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Attorney Arcadier
Attorney Arcadier, Attorney
Category: Business Law
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Experience:  Contract questions and Incorporation questions answered.
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Does a pawn broker need to have insurance over his shop as

Customer Question

Does a pawn broker need to have insurance over his shop as part of a standard of care?
Submitted: 2 years ago.
Category: Business Law
Expert:  Attorney Arcadier replied 2 years ago.

Attorney Arcadier : No. No legal requirement. If there is a requirement it would be a contractual one, i.e. your lender requires it.
Attorney Arcadier : I hope you found my answer helpful, please click on the GREEN ACCEPT button above for my answer OR the HAPPY SMILEY FACE. This is necessary for me to be paid for my work and so that I can get credit for assisting you. Your question will not close, and you will still have the opportunity to follow-up if needed. Leaving a bonus and positive feedback is not required, but doing so is certainly appreciated!If you have additional questions, please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.Kindly note, sometimes legal answers take more than a few minutes to be properly addressed as the law is esoteric. Indeed, we are dealing with laws throughout the United Estates and applying them to complex fact patterns, SO PLEASE BE PATIENT IT WILL BE MORE THAN “MINUTES” IN SOME CASES BEFORE YOU GET A RESPONSE, BUT BE ASSURED YOU ARE NOT BEING IGNORED.There can also be a delay of an hour or more in between my answers because I may be helping other customers or taking a break.
Customer: In the event that my pawned goods are stolen, what is the reasonable standard of care?
Attorney Arcadier, Attorney
Category: Business Law
Satisfied Customers: 1106
Experience: Contract questions and Incorporation questions answered.
Attorney Arcadier and 4 other Business Law Specialists are ready to help you
Expert:  Attorney Arcadier replied 2 years ago.
Any theft would be a negligent theft, meaning you have a duty to take reasonable actions to prevent the theft. And, you would owe the value of the goods to the customer. I am not sure I understand your question. Why dont you tell me what your concern is. Lets put standard of care aside for a sec.
Customer: replied 2 years ago.
I gave jewelry to a pawn broker as collateral in return for a loan. I paid interest for 3 years. He claims that after the first year, his shop was robbed and my collateral stolen. He says that he does not have to give me the amount my collateral was worth because he exercised reasonable care.
Expert:  Attorney Arcadier replied 2 years ago.
Ah, ok. That is complete bs. You clearly have a civil claim against broker for full amount of property plus a right to get all interests paid back. If the amount is less than 5k, then you can sue him in small claims court yourself.
Customer: replied 2 years ago.

I saw some early cases that seem to say he's not liable if he exercised orinary care: "A pawnbroker fully overcame any presumption of negligence arising from his failure to deliver a ring in compliance with the pawnor's demand, Seiden v Stern (1916) 95 Misc 255, 159 NYS 88, where the pawnbroker showed that the ring was in a safe stolen by robbers who entered the store and took the safe and other goods at gun point."

Although the robbery occurring after only a year is a wrinkle (which I don't know how to handle), if he exercised "ordinary care", it seems like he's not liable.

Expert:  Attorney Arcadier replied 2 years ago.
No... you are completely analyzing this incorrectly. Lets say a bank has your money in the vault, has one million guards protecting your money, 1 million alarm systems and your money is still stolen. Regardless of negligence, the bank owes you your money. Same thing in your case.
Expert:  Attorney Arcadier replied 2 years ago.
This is because the pawn broker was a custodian of your property and has strict liability regardless of negligence, duty of care, etc.
Customer: replied 2 years ago.

If the broker is absolutely liable for any thefts, that means a higher court or a statute overturned Seiden.

Is there a cite? If not, is it known which it was (a higher court or statute)?

Expert:  Attorney Arcadier replied 2 years ago.
You are not reading Seiden correctly. Seiden is really a contract case where customer agreed not to hold pawn broker liable. In 100 years since seiden, the contract law cases do not let a custodian relinquish his strict liability. This is as far as I am willing to explain the legal concepts. Best wishes.

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