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Ward's Case [Digest 2][More Replys]


#1
   I am a goldsmith/gemologist in El Paso, Texas.  I have been
following your whole case intently.  It scares the liver out
of me.  As I see it, the point is WHAT were YOU supposed to
have DONE?  The emerald was not filled, there is no need to
disclose anything.  What happened to you could have happened to
me or any ethical jeweler. What kind of defense do we have?  I
wish you all the best, I am sure you have alot of *spiritual*
support among ethical jewelers.  I guess the only good thing
about this is, maybe it will shake up the jewelers who are
making an unhonest dollar selling inferior goods at top notch
price, not disclosing in order to make an unfair profit, they
are the ones who should be strung out to dry.  I just wonder
what the solution to this is.    
Rick Laspada Owner TLC Jewelry and Watch Repair
tlc.jewelry@mailexcite.com  

Fred Ward replies:

You are right. Now that several people are going around the US
speaking on this case and its implications to the trade, I am
struck by the thought, “What would I do differently had I to do
it over.” Of course, there are a number of minor things. But if a
customer breaks something and does not want to accept
responsibility for her action, and if an insurance company
refuses to pay a claim and the customer sues the insurance
company and the seller… and if the customers can find a jury
that believes them in spite of photographic and eyewitness
accounts to the contrary, what indeed is one to do?

I would say do not despair. But I would also say to prepare.
Figure on the worst now. Keep records, get signatures, disclose,
assume everything is treated, disclose again, and watch your
backside for any customer who does not seem exactly right. Better
to lose a sale than lose a lawsuit.

Fred Ward

 And I thought my the ten years of real estate was litigious.
Now I own Allgem and I have hoped from the fire into the pan.
I WILL NEVER SUBSCRIBE TO NATIONAL JEWELER. Good Luck!      
Allgem

Fred Ward replies:

I fully agree with you that this is a sobering experience, and a
scary one. I have not had a good night’s sleep in so many months
that I forget when it was. Binding arbitration or something
similar might work. But I have no idea how to circumvent the much
lauded American jury system. Most of the times it works. But
remember O.J. And now you can remember Fred too. Fred Ward

   These sort of problems were discussed breifly at the RV
conference at Loughborough the probelms will come to UK. I
have also come into contact with a fracture filled Emerald that
was purchased allegedly in USA somewhere. The customer was very
short of and not very explicit he told me that he
hoped to sell it in UK. I advised a Lab report which he
declined. Is this a sign of the future? Tony H 

Fred Ward responds:

I greatly fear that this is the near future. There are so many
zealots and opportunists trying to make some money and build
reputations from the growing anxiety about emerald (and other
gem) treatments that this is not going to go away quietly. I get
one or two notices a day about somebody doing something somewhere
to scare jewelers and the public. This will hit national TV here
soon, and then we will really see a mess. There is no way for a
local jeweler or appraiser to correctly identify what material(s)
may be in a stone. Disclosure that is accurate, treats the
customer fairly, and conforms to the law is going to be a very
tricky business now.

   I read the case and the article about the case and I have a
couple of questions.  Premise, this is an extremely expensive
stone and the mount is high quality also.  As a setter myself
I've had experience with filled emeralds and found it unnerving
to have the filler fall out in the sonic.  But it was self
evident that it had been filled because of no surface abrasion
or impact sight. You state that there was an impact sight after
the customer brought it back.  She admitted damaging the stone.
   Question 1.  Who received the ring back after a week, if it
was you,why didn't you resolve the problem then.  It's good you
took a picture of the item when it came back.  I'm not quite
getting why this mount would have gone any further than this
point without closure on the subject.
   Question 2.  Why did send the ring to the goldsmith-setter
for work? I don't blame him for not working on it, I would not
have. Unless you wanted him as an outside whiteness.
   Question 3.  Why would you release the ring back to
customer the unresolved?  Without some sort of release signed.
Your paper trail on the gemological side sounds good and quite
obvious. Why is the jury having a hard time following it or
believing it? Are they stunned or baffled?  I do hope you win
your case though. Jim  alpine@hay.net

Fred Ward responds:

You have a number of questions, and I will deal with them one at
a time.

I think you meant to say that it was evident that there was no
filler in the emerald when we sold it or when the customer
brought it back after wearing it 5-6 days. In any case, those are
the facts. There was no filler present either time.

  1. My partner took in the ring about 5:30PM on a Friday night,
    May 6, 1994. She is a designer and not a gemologist or appraiser.
    She took it in noting the fracture and discussing the owner’s
    breaking the emerald in her kitchen. My partner assisted the
    owner with hand lotion to remove the ring because her ring finger
    was so bruised and swollen. The owner had called asking for
    sizing beads and my partner said at take-in she would ask the
    goldsmith who made the mount if he could put in beads now. Later
    that night, after my partner and hes husband delivered the ring
    to the goldsmith, the goldsmith called saying he would not work
    on the mount without a written release from the owner (or us).
    You asked why that did not settle things. There was nothing to
    settle then. The owner had not contacted lawyers, she planned to
    file an insurance claim, and she wanted sizing beads. What was
    there to settle? She broke her emerald and knew it. Only a year
    later did she file a lawsuit, after State Farm refused to honor
    her claim, and after talking with attorneys about how to get her
    money back. So she sued State Farm, my company, me personally, my
    partner personally, and the independent GG-appraiser personally.

  2. I explained why we sent the ring to the goldsmith in #1
    above. There was no issue then with the client. She fractured her
    emerald and knew it. She wanted sizing beads and my partner said
    she had to ask the goldsmith if he could or would do the work. He
    said no, and we thought that was the end of it. Big surprise…
    State Farm refuses her claim, and she sues us… AND WINS !!!
    It is ridiculous, and very costly.

