ORDERS:
ORDER
STATEMENT
OF THE CASE
On September 16,
2008, Petitioner South Carolina Department of Consumer Affairs (Department)
filed a Petition with this Court seeking, inter alia, an Order requiring
Respondents to Cease and Desist from engaging in Pawnbroking, pursuant to the
South Carolina Pawnbroker Act (the Act), S.C. Code Ann. §40-39-10 et seq., (Supp. 2007). By Order of this Court dated October 13, 2008, the Respondents
were required to Answer the Petition by October 28, 2008. Failure to answer by
the aforementioned date would result in the Respondents being found in default.
Respondents did not file an answer with the Court or Petitioner by October 28,
2008. Thereafter, this Court issued an Order for Entry of Default on November
4, 2008, finding Respondents in Default, pursuant to ALC Rule 23(A).
FINDINGS OF FACT
Petitioner mailed
Respondents a renewal notice on or about May 1st 2008, wherein it
was stated that the renewal application and attending information must be
submitted to the Department for review and approval by the June 30th 2008, deadline for obtaining a Certificate of Authority, pursuant to Regulation
28-200 B.(2) & (3). Petitioner was notified on June 18, 2008, by Western
Surety Company that Respondent’s $5,000.00 surety bond would be canceled
effective August 7, 2008. Petitioner notified Respondents by letter of June 19,
2008, that pursuant to § 40-39-50 of the Act a current bond must be maintained
with the Department in order to continue as a pawnbroker. Respondents submitted
a renewal application on July 1, 2008, one day after their Certificate of
Authority expired. Respondents did not remit a new bond or a reinstatement of
the Western Surety bond with the renewal application as requested in the
notification letter of June 19, 2008. Respondents were contacted again
regarding remittal of the required surety bond. However, Respondents have not
to date complied with the bonding requirements of §40-39-50. Respondents are
now over three months delinquent in renewing their Certificate of Authority and
are apparently still operating in violation of the Act.
CONCLUSIONS
OF LAW
Pawnbrokers are
defined as “...any person engaged in the business of lending money on the
security of pledged goods, or engaged in the business of purchasing tangible
personal property on condition that it may be redeemed or repurchased by the
seller for a fixed price within a fixed period of time...” S.C. Code Ann. §40-39-10(2).
Pawnbrokers are required by §40-39-50 of the Act to maintain a surety bond or
letter of credit in the amount of five-thousand dollars ($5,000.00). “... The
bond must be conditioned for the faithful performance of the duties and
obligations pertaining to the business so authorized....”. S.C. Code Ann.
§40-39-50. One of these duties is to ensure that pawned items held in bailment
by the Pawnbroker are returned to pledgors upon payment of the principle and
interest at redemption. If a pawnbroker cannot produce the original item of
personalty at redemption, because it has been wrongly withheld, lost or stolen,
or because the Pawnbroker has ceased doing business, the pledgor has a right of
action on the bond against the pawnbroker. S.C. Code Ann. § 40-39-60. The
required maintenance of the surety bond by the Act, therefore, ensures that
pledgors will have an avenue of relief should their items not be returned at
redemption.
Because
Respondents have failed to remit a new surety bond or a reinstatement of the
old bond, and have failed to answer the Department’s Petition by October 28,
2008, as required by the Order of this Court issued October 13, 2008, the
Respondents are deemed in DEFAULT, pursuant to ALC Rule 23(A).
ORDER
The Department
in its Petition for relief requested an Order of the Administrative Law Court:
A. Requiring
Respondents to Cease and Desist operating as a pawnbroker, pursuant to S.C.
Code Ann. § 40-39-150(A).
B. Imposing
an administrative fine on Respondents of seven-hundred fifty dollars ($750.00)
for each violation of the Act up to fifteen thousand dollars ($15,000.00),
pursuant to S.C. Code Ann. § 40-39-150(B).
C. Assessing
Respondent’s Western Surety Bond #14704581 and made payable to the
Administrator for those affected members of the public who may have a cause of
action against Respondents during the effective term of the bond, should
Respondent’s Certificate of Authority be revoked, suspended or otherwise not
continued, pursuant to S.C. Code Ann. §§40-39-50, 40-39-60, & 40-39-150.
D. Allowing
the Administrator to hold such monies from Bond #14704581 during the statutory
period until Petitioner can determine any consumers who may have been affected
during the term of Bond #14704581.
E Requesting
such other and further relief as the Administrator Law Court deems just and
appropriate. Therefore,
IT IS HEREBY
ORDERED that Respondents shall CEASE AND DESIST operating as a
“pawnbroker”, engaging in “pawn transaction[s]”, or otherwise operating a “pawn
shop”, all as defined in §40-39-10(2), (7), & (4), respectively, of the
Act, pursuant to S.C. Code Ann. § 40-39-150(A).
IT IS
FURTHERMORE ORDERED that Respondents Certificate of Authority is hereby REVOKED,
effective immediately, pursuant to S.C. Code Ann.§ 40-39-150(B).
IT IS
FURTHERMORE ORDERED that Respondents are ASSESSED a seventy-five hundred
dollar ($7,500.00) administrative fine that must be paid within thirty
days of this Order, and before any of the Respondents may apply or re-apply for
a Pawnbroker Certificate of Authority, pursuant to S.C. Code Ann. § 40-39-150(B).
IT IS
FURTHERMORE ORDERED that Respondents Western Surety bond #14704581 may be ASSESSED by the Department, and all monies from the bond held by the Department for
the benefit of any pledgors who may have a claim against Respondents, during
the effective term of the bond, because of the consequences of this Order or
any other closure or in-operation of the business, pursuant to S.C. Code Ann.§
40-39-60.
IT IS
FURTHERMORE ORDERED that Petitioner may inventory, secure, and hold pledged
items and pawn records, as necessary, and otherwise take measures to ensure the
effective termination of Respondents’ pawn business in the event of closure.
AND IT IS SO
ORDERED.
________________________________
Ralph King
Anderson, III
Administrative
Law Judge
November 20, 2008
Columbia, South Carolina
|
