I run a pawnshop and sold and ATV that had a lien on it.

[ncpawn]

What is the name of your state (only U.S. law)? North Carolina

Hi, I run a pawnshop in NC and I ran into a situation. An individual came in and got a loan on an ATV. In the state of NC you don't need titles for ATVs so I gave him a loan on it. 3 months later he didn't pick up the ATV and I sold it. Shortly after selling it, I get a letter saying that the ATV had a lien on it and I'm being sued for over $10K (the balance left on the ATV).

My question is, Do I legally owe them money? The customer signed the loan agreement stating that its not stolen or has an liens on it.

 

[Zigner]

What is the name of your state (only U.S. law)? North Carolina

Hi, I run a pawnshop in NC and I ran into a situation. An individual came in and got a loan on an ATV. In the state of NC you don't need titles for ATVs so I gave him a loan on it. 3 months later he didn't pick up the ATV and I sold it. Shortly after selling it, I get a letter saying that the ATV had a lien on it and I'm being sued for over $10K (the balance left on the ATV).

My question is, Do I legally owe them money? The customer signed the loan agreement stating that its not stolen or has an liens on it.

For such an amount, you will want to seek the guidance of a local attorney.

 

[ncpawn]

For such an amount, you will want to seek the guidance of a local attorney.

If I win the case, would I be able to sue for attorney fees acquired?

 

[Zigner]

If I win the case, would I be able to sue for attorney fees acquired?

Almost definitely not.

ETA: Don't you carry some type of insurance that would cover this?

 

[ncpawn]

Almost definitely not.

ETA: Don't you carry some type of insurance that would cover this?

No I do not

 

[LdiJ]

Almost definitely not.

ETA: Don't you carry some type of insurance that would cover this?

He wouldn't be able to sue the people who carry the lien for attorney fees, but he might very well be able to sue the person who brought the ATV to him for any damages, including attorney fees. Although, that might be like trying to get blood from a turnip.

 

[quincy]

Here is a link to the laws that govern pawnshops in North Carolina: http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_66/Article_45.pdf

See in particular Prohibitions, §66-395(9).

 

[justalayman]

There are a few other sections to be concerned with as well (the one stating violating section 9 is a misdemeanor is a good one) but this one is pertinent to the issue at hand more specifically.

(c) Any contract of pawn the making or collecting of which violates any provision of this Part, except as a result of accidental or bona fide error of computation, shall be void, and the licensee shall have no right to collect, receive or retain any interest or fee whatsoever with respect to such pawn. (1989, c. 638, s. 2; 1993, c. 539, s. 655; 1994, Ex. Sess., c. 24, s. 14(c); 2011-325, s. 8; 2012-46, ss. 2, 11.)


So to start with, whatever money you received for selling the Atv is ill gotten gains.

Then, since you broke the law by accepting the Atv for pawn i suspect you will be held liable for whatever was owed to the lien holder. And due to the section I posted you likely don't have any recourse against the original owner.

 

[ncpawn]

There are a few other sections to be concerned with as well (the one stating violating section 9 is a misdemeanor is a good one) but this one is pertinent to the issue at hand more specifically.

(c) Any contract of pawn the making or collecting of which violates any provision of this Part, except as a result of accidental or bona fide error of computation, shall be void, and the licensee shall have no right to collect, receive or retain any interest or fee whatsoever with respect to such pawn. (1989, c. 638, s. 2; 1993, c. 539, s. 655; 1994, Ex. Sess., c. 24, s. 14(c); 2011-325, s. 8; 2012-46, ss. 2, 11.)


So to start with, whatever money you received for selling the Atv is ill gotten gains.

Then, since you broke the law by accepting the Atv for pawn i suspect you will be held liable for whatever was owed to the lien holder. And due to the section I posted you likely don't have any recourse against the original owner.

I did see that and raise the question is an ATV considered a motor vehicle. From my understanding by definition, a motor vehicle is a vehicle that can travel on high-ways

Under G.S. 20-4.01(49), a vehicle is “[e]very device in, upon, or by which any person or property is or may be transported or drawn upon a highway,” including bicycles but not other human-powered devices, and generally not including mobility devices for the disabled

 

[Zigner]

I did see that and raise the question is an ATV considered a motor vehicle. From my understanding by definition, a motor vehicle is a vehicle that can travel on high-ways

Under G.S. 20-4.01(49), a vehicle is “[e]very device in, upon, or by which any person or property is or may be transported or drawn upon a highway,” including bicycles but not other human-powered devices, and generally not including mobility devices for the disabled

Great questions for your attorney - one who is familiar with your business and who can help you brush up on the requirements in your state. Additionally, I suspect that there is a professional trade organization or group of some kind related to running pawn shops in your state. It's probably a good idea to get involved with them.

 

[quincy]

I did see that and raise the question is an ATV considered a motor vehicle. From my understanding by definition, a motor vehicle is a vehicle that can travel on high-ways

Under G.S. 20-4.01(49), a vehicle is “[e]very device in, upon, or by which any person or property is or may be transported or drawn upon a highway,” including bicycles but not other human-powered devices, and generally not including mobility devices for the disabled

Is the ATV a motorcycle? If not, it violates the law to "take as pledged goods any manufactured mobile home, recreational vehicle, or motor vehicle other than a motorcycle."

 

[ncpawn]

Is the ATV a motorcycle? If not, it violates the law to "take as pledged goods any manufactured mobile home, recreational vehicle, or motor vehicle other than a motorcycle."

According to G.S. 20-4.01(49), an ATV is not considered a MOTOR VEHICLE

 

[quincy]

According to G.S. 20-4.01(49), an ATV is not considered a MOTOR VEHICLE

So ... is an ATV a motorcycle?

By definition, an All-Terrain Vehicle is a vehicle that is motorized. See the following North Carolina Definitions link (1c not 49, because 49 is not applicable):
http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bysection/chapter_20/gs_20-4.01.html

 

[ncpawn]

So ... is an ATV a motorcycle?

No its not a motorcycle, so is it a motor vehicle?

 

[Zigner]

No, an ATV is not a motorcycle.
Yes, an ATV MAY be operated on a road. Granted, for limited purposes, but it's still allowed. As such, it seems to me that the code section may very well apply.

Refer to http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_20.html (see the definitions and see Part 10C)