Gilmore v. Pawn King, Inc.Annotate this Case
At issue in this case was whether the interest rates applicable to pawnbroker repurchase agreements are governed by the pawnbroker interest rate statute or the usury statute or whether these agreements are regulated at all. Defendant-pawnbroker entered into five separate repurchase transactions with Plaintiff pursuant to which Plaintiff agreed to sell personal property items for Defendant and to hold those items subject to Plaintiff’s right to repurchase them. After a dispute over the fees Defendant charged Plaintiff to secure the right to repurchase those items, Plaintiff brought this action claiming, inter alia, that Defendant’s actions violated the pawnbroker interest rate statute. Defendants moved for summary judgment, arguing that the rate limits set forth in the pawnbroker interest rate statute do not apply to repurchase transactions. The district court certified questions of law to the Supreme Court. The Supreme Court answered (1) the pawnbroker interest rate statute does not govern the rates that pawnbrokers may charge in connection with repurchase agreements; and (2) the interest rates applicable to pawnbroker repurchase agreements are governed by the usury statute.