Small claims question for any lawyer types with the time

[kingcat]

I have a friend who has lost a valuable item in a pawn shop owned by my first cousin. The item was pawned around the first of April but being my "trusted family member" he went back a month or so later and obtained more money on the same item by redoing the loan. (I recall the phone call he made to me seeing if it was appropriate to ask) There was no copy of that agreement although now, the pawnbroker claims it was done three days after the initial loan. That is 100% false.
Said pawnbroker also had forgotten the second loan when asked on the phone after the sale.

The real problem is that there was no notice of sale as per Kentucky statute. The pawnbroker said he just needed some money and so did what he felt he needed by selling the item without notice using the initial agreement as binding.

There is also no address on the initial ticket and as I said, no notice was given. The latest is he now remembers sending a letter. He didn't.

This is a matter of principle to he and I more than anything and its important that the family understands the actions and why there is such hostility. But if he has no case whatsoever, he wants to know.

I told him I'd see what I might find out since...embarrassed to say, it is my family.

226.050
Pawnbroker to give ticket and receipt for articles
--
Sale after sixty days
--
Notice before sale.
(1)
Every pawnbroker shall give a plain written or printed ticket for the loan to the
person negotiating or selling, and a plain written or printed receipt o
f the articles
that have been purchased, or upon which money is loaned, having on each a copy of
the entries required by KRS 226.040 to be kept in his register. He shall not make
any charge for the ticket or receipt.
(2)
A pawnbroker may sell any article p
awned after the expiration of sixty (60) days
from the maturity of the loan, provided that, not less than ten (10) days before
making the sale, the pawnbroker shall have given notice to the person by whom the
article was pawned, by mail addressed to the po
st office address of such person as
shown on the pawnbroker's register, notifying such person that, unless he redeems
the article within ten (10) days from the date of mailing said notice, the article will
be sold.
Effective:
July 15, 2008
History:
Amended
2008 Ky. Acts ch.
69, sec.
1, effective July 15, 2008.
--

[CitizenBBN]

When he said "using the initial agreement as binding" did he mean the timetable of the original agreement? I'm assuming there was nothing in there re waiving notice or anything, so even following the original agreement he still gave no notice, right?

So he went in and borrowed $X, then went back and borrowed $Y additional dollars. Did he ever pay on either of the loans? For the broker to intentionally forget the the $Y amount he must have sold it for more than X+Y? I need the details on the payments I think.

Oddly in Ky pawn law the state requires notice and references the ledger but in the section on the ledger there is actually no requirement to keep an address. Clearly there is a need for one to give notice, but it is unclear in the way the statutes are set up. It doesn't have to be on the receipt, though I'd consider it good practice b/c then the person doesn't have a dispute on the notice. The broker ideally would have a signed copy of a receipt that includes such information, but all that is required in the statute is the ledger.

[kingcat]

No notice was given period. My question would be, if he just says he mailed a notice, which he only stated doing after being reminded about the redo of the initial loan in trying to justify what he had done....is that all he's required to do?

It will be hard to prove the fact that he set him up with the second loan by not giving him a copy of the ticket I understand. No interest was required to be paid other than picking it up before the 90 days expired.

But there was no notice given, and the deal was done mainly on a gentleman's understanding. There was no doubt by either party the debt would have been paid as agreed.

Where does the burden of proof lie as far as notice of sale?

[CitizenBBN]

Typically a legal record of notice is to send mail with return receipt so there is proof of delivery. Another is to mail it in person at the post office with a receipt showing the mailing address, you can at least prove it's sent. I'm not sure in Ky what the case law has said about the notice obligations of brokers, but I'm keen to see if anyone has details. It hinges on whether there is a requirement to show "delivery" to a given address as "notice". Typically that is the case in such situations, but I don't know about pawn notice specifically.

Also typically any failure on the part of the recipient to provide a valid address or otherwise not get their mail won't trigger a notice issue. if the sender followed the procedures notice is usually legally seen as given, the recipient does have some obligation there.

I doubt just saying "I sent a letter" will cut it based on what I've seen in other areas like real estate law, but I'd feel way better with specific case law.

This thing sounds to have been so horribly informal you may be able to press the broker to even provide the address to which he sent it and he may not have one. This is why BOTH parties follow the proper steps of recording a transaction. The broker may be on the hook b/c of lack of notice, maybe not, but the borrower did a terrible job protecting himself legally and the law on pawn isn't all that friendly to the borrowers. Pawn brokers have good lobbying in most states.

[kingcat]

This thing sounds to have been so horribly informal you may be able to press the broker to even provide the address to which he sent it and he may not have one. This is why BOTH parties follow the proper steps of recording a transaction. The broker may be on the hook b/c of lack of notice, maybe not, but the borrower did a terrible job protecting himself legally and the law on pawn isn't all that friendly to the borrowers. Pawn brokers have good lobbying in most states.

That's why I feel partially responsible. My cousin has a questionable background and has issues. He lacks education in the worst way, but had seemingly turned his life around. That he runs a business at all is a shocker to the family...that he carries a 45 on his waist everywhere he goes is down right scary.

But, I believed he was trying to do things right..and now this.

[CitizenBBN]

Don't think you're responsible at all. the borrower in this case went on with a "gentleman's agreement" as well, which is a poor decision I don't care if he was dealing with the Bank of England. That part is on him.

I also don't know what the remedy in this case. Hopefully a lawyer or three will stop by. If we get 3 lawyers to comment that will be 5 different opinions, a good start.

[KSRBEvans]

It appears you'd have a case, but I'm sorry, I'm just not that up on that type of law to give an informed answer.

I will say that 226.010 requires pawn brokers post bond with the city or county in which they do business, so I'd check with the city or county government and see if claim can be made on that bond.

Alternatively, I'd submit a complaint to the KY AG's Consumer Protection Division:

http://ag.ky.gov/civil/consumerprote...s/default.aspx