Gilmore v. Pawn King, Inc. ( 2014 )

******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
DOUGLAS GILMORE, EXECUTOR (ESTATE
OF BESS GILMORE) v. PAWN
KING, INC., ET AL.
(SC 18848)
Rogers, C. J., and Palmer, Zarella, Eveleigh, McDonald and Espinosa, Js.
Argued September 23, 2013—officially released September 16, 2014
Jonathan J. Klein, for the appellant (plaintiff).
Robert M. Frost, Jr., with whom, on the brief, was
Brian E. Tims, for the appellees (defendants).
Opinion
ZARELLA, J. The dispositive issue in the present case,
which comes to us upon our acceptance of three certi-
fied questions of law from the United States District
Court for the District of Connecticut pursuant to Gen-
eral Statutes § 51-199b (d),1 is whether the interest rates
applicable to pawnbroker repurchase agreements are
governed by the pawnbroker interest rate statute, Gen-
eral Statutes § 21-44, or the usury statute, General Stat-
utes § 37-4, or whether such agreements are not regu-
lated at all. After considering the language of §§ 21-
44 and 37-4, the genealogy of these statutes, and the
pawnbroker statutory scheme, we conclude that the
interest rates applicable to such repurchase agreements
are governed by § 37-4.
The record certified by the District Court contains
the following undisputed facts and procedural history.
Between 2005 and 2007, the named defendant, Pawn
King, Inc. (Pawn King),2 entered into five separate
repurchase transactions with the original plaintiff in
this action, Bess Gilmore,3 pursuant to which Gilmore
agreed to sell items of personal property to Pawn King
in exchange for an agreed on amount, and Pawn King
agreed to hold those items, subject to Gilmore’s right
to repurchase them. The repurchase agreements set the
repurchase price as the original amount that Pawn King
had paid to Gilmore for the items, plus a fee of 20
percent of that original amount for each month that
Pawn King held the items. The District Court provided
the following example: ‘‘Pawn King paid . . . Gilmore
$1500 for three items—a watch, [a] lighter and [a] brace-
let. . . . Gilmore secured the right to repurchase those
items within thirty days for $1800—the $1500 original
price paid plus $300 (20 [percent] fee). Pawn King would
often agree to hold the items longer than thirty days
conditioned [on] . . . Gilmore’s payment of additional
monthly fees of [20] percent.’’
On June 4, 2008, Pawn King informed Gilmore that,
if she did not pay two months of fees on the items that
were the subject of three of the repurchase transac-
tions, it would sell those items. On July 1, 2008, when
Gilmore contacted Pawn King to arrange payment, it
informed her that it had disposed of the items. She
demanded that Pawn King return the property, and,
when it did not, she initiated this action in the District
Court, claiming, inter alia, that Pawn King’s actions
violated § 21-44. Gilmore alleged violations of the Rack-
eteer Influenced and Corrupt Organizations Act, 18
U.S.C. § 1962 (a) and (c), and the Connecticut Unfair
Trade Practices Act, General Statutes § 42-110a et seq.,
and also alleged conversion, statutory theft, intentional
infliction of emotional distress, unjust enrichment,
breach of contract, breach of an implied contract, and
breach of the implied duty of good faith and fair
dealing.4
The defendants filed a motion for summary judgment
on the ground that the language of § 21-44 restricts its
scope to pawnbroker loans, and, therefore, the rate
limits set forth in § 21-44 do not apply to repurchase
transactions. Specifically, the defendants contended
that Public Acts 1997, No. 97-164, § 5 (P.A. 97-164),
legislatively overruled this court’s holding in Rhodes v.
Hartford, 201 Conn. 89, 96–97, 513 A.2d 124 (1986), that
the pre-1997 version5 of § 21-44 applied to repurchase
transactions, by amending the statute and deleting a
key statutory term on which this court had relied in
interpreting the statute. In opposition to the defendants’
motion for summary judgment, the plaintiff argued that
P.A. 97-164, § 5, did not change the meaning of the pre-
1997 version of § 21-44, as articulated by this court
in Rhodes.
The District Court determined that the resolution of
the defendants’ motion for summary judgment turned
on whether, in light of P.A. 97-164, § 5, § 21-44 continues
to govern the rates charged by pawnbrokers in repur-
chase transactions. Because no appellate authority has
construed § 21-44 since the 1997 amendment to that
statute, and because the question is one of public impor-
tance, the District Court certified the following ques-
tions to this court: ‘‘1. Does . . . § 21-44 restrict ‘rates
of interest’ chargeable by a pawnbroker, or does it more
generally restrict the ‘rates’ chargeable for the use of
money obtained from a pawnbroker in connection with
a repurchase transaction?
‘‘2. Did the Connecticut [General Assembly], in its
1997 amendment to [the pre-1997 version of] § 21-44,
exempt repurchase transactions and the attendant fees
charged from the limits on rates received by pawn-
brokers?
‘‘3. If so, are repurchase transactions, as described
by the court in Rhodes v. [Hartford, supra, 201 Conn.
89], considered loans subject to the interest rate limits
imposed by . . . § 37-4?’’
In their brief to this court, the defendants argue that
the rates imposed by pawnbrokers in connection with
repurchase transactions are not regulated under either
§ 21-44 or § 37-4. First, the defendants contend that
§ 21-44 restricts only rates of interest chargeable by a
pawnbroker, and, because the rates applicable to repur-
chase agreements are not rates of interest, such rates
do not fall within the scope of the statute. Second, the
defendants argue that the legislature exempted repur-
chase agreements from § 21-44 in P.A. 97-164, § 5,
thereby overruling Rhodes. Third, the defendants assert
that this court should decline to answer the third certi-
fied question because it is unnecessary to address it as
it does not relate to any of the plaintiff’s pending claims.
If the court does address this question, however, the
defendants posit that § 37-4 does not govern the rates
charged in connection with repurchase agreements
because (1) such agreements are not loans as contem-
plated by the statute, and (2) § 37-4 excludes all pawn-
broker transactions.
