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Allen Smith proposed to an Australian woman he met through match.com just weeks after the two began exchanging e-mails. Bergittia von Buelow de Rothschild said yes, and she left Philadelphia sporting an engagement ring for which Smith had coughed up $12,475. Smith never saw his intended again. Now he’s battling Liberty Mutual Fire Insurance Co. to recover the value of the ring. Claiming the 2-carat diamond ring was stolen, Smith filed a sworn proof of loss with the insurer pursuant to his homeowner’s policy, Philadelphia Common Pleas Judge Stephen E. Levin reported in a recent opinion. Though Levin found that Rothschild conned Smith into entering into the engagement, he held that the woman’s actions did not constitute theft under Smith’s insurance policy. “Because Rothschild neither took and removed the ring nor obtained it under false pretenses, the loss does not fall within the theft provision of the plaintiff’s insurance policy,” Levin wrote in Smith v. Liberty Mutual Fire Ins. Co. “Further, because I do not believe that the failure to return an engagement ring following termination of the engagement constitutes a criminal offense, the plaintiff cannot recover under the policy by so characterizing Rothschild’s behavior.” Levin issued the opinion after Smith appealed to the Superior Court. Smith’s attorney, Joseph A. Zenstein of Zenstein & Gallant in Jenkintown, Pa., said that the judge’s first finding of fact — that Smith had been conned — indicates Rothschild stole the ring. Zenstein also said Smith’s insurance policy does not define theft. “An insurance policy is a contract of adhesion, and policy language is supposed to be given the most liberal interpretation in favor of the policyholder, and I don’t think the judge did that,” the attorney said. Levin focused on whether Rothschild’s failure to return the ring transformed the gift into an object of theft. And though Smith did not argue the point, the judge also considered whether the circumstances of the engagement constituted theft by deception. Turning to the Supreme Court of Pennsylvania’s 1999 decision in Lindh v. Surman, Levin observed that an engagement ring is a conditional gift — the condition being that the recipient says “I do” — returnable if the engagement is terminated. “It is difficult to imagine that the court intended that failure to return the ring under such circumstances would constitute a criminal offense,” the judge wrote. Instead, Levin found that Lindh was based on contract principles. “Certainly, breach of a contract — even if that contract requires the return of goods upon demand and the breaching party fails to do so — does not automatically constitute a crime, nor — I think — should failure to return an engagement ring rise to the level of a criminal offense.” And though the facts may seem ripe for a theft by deception spin, Levin said, the crime did not fit the circumstances. “Based upon the evidence presented at trial,” Levin wrote, “it seems clear that Rothschild’s conduct does not constitute the criminal offense of theft by deception, defined [under Pennsylvania law] as ‘… intentionally obtaining or withholding property of another by deception.’” The judge said that Smith chose to give Rothschild the ring of his own free will and that nothing in the record suggested that Rothschild asked Smith to buy her a ring or otherwise induced him to do so. “I am simply unwilling to find, on the record presented, that Rothschild’s sole purpose in establishing a relationship with the plaintiff was to obtain valuable property from him under false pretenses,” Levin said in a footnote. “Had that been shown, the applicability of the Theft by Deception statute might have been a closer call.” Levin concluded that even though he was sympathetic toward Smith, he simply could not see any basis upon which the plaintiff was entitled to recovery from Liberty Mutual. William C. Foster and Steven L. Chung, both of Kelly, McLaughlin & Foster in Philadelphia, served as counsel for Liberty Mutual.

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