When a jeweler acts according to her conscience, she is sued for breach of confidentiality.
Tina Keller opened her studio more than 20 years ago. Over a relatively short period of time, the right combination of innovative marketing, great product instincts, a commitment to creating an extraordinary service experience and a superior talent for custom design made TK Creations the “go to” place for engagement rings and contemporary fashion jewelry in her town. Tina joked that she’d lost count of the number of engagement rings she’d personally sold over the years — and she thought she’d probably seen it all with the couples coming through her door.
Several months ago, Tina took a call from the son of an old high school friend who had recently transferred back to the area to take a job with a growing tech firm. Derrick told Tina that he had met his soon-to-be fiancée Nicole while they were both in graduate school back east and that he was delighted she agreed to move back with him. He wanted an appointment to look at diamonds and to talk about designing a ring. He said that Nicole had some ideas about what she wanted, and that he needed to stay in the $20,000 range for the ring. The appointment was set for the next day.
The conversation began well enough, with Nicole showing Tina some pictures of rings she liked, and Tina showing a few models and sketching some concepts. When it came time to look at diamonds, keeping in mind the general type of setting Nicole liked and Derrick’s budget, Tina started with a mid-quality 1.50-carat. Nicole very quickly made it clear that the diamond was not at all what she had in mind, and insisted on looking at a minimum 2.50-carat. Tina could sense that Derrick was getting more and more uncomfortable as Nicole continued to make choices that raised the price of the ring well out of range. He made several references to expenses, budget and practicality, but Nicole went on with increasing her demands until she had settled on a diamond she could “live with” — right at 3 carats.
Tina agreed to hold the diamond for a week while she worked on finalizing design concepts for the couple to review. She prepared the designs with flexibility for diamond size, in the hope that Derrick might take the time to explain his budget concerns to Nicole and get her to make things a bit more reasonable for him.
When they came back in the following week, Nicole selected one of Tina’s designs and Derrick asked if they could see one of the diamonds they had looked at previously — just under 2 carats — to put into the ring. By the time Tina brought the diamond out, it was clear that Nicole was in full “persuasion mode,” explaining why she really did deserve the 3-carat. She looked at the smaller diamond, but after a lengthy (and miserably uncomfortable) discussion that included begging, pleading, smiles, thinly veiled innuendo and a commitment to contribute $5,000 toward the ring, Nicole talked Derrick into the 3-carat — and a $30,260 total tab.
Tina felt less than great about having witnessed the whole process, but she also recognized that her job was to deliver what her client asked for. The dynamic of the relationship — and the depth of Derrick’s savings account - were none of her business. She wrote up the sale (in Derrick’s name), putting a $5,000 deposit on Nicole’s credit card. When the ring was finished several weeks later, Derrick picked it up and left her a cashier’s check for the balance. He loved the ring and told Tina all about how he planned to present it to Nicole at dinner that night.
About a month after the engagement dinner, Nicole came to Tina’s studio alone and asked Tina if she could remove the center diamond and replace it with a CZ. Tina said it could be done, but suggested that if travel or security were issues, Nicole might consider having her make a high-quality silver and CZ replica of the ring and not compromise the integrity of the original. Nicole politely disregarded the suggestion, saying that she just wanted the diamond loose and the ring with a CZ in it at that point. She offered no other explanation.
Tina agreed to take the ring in and do the job, giving Nicole a due date of a week. As soon as Nicole was gone, however, she took it upon herself to call Derrick. After a minute or two of chatting (which gave Tina the impression that Derrick was still very happy), she asked if he was aware of Nicole’s request to take the diamond out of the ring. He was unaware and totally shocked. He asked that Tina not do anything with the ring till he could find out what was going on. Derrick called back the next day to tell Tina that Nicole came clean — that she was planning to break off the engagement, give him back the ring, keep the diamond and move back east. He was obviously devastated and asked Tina if he could get a refund on the ring.
Tina decided to make an exception to her “no refunds” policy. She refunded Nicole’s credit card and Derrick’s check and assumed it would be the end of the story … until 3 weeks later when she got notice that she was being sued by Nicole for damages related to breach of client confidentiality.
- Does Nicole have a case?
- Who owns the engagement ring when both parties have some stake in paying for it?
- Did Tina do the right thing by contacting Derrick?
- Is it ever OK to follow your gut and NOT make a sale when you know it’s just not right?
Real Deal Expanded Responses
Robert L. New York, NY
Derrick gave Nicole the ring as “consideration” for her agreeing to marrying him. If she broke off the engagement she would have to return the ring to Derrick in any case and probably he would need to refund to her the $5000 she paid and take full ownership. If she had gone ahead and married him she would then own the ring.
