A Hamilton County pawnbroker is challenging a jewelry owner’s right to sue him for disassembling and selling the goods.

A Hamilton County pawnbroker is challenging a jewelry owner’s right to sue him for disassembling and selling the goods.

Ohio pawnshops generally are immune from civil lawsuits for unknowingly selling stolen property if they follow procedures prescribed in state law. But does a shop lose that protection when it disassembles and melts down pawned merchandise to sell it for a better price?

In June 2014, burglars stole jewelry from the Montgomery County residence of Irene Danopulos. Three days after the theft, American Trading, located in Cheviot in neighboring Hamilton County, purchased three jewelry items from 19-year-old Steven Tyler Moore of Richmond, Kentucky, an alleged accomplice to the Danopulos burglary. The pawnshop paid Moore $2,125 for the items and reported the purchase to the Hamilton County Sheriff’s Office. After holding the items for more than 15 days, American Trading disassembled the jewelry, melted some of it down, and sold the materials to various buyers for $7,064.

In mid-July, a Montgomery County Sheriff’s Department detective visited American Trading. He determined the jewelry sold there belonged to Danopulos, and requested that it be returned. American Trading told him it no longer had the jewelry.

Owner Seeks Damages from Pawnbroker
Danopulos sued American Trading, claiming conversion, which is the wrongful use or withholding of someone else’s property to the exclusion of the owner. The pawnshop argued it couldn’t be held liable for conversion because it complied with the provisions of the Ohio Pawnbrokers Act, specifically R.C. 4727.09 and R.C. 4727.12, which specify a 15-day holding period for the property it receives. The trial court agreed with American Trading, and Danopulos appealed to the First District Court of Appeals.

The First District reversed the ruling, finding compliance with the statutes alone doesn’t excuse American Trading if the goods were stolen. Even if American Trading had been the “lawful” possessor of the stolen jewelry when the company intentionally disassembled the jewelry, it still became liable for conversion, the court ruled.

Brokers Must Be Able to Rely on State Law, Shop Argues
In Danopulos v. American Trading, the broker maintains that pawnshops must be able to rely on the protections against conversion claims by following state law and believes the First District’s decision creates “uncertainty and inconsistency in the pawnbroker industry.” The shop argues the appellate court wasn’t clear whether disassembly of the jewelry was the wrongful intentional act or if selling the disassembled jewelry made it liable for conversion. The company maintains the whole theory is misplaced because pawnshops and other secondhand jewelry purchasers regularly disassemble jewelry for sale as parts for higher prices.

The jewelry owner counters that American Trading didn’t follow state law when it bought the items, estimated to be worth $39,000, from an out-of-state teenage man. Danopulos argues American Trading should have been more suspicious when it took possession of the jewels and it didn’t follow the state law, which requires the shop to provide its local police chief, not the county sheriff’s department, with a list of merchandise it purchases. She maintains the First District correctly held the pawnshop is liable for conversion.

Oral Argument Details
Along with Danopulos, the Court will hear three other cases during its Tuesday, July 9 session. Oral arguments begin at 9 a.m. at the Thomas J. Moyer Ohio Judicial Center in Columbus. All arguments are streamed live online at sc.ohio.gov and broadcast live and archived on The Ohio Channel.

Case Previews Published
In addition to the information provided in this article, the Supreme Court’s Office of Public Information today released in-depth previews of the cases.

In Willacy v. Cleveland Board of Income Tax Review, an attorney who worked for a Cleveland company for 30 years and retired to Florida exercised her stock options after her retirement. She requested refunds of Cleveland income taxes assessed against the money earned from exercising the stock options because she didn’t live, work, or perform services in the city during those tax years. Cleveland issued refunds for three years, but declined refunds for 2014 and 2015. She argues the city had no jurisdiction to tax her because she no longer is a Cleveland resident. The city responds that the stock options are taxable wages and, because they were earned when she was employed in Cleveland, they can be taxed.

A Columbus company applied for a conditional-use permit to operate a surface sand and gravel mine in Pickaway County’s Harrison Township. Neighboring property owners and township development officials objected to the proposal for a number of reasons, including that it conflicted with a strategic land use plan for the area. The zoning board rejected the proposal, and the company appealed, arguing that under state law, a township zoning board can reject a mining conditional-use permit only for “public health and safety” reasons and not for “general welfare” concerns such as dust, noise, traffic congestion, or inconsistency with other development plans. In Columbus Bituminous Concrete v. Harrison Township Board of Zoning Appeals, the Court will consider if state law authorizes a township zoning board to deny surface mining as a conditional use based on general welfare concerns.

In re N.M.P. involves a disagreement among state appellate courts about when a children services agency can ask a court for permanent custody of a child. A Portage County child was placed in the county agency’s temporary custody in 2017, and the agency filed a motion in court the following year for permanent custody. The law states that a court can grant permanent custody to a children services agency when a child has been in temporary custody for 12 or more months of a 22-month consecutive period. The mother maintains that the agency must be involved with the child for the entire 22-month timeframe, while the county states that the law says nothing about agency involvement for 22 months.