Question: Schauer and Erstad went shopping for an engagement ring on

Schauer and Erstad went shopping for an engagement ring on August 15, 1999. After looking at diamonds in premier jewelry establishments such as Tiffany and Company and Cartier, they went to Mandarin Gem's store, where they found a ring that salesperson Joy said featured a 3.01 carat diamond with a clarity grading of "SI1." Erstad bought the ring the same day for $43,121.55. The following month, for insurance purposes, Mandarin Gem provided Erstad a written appraisal verifying the ring had certain characteristics, including an SI1 clarity rating and an average replacement value of $45,500. Lam, a graduate gemologist with the European Gemological Laboratory (EGL), signed the appraisal. The couple's subsequent shortterm marriage was dissolved in a North Dakota judgment awarding each party "the exclusive right, title and possession of all personal property... which such party now owns, possesses, holds or hereafter acquires." Schauer's personal property included the engagement ring given to her by Erstad. On June 3, 2002, after the divorce, Schauer had the ring evaluated by the Gem Trade Laboratory, which gave the diamond a rating of "SI2" quality, an appraisal with which other unidentified jewelers, including one at Mandarin Gem's store agreed. Schauer alleged that the true clarity of the diamond and its actual worth, which is some $23,000 less than what Erstad paid for it. Schauer sued Mandarin Gems on several theories, alleging that she was a thirdparty beneficiary of Erstad's contract with Mandarin Gems. Is she correct?

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  • CreatedJuly 16, 2014
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