Vivid Collection, GIA sued over grade dispute

A former Harry Winston employee is suing Vivid Collection and the Gemological Institute of America over two diamonds that he charges were misrepresented in their grades. In perhaps its most eyebrow-raising allegation, the suit claims that “payments were made” to GIA to have the two stones “upgraded.”

GIA told JCK it, “vigorously denies the allegations.” It has filed a motion to dismiss the suit, which argues that statements regarding the color and clarity grades are ‘statements of opinion.’ “

The suit, filed in the Supreme Court of the State of New York this April, charges that in 2001, dealer Max Pincione purchased two pieces of jewelry from Vivid Collection, a New York-based jewelry designer and manufacturer: a platinum diamond ring with a 37.01-ct. stone, and 103.78-ct. pear-shaped pendant. According to the lawsuit, the pieces had reports labeling them as H VS2 and D Flawless, respectively. (The legal papers say the stones were “certified” as those grades. That term is widely used in the trade, but is discouraged by GIA and most experts.)

Pincione, according to the complaint, then sold the diamond ring to the Royal Family of Saudi Arabia. “After the sale was made, and the stone was examined by independent experts of the Royal family of Saudi Arabia, the diamond ring was returned to the plaintiff without explanation, and with a demand for the return of the monies paid for the stones,” the suit said.

Pincione then sold the pendant to a Saudi entrepreneur. Again, the diamond was returned to the plaintiff. “The plaintiff later was advised that the stones were not of quality stated in the GIA grading reports …. and thus the plaintiff lost both the Saudi Royal Family and Saudi entrepreneur as clients,” the suit says.

This caused Pincione to risk “incarceration and punishment in Saudi Arabia,” the suit says. For the harm to his business reputation and other complaints, he seeks $50 million.

The suit includes an “Exhibit F,” which it claims is “a document delivered to the plaintiff by an informant which indicates that payments were made by defendant VIVID to defendant GIA to ‘upgrade’ the quality of the diamonds.” The document shown, however, is mostly a page of handwritten numbers and letters which were hard to interpret.

In its motion to dismiss, GIA’s lawyers noted the “important limitations” listed on the back of its reports, which says that the GIA “has made no representation or warranty regarding the Report … the results of any other examination performed on the diamond may differ… this report may not be referred to as a guarantee, valuation or an appraisal.” It also noted that GIA never dealt directly with Pincione, thereby undermining the suit’s legal standing.

Pincione declined comment. He has replaced his first legal team. His new lawyer, Stephen Hans of Forest Hills, Queens, says that he is filing an “amended complaint” to the court, but declined further comment. Vivid Collection could not be reached for comment at press time.