ENHANCING YOUR LECTURE- 9 WHO OWNS THE ENGAGEMENT RING? 8 8 Often, when a couple decides to marry, one party gives the other an engagement ring. If the engagement is called off, typically the ring is returned. Yet what if the recipient of the ring refuses to return it and a dispute over who owns the ring reaches a court? What law should apply in determining ownership rights in this particular form of personal property? In the eyes of the law, is an engagement ring a "conditional gift" that becomes effective only when the couple actually marries? Or is it an effective gift to begin with, meaning that it belongs to the person to whom it was given-the donee? Furthermore, does ownership of the ring depend on who breaks the engagement? On these questions, the courts are widely divided. AN ENGAGEMENT RING IS A CONDITIONAL GIFT A number of courts have held that an engagement ring is a conditional gift with strings attached-the gift becomes absolute only on marriage. In a Michigan case, for example, Barry Meyer had given Robyn Mitnick an engagement ring that cost $19,500. When Barry later asked Robyn to sign a prenuptial agreement and she refused to do so, the wedding was called off. Robyn refused to return the ring, contending that it was an unconditional gift. Barry claimed that it was a conditional gift given in contemplation of marriage. The court held for Barry, ruling that the gift of an engagement ring is a conditional gift that becomes final only if the marriage occurs The Michigan decision echoed earlier rulings by courts in several other jurisdictions. For example, in a Pennsylvania case a prospective husband gave his bride-to-be a diamond ring that he had purchased for $17,400. A few months later, the man broke the engagement and demanded that the ring be returned. The woman refused, and the case went to court. Ultimately, the Pennsylvania Supreme Court concluded that the ring belonged to the man because an engagement ring is a temporary gift that becomes absolute only when the marriage takes place." A few years earlier, the Kansas Supreme Court had reached a similar conclusion: an engagement ring, by its very nature, is a "conditional gift" given in contemplation of marriage & Courts in Ohio, New York, and New Mexico have held likewise. FAULT VERSUS NO-FAULT RULES When a court decides that an engagement ring is a conditional gift, the next question to be considered is whether ownership rights in the ring depend on who breaks the engagement. In ancient Rome, the rule was that a woman who called off the wedding had to return the ring and its value as a penalty, but a man who called off the wedding faced no penalty. Over the ages, this rule changed. Today, etiquette authorities routinely claim that if a woman breaks an engagement, she should return the ring; if the man breaks the engagement, the woman is entitled to keep the ring. But how do the courts approach this question? Again, there is a split in authority. Some jurisdictions follow a fault-based rule. That is, if an engagement has been unjustifiably broken by the donor, the donor cannot recover the ring. If, however, the engagement is broken by mutual agreement or unjustifiably by the donee, then the ring should be returned to the donor. Other jurisdictions follow a no-fault rule. In the Michigan case just discussed, for example, the court held that fault-which party broke the engagement-is not an issue. Because marriage is an implied condition of the ring, the gift does not become absolute until the marriage occurs. If the engagement is broken, the law requires that the ring be returned to the donor. AN ENGAGEMENT RING IS FOREVER Other courts, when deciding engagement-ring cases, avoid the faulto-fault issue by applying the law governing gifts. In these jurisdictions, an engagement ring, once delivered to and accepted by the donee, isan effective gift belonging to the donee. For example, in one case Michael Albinger had given Michelle Harris a $29,000 diamond engagement ring in contemplation of their marriage. When the couple decided not to go through with the marriage, Michelle claimed that the ring was hers to keep. Michael wanted it back. Ultimately, the Montana Supreme Court held for Michelle. The court stated that Montana law defined a gift as a "transfer of personal property made voluntarily and without consideration." The court was reluctant to carve out an exception in the state's gift law for engagement rings. Among other things, stated the court, to do so would reflect a gender bias favoring men. A dissenting judge was astonished by the majority's decision. The judge noted that women are more likely to be the subject of these actions simply because they are more likely to receive the rings. Does that mean, queried the judge, that "we [should just prohibit gifts in anticipation of marriage altogether because men are more likely to have to pay for them? FOR CRITICAL ANALYSIS As noted, some courts hold that an engagement ring is a conditional gift that becomes an absolute (effective) gift only on marriage. Other courts conclude that when an engagement ring is given to the dopee. the donee should have full ownership rights in the property. Where do your students stand on this issue? Why? a. Meyer