Nicole has no case for client confidentiality. A jeweler is not a professional who has a personal responsibility toward clients to maintain other than ethically and honestly representing the products she sells. The fact that Nicole was going to perpetrate a fraud relieves Tina of any cause for concern for telling Derrick. In fact if she didn’t tell him she would be complicit in the fraud as it had to be obvious to a professional that she was up to no good.
Sandra R. West Chester, PA
I would have done the same thing! In some states the ring belongs to the person who gave it and must be returned if the engagement is broken. If it went to court I would want to believe a judge would see that this women had intentionally tried to deceive everyone.
But who wants to have to defend themselves for doing the morally correct thing, the guy is lucky he didn’t marry her a divorce would have cost him even more.
Marcus M. Midland, TX
Nicole does not have a case. In fact the police should have a case against her for conspiracy to commit fraud. Nicole is shady and her actions are down right criminal. She got her 5k back and needs to walk away from this situation before she finds herself in hot water. Tina definitely did the right thing by contacting Derrick. Can you image what would happen if Nicole got away with this and Derrick found out that Tina knew what was happening? That’s a whole new can of worms! Tina did everything right here. Even though she was uneasy about the situation to begin with she still couldn’t reject the sale. At the end of the day she really didn’t know the dynamics of the relationship until Nicole revealed her true conniving self.
Daniel R. Nashville, TN
Nicole does not have a case. There is no breach of confidentiality between the parties. Their relationship was that of consumer and business, no confidentiality exists at law. I would not have called, like Tina did. Nicole’s motivations were not of Tina’s concern. Nicole will not win. We don’t know what financial agreement the parties have as it relates to ownership. Looking at it on its face both parties have an interest in the ring.
Bruce A. Sherwood Park, Alberta, Canada
Tina handled this brilliantly and is a credit to our industry. She went miles beyond what was required when she refunded the full purchase to each of the two clients. No law has been broken unless Tina’s repair tag on the HOLD, tied her to a specified confidentiality agreement. I would never casually suggest a retailer use a court room to settle a dispute with a client but in this case, Tina needs to complete the journey under the umbrella of high professional standards by which she governs herself and her business. Tina should have her lawyer respond with an acknowledgment that TK Creations will defend this action by their client.
Steve F. New York, NY
When doing the right thing becomes the wrong thing to do, the problems of our industry and our nation are far worse than i ever imagined.
Joseph C.Huntington, NY
First off we would not change out the Diamond with out both parties being aware & we would of told Nicole to please have Derrick call us & to let us know he was ok with this first, store owner should of put Nicole’s back to the wall & she most likely would not be in a position to be sued or liable for her actions. I believe Derrick still has some owner ship & doesn’t fraud on Nicole’s part stand for anything, she convinced the store owner to be deceitful as Nicole was. Good lesson for the store owner, two parties came in to purchase so two parties should be on board.
Michael B. Graham, NC
Yes, I believe Tina would be a participant in a case of fraud. Derrick was the majority owner, and since Nicole was going to break the engagement, she would be the one to return the ring for not completing the marriage contract. If Derrick had found out and had the courage to file a fraud case Nicole would have a felony conviction for fraud.
Pam S. Boston, MA
Good job Tina..I think she did the right thing and after Derrick heard the real story from the slimy ex that she was planning on scamming him I do not see her case! Derrick you are a lucky guy to have gotten away from this horror.
Adrienne R. Los Angeles, CA
Nicole has no case. In most states, if not all, there is no legal concept of breach of confidentiality between a customer and a retailer. Unfortunately Tina will have the cost of defending the lawsuit, even though she will probably prevail. (By doing so, she can gain Derrick’s lifetime loyalty and that of his friends and family.) Nicole no longer has a stake in paying for the ring, since her deposit was refunded in full. She is a fraudster, and in all likelihood will be treated as one in court. Tina did the right thing by contacting Derrick before compromising the ring, as she needed to be sure that he, her primary customer and the son of a long time friend, was authorizing this request.
The question remains if the ring was a completed gift, or if accepting it was a promise to wed.
In my opinion it is always OK not to make a sale when you know it’s just not right.
Ira K. Tallahassee, FL
1st—-If the sales slip has Derrick’s name on it, the ring belongs to him.
2nd—-Yes, Derrick is the buyer of record and; of course, the son of a friend.
3rd—-Always correct to believe in your gut feelings. It might cost you a sale or two, but you’ll feel better by doing the right thing.
Aubrey M. Norfolk, VA
I would tell her no way unless both parties come into the store to have this done. Never go against your policy even for one person. Happy shopping days.
Jake J. West Des Moines, IA
Tina was in the right to alert Derrick as this transaction smelled of fraud. It’s very suspect when the blushing bride comes in wanting to swap out the center for a fake. Nicole should be arrested for attempted fraud. I would fire back a letter stating the store policy in this situation that both parties must be contacted to make sure one isn’t trying to commit fraud against the other, which would make the store party to an illegal transaction. While it is technically her ring, depending on state laws, the intention of returning the ring with a fake center without Derricks knowledge is where the illegal action takes place. In the future, Tina should alert Nicole to the policy that she needs to contact Derrick to make sure he has knowledge and is agreeable to it.
