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.


So, for Tsai, the law is on his side, as long as he can prove the eleven-carat canary was indeed, to symbolize their engagement. However, states such as California review the circumstances of the breakup before ruling on whether a ring is to be returned. If the “receiver” of the gift refuses to enter into marriage, then the “giver” is entitled to recover the value of the ring. If the breakup is mutual, the “giver” is also entitled to get the ring back. It works conversely as well. If the “giver” is the one with cold feet, then the “receiver” gets to keep the ring. Applying “fault,” is a slippery slope, says Joanna Grossman, a law professor at Hofstra University, on FindLaw.com. According to Grossman: “It induces the parties into an endless game of chicken, where each, having lost interest in marriage, is compelled to behave worse and worse until the other party cannot stand it anymore and calls it quits.” 


Either way, if you are tired of staring at that little velvet box in your sock drawer, some jewelers are sensitive to a broken heart and will take back the ring months, or even years later. “We’ll feel for them and give them [full] credit,” says Oscar Bayeh, of Oscar Design Jewelry in Los Angeles, Calif. “But when an engagement is broken, usually they’re so down, you don’t ever hear anything. Sometimes it takes years before they’re ready.”