v. Mitnick, 244 Mich App. 897, 625 N.W.2d 136 (2001)- b. Linch v. Swoman, 580 Pa. 1, 742 A.2d 643 (1989) . Heiman v. Parrish, 282 Kan. 928, 042 P.2d 631 (1997). d. Albigger v. Harris, 310 Mont. 27, 48 P.3d 711 (2002). http://traversecityfamilylaw.com/Documents/Meyer_v Mitnick.pdf 625 N.W.2d 136 (\\lich.App. 2001) BARRY MEYER, D.O., Plaintiff-Appellee, ROBYN MITNICK, Defendant-Appellant. No. 213950 MICHIGAN COURT OF APPEALS February 20, 2001 Oakland Circuit Court LC No. 96-534671-CK Before: Fitzgerald, P.J., and Holbrook, Jr. and McDonald, JJ. FITZGERALD, P J. Defendant appeals as of right the order granting summary disposition pursuant to MCR. 2.116(C)(9) and (10) in favor of plaintiff. We affirm. Plaintiff Barry Meyer, D.O., and defendant Robyn Mitnick became engaged on August 9, 1996, at which time Barry gave Robyn a custom-designed engagement ring that he purchased for $19,500.1 On November 8, 1996, Barry asked Robyn to sign a prenuptial agreement and Robyn refused. The parties agree that the engagement was broken during that meeting, but both Barry and Robyn contend that the other party caused the breakup. Robyn did not return the engagement ring after the engagement ended and Barry filed the present action on December 2, 1996. Barry alleged that the engagement ring was a conditional gift given in contemplation of marriage and that, because the condition of marriage did not occur, the ring should be returned to him. Robyn filed a countercomplaint, alleging that the ring was an unconditional gift and that, because Barry broke the engagement, she was entitled to keep the ring.2 Following a hearing on Barry's motion for summary disposition, the trial court granted summary disposition in favor of Barry. The court held that since an engagement ring is given in contemplation of marriage, the marriage itself is a condition precedent to the ultimate ownership of the ring. Since the parties did not perform the condition of marriage, Barry is entitled to return of the ring. The court also determined that the issue of who ended the engagement is not determinative of ownership of the ring.3The issue presented is whether fault must be considered in determining ownership of an engagement ring following termination of the engagement. We conclude that determination of who owns the engagement ring following termination of the engagement does not require a determination of which party was at fault. Although Robyn does not challenge the trial court's finding that an engagement ring is a conditional gift given in contemplation of marriage, an analysis of the conditional nature of the gift is essential to a complete analysis of the issue presented. One of the few cases in Michigan involving gifts in contemplation of marriage is In re Lowe Estate, 146 Mich App 325; 379 NW2d 485 (1985). In Lowe, the donor gave an engagement ring to the donee in 1974, but because of extenuating circumstances the couple never married. The donee held the ring until her death and, thereafter, the donor attempted to regain possession of the ring from the donne's estate. In its analysis, the Court noted the lack of case law on this issue and looked to cases from other states. Id. at 327-328. The Court stated that an engagement ring is a conditional gift made in contemplation of marriage. Id. at 327. The Court further cited the general rule that, if the engagement is broken by the donee, the donor is entitled to the ring. Id. Additionally, the Court cited the general principle that, if the engagement is unjustifiably broken by the donor, he may not recover the ring. Id. The Court specifically stated that "[these results can be justified on the finding of fault on the conduct of one of the parties." Id. However, the Court noted that "where the engagement is expressly terminated by the mutual consent of the parties, the general view is that the donor may obtain recovery since the principle applies that the ring was given and received upon the condition subsequent that it would be returned if the parties did not wed without the fault of either." Id. at 327, quoting 46 ALR3d 601. After this discussion, the Court concluded that the general rules were not applicable to the case because there was no termination of the engagement. Id. at 328. Rather, the possibility of marriage ended only upon the domes's death and, because she had the right to possession of the ring against all others, including the donor, at the time of her death, the ring passed to her estate and could not be recovered by the donor. Id. at 328-329 Both parties cite Lowe to support their respective positions. Robyn contends that Lowe requires an analysis of which party was at fault for ending the engagement. Barry argues that because Lowe states that an engagement ring is a conditional gift, he is entitled to the ring because the condition of marriage did not occur, regardless of fault. Meyer v. Mitnick, 825 N.W.2d 138 (Mich. App., 2001) -2 - Barry also contends, however, that if an analysis of fault is proper, he is still entitled to return of the ring because he did not unjustifiably end the engagement. We find, however, that the Court's discussion in Lowe concerning the ownership of an engagement ring after a broken engagement is merely