The plaintiff responds that the rates applicable to
repurchase transactions are governed by § 21-44, or,
alternatively, they are governed by § 37-4. Repurchase
transactions must be regulated, according to the plain-
tiff, because the pawnbroker statutes are remedial in
nature and were intended to protect borrowers from
unscrupulous lenders. With respect to the first certified
question, the plaintiff contends that § 21-44 governs
all rates chargeable for the use of money obtained in
connection with a repurchase transaction, rather than
just rates of interest. In addition, the plaintiff argues
that P.A. 97-164, § 5, did not overrule Rhodes because
the genealogy of the pawnbroker statutes and the legis-
lative history do not indicate that this amendment was
made in response to this court’s decision in Rhodes.
Moreover, the plaintiff posits that, because the legisla-
ture removed the words ‘‘directly’’ and ‘‘indirectly’’ from
the pre-1997 version of § 21-44 in P.A. 97-164, § 5, the
scope of § 21-44 did not change. Finally, the plaintiff
claims that, if the rates that pawnbrokers charge for
repurchase transactions are not governed by § 21-44,
then such transactions must be governed by § 37-4.
Although we agree with the defendants that § 21-
44 no longer governs the rates that pawnbrokers may
charge in connection with repurchase transactions, we
also agree with the plaintiff that, because § 21-44 no
longer governs repurchase transactions, such transac-
tions are governed by § 37-4. Thus, the answer to the
first certified question is that § 21-44 governs rates of
interest rather than the rates pawnbrokers may charge
in connection with repurchase agreements. The answer
to the second certified question is that the legislature
exempted repurchase transactions from § 21-44 in P.A.
97-164, § 5. Finally, the answer to the third certified
question is that the rates pawnbrokers may charge in
connection with repurchase agreements are subject to
the rate limits imposed by § 37-4.
I
We begin our analysis with the first and second certi-
fied questions, which together ask the court to decide
whether § 21-44 governs the rates that pawnbrokers
may charge in connection with repurchase transactions.
For the reasons set forth hereinafter, we conclude that
repurchase transactions are no longer included within
the purview of § 21-44.
Because this court previously held in Rhodes that the
pre-1997 version of § 21-44 encompassed repurchase
agreements; see Rhodes v. Hartford, supra, 201 Conn.
96–97; it is necessary to determine whether the legisla-
ture’s amendment to the pre-1997 version of § 21-44 in
P.A. 97-164, § 5, altered the scope of the statute.
Although ‘‘we do not write on a clean slate’’ when this
court previously has interpreted a statute; Kasica v.
Columbia, 309 Conn. 85, 93, 70 A.3d 1 (2013); whether
the legislature has changed the meaning of a statute is
a matter of statutory interpretation. ‘‘When construing
a statute, [o]ur fundamental objective is to ascertain
and give effect to the apparent intent of the legislature.
. . . In seeking to determine that meaning, General
Statutes § 1-2z directs us first to consider the text of
the statute itself and its relationship to other statutes.
If, after examining such text and considering such rela-
tionship, the meaning of such text is plain and unambig-
uous and does not yield absurd or unworkable results,
extratextual evidence of the meaning of the statute shall
not be considered. . . . When a statute is not plain and
unambiguous, we also look for interpretive guidance
to the legislative history and circumstances surrounding
its enactment, to the legislative policy it was designed to
implement, and to its relationship to existing legislation
and common law principles governing the same general
subject matter . . . .’’ (Internal quotation marks omit-
ted.) Fedus v. Planning & Zoning Commission, 278
Conn. 751, 756, 900 A.2d 1 (2006).
‘‘[I]t is reasonable to presume that, by rejecting the
underlying premise [of a prior decision], the legislature
also . . . express[es] its disapproval of [the court’s
prior] conclusion . . . .’’ Id., 763–64. The legislature
can reject the underlying premise of a decision by
changing or deleting a provision on which the court
relied. This is especially true when that provision exists
elsewhere in the statutory scheme. For instance,
‘‘[when] a statute, with reference to one subject, con-
tains a given provision, the omission of such provision
from a similar statute concerning a related subject . . .
is significant to show that a different intention existed.’’
(Internal quotation marks omitted.) M. DeMatteo Con-
struction Co. v. New London, 236 Conn. 710, 717, 674
A.2d 845 (1996). This tenet of statutory construction
ensures that ‘‘statutes [are] construed, if possible, such
that no clause, sentence or word shall be superfluous,
void or insignificant, and that every sentence, phrase
and clause is presumed to have a purpose.’’6 Hopkins
v. Pac, 180 Conn. 474, 476, 429 A.2d 952 (1980).
In Rhodes, the court, relying predominantly on the
phrase ‘‘directly or indirectly’’ in the pre-1997 version
of § 21-44, decided that the pre-1997 versions of §§ 21-
44 and 21-45 applied to repurchase agreements. See
Rhodes v. Hartford, supra, 201 Conn. 96–97. The court
in Rhodes interpreted the pre-1997 version of § 21-44,
which provided in relevant part: ‘‘No pawnbroker or
loan broker or person who loans money on the pledge
of personal property shall take or receive, directly or
indirectly, for the use of money loaned on personal
property, any more than the . . . rates [set forth in the
statute] . . . .’’ (Emphasis added.) The pre-1997 ver-
sion of § 21-45 at issue in Rhodes provided in relevant
part: ‘‘No such lender shall sell or dispose of any per-
sonal property left with him in pledge for money loaned
in less than six months from the day when the same is
left in pledge as aforesaid. . . .’’
The court concluded in Rhodes that these statutes
applied to repurchase agreements because repurchase
agreements could be characterized as indirect loans
that were expressly included within the language of the
pre-1997 version of § 21-44.7 See Rhodes v. Hartford,
supra, 201 Conn. 96. The court observed that ‘‘[e]xami-
nation of the language of [the pre-1997 versions of]
§§ 21-44 and 21-45 reveals that neither statute plainly
defines the pawnbroking activity to which it applies.’’
Id., 93. As a result, the phrase ‘‘directly or indirectly’’
in the pre-1997 version of § 21-44 was crucial to the
court’s determination of the scope of the statutory
scheme. The court reasoned that, ‘‘[b]y extending the
statutes’ coverage to transactions involving the indirect
payment of interest, the legislature indicated that it
intended the statutes to regulate not only those transac-
tions that take the classic form of a conventional pawn-
broker loan, but also financing arrangements that, in
substance if not in form, amount to the economic [equiv-
alent] of such a loan.’’ (Emphasis added.) Rhodes v.
Hartford, supra, 96.
