Update on Johnson v. Settino, Celebrated Engagement Ring Dispute

Last year, we posted about the intermediate appellate court’s ruling in Johnson v. Settino, a case about a woman’s refusal to return an engagement ring. In that post, we complained that Massachusetts courts had adopted what we delicately termed “the most idiotic approach” to resolving disputes over which party gets to keep the ring after a broken engagement. Under then-existing Massachusetts law, the appellate court had to determine who was at fault for the engagement’s demise, and it would award the ring to the other party. In this case, that other party was Mr. Johnson, the appellate court found. Even though it was Mr. Johnson who initiated the breakup, Ms. Settino gave him ample reason to do so, and so she was not entitled to keep the ring.

Earlier this month, no doubt shamed by the Blog’s emphatic criticisms of its approach, in Johnson v. Settino, Massachusett’s Supreme Judicial Court abandoned its rule requiring the court to determine which party was at fault for a break up. We poured the tea in the original post on this case, so I won’t recount all the facts here.

For our purposes, it suffices to say that there are really two issues here: first, is Ms. Settino required to return the engagement ring and wedding bands that Mr. Johnson bought for $73,700? Second, while Mr. Johnson did not challenge the ruling that he was obligated to pay for Ms. Settino’s dental implants as promised, he did challenge the calculation of pre-judgment interest.

As to the first issue, over sixty years ago, Massachusetts wed itself to the rule that engagement rings and the like are conditional gifts that must be returned if the condition is not met, unless the gift-giver is at fault for the termination of the engagement. In the interim, the modern trend has tended to remove the extra condition from the conditional gift analysis. Reviewing  decisions from other jurisdictions illustrating the trend, the Court provides four reasons why  courts should not be in the business of determining which party is “at fault” for a break-up. What part of “the most idiotic approach imaginable” does this court not understand? In any case, four reasons seem to be sufficient to persuade the Court that it erred sixty years ago.

The Court then considers whether the principle of stare decisis should prevent it from joining the modern position. Based on some recent decisions from a very different court, I thought it sufficed if a majority of the court determined that the original decisions was “egregiously wrong” when decided. This Court’s approach was far more cautious, but it ultimately concluded that stare decisis should be no barrier to change in this instance.

As a result, the ring was to be considered a gift, conditioned on marriage. The condition not being met, it was incumbent upon Ms. Settino to return the ring. The substance of the appellate court’s decision was affirmed; its reasoning was abandoned.

There remained the matter of Ms. Settino’s counterclaim, construed as one for promissory estoppel although originally pled as breach of contract. The lower courts found that Mr. Johnson was obligated to pay for her dental implant surgery, which he promised to cover during their engagement. Mr. Johnson did not challenge that ruling, but he did challenge the award of pre-judgment interest. She is entitled to pre-judgment interest from the time that she filed her counterclaim, not from the time of the original complaint. The case was remanded for a calculation of pre-judgment interest on that basis.

I learned of this decision by the happiest of all means. I ran into Joe Tomain, of Indiana University’s Maurer School of Law, at a constitutional law conference (of all places). When not engaged in the lofty pursuit of public law, Joe teaches contracts, and he follows the Blog. His student Marie Burns shared the case with him. So I tip my hat to Joe and to Marie!