In a dispute between parties asserting competing claims of ownership of a 7.35 carat15 pear‐shaped diamond, the District Court's conclusion that plaintiffs are the rightful owners and grant of summary judgment in their favor is reversed and remanded where: 1) the district court erred in failing to apply the requirement of section 2‐403(2) of the New York Commercial Code, that a merchant entrusted with a good can transfer rights to it only if that person 'deals in goods of that kind,' which we understand to mean regularly 'sells' goods of that kind; and 2) assessing the record on summary judgment, there is no material evidence to support the application of section 2‐403(2) to this case