This interpretation was consistent with the use of
the phrase ‘‘directly or indirectly’’ in the small loans
interest rate regulatory statute, General Statutes (Rev.
to 1993) § 36-243,8 which provided in relevant part: ‘‘No
person, partnership, association or corporation . . .
shall, directly or indirectly, charge contract for or
receive any interest, charge, or consideration greater
than twelve per cent per annum . . . .’’ In Rhodes, we
determined that the language of General Statutes (Rev.
to 1985) § 36-243, which was identical in all material
respects to the 1993 revision, was ‘‘evidence that the
clause [‘directly or indirectly’] was used in § 21-44 as
an all-encompassing term designed to include virtually
any transaction in which a pawnbroker takes or
receives, directly or indirectly, excess interest on a
loan.’’ Rhodes v. Hartford, supra, 201 Conn. 99 n.8.
Furthermore, even though the plaintiff in Rhodes
relied on the fact that the pre-1997 version of General
Statutes § 21-39 expressly included repurchase agree-
ments, whereas the pre-1997 version of §§ 21-44 and
21-45 did not, the court discounted that fact, reasoning
that ‘‘[i]t is likely that the legislature omitted such spe-
cific references [in the pre-1997 version of §§ 21-44 and
21-45] because it believed that [these two statutes], in
addressing themselves to financial arrangements that
call for the payment of indirect, as well as direct, inter-
est in return for the use of money, already adequately
indicated that they apply to such transactions.’’ Id., 102.
The court explained that it ‘‘would have been unreason-
able for the legislature to have required pawnbrokers
who conduct repurchase transactions to be licensed,
without also requiring their compliance with . . .
other pawnbroking statutes.’’ Id., 103.
Finally, the court in Rhodes emphasized that it inter-
preted the pre-1997 version of §§ 21-44 and 21-45 to
comport with the remedial purpose of the pawnbroker
statutes, which was to ‘‘protect impecunious borrowers
from extortionate interest rates and oppressive financ-
ing terms that some pawnbrokers might otherwise
impose.’’ Id., 97. Repurchase agreements traditionally
had been ‘‘vehicles used by unscrupulous pawnbrokers
to extract usurious interest rates from their customers.’’
Id. Accordingly, the court indicated that it would have
been inconsistent with this policy to leave such transac-
tions unregulated. Id., 98. The court also noted that
the pawnbroker statutes were part of a greater, more
general policy embodied in the consumer transaction
and small loans interest rate statutes, namely, ‘‘to pre-
vent overbearing lenders and commercial entrepre-
neurs from exploiting impecunious borrowers and con-
sumers who lack bargaining power.’’ Id., 98–99.
The legislature subsequently amended the pawnbro-
ker statutes in 1997 and 2011, resulting in several
changes that evince the legislature’s intent to limit § 21-
44 to traditional loans, thereby necessarily excluding
repurchase agreements from its scope. See Public Acts
2011, No. 11-100 (P.A. 11-100); P.A. 97-164. First, despite
this court’s heavy textual reliance on the phrase
‘‘directly or indirectly’’ in Rhodes, the legislature
removed this language from the pre-1997 version of
§ 21-44 in 1997.9 See P.A. 97-164, § 5. Section 21-44 cur-
rently provides in relevant part: ‘‘No pawnbroker or
person who loans money on the deposit or pledge of
personal property shall take or receive, for the use of
money loaned on personal property, any more than the
. . . rates [set forth in the statute] . . . .’’ This change
vitiated the underlying premise of Rhodes, as § 21-44
no longer applies to indirect interest.10 If the legislature
had intended to maintain the status quo with respect
to § 21-44, it could have demonstrated its acquiescence
with our decision in Rhodes by maintaining this portion
of the statute or substituting other more express lan-
guage consistent with Rhodes.
Second, the legislature added references to repur-
chase agreements to several other provisions in the
pawnbroker statutes, but did not add such language to
§ 21-44. When Rhodes was decided, only the pawnbro-
ker licensing statutes; General Statutes (Rev. to 1985)
§§ 21-39 and 21-40; expressly referred to both repur-
chase agreements and pawnbroker loans. In 1997, how-
ever, in the same public act that eliminated the phrase
‘‘directly or indirectly’’ from the pre-1997 version of
§ 21-44, the legislature added language referencing
repurchase agreements to other pawnbroker statutes
that previously had referred only to loan transactions.11
See P.A. 97-164, §§ 3, 4 and 7, respectively codified at
General Statutes (Rev. to 1999) §§ 21-41 (a) and (b),
21-42 and 21-47 (b). For instance, the pre-1997 version
of § 21-42 provided in relevant part: ‘‘Each such pawn-
broker shall, at the time of making any loan on a pawn
or pledge, deliver to the person who pawns or pledges
any goods, article or thing a memorandum or note con-
taining the entry required . . . by the provisions of sec-
tion 21-41. . . .’’ General Statutes (Rev. to 1997) § 21-
42. The legislature amended the pre-1997 version of
§ 21-42 in P.A. 97-164, § 4, however, by expressly includ-
ing repurchase agreements: ‘‘Each such pawnbroker
shall, at the time of making any loan on a pawn or pledge
of personal property or of purchasing such property on
condition of selling the same back again at a stipulated
price or of purchasing such property from a person
who is not a wholesaler, deliver to the person who
pawns, pledges or sells such property a memorandum
or note containing the entry required . . . by the provi-
sions of section 21-41 . . . .’’ (Emphasis added.) P.A.
97-164, § 4, codified at General Statutes (Rev. to 1999)
§ 21-42.
In 2011, the legislature added language referring to
both repurchase agreements and loan transactions to
four pawnbroker statutes.12 See P.A. 11-100, §§ 3, 4, 7
and 8. Notably, in the 2011 amendments, the legislature
added repurchase agreement language to § 21-45; see
P.A. 11-100, § 7; one of the statutes other than § 21-44
that the court in Rhodes considered.13 See Rhodes v.
Hartford, supra, 201 Conn. 93. Thus, despite the oppor-
tunity to add repurchase agreement language to § 21-
44 in both 1997 and 2011, which would have clarified
that the removal of ‘‘directly or indirectly’’ did not
change the scope of the statute as construed in Rhodes,
the legislature chose not do so on either occasion.
