Christie’s gets sued by Elizabeth Taylor’s trust

Elizabeth Taylor had a jewelry collection worth millions and even penned a book called “My Love Affair with Jewelry.” Christie’s was tapped to auction the jewels following her death in March 2011 at the age of 79. (Photo credit: Getty Image

Last week, The Sothern Trust, the trust for the late actress, filed a lawsuit in federal court in Los Angeles against New York-based Christie’s Inc., accusing the auction house of cancelling sales from the auction without good reason and not paying the trust for other items that were sold. 

At the heart of the lawsuit between the two parties is the sale of the “Taj Mahal Diamond,” the third highest-grossing lot of the auction, which remains the most valuable jewelry sale in auction history.

An anonymous buyer paid $8.8 million for the jewel, a heart-shaped diamond set in a jade pendant, later hung on a gold and ruby chain designed by Cartier. The diamond is inscribed with the name of a wife of a Mughal emperor.

According to the lawsuit, filed Feb. 24 in U.S. District Court for the Central District of California, Christie’s canceled the sale when the buyer balked because they claimed the diamond was not from the Mughal period.

Taylor’s trust, however, contends that the auction house wasn’t obligated to do so and, in fact, shouldn’t have because it had an obligation to the trust not to cancel any sales from the Taylor auction unless it “reasonably” believed it was going to get sued.

“Christie’s never warranted or guaranteed the age of the diamond … including its believed Mughal origins,” court papers state. “Christie’s warranted only that the diamond was an ‘Indian’ diamond, a statement that … the buyer did not dispute.”

While the auction house has in the past “consistently (and successfully)” stood by sales when the buyer’s claim fell outside the scope of its warranty, Christie’s did not do that in this case because it wanted to “appease the buyer” who is an “important customer” of the auction house, Taylor’s trust alleges in the lawsuit.

The trust admits that it has declined to give Christie’s back the $8.8 million from the now-canceled sale of the Taj Mahal Diamond, which it said it believes the auction house still has.

Christie’s, in turn,