  3. We turned the ring back to the customer because it was hers.
    No sizing beads had been soldered in. There was no reason for any
    release or to worry about anything at this point… or so we
    thought. The only thing we asked was a signature from the owner
    saying she had picked up the ring from us. We do that every time
    a piece changes hands.

Fred Ward

   As a retailer, I am curious if you had any written
guarantee policy.  I have seen chain jewelers in this area (New
England) with written policies of lifetime warrantees which
specifically exclude emeralds and opals.  Perhaps if this gets
dragged into court, that fact may help your case.  Sort of an
"industry practice" based on the fact that you cannot
reasonably assure that any emerald will not break during normal
wear, a statement which I am sure that you can find many an
expert witness willing to make.
   At any rate, good luck.  My prayers will be with you and
this greedy world we live in.

Fred Ward responds:

Thanks for your kind thoughts. No, we have no guarantee to
customers and we have no particular disclaimer either. We just
follow standard trade practices. We do disclose, fully, to every
customer on every sale.

It is not the breakage that brought this case to court. It was
the plaintiffs claiming that we sold an emerald that was
fractured and filled without telling them. And State Farm
ultimately claimed they denied the customer’s filed claim because
we did not deliver the emerald we said we delivered. Obviously,
we did deliver what we said we delivered, and it was exactly the
same sound, unfractured and unfilled emerald that we promised
that was set into the ring and delivered to the customer.

Fred Ward

Just another instance where the law allows discretion to a

judge with no discretion. Dangerous! But not surprising. Read a
few court cases.

   Jo, this was a jury verdict. People just like you and me.
However, I do remember thinking when I first read about the
case in National Jeweler that this guy got screwed. (Despite
NJ's apparent erroneous reporting.)  

Fred Ward responds:

Yes, it was a jury trial, but the jury was hopelessly confused
by the evidence, all the gem terms, the various fillers
discussed, and trade practices. The judge also never grasped the
nuances of the trial. What they saw was defendant State Farm
ganging up with the customers to attack us as the culprits. By so
doing State Farm escaped payment (even though their legal bills
and $17,900 to Cap Beesley in fees cost State Farm far more than
the value of the ring), the plaintiffs got another ally in the
fray, and provided a mechanism where we could be liable as
individuals in addition to a corporation, and were liable for
triple damages, and for the plaintiffs’ legal fees. Unfair? You
bet! Pray you never get trapped in such a greedy, horrible mess.

   Some suggestions on the import of this case to individual
jewelers and gem dealers:
   [1]     Don't sell extremely expensive gems without a GIA
report.
   [2]     Hire a good lawyer to write you a sales contract
with a BINDING ARBITRATION CLAUSE.  Use this contract for all
sales in excess of X dollars.  (X being an amount you must
decide on.)
   [3]     Don't be in a hurry.  Whether you are a buyer,
seller, or professional dealer, THERE IS NO SUCH THING AS A
DEAL THAT IS "TOO GOOD TO PASS UP."  
   A suggestion on the import of this case to the industry:  
   [1]     The industry needs to set up a process and
structure for the arbitration of such disputes.  The securities
industry has one, why not the gemstone industry (especially
since a large gem often costs more than a small company)?
   DISCLAIMER:  I AM NOT A LAWYER.  THIS IS NOT LEGAL ADVICE,
NOR IS IT A LEGAL OPINION.  CONSULT A LICENSED ATTORNEY BEFORE
DOING ANYTHING AT ANY TIME.

Fred Ward responds:

I certainly see some merit in these ideas. You do not have to
look outside the trade for a comparison. The diamond trade
operates with mandatory arbitration conducted by other diamond
dealers as the basis of dispute settlement. I would have welcomed
that. We lost this case because the other side deliberately
confused the jury (and judge too it seems). That did not occur
when we had one educated arbitrator. We had one DC juror
dismissed during the trial for sleeping away the day.

   I am so glad to see this message.  My name is Robby and I
own and operate Renaissance Jewelers in Gainesville Florida. 
This whole scenario from the jury not at all interested in the
sizing beads in the interior of the ring . Who put them their
and what happened.I know I would be very apprehensive if my
customer asked me to do this. If this occuried after the ring
was dropped the heat from the soldering could have affected the
the over stability of the gem. It seems to me the jeweler who
put the beads in the ring caused the fracture to become evident
and tried to cover up the problem with opticon. I know if such
a job came to our shop we would have examined the gem and
warned the customer of the potential danger. Out here in the
trenches it is very scary the unlimited possibilty for
potential lawsuits. We suppot your case and hope the truth will
right a terrible wrong. Good Luck Robby 

Fred Ward responds:

Thanks for the support. You are right. Look elsewhere on this
site for the page HAVE YOU SEEN THIS RING?
http://www.ganoksin.com/borisat/nenam/emerald-case-ring.htm I am
trying very hard to find the person or persons who put in the
sizing beads and filled the emerald. Fred Ward

   You should see if there are any medical records on or near
the date that the ring was damaged to help prove the forced
that the stone was hit by when it was fractured.
   Also, if there is anyway to contact all jewelers who do
repairs in your area, and inquire if they worked on such a
ring.  My bet is they will not want it known, but you may be
surprised.  Let's face it, she wanted to wear it, so she had it
"FIXED" by someone.
 Oh, and Appeal appeal appeal

Fred Ward responds:

Thanks. The buyer said she did not seek medical attention. We
are looking for the person or persons who put in sizing beads and
the filler. Look around this site for a new page called HAVE YOU
SEEN THIS RING? We very much want to find who did it.

Fred Ward