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First District: Pawnshop Owes Theft Victim for Deconstructing Stolen Jewelry

Image of a pile of gold jewelry sitting on top of paper money (iStock/Gerakl)

The First District Court of Appeals is sending a dispute between a Hamilton County pawnshop and a victim of stolen jewelry back to the trial court.

Image of a pile of gold jewelry sitting on top of paper money (iStock/Gerakl)

The First District Court of Appeals is sending a dispute between a Hamilton County pawnshop and a victim of stolen jewelry back to the trial court.

An Ohio appeals court is sending a dispute between a Hamilton County pawnshop and a victim of stolen jewelry — that reached the Ohio Supreme Court — back to the trial court for the fourth time in seven years.

The First District Court of Appeals recently rejected an appeal by American Trading II in Cheviot. The company argued that Hamilton County Common Pleas Court incorrectly calculated that it owed Irene Danopulos $39,500 for disassembling and selling parts her stolen antique jewelry. The appeals court also sided with Danopulos, who maintained the trial court wrongly declined to compensate her for the loss of a diamond bracelet.

The latest legal dispute comes after the Ohio Supreme Court conducted oral argument in the case in July 2019. The Court ruled 5-2 that the case was improvidently accepted, upholding the First District’s 2018 decision. The First District ruled then that further trial court proceedings were necessary.

Writing for the First District, Judge Pierre Bergeron said there are many reasons to doubt American Trading’s contention that the sale between the thieves and American Trading, and American Trading’s sale of the jewelry, represented the item’s fair market value.

Thieves Steal and Pawn Jewelry
In 2014, thieves stole a diamond bracelet, emerald ring, and unique brooch from Danopulos’ home in Montgomery County’s Washington Township.

A 19-year-old Kentucky man pawned the jewelry to American Trading in exchange for $2,125. American Trading denied any suspicion or knowledge that the items were stolen. After holding the items for 15 days as required by the Ohio Pawnbroker’s Act, the pawnshop deconstructed the pieces and sold them in parts for $7,964.

Following the sale, detectives tracked down Danopulos’ burglars and then discovered American Trading had disassembled and sold the jewelry.

Theft Victim Sues Pawnshop
Danopulos filed a civil lawsuit against American Trading in 2014, claiming conversion, which is the wrongful use or withholding of someone else’s property to the exclusion of the owner. The pawnshop asked the trial court for summary judgment, arguing it couldn’t be held liable for conversion because it had complied with the provisions of the Ohio Pawnbrokers Act, specifically R.C. 4727.09 and R.C. 4727.12, which simply require a 15-day holding period. The trial court agreed with American Trading in 2015, and Danopulos appealed to the First District.

In 2016, the First District reversed, finding compliance with the statutes alone doesn’t excuse American Trading if the goods were stolen. The appellate court remanded the case to the trial court.

Based on the facts and compliance with R.C. 4727.09 and R.C. 4727.12, the trial court found in a 2017 bench trial that American Trading wasn’t liable.

Danopulos appealed to the First District again. The appellate court found that compliance with the law doesn’t absolve the pawnshop from Danopulos’ civil claims. It directed the trial court to conduct further proceedings, but American Trading appealed to the Supreme Court, which agreed to hear the case.

Ruling the appeal was improvidently accepted, the Supreme Court upheld the First District’s decision to return the case to the trial court for a third time.

Trial Court Considers Case Again
Back in trial court, a jewelry expert used photographs and information gathered from Danopulos and her late husband to track purchase information, carat count, artistic influences, and age of the three stolen pieces. The expert acknowledged that because the jewelry was deconstructed, it lost the artistic and antique value it once had. However, the expert offered that the emerald ring and brooch were worth at least $39,500.

The expert was unable to estimate value of the diamond bracelet, but testified that high-quality diamonds are worth generally $1,500 per carat. Danopulos testified that her bracelet contained 10 carats of diamonds, giving it an assumed value of $15,000.

American Trading asked the trial court to reject the expert’s values. The pawnshop maintained that if it were liable for conversion, it should owe Danopulos only the $7,964 they received from the sale of the individual gems and metals.

In 2020, the court accepted the values offered by the expert and awarded Danopulos $31,500 for the emerald ring and $8,000 for the brooch. Because the expert offered no estimate for the diamond bracelet, the court didn’t award any compensation for the item.

This time American Trading appealed to the First District.

First District Hears Pawnshop’s Appeal
American Trading argued the value of the jewels should be closer to the $7,964 it received. It told the First District the value of the stolen jewelry must be based on fair market value, meaning the price a seller is willing to accept and a price that a buyer is willing to pay. Danopulos then cross appealed, arguing she should receive not only $39,500 for the ring and brooch, but also $15,000 for the bracelet. She maintained the jewelry should be considered as artistic pieces with values beyond the mere price of gold, diamonds, and emeralds. Unique factors, such as age, artistic styles, and uniqueness, cause the value to change depending on the effort of the buyer to find a particular seller.

The First District concluded the pawnshop transactions didn’t represent the fair market value of the jewelry. The thieves had “every incentive to accept a price far below fair market value,” the court noted, and the transaction between American Trading and its scrap buyer was “unrepresentative of the relevant market.”

Judge Bergeron clarified that neither the thieves nor American Trading recognized the artistry of the original pieces and, as such, didn’t price the jewelry at its highest value when buying or selling them. As such, the prices provided by American Trading can’t be relied upon, he wrote.

The First District also stated that if the trial court deems Danopulos’ testimony about the bracelet to be credible, it should combine that testimony with her expert witness’ estimate of $1,500 per carat for the diamonds in the bracelet and award Danopulos $54,500.

Danopulos v. Am. Trading II, L.L.C., 2021-Ohio-2196.

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