Jeweler Is Liable Over Filled Emerald
Reprinted from NATIONAL JEWELER
By Whitney Sielaff
Washington- Emerald fracture-filling went on trial here, and an independent jeweler came away the big, big loser.
After two weeks of testimony and argument, a seven-member jury returned a decision July 2 that found Fred Ward and Carol Tutera, partners in Bethesda, Md.-based Blue Planet Gems, liable-on some charges personally-for $78,000 in damages and legal fees estimated at $184,000.
The case, filed in the Superior Court of the District of Columbia Civil Division, hinged on charges of unlawful trade practices concerning a 3.65-carat Colombian emerald Ward bought in January 1994 for $14,500 from Ray Zajicek of Equatorian Imports, Dallas. Non-disclosure of the existence of a fracture in the stone and use of Opticon filler to conceal it ranked as leading charges in the case.
Ward, whose operation is a design studio that specializes in colored stones, sold the emerald in April 1994 to consumer Doree Waldbaum, a longtime family friend, for $26,000, part of a $38,600 total price tag for a custom-designed ring that included two 1-carat-plus diamonds as side stones.
On April 17, 1994, Waldbaum married, a wedding that Ward attended. Now Doree Lynn, she embarked shortly afterward for a honeymoon in Turkey, leaving her ring at home. Lynn claimed that when she returned in early May 1994, she accidentally struck the ring on her kitchen counter, revealing a large fracture.
She then brought it back for sizing to Blue Planet, which said it would not undertake the work because of the fracture and returned it to her. In June, she filed a claim with State Farm Firm and Casualty Co., her insurer of the piece. State Farm had her take it to Continental Jewelers, a Washington D.C., retailer that handles replacement for the insurer. This trip engendered the first verifiable account of the presence of fracture-filling material within the emerald.
Besides these events, agreed upon in testimony of both plaintiffs and defendants, versions of what happened diverged. Other critical details remain fuzzy until June 1995, when Lynn and her husband, Michael Lynn, sued Ward, Tutera, the independent appraiser for the piece-Karen Sternberg of Falls Church, Va.-and State Farm.
The judgement orders that Sternberg pay $9,100 and legal costs. State Farm incurred no liability and wins legal costs from the Lynns. According to one version , that set forth by the insurance company and ultimately accepted by the jury, which awarded treble damages-$78,000 on the original $26,000 price tag- based on malice, indicated that Ward knew it was treated all along. This is the so-called “conspiracy” version.
Testimony for State Farm did not go so far, claiming only that the stone had been treated so cleverly in Colombia that Ward and veteran emerald dealer Zajicek had been duped themselves.
Ward and Zajicek vehemently denied the possibility of having missed that the stone had been treated. Their version maintained there was no fracture, filled or unfilled, until Lynn damaged it with the kitchen blow. Ward’s theory then hinged upon the existence of an unknown third jeweler who worked on the piece between the original sale and the inspection by Continental.
By the time the ring showed up at Continental, someone had installed sizing beads on the shank. Ward said that whoever applied those beads must have exacerbated the fracture, panicked and tried to mend the stone with the filler.
Zajicek claimed to have had the stone in his office for only several days before sending it off in a memo parcel of three stones to Ward. Besides marking the parcel “E,” representing the emerald as filled with cedarwood or palm oil, he said, he had little time for inspection.
Ward, however, cited a long list of experts who subsequently evaluated the stone using tools that included special lighting and microscopes before it was sold. He said none of them caught any signs of a fracture.
“No filling can make such a fracture invisible,” Ward told NATIONAL JEWELER in one of several post-trial interviews.
In contrast, he said, when he next saw the stone, during depositions taken after Lynn filed the complaint, the fracture and foreign matter were readily apparent to the naked eye. The fracture today transverses lengthwise the emerald’s approximately 10mm table and runs down the crown facets to the girdle.
Reports issued in late 1994 by the Gemological Institute of America’s Gem Trade Laboratory and American Gemological Laboratories, New York, requested by State Farm, suggest that the fracture had existed prior to its last polishing.
“The flaw in question is inherent to the stone and was present when the stone was last polished,” the GTL report states.
Ward and Zajicek maintained that this wording does not indicate that the fracture existed before they owned it. But according to C.R. “Cap” Beesley of AGL, who served expert witness for State Farm, the stone could not have been polished after they owned it because its weight remained constant. Polishing a table of that size would have decreased the stone’s weight by several points, he said.
Despite the emerald’s high price, it was not sent for graduating at the time of the original April 1994 sale.
Early in the proceedings, the judge sent the case to third-party arbitration. Arbitrators exonerated Ward and determined that State Farm should pay the claim Lynn had filed in June 1994 and the insurer had denied six months later.
“The plaintiffs are awarded judgment against State Farm only for the amount of $58,650,” found court-appointed arbitrator Michael T. O’Bryant. “All other affirmative claims, counterclaims and cross-claims are hereby dismissed.” But those results were non-binding, and the case returned to court.
Ward, who now says it “is very difficult to have any confidence at this point” about avoiding the judgment, is pinning his hopes to a pending motion to throw it out and, if that fails, an appeal.
Ward told NATIONAL JEWELER that many factors may have prodded the jury on to its harsh decision against him. He said jurors were angered that the trial ran on for two and a half weeks rather than the initially expected four days. Also, he said, conditions in the Washington courthouse were highly uncomfortable, as the trial moved from a sweltering room with no air conditioning to a frigid one, where broken air conditioning was stuck on high.
Uncomfortable conditions aside, ventral to the jury’s refusal to see his side, Ward said, was its inability to understand the gemological arguments brought forth, which may not have been adequately explained.
Since the judgement, industry experts have voiced high concern that the conditions that brought on this case carry the potential to seriously damage the trade’s image. At a special panel discussion held in July during the JA International Jewelry Show in New York, Beesley distributed a broadsheet titled “Judgement Day: Fracture-Filling Moves Out of the Shadows and Into the Courtroom.”
“Implications of this case will continue to reverberate throughout the industry for some time,” it stated. “Hopefully, the repercussions will cause the jewelry industry to reflect on the serious consequences of inadequate detection and enhancement disclosure policies.”