Some Diamonds Aren't Forever

Financier Gerald Tsai (AINV) is suing his ex-fiancée Sharon Bush – also the former sister-in-law of President Bush—for the return of an eleven-carat canary diamond engagement ring. The 78-year-old billionaire purchased the ring at Saks Fifth Avenue (SKS) for $243,040, and proposed on Christmas Day 2006. But the couple split in January 2008, almost a year after they were supposed to wed  on Valentine’s Day 2007.  Bush is using the diamond to help remember the good times, while Tsai, is suing for $434,000, what he considers the ring’s replacement value when taking its appreciation into account. Bush’s attorney, Raoul Felder is arguing the ring was simply a gift, and had nothing to do with their plans to wed. The lawyer, who happens to also be the author of Schmucks! Our Favorite Fakes, Frauds, Lowlifes, Liars, the Armed and Dangerous, and Good Guys Gone Bad, was also unnerved that Tsai filed his suit three days before Valentine's Day. “Valentine's Day is a day you give gifts to your sweetheart,” Felder said. “It's not the day you demand Christmas presents back.”

There is no clear engagement ring etiquette when you ditch your plans to get hitched. The great Zsa Zsa Gabor, who gathered plenty of experience over nine marriages, once said, “If you break up with your fiancé, always send back the ring . . . but keep the stone.” Well, the courts may have something to say about that. If you do want to hang onto the bling, a court will usually consider it a gift if three facts are established: The intent to give the ring as a present, the presentation of the gift, and its acceptance. But these are hard elements to prove, especially if the gift-giver is claiming the ring was a “conditional gift” contingent on actually tying the knot. In Iowa, Kansas, Michigan, New Jersey, New Mexico, New York, Pennsylvania and Wisconsin a breakup is reason enough to warrant the ring’s return, regardless of fault.