Reid v. Moskovitz

Opinion

McCLOSKY, J.

Defendants Mark Moskovitz, Harry Vartanian and Marvel, Inc. appeal from the judgment in favor of plaintiff James H. Reid. Plaintiff initiated this action for breach of contract, breach of warranty and fraud based upon intentional and negligent misrepresentations due to defendants’ sale to him of what was purported to be a diamond VS1-G color, weighing 1.23 carats with a replacement value of $7,500 for which plaintiff paid defendants $3,600. Plaintiff alleged that in reality he was sold a simulated diamond with a value of approximately $25.

Facts

The trial was conducted before the court sitting without a jury. Plaintiff introduced evidence that he purchased what purported to be a 1.23 carat diamond from defendants for $3,600 to be mounted in a ring. Defendant Moskovitz caused an appraisal of the stone for insurance purposes to be prepared. That appraisal provided ‘“one modern full cut diamond VS1-G color, weighing 1.23 carats.’ ” The stone subsequently dislodged from the ring. Plaintiff then left the ring and stone overnight to be repaired with a jeweler known only as “John.” When plaintiff picked up the ring he was told the stone was not a natural diamond. When plaintiff confronted defendants with this information the defendants suggested the stone plaintiff now had was not the stone he purchased from them.

Expert testimony was that the $3,600 sale price of a diamond of the size and quality defendants purported to sell plaintiff was too low. Six thousand

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dollars would be a more reasonable sale price for that diamond. It was undisputed that the stone plaintiff now possessed was a cubic zirconia, rather than a natural diamond with a value of approximately $50.

Defendants’ principal defense was that the stone plaintiff now possessed was not the stone they sold to him.

After trial, the court found for plaintiff and against defendants. The court stated, however, that “while I think there was a type of fraud here I don’t think it was intentional fraud for the reason that that appraisal was given in the manner that it was. I think it was a negligent misrepresentation. I think what probably happened was that Mr. Moskovitz got careless, didn’t really look carefully at that ring, even if he looked through the loop, and sold something that was not what it should be. The difference between intentional and negligent fraud is important when you talk about punitive damages.”