dicta because the statements were not essential to determining the outcome of the case. Edelberg v Leco Corp, 236 Mich App 177, 183; 599 NW2d 785 (1999). Statements regarding a rule of law that are not essential to the outcome of the case do not create a binding rule of law. Luster v Five Star Carpet Installations, 239 Mich App 719, 731 n 5; 609 NW2d 859 (2000). While there is no Michigan law regarding ownership of engagement rings given in contemplation of marriage where the engagement is broken, the jurisdictions that have considered cases dealing with the gift of an engagement ring uniformly hold that marriage is an implied condition of the transfer of title and that the gift does not become absolute until the marriage occurs. See Annotation, Rights in Respect of Engagement and Courtship Presents When Marriage Does Not Ensue (1996), 44 ALR5th 1. Most courts recognize that engagement rings occupy a rather unique niche in our society. One court explained: Where a gift of personal property is made with the intent to take effect irrevocably, and is fully executed by mconditional delivery, it is a valid gift inter vivos. . Such a gift is absolute and, once made, cannot be revoked. .. . A gift, however, may be conditioned on the performance of some act by the donee, and if the condition is not fulfilled the donor may recover the gift_We find the conditional gift theory particularly appropriate when the contested property is an engagement ring. The inherent symbolism of this gift . . . forecloses the need to establish an express condition that marriage will ensue. Rather, the condition may be implied in fact or imposed by law in order to prevent unjust enrichment. [Brown v Thomas, 127 Wis 2d 318; 379 NW2d 868, 872 (1985).] Similarly, in Lyle v Durham, 16 Ohio App 3d 1, 2-3; 473 NE2d 1216 (1984), the court determined that because an engagement ring is a symbol or pledge of a future marriage, it signifies that the one who wears it is engaged to marry the man who gave it to her. Therefore, it is given in contemplation of the marriage and is a unique type of conditional gift. Like the courts in other states and the dicta in Lowe, we find that engagement rings should be considered, by their very nature, conditional gifts given in contemplation of marriage. See, e.g., Heiman v Parrish, 262 Kan 926, 930; 942 P2d 631 (1997); Lindh v Surman, 560 Pa 1; 742 A2d 643 (1999); Mcintire v Raukhorst, 65 Ohio App 3d728; 585 NE2d 456 (1989); Aronow v Silver, 223 NJ Super 344; 538 A2d $51 (1987). Once we recognize an engagement ring is a conditional gift, the question still remains: who gets the gift when the condition is not fulfilled? The general principles of law concerning a donor's right to the return of an engagement ring or its value when the marriage does not occur are contained in a collection of cases from multiple jurisdictions. See Annotation, 44 ALR5th 1. Generally, courts have taken two divergent paths. The older one rules that when an engagement has been unjustifiably broken by the donor the donor shall not recover the ring. However, if the engagement is broken by mutual agreement, or unjustifiably by the dones, the ring should be returned to the donor. The critical inquiry in this fault-based line of cases is who was at "fault" for the termination of the relationship. The other rule, the so-called, "modern trend," holds that because an engagement ring is an inherently conditional gift, once the engagement has been broken the ring should be returned to the donor. Thus, the question of who broke the engagement and why, or who was "at fault," is irrelevant. This is the no-fault line of cases. We find the reasoning of the no-fault cases persuasive. Because the engagement ring is a conditional gift, when the condition is not fulfilled the ring or its value should be returned to the donor no matter who broke the engagement or caused it to be broken. As stated by the court in Aronow v Silver, 223 NJ Super 344, 348; 538 A2d 851 (1987), in concluding that fault is irrelevant in an engagement setting: What fact justifies the breaking of an engagement? The absence of a sense of humor? Differing musical tastes? Differing political view? The painfully-learned fact is that marriages are made on earth, not in heaven. They must be approached with intelligent care and should not happen without a decent assurance of success. When either party lacks that assurance, for whatever reason, the engagement should be broken. No justification is needed. Either party may act. Fault, impossible to fix, does not count.4 In sum, we hold that an engagement ring given in contemplation of marriage is an impliedly conditional gift that is a completed gift only upon marriage. If the engagement is called off, for whatever reason, the gift is not capable of becoming a completed gift and must be returned to the donor. Affirmed. 's/ E. Thomas Fitzgerald s/ Donald E. Holbrook, Jr. /s/ Gary R. McDonald 1. What do the non-fault line of cases that the court refer to hold? Under these cases does it matter who breaks off the engagement? 2. What does the older line cases hold? 3. Which line of cases do you feel should be adopted by courts today explain your answer. Meyer v. Mitnick, 625 N.W.2d 136 (Mich. App., 2001) -3