Disputes over engagement rings appear to be getting more high profile with Wall Street investment manager Gerald Tsai now taking on a former sister-in-law of George W. Bush to whom he gave a $243,040 rock.

Tsai, 78, alleges Sharon Bush, 55, has refused to return the 11.07 carat diamond ring since they broke off their engagement in January and she is therefore liable for conversion, fraud and “replevin” (recovery of personal property claimed to be unlawfully taken). He bought the ring in December 2006 and says it is now worth $434,000.

“The transfer of the Ring by Plaintiff to Defendant was subject to the condition, agreed upon by Plaintiff and Defendant and implied by operation of law, that the Ring would be returned to Plaintiff by Defendant in the event that the marriage between Plaintiff and Defendant did not occur,” the complaint, filed in Manhattan Supreme Court, says.

Bush, the ex-wife of Neil Bush, began dating Tsai in 2005 when they were both recovering from divorces. Neil Bush famously broke up with Sharon Bush by e-mail after 23 years of marriage.

Tsai's suit is a higher-priced version of a case filed last year by the ex-fiancé of Philadelphia TV news anchor Monica Malpass, who sued her for the return of a relatively modest $78,000 engagement ring. A recent Pennsylvania Supreme Court precedent supported the claims of Stephen Thorne and the case quickly settled.

Under Lindh v. Surman, 742 A.2d 643 (1999), the giving of an engagement ring is conditional on performance of a marriage ceremony, not acceptance of a marriage proposal, and the donor may recover it no matter who is at fault for the breakup.

New York law also tilts toward Tsai as a conditional ring-giver. A 1965 amendment to the state's Civil Rights Law allows a right of action to recover property when the “sole consideration” for the transfer of the property was “a contemplated marriage that has not occurred.”

In Goldstein v. Rosenthal, 288 N.Y.S.2d 503 (1968), a Bronx judge cited the Civil Rights Law in ordering the defendant to return an engagement ring to her ex-fiancé or pay him its agreed value of $2,450.

Tsai, who made his name as an investor in the 1960s, is seeking either a judgment declaring he is entitled to immediate possession of his gift to Sharon Bush or a judgment against her of $434,000 plus interest.

But Bush's attorney has already raised a fact-based defense, saying Tsai gave her the ring as a Christmas present, not as a token of their engagement. “We will vigorously defend this case,” promised Raoul Felder, best-known for representing celebrities in divorce cases. “The ring is hers.”

Tsai and Bush had once planned to marry at his estate in Rye, N.Y., on Valentine's Day of 2007. According to the New York Post, those plans fell apart after he refused to sign a prenuptial agreement guaranteeing her financial security if anything happened to him.

Felder slammed Tsai for filing his suit just days before this year's romantic holiday. “Valentine's Day is a day you give gifts to your sweetheart. It's not the day you demand Christmas presents back,” he told the Post.

By Matthew Heller
2/15/08