Can a Pawnshop Legally Sell Our Stolen Goods?

Q: We have a wholesale jewelry business. Our offices were burglarized and various items were stolen, including some expensive rings and watches. We filed a police report, and then about six months later we got a tip that some of our items were for sale at a local pawnshop. We told the police and they investigated, but they later informed us the pawnshop had followed required procedures so it owned the goods and had the legal right to sell them. How is this possible?

-- "Feeling Ripped Off in Florida"

A: The applicable Florida law is Chapter 539, the "Florida Pawnbrokering Act," originally enacted in 1996 to regulate that industry. The law has certain key provisions relating to your situation:

Pawnbrokers are licensed through the Department of Agriculture and Consumer Services on an annual renewal basis after satisfying eligibility requirements that the applicant has good moral character, has a net worth of at least $50,000, and has not been convicted, found guilty, pled guilty or been incarcerated within the past 10 years for a felony or any crime involving theft, larceny, receiving stolen property, burglary, embezzlement or any other fraudulent or dishonest dealing.

They buy goods from "permitted vendors" who have an established place of business and furnish a detailed invoice, or "pawn" goods by loaning money to a party who delivers the goods as security until the end of the agreed pawn time period (usually 30 days) for which they receive a pawn service charge up to 25 percent of the amount financed. At the time of a purchase or pawn transaction, the pawnbroker is required to complete a form that includes detailed information about the transaction, the goods, and the seller or pledgor, including name, address, home telephone number, place of employment, date of birth, physical description, and right thumbprint.

Pledged property not redeemed within 30 days following the maturity date of the pawn "are automatically forfeited to the pawnbroker," who then is vested with "absolute right, title and interest in and to the property."

To obtain possession of goods held by a pawnbroker, which are claimed to have been stolen, the claimant must give written notice by certified mail that contains an accurate description of the goods as well as a copy of the police report for the loss. If the police have probable cause to believe that property in the possession of a pawnbroker is stolen, they can place a 90-day hold order on it. If the parties can't agree within 10 days on property ownership, the claimant can petition a court to order return of the property, but it stays in the pawnbroker's possession until the matter is resolved. If the court finds against the claimant, he is liable for all costs of the action including attorney's fees.

Now let's apply the facts of your case to the applicable law. Since the police apparently couldn't find the thief, chose not to place a hold on the goods after they looked into the situation and were satisfied the pawnbroker had followed required procedures -- it appears your rights are limited after six months have elapsed. You are fortunate that the goods are still in the pawnbroker's possession. If they had been sold to a bona fide purchaser who paid fair value and had no knowledge of any ownership dispute, the buyer would have good title and you couldn't reclaim them.

But your only recourse against the pawnbroker now is to file a claim and try to prove that: you are the original owner of the goods rather than the pawning pledgor, and the 30-day non-redemption time period for vesting of title in the pawnbroker has somehow not yet run or the pawnbroker's title is defective because required statutory procedures weren't followed. Good luck.

Disclaimer: This column isn't intended to be a solicitation of legal business or the furnishing of self-help legal advice. Laws vary from state to state. Readers are strongly urged to consult independent and qualified legal professionals before making any business decisions. The views expressed are those of the writer and not of The Herald.

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