:IL;

:Sep 3, 2008;

:FOCUS: Family Law;

:6

With this ring ...

Engagement jewelry becomes divisive part of dissolutions, breakups.

By Michael W. Hoskins mhoskins@ibj.com



    Family lawyers see it often.

    Man loves woman. He proposes, gives her a ring, promises marriage. Sometimes they tie the knot; sometimes not.

    But when those former lovebirds enter Splitsville, the engagement ring that once symbolized the couple’s union transforms into a pivotal, emotional element of their separation and frequently a hurdle in dividing assets.

    Wife or girlfriend sees the ring as a gift and wants to keep it, while husband or boyfriend wants what he paid for returned to him.

    State courts across the country have considered the engagement ring issue and reached differing conclusions, meaning the answer to that question of “Who gets the ring?” can pretty much depend on where the litigants live.

    In Indiana, the answer is one adopted by most states: it depends on whether the marriage actually happened. Post-vows, the ring ownership boils down to it either being part of the total marital property pot or which ex has the better negotiating skills.

    “This can be a very emotional issue, but we’re fairly simple in our treatment compared to how other jurisdictions handle engagement rings,” said Indianapolis attorney Andrew Soshnick with Baker & Daniels, who handles the issue mostly during mediations. “There is a difference jurisdictionally.”

    A general rule applies most the time, attorneys say: Everything you bring in to a marriage, regardless of how it was acquired, is part of the marriage estate that will be divided up. Pre-nuptial agreements or wills can change that, though.

    Under the Indiana law, an engagement ring is a conditional gift before marriage and if that condition isn’t met, the gift must be returned, Soshnick said. After marriage, the ring is assigned a fair market value and goes into the marriage asset pot, he said.

    Not all states use the same legal rationale, though. A review of state laws shows that many courts adopt the Indiana-view that looks at an engagement ring as a conditional gift given in contemplation of marriage. Some use different approaches, such as saying if the guy breaks an engagement, he won’t get it back, but if he doesn’t end the relationship, he can request its return. Other courts have held the belief that an engagement ring is an unconditional gift and so it doesn’t need to be given back.

    Indiana courts first took on this issue three years ago in Robert S. Fowler v. Sue A. Perry, 830 N.E.2d 97 (Ind. Ct. App. 2005), which asked a question of first impression about whether former finance Fowler was entitled to the ring’s return or purchase price since he and Perry weren’t married.

    The two had lived together for years, but then decided to split before the marriage. Perry took the ring to a pawnshop, but it was stolen from her car and Fowler later filed a complaint seeking the value of the stolen engagement ring. The trial court ruled in her favor, but the appellate court determined the marriage condition wasn’t met, so Fowler was entitled to the $5,499 ring purchase price since it had been stolen and couldn’t be returned.

    Appellate judges examined the dictionary definitions of “engagement ring” in their analysis, finding the trial court had erred when deciding there was insufficient evidence to prove the ring was given in contemplation of marriage. In that ruling, the court adopted a standard seen as the “no fault” approach, holding that once an engagement is broken, the engagement ring should be returned to the giver, regardless of fault, since the ring’s ownership was conditional upon the marriage. They decided it isn’t a lifetime gift, as other states have ruled.

    “In our society, an engagement ring – i.e. a gift incidental to an engagement – is the symbol and token of a couple’s agreement to marry,” the court wrote. “As such, marriage is an implied condition of the transfer of title to the ring and, thus, the gift does not become absolute until the marriage occurs. Therefore, in the absence of a contrary expression of intent, an engagement ring is a conditional gift given in contemplation of marriage and not an inter vivos transfer of personal property.”

    A recent Court of Appeals case that resulted in an unpublished memorandum decision July 25 delved into that issue again. In Donita McMahon v. Joseph Lopat, the appellant-defendant, who’d sued to keep the ring, argued that her jury should have gotten instructions pertaining to conditional versus completed gifts; the court declined to do so.

    Soshnick said it really is amazing that it took until recent years for the state’s appellate courts to broach that issue of first impression. But he said the Fowler decision was welcomed by the legal community, reducing many of the arguments made by separating couples and allowing attorneys to point them to a direct authority.

    However, that rule of law can be disheartening for litigants who think they should be able to keep the ring, even after marriage and the ring becomes part of the marital property, according to Carmel attorney Stephenie Jocham with Jocham Hardin Dimick Jackson.

    Sometimes, pre-marriage litigants won’t budge even if they hear they can’t keep the ring, she said. In cases where the couple was married, the men sometimes want a ring that’s been passed down through the generations to be returned so they can keep it in their family, Jocham said.

    “We often have women who believe it was a gift and it shouldn’t be included in a marital estate,” Jocham said. “Husbands say it’s property and it should be included at the value paid. That can be a tough point to negotiate.”

    In a dissolution case, Jocham said the wife wanted to get the ring back in order to take it to the jewelry store and trade it for a ring in her next marriage. The husband knew her plans, and in the end both agreed to let her receive an amount close to the purchase price, Jocham said.

    Other engagement items – such as a house or pet purchased together pre-marriage – can be a contentious issue for family law attorneys to deal with, though the laws governing the rings don’t transfer as clearly, Jocham said.

    For example, she has witnessed many couples – married and engaged — debate endlessly about a dog they aren’t willing to let the other have after separation. The law treats animals as property and doesn’t assign ownership rights subject to conditions.

    “People fight over pets like they would a child, and they become an incredible sticking point,” Jocham said, noting she’s drafted visitation schedules for pets, and agreements on who will pay for grooming, vet bills, and exchanges of animals. “They can agree on everything else, but they dig in on the pets. Courts don’t like to spend time on those types of issues, so it always keeps us there longer.”

    Soshnick said who gets ownership of an engagement ring or another important item can sometimes come down to simple negotiation, particularly after a marriage has taken place and the pair is going through a dissolution. Starting at the 50-50 split, one party can sometimes get more – or have to give their former spouse less of the estate – if they agree to return the ring.

    “Sometimes they may take a lower estate percentage if they get a favorable result on something important to him or her,” he said. “It can turn out to be a win-win situation because many believe the engagement ring has a special status.”

    The best advice attorneys give is for husbands and wives to put their wishes into wills or agreements, even before marriage, to avoid the disputes down the road.
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