WGDC") in 2003. Plaintiffs assert that they have legal title to the diamond, but, in the alternative, plead claims for breach of warranty of title and misrepresentation against S&S. S&S moves to dismiss the breach of warranty claim for lack of standing under Federal Rule of Civil Procedure ("Rule") 12(b)(1), and both claims for failure to state a claim under Rule 12(b)(6). For the following reasons, S&S's motion to dismiss is GRANTED.
On May 29, 2002, GIA certified a 7.44 carat, pear-shaped diamond for WGDC (the "WGDC diamond"). On March 19, 2003, WGDC sent GIA a copy of a police report indicating certain items of jewelry, including a 7.44 carat stone, were stolen from WGDC in January 2003.
On March 24, 2003, GIA certified a 7.35 carat pear-shaped diamond for Louis E. Newman, Inc. Suzanne Zarestky's parents, Frank and Donna Walsh, purchased that diamond on December 23, 2003 from S&S. S&S, in turn, purchased the diamond from Louis E. Newman.
In August 2012, after Frank Walsh's death, Donna Walsh gave the diamond to plaintiffs as a gift. On December 10, 2012, Steven Zaretsky brought the diamond to nonparty K&D Jewelers ("K&D") in order to have it appraised for insurance purposes. Steven Zaretsky authorized K&D to submit the diamond to GIA after K&D recommended obtaining an appraisal and certification from GIA.
On December 20, 2012, GIA informed Steven Zaretsky that it would not release the diamond because a diamond with similar characteristics - that is, the WGDC diamond - had been reported stolen in March 2003. Zaretsky demanded the return of the diamond, but GIA refused based on its disputed ownership. On April 17, 2013, GIA issued a Notice of Competing Claims "identifying the party reporting the [diamond] as stolen as well as outlining terms to which the parties must conform in order for the [diamond] to be returned." The notice names Eve Goldberg as the party reporting the diamond as stolen and representing a claim of ownership on behalf of WDGC.
A. Breach of Warranty ...