Chuck K. West Des Moines, IA
First, I’m not an attorney but I have been in the business of selling engagement and wedding jewelry exclusively for over 25 years. The correct answer to your questions varies from state to state. In some states, the engagement ring is the consideration in the contract to marry. If the man breaks the engagement, the woman gets to keep the ring because he broke the contract. If she breaks the engagement, he gets the ring back. In other states, the ring is considered a gift so the woman gets to keep it either way. But If the ring was sold to him and she was trying to pull a fast one by taking the diamond out without telling him, then she might actually be breaking the law. It’s called “Fraud In The Inducement” I believe. Again, I’m not a lawyer, but my gut tells me she doesn’t have a leg to stand on. It’s an interesting case study though and I plan to ask our company attorney about it.
James L. D. Kingston, NH
Tina followed due process and protected the rights of Derrick, the owner of the ring. An engagement ring is not the bride’s property until after she says “I do”. Had Tina done as Nichole requested it would have been business suicide... Tina could lose her sterling reputation as word spread that she sold a CZ as a diamond and the ensuing legal suit for fraud. If I were Tina I would be advising Derrick to have Nicole arrested for her actions.
Sid S. Albany, OR
She has not a leg to stand on! The ring belonged to both of them.
Herman G. Cedar Rapids, IA
If she paid 5-figures for an item she wasn’t budgeted for and for nothing she needs for stock, max she should do is give in-store credit for amount paid.
Gabi M. Tewksbury, MA
Tina had no right to call Derrick, even if it was the “right” thing to do. Although he had more stake in the initial purchase, Nicole is now Tina’s sole customer in this new job take-in. That being said, there was probably no “customer confidentiality”, so Nicole probably doesn’t have a case. She should have gone to another jeweler!
Mark B. Wausau, WI
First it is my understanding that the ring is a commitment to marry, and if she brakes up with him she has to give the ring back. She is only entitled to the 5,000.00 dollars she put down on the ring if the store takes the ring back. I would never remove one stone for a CZ with out both people knowing what is going on. I feel Nicole has no case, and I would have let Derrick know what is going on.
Etienne P. Camden, ME
It seems pretty simple to me in that the ring was originally sold to Derrick any work done to alter the original ring that was sold would void the warranty. For this reason, Derrick had to be notified.
I doubt that the lawsuit will be taken seriously in the courts.
Everardo C. Santa Barbara, CA
Tina absolutely did the right thing, Sales are great but we have to also have morals and trust our instincts. In my opinion, the engagement ring ownership would come down to majority owner like a tradable company, whoever holds the higher “stock” will be able to make the majority decision in favor of Derrick. So I feel that it was definitely his call on what to do. Nicole was basically going for a money grab and basically was going to finess her way back home and pocket cash. Moral of the story- Think with your brain not your heart. I hope that Derrick will make better selective decisions in the future.
Daniel S. Cambridge, MA
My understanding is that engagement rings go back to the purchasers if the engagement is broken off. Admittedly the woman paid a small percentage of the cost but the bulk of it was paid for by the gentleman. The ring should have been returned to him by his fiancee and he should have given her the $5000 she put in for it . However I don’t think that’s what is going on here. I think she was taking him for a ride from the beginning. She obviously planned to screw him out of the diamond so he couldn’t get back the $25,000 and she figured she could go sell it and make a profit on his misery. She was a gold digger and what she was doing was stealing from him which is illegal. He should be bringing a suit against her for attempted theft of property, The jeweler should have an attorney tell hers this is what was going on and she has no role in it except to prevent a theft from happening.
Kent C. St. Simon’s Island, GA
It’s Derrick’s property. The store was not involved with the gift to the gold digger.
A judge will rule, I don’t know how the store could do anything different.
It’s unfortunate the store will have to defend itself and unlikely recover court and attorney expense.
Jay F. Apple Valley, MN
There is no confidentiality here. Instead it is solid good business and etiquette to be confidential until a crime is involved. Nicole was about to fraud Derrick, he could have called the police upon finding out she did not return the ring whole. He could also sue her.
There is implied confidentiality but it is not a legal one. I would counter sue Nicole for distress and her intent to involve Tina in a crime.
Amy C. Grove, OK
Tina shouldn’t worry about this. Get a lawyer to fight first, then relax. The confidentiality seems to cover all three people in the situation together. I can’t picture a judge allowing her a privacy cover for what is essentially a deception. She did the right thing for all, especially that poor man who nearly married the wrong woman. He should be a customer forever!
This article originally appeared in the January 2018 edition of INSTORE.
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