State rules vary governing what happens to an engagement ring if the marriage fails to occur. There are even different rules from state to state determining whether the ring becomes marital property subject to division after marriage.
This week, I had the chance to comment on the recent New York case where a restauranteur proposed to his girlfriend sealing the deal with a $53,000 sparkler. When the girlfriend (now fiancee) refused to sign a prenuptial agreement, the restaurateur broke off the engagement. See clip here.
If the story ended here, under New York law, the ring would have to be returned to the restauranteur. In New York, an engagement ring is a gift conditioned upon marriage. Thus, if the marriage does not occur, despite who breaks it off, the ring must be returned to the donor.
In this unusual case, however, after breaking off the marriage via text message, the restauranteur, being a generous guy, decided to send a subsequent text to his former fiancee stating that he would let her keep the ring as a “parting gift,” and that she could use it to make a down payment on a home. Later, he recanted this message, saying he was only joking and requested the ring be returned.
The Court decided that the ring did not have to be returned despite the existing law. It was determined that the second text message sent indicating that the ring was a “parting gift,” was essentially regifting the ring and thus, it became an irrevocable present to the donee. While this case is highly unusual and very fact specific, it does teach an important lesson: parties need to be mindful of what they put in writing, whether by text, email, social media posting or otherwise.
Do you think that the Court made the right decision? Please feel free to leave a comment.