As a result of the foregoing amendments, the pawn-
broker statutes use consistent terms in referring to
loans and repurchase agreements. These terms conform
with the language of the pawnbroker definitional stat-
ute, General Statutes § 21-39a, which was added to the
scheme in 2011. See P.A. 11-100, § 1. Section 21-39a (1)
defines a pawnbroker as ‘‘a person who is engaged in
the business of loaning money on the deposit or pledge
of . . . personal property or purchasing such property
on condition of selling the same back again at a stipu-
lated price . . . .’’ Accordingly, the current pawnbro-
ker statutory scheme refers to loans using the phrases
‘‘loaning money,’’ ‘‘loans money,’’ ‘‘loan,’’ ‘‘money
loaned,’’ ‘‘take,’’ ‘‘deposit,’’ deposited,’’ ‘‘pledge’’ and
‘‘pledging’’; General Statutes §§ 21-39, 21-39a (1), § 21-
41 (a) and (b), 21-42 (a), 21-44, 21-45 and § 21-46a; and
refers to repurchase agreements using the terms ‘‘sale,’’
‘‘sold,’’ ‘‘purchase,’’ ‘‘purchasing,’’ and the purchase of
‘‘such property on condition of selling the same back
again at a stipulated price’’ General Statutes §§ 21-39a
(1), 21-40 (c), 21-41 (a) and (b), 21-42 (a), 21-45 and
21-46a.
Notably, § 21-44 refers only to loans: ‘‘No pawnbroker
or person who loans money on the deposit or pledge
of personal property shall take or receive, for the use
of money loaned on personal property, any more than
the . . . rates [set forth in the statute] . . . .’’ (Empha-
sis added.) In fact, the legislature clarified the refer-
ences in § 21-44 to loans in the same public act in which
the legislature deleted the phrase ‘‘directly or indi-
rectly.’’ See P.A. 97-164, § 5. In P.A. 97-164, § 5, the
legislature not only removed ‘‘directly or indirectly,’’
but also added the word ‘‘deposit’’ and removed the
term ‘‘loan broker.’’ These changes made the loan refer-
ences in § 21-44 more consistent with the remainder of
the pawnbroker statutory scheme.
Thus, § 21-44 now contains the same loan language
present throughout the pawnbroker statutes but does
not include any language referring to repurchase agree-
ments. It would be anomalous to read the terms ‘‘loans
money,’’ ‘‘money loaned,’’ ‘‘deposit’’ and ‘‘pledge’’ in
§ 21-44 to include repurchase agreements when such
terms are not used to refer to repurchase agreements
anywhere else in the statutory scheme. Accordingly,
we conclude that the rate that pawnbrokers may charge
in connection with repurchase agreements is not gov-
erned by § 21-44.
That is not to say, however, that we disagree with
the reasoning in Rhodes. We agree that the rates charged
in connection with repurchase agreements can be con-
sidered a form of indirect interest. Nonetheless,
because § 21-44 no longer includes indirect interest; see
P.A. 97-164, § 5; the reasoning in Rhodes is no longer
applicable to the current statutory scheme. In addition,
Rhodes observed that the pre-1997 versions of §§ 21-44
and 21-45 could apply to both loans and repurchase
agreements because ‘‘neither statute plainly define[d]
the pawnbroking activity to which it applies.’’ Rhodes v.
Hartford, supra, 201 Conn. 93. The legislature, however,
subsequently clarified the scope of the pawnbroker stat-
utes by adding explicit repurchase agreement language
throughout the statutory scheme.
The court in Rhodes also relied strongly on the princi-
ple that repurchase agreements are ‘‘the economic
[equivalent] of . . . a loan’’ in support of its conclusion
that the two transactions should be treated similarly
for purposes of the pre-1997 versions of §§ 21-44 and
21-45. Id., 96. Although repurchase transactions can be
considered a type of loan in theory;14 see part II of this
opinion; the legislature has manifested a clear intent to
no longer treat pawnbroker repurchase agreements as
the equivalent of a pawnbroker loan. The definition of
a ‘‘pawnbroker’’ in § 21-39a (1) explicitly distinguishes
between the two transactions15 rather than simply stat-
ing that a pawnbroker deals in direct or indirect loans.
Therefore, although Rhodes properly concluded that
repurchase agreements can be a type of indirect loan
that provides indirect interest, the reasoning of Rhodes
no longer applies to the current statutory scheme.
II
The third certified question asks whether pawnbro-
ker repurchase transactions are subject to the lower
interest rate cap imposed by the usury statute, § 37-4.
Section 37-4 regulates interest rates for all direct or
indirect loans by persons or entities, ‘‘other than a
pawnbroker as provided in section 21-44 . . . .’’16 The
defendants contend that repurchase agreements are not
subject to either §§ 37-4 or 21-44.17 As we explain herein-
after, in light of our interpretation of § 21-44 and the
reasoning set forth in Rhodes, we conclude that pawn-
broker repurchase agreements are subject to the lower
interest rate cap set forth in § 37-4 and pawnbroker
loans are subject to the higher interest rate cap set
forth in § 21-44.18
The issue of whether § 37-4 applies to pawnbroker
repurchase agreements ‘‘raises a question of statutory
construction . . . over which we exercise plenary
review.’’ (Internal quotation marks omitted.) Weems v.
Citigroup, Inc., 289 Conn. 769, 778, 961 A.2d 349 (2008).
Therefore, we apply the same standard of review set
forth in part I of this opinion.
Section 37-4 provides: ‘‘No person and no firm or
corporation or agent thereof, other than a pawnbroker
as provided in section 21-44, shall, as guarantor or
otherwise, directly or indirectly, loan money to any
person and, directly or indirectly, charge, demand,
accept or make any agreement to receive therefor inter-
est at a rate greater than twelve per cent per annum.’’
(Emphasis added.) This court previously has deter-
mined that a prior, nearly identical version of this stat-
ute ‘‘brought every form of loan within its terms.’’
(Emphasis added.) State v. O’Brien, 93 Conn. 643, 646,
107 A. 520 (1919). This court also has determined that
‘‘the intention of the legislators [in enacting the statute]
was to prevent the making of loans under color of a
guaranty or in any other way.’’ (Emphasis added.) Id.;
see also Bridgeport L. A. W. Corp. v. Levy, 110 Conn.
255, 261, 147 A. 841 (1929) (‘‘[t]he parties . . . must
act in good faith, and [when] a contract appears as a
sale but is in fact a mere cloak for [a] usurious loan,
it will not be free from the taint of usury’’ [emphasis
added]); Kjar v. Brimley, 27 Utah 2d 411, 416, 497 P.2d
23 (1972) (‘‘casting a loan transaction in the form of a
sale with an option to repurchase will not insulate the
transaction from the usury laws’’).
Because the phrase ‘‘directly or indirectly’’ is ambigu-
ous, we turn to the court’s interpretation of the identical
phrase in the pre-1997 version of § 21-44 for guidance.
See State v. Rhodes, supra, 201 Conn. 95–97. ‘‘In inter-
preting a statute, [r]elated statutory provisions, or stat-
utes in pari materia, often provide guidance in deter-
mining the meaning of a particular word . . . .’’ (Inter-
nal quotation marks omitted.) State v. Ehlers, 252 Conn.
579, 590, 750 A.2d 1079 (2000). In Rhodes, the court
determined that the phrase ‘‘directly or indirectly’’ in
the pre-1997 version of § 21-44, when applied to interest,
included the rates charged in connection with repur-
chase agreements because it evinced the legislature’s
intent ‘‘to regulate not only those transactions that take
the classic form of a conventional pawnbroking loan,
but also financing arrangements that, in substance if
not in form, amount to the economic [equivalent] of
such a loan.’’ Rhodes v. Hartford, supra, 201 Conn.
96.19 The court in Rhodes reasoned that ‘‘directly or
indirectly’’ is ‘‘an all-encompassing term designed to
include virtually any transaction in which a pawnbroker
takes or receives, directly or indirectly, excess interest
on a loan.’’ Id., 99 n.8.
Section 37-4, like the pre-1997 version of § 21-44,
includes direct or indirect interest within its scope and
thus encompasses repurchase agreements as well as
traditional loans. As we observed in Rhodes, repurchase
agreements, ‘‘in substance if not in form,’’ can be consid-
ered the economic equivalent of a loan. Id., 96. Thus,
the rates that pawnbrokers charge in connection with
repurchase agreements are a form of ‘‘indirect’’ interest
included within the terms of § 37-4. The inclusion of
repurchase agreements within the purview of § 37-4
also is consistent with the general policy of this state
to ‘‘prevent overbearing lenders and commercial entre-
preneurs from exploiting impecunious borrowers and
consumers who lack bargaining power.’’ Id., 98–99.
Although § 37-4 contains an exception for ‘‘pawnbro-
ker[s] as provided in section 21-44,’’ this exception does
not exclude pawnbroker repurchase agreements
because, as we previously explained; see part I of this
opinion; such transactions are no longer governed by
§ 21-44. The phrase ‘‘pawnbroker as provided in section
21-44’’ is an elastic term that allows the scope of § 37-
4 to expand and contract with the scope of § 21-44,
ensuring that, consistent with the remedial nature of
the pawnbroker and usury statutes, all pawnbroker
transactions are regulated. Thus, although repurchase
agreements were excluded from § 37-4 prior to P.A.
97-164, § 5, § 37-4 now encompasses such transactions
because they are not included within the purview of
§ 21-44.
The defendants claim that the exception to § 37-4
excludes pawnbrokers who engage in both types of
transactions because, at the time that the precursor to
§ 37-4 was enacted, the precursor to § 21-44 included
both loans and repurchase agreements.20 The defen-
dants thus contend that rates charged in connection
with repurchase transactions are entirely unregulated.
In addition to the fact that the scope of § 37-4 can
change as the scope of § 21-44 changes, there are other
reasons that we disagree with the defendants’ con-
tention. First, leaving repurchase transactions unregu-
lated would run counter to the remedial purposes of
the pawnbroker and usury statutes. ‘‘We have long rec-
ognized that pawnbroking is a business peculiarly
demanding special regulation. . . . In enacting [the
pawnbroker] statutes, the legislature sought to protect
impecunious borrowers from extortionate interest rates
and oppressive financing terms that some pawnbrokers
might otherwise impose. . . . At the time of the pas-
sage of the predecessors to . . . §§ 21-44 and 21-45,
repurchase transactions were recognized as vehicles
used by unscrupulous pawnbrokers to extract usurious
interest rates from their customers.’’ (Citations omitted;
internal quotation marks omitted.) Rhodes v. Hartford,
supra, 201 Conn. 97. Similarly, ‘‘[t]he statute of usury
was made to protect weak or necessitous men from
oppression . . . .’’ Camp v. Bates, 11 Conn. 487, 500
(1836). It would be inconsistent with these purposes
to allow pawnbrokers to impose oppressive rates on
borrowers merely by structuring a transaction as a
repurchase agreement rather than as a loan.
We also observe that, if the legislature had intended to
exclude pawnbrokers as a class rather than transactions
already regulated under § 21-44, the legislature simply
could have referenced the pawnbroker chapter gener-
ally or one of the pawnbroker statutes defining the
business of a pawnbroker. When the legislature enacted
the precursor to § 37-4, which contained the exception
for pawnbrokers, in 1907; see Public Acts 1907, c. 238,
§ 1; the pawnbroker statutory scheme contained a pro-
vision defining which activities required a pawnbroker
license; see Public Acts 1905, c. 235, § 1; and another
provision governing interest rates on pawnbroker trans-
actions. See Public Acts 1905, c. 235, § 7. The pawnbro-
ker licensing provision, in defining which activities
required a pawnbroker license, effectively defined the
term ‘‘pawnbroker’’: ‘‘No person, corporation, or part-
nership shall, in any city or town of this state, engage
in or carry on the business of loaning money upon
deposits or pledges of wearing apparel, jewelry, orna-
ments, household goods, or other personal property,
or of purchasing such property on condition of selling
the same back again at a stipulated price, unless such
person, corporation, or partnership is licensed as a
pawnbroker . . . .’’ Public Acts 1905, c. 235, § 1.
The legislature could have demonstrated its intent to
exclude pawnbrokers as a class from the usury statute
by referencing the pawnbroker licensing statute, but,
instead, in 1918, the legislature tied the scope of the
usury statute to the scope of the pawnbroker interest
rate statute.21 See General Statutes (1918 Rev.) §§ 3011
and 4798. Similarly, the legislature could have demon-
strated its intent to exclude pawnbrokers as a class by
amending § 37-4 to reference the pawnbroker licensing
statute, § 21-39, when the legislature removed the words
‘‘directly or indirectly’’ from the pre-1997 version of
§ 21-44 in 1997. See P.A. 97-164, § 5. Furthermore, the
legislature could have amended § 37-4 to reference the
pawnbroker definitional statute, § 21-39a, when it was
enacted in 2011. See P.A. 11-100, § 1. Such an amend-
ment would have made clear the legislature’s intent
to exclude an entire class of individuals, rather than
transactions not covered under § 21-44, from the pur-
view of § 37-4. In the absence of such an amendment,
we are guided by the flexible language of § 37-4 and
the remedial purpose of the pawnbroker and usury stat-
utes in concluding that the rate that pawnbrokers may
charge in connection with repurchase agreements
should be regulated, and, because such rates do not
fall within the purview of § 21-44, they must be governed
by § 37-4.22
The answer to the first certified question is that § 21-
44 is restricted to rates of interest and does not govern
the rates that pawnbrokers may charge in connection
with repurchase agreements; the answer to the second
certified question is, yes; and the answer to the third
certified question is, yes.
No costs shall be taxed in this court to either the
plaintiff or the defendants.
In this opinion ROGERS, C. J., and PALMER, EVE-
LEIGH and McDONALD, Js., concurred.
1
General Statutes § 51-199b (d) provides: ‘‘The Supreme Court may answer
a question of law certified to it by a court of the United States or by the
highest court of another state or of a tribe, if the answer may be determinative
of an issue in pending litigation in the certifying court and if there is no
controlling appellate decision, constitutional provision or statute of this
state.’’
2
William V. Mingione, Pawn King’s principal, also was named as a defen-
dant. We hereinafter refer to Pawn King and Mingione collectively as the
defendants.
3
We note that Douglas Gilmore, the executor of Bess Gilmore’s estate,
was substituted as the plaintiff in this action on October 27, 2009. In the
interest of simplicity, we hereinafter refer to Douglas Gilmore as the plaintiff
and Bess Gilmore by her surname.
4
Gilmore also alleged that Pawn King violated the municipal code of the
town of Stratford but the plaintiff subsequently conceded that that claim
should be dismissed.
5
When we refer to the pre-1997 versions of §§ 21-39 through 21-42, 21-44
through 21-45, and 21-47, we are referring specifically to the versions of
these statutes in effect before October 1, 1997, the effective date of P.A.
97-164.
6
The dissenting justice contends that we fail to address the question of
whether the legislature intended to overrule Rhodes. To the contrary, our
goal in this opinion is to determine the legislature’s intent, which we accom-
plish in accordance with § 1-2z by beginning our analysis with a review of
the text of the statute itself, the relevant statutory scheme, and this court’s
prior interpretation of the relevant statutes.
7
With respect to the first certified question, the defendants contend that
the term ‘‘rates’’ in § 21-44 is restricted to rates of interest, and, therefore,
does not extend to the rates charged in connection with repurchase transac-
tions. In Rhodes, however, this court apparently assumed that the term
‘‘rates’’ in the pre-1997 version of § 21-44 was restricted to rates of interest
but nonetheless concluded that the term included rates charged in connec-
tion with repurchase transactions because those rates were a form of indirect
interest. See Rhodes v. Hartford, supra, 201 Conn. 96.
8
General Statutes (Rev. to 1993) § 36-243 was transferred to General
Statutes § 36a-573 in 1995. General Statutes § 36a-573 provides in relevant
part: ‘‘(a) No person, except as authorized by the provisions of sections
36a-555 to 36a-573, inclusive, shall, directly or indirectly, charge, contract
for or receive any interest, charge or consideration greater than twelve per
cent per annum . . . .’’ (Emphasis added.)
9
Although the 1997 amendment to the pre-1997 version of § 21-44 occurred
approximately eleven years after our decision in Rhodes, we do not accord
this delay great weight in light of the fact that the legislature deleted the
very words on which this court relied in its interpretation of the pre-1997
version of the statute. In addition, even in situations in which the legislature
has not subsequently amended a statute that we have construed, this court
has recognized that ‘‘legislative inaction . . . is not necessarily legislative
affirmation . . . . [T]he legislature’s failure to amend a statute in response
to our interpretation of that provision is not dispositive of the issue because
legislative inaction is not always the best . . . [guide] to legislative intent.’’
(Citations omitted; internal quotation marks omitted.) State v. Salamon, 287
Conn. 509, 521–22, 949 A.2d 1092 (2008).
10
We observe that the deletion of the word ‘‘directly,’’ in addition to
‘‘indirectly,’’ does not render the legislature’s 1997 amendment to the pre-
1997 version of § 21-44 ambiguous. Presuming, as we must, that the legisla-
ture was aware of our decision in Rhodes, we must accord great weight to
the fact that the legislature deleted the very language on which this court
heavily relied. In addition, it would have been repetitive and cumbersome
for the legislature to have deleted only the word ‘‘indirectly.’’ If the legislature
had done so, § 21-44 would provide that no pawnbroker or person who
loans money on the deposit or pledge of personal property shall take or
receive, directly, for the use of money loaned on personal property, any
more than the rates set forth in the statute. Notwithstanding this court’s
decision in Rhodes, the continued use of the word ‘‘directly,’’ in light of the
removal of the word ‘‘indirectly,’’ would have been unnecessary because
(1) the scope of the statute already was so limited by the phrase ‘‘loans
money on the deposit or pledge,’’ (2) the legislature was capable of and did
in fact indicate its intent to change the scope of § 21-44 by deleting the
phrase on which this court heavily relied in deciding Rhodes, and (3) as we
subsequently explain, the legislature provided even more evidence of its
intent by simultaneously and subsequently adding language to other pawn-
broker statutes specifically referring to repurchase agreements.
The dissenting justice states that we mistakenly rely on the 1997 amend-
ment to the pre-1997 version of General Statutes § 21-47; see P.A. 97-164,
§ 7; because the language in that amendment refers to purchases. See text
accompanying footnote 6 of the dissenting opinion. Repurchase transactions,
however, are a type of purchase transaction pursuant to which the customer
may buy his property back under certain conditions. In fact, repurchase
agreements are described as a type of pawnbroker purchase transaction in
the statutory scheme. See General Statutes § 21-39a (1) (defining ‘‘pawnbro-
ker’’ in relevant part as ‘‘a person who is engaged in the business of [inter
alia] . . . purchasing . . . property on condition of selling the same back
again at a stipulated price’’ [emphasis added]).
11
See General Statutes (Rev. to 1999) § 21-41 (a) (‘‘[n]o pawnbroker or
person who loans money on the deposit or pledge of wearing apparel,
jewelry, ornaments, household goods or other personal property or pur-
chases such property on condition of selling the same back again at a
stipulated price . . . shall take, receive or purchase such property without
receiving proof of the identity of the person depositing, pledging or selling
the property’’ [emphasis added]); General Statutes (Rev. to 1999) § 21-41
(b) (‘‘[e]ach such pawnbroker or person carrying on such business of loaning
money on the deposit or pledge of personal property or of purchasing such
property on condition of selling the same back again at a stipulated price
. . . shall maintain a record-keeping system . . . in which shall be entered
in English, at the time he receives any article of personal property by
way of pledge, pawn or purchase, a description of such article’’ [emphasis
added]); General Statutes (Rev. to 1999) § 21-42 (‘‘[e]ach such pawnbroker
shall, at the time of making any loan on a pawn or pledge of personal
property or of purchasing such property on condition of selling the same
back again at a stipulated price . . . deliver to the person who pawns,
pledges or sells such property . . . a memorandum or note containing the
entry required to be made . . . by the provisions of section 21-41’’ [emphasis
added]); General Statutes (Rev. to 1999) § 21-47 (b) (‘‘[a]ny person [or entity]
which wilfully violates any of the provisions of this chapter . . . or receives
an article of personal property by way of pawn, pledge or purchase from
any minor . . . shall be guilty of a class A misdemeanor’’ [emphasis added]).
12
See General Statutes (Supp. 2012) § 21-40 (c) (‘‘the applicant [for a
pawnbroker license or the renewal thereof] shall disclose to the licensing
authority all places used or intended to be used by the business for the
purchase, receipt, storage or sale of property’’ [emphasis added]); General
Statutes (Supp. 2012) § 21-41 (a) (‘‘[n]o pawnbroker shall enter into any
pledge or purchase transaction with a minor unless such minor is accompa-
nied by such minor’s parent or guardian’’ [emphasis added]); General Stat-
utes (Supp. 2012) § 21-45 (‘‘[n]o pawnbroker shall sell or dispose of any
personal property left with such pawnbroker in deposit or pledge for money
loaned or as a result of the purchase of such property on condition of
selling the same back again at a stipulated price in less than sixty days
from the date when the same is left in deposit or pledge or purchased on
condition of selling the same back again at a stipulated price, except when
such sale or disposition is to the person who deposited, pledged or sold
such property’’ [emphasis added]); General Statutes (Supp. 2012) § 21-46a
(‘‘[i]f the person who deposited, pledged or sold any property received by
a pawnbroker or dealer is convicted of any offense arising out of such
pawnbroker’s . . . acquisition, retention or disposition of the property and
such pawnbroker . . . suffered an economic loss . . . the court . . . may
order restitution to such pawnbroker’’ [emphasis added]).
Although the legislature deleted some repurchase agreement language
from General Statutes (Rev. to 2011) §§ 21-39 and 21-40 in 2011; see P.A.
11-100, §§ 2 and 3; it also concurrently deleted references to loans in those
provisions. In addition, the legislature added a new definitional statute; see
P.A. 11-100, § 1; which defines a ‘‘pawnbroker’’ as ‘‘a person who is engaged
in the business of loaning money on the deposit or pledge of wearing
apparel, jewelry, ornaments, household goods or other personal property
or purchasing such property on condition of selling the same back again at
a stipulated price,’’ or, in other words, a person who is in the business of
loaning money and entering into repurchase agreements. General Statutes
§ 21-39a (1). Thus, the phrase ‘‘business of a pawnbroker’’ in the current
revision of § 21-39 incorporates by reference both types of transactions.
Similarly, the current revision of § 21-40 (a) includes ‘‘suitable persons to
be pawnbrokers,’’ and, thus, in light of the definition of ‘‘pawnbroker’’ in
§ 21-39a (1), the inclusion of additional language in § 21-40 (a) regarding
lending money or entering into repurchase agreements would have been
redundant.
13
The legislature’s express inclusion of repurchase agreement language
in § 21-45, as well as its removal of the phrase ‘‘directly and indirectly’’ from
the pre-1997 version of § 21-44, is strong evidence that the scope of the two
statutes is different. In 2011, the legislature amended General Statutes (Rev.
to 2011) § 21-45 to provide: ‘‘No pawnbroker shall sell or dispose of any
personal property left with such pawnbroker in deposit or pledge for money
loaned or as a result of the purchase of such property on condition of
selling the same back again at a stipulated price in less than sixty days
from the date when the same is left in deposit or pledge or purchased on
condition of selling the same back again at a stipulated price, except when
such sale or disposition is to the person who deposited, pledged or sold
such property . . . .’’ (Emphasis added.) P.A. 11-100, § 7, codified at General
Statutes (Supp. 2012) § 21-45. The court in Rhodes considered the pre-1997
versions of §§ 21-44 and 21-45 together; see Rhodes v. Hartford, supra, 201
Conn. 93–102; and, therefore, if the legislature had not amended § 21-45,
we might have determined that § 21-45 applied only to loans, as well.
We finally observe that, although the last sentence of § 21-45 appears to
suggest that ‘‘deposit or pledge’’ includes repurchase agreements, both the
language of § 21-45 and the statutory scheme as a whole strongly suggest
that the inclusion of ‘‘repurchase’’ in the last sentence is a drafting error.
The last sentence of § 21-45, which governs the transfer of title from the
original property owner to the pawnbroker in the event that the original
property owner fails to redeem the property, provides: ‘‘Upon the expiration
of sixty days from the date when such property is left with a pawnbroker,
if the person who deposited or pledged such property fails to redeem any
such property in accordance with the terms of the transaction, such right
of redemption or repurchase on the part of the person who deposited or
pledged such property shall be extinguished and the pawnbroker shall
acquire the entire interest in the property that was held by the person who
deposited or pledged such property prior to such deposit or pledge without
further notice to such person.’’ (Emphasis added.) Because a repurchase
transaction involves the transfer of title, the pawnbroker acquires the ‘‘entire
interest’’ in the property when the transaction occurs rather than upon the
customer’s failure to redeem the property. Thus, practically speaking, the
last sentence of § 21-45 would never apply to repurchase agreements because
title already would have transferred by the time this provision applied.
14
At its core, a loan is ‘‘a grant of something for temporary use . . . .’’
Black’s Law Dictionary (9th Ed. 2009) p. 1019. With respect to a loan secured
by collateral, or a secured loan, the loan ‘‘is secured by property or securi-
ties.’’ Id., p. 1021. A ‘‘repurchase agreement’’ is a type of secured loan, that
is, ‘‘[a] short term loan agreement by which one party sells a security [or
property] to another party but promises to buy back the security [or property]
on a specified date at a specified price.’’ Id., p. 1419.
15
We observe that the definition of ‘‘pawnbroker’’ in § 21-39a (1) is not
incorporated by reference into the rest of the statutory scheme. Section 21-
39a (1) defines ‘‘pawnbroker’’ as ‘‘a person who is engaged in the business
of loaning money on the deposit or pledge of wearing apparel, jewelry,
ornaments, household goods or other personal property or purchasing such
property on condition of selling the same back again at a stipulated price
. . . .’’ The word ‘‘pawnbroker,’’ however, consistently is modified through-
out the statutory scheme by references to loans, repurchase agreements, or
both. Accordingly, incorporating the definition of ‘‘pawnbroker’’ by reference
would render all subsequent references to loans and repurchase agreements
superfluous. It is well established that ‘‘statutes must be construed, if possi-
ble, such that no clause, sentence or word shall be superfluous, void or
insignificant, and that every sentence, phrase and clause is presumed to
have a purpose.’’ Hopkins v. Pac, supra, 180 Conn. 476. Thus, we determine
that the definition of pawnbroker in § 21-39a does not incorporate automati-
cally both types of transactions but, rather, that the inclusion of these
transactions is set forth in the statute either by explicit reference or, as in
§ 21-39, by reference to the ‘‘business of a pawnbroker . . . .’’
16
General Statutes § 37-4 provides in relevant part: ‘‘No person . . . other
than a pawnbroker as provided in section 21-44, shall, as guarantor or
otherwise, directly or indirectly, loan money to any person and, directly or
indirectly, charge, demand, accept or make any agreement to receive therefor
interest at a rate greater than twelve per cent per annum.’’
17
The defendants also contend that we should not address this issue
because it is unnecessary to do so as it does not relate to any of the plaintiff’s
pending claims. General Statutes § 51-199b (d) provides in relevant part that
this court ‘‘may answer a question of law certified to it by a court of the
United States . . . if the answer may be determinative of an issue in pending
litigation in the certifying court and if there is no controlling appellate
decision, constitutional provision or statute of this state.’’ Because the appli-
cability of § 37-4 may be determinative of an issue before the District Court,
we address the third certified question.
18
We note that repurchase agreements are not unique to the pawnbroker
context. For example, an individual might sell his watch to a neighbor for
$100 with an option to repurchase the watch in thirty days for $200.
19
As we explained in part I of this opinion, although the legislature’s 1997
amendments to the pawnbroker statutes rendered this court’s reasoning in
Rhodes no longer applicable to that scheme, we agree with Rhodes that a
repurchase agreement can be considered a type of indirect loan transaction.
20
The precursor to § 37-4 was enacted in 1907. See Public Acts 1907, c.
238, § 1 (‘‘[n]o person, firm, or corporation, or any agent thereof, other than
a national bank or a bank or trust company duly incorporated under the
laws of this state or a pawnbroker as provided in chapter 235 of the public
acts of 1905, shall directly or indirectly loan money to any person and
directly or indirectly charge, demand, accept, or make an agreement to
receive therefor, interest at a greater rate than fifteen per centum per
annum’’). At that time, the precursor to § 21-44 provided in relevant part:
‘‘Pawnbrokers and loan brokers, and all persons who loan money on the
pledge of personal property, are prohibited from taking or receiving directly
or indirectly, for the use of money loaned on personal property, any more
than the . . . rates [set forth in the statute] . . . .’’ (Emphasis added.)
Public Acts 1905, c. 235, § 7.
21
As we previously noted, the usury statute that was the precursor to
§ 37-4 was enacted in 1907, and the 1907 provision contained an exception
for pawnbrokers. See Public Acts 1907, c. 238, § 1. That exception appeared
to be applicable to the entire pawnbroker statutory scheme. See Public Acts
1907, c. 238, § 1 (‘‘[n]o person, firm, or corporation . . . other than a national
bank or a bank or trust company duly incorporated under the laws of this
state or a pawnbroker as provided in chapter 235 of the public acts of
1905, shall directly or indirectly loan money to any person and directly or
indirectly charge, demand, accept, or make an agreement to receive therefor,
interest at a greater rate than fifteen per centum per annum’’ [emphasis
added]). Chapter 235 of the 1905 Public Acts contained the eight provisions
that comprised the entire pawnbroker statutory scheme. See generally Public
Acts 1905, c. 235, §§ 1 through 8. The 1918 revision of the usury statute,
however, restricted the pawnbroker exception to the provision in the pawn-
broker statutory scheme governing interest rates. See General Statutes (1918
Rev.) § 4798 (‘‘[n]o person and no firm or corporation . . . other than a
pawnbroker as provided in section 3011, shall, as guarantor or otherwise,
directly or indirectly, loan money to any person and, directly or indirectly,
charge, demand, accept or make any agreement to receive, therefor, interest
at a rate greater than twelve per centum per annum’’ [emphasis added]).
General Statutes (1918 Rev.) § 3011 was a precursor to § 21-44 and governed
rates of interest that pawnbrokers could take or receive, ‘‘directly or indi-
rectly, for the use of money loaned on personal property . . . .’’
22
The dissenting justice concludes that pawnbrokers are excluded as a
class from § 37-4 because General Statutes § 37-9 enumerates the types of
transactions that are exempt from § 37-4, whereas § 37-4 enumerates the
classes of individuals who are subject to its provisions. We disagree.
Although § 37-9 does enumerate exceptions to § 37-4, these exceptions are
not all based on the category of the transaction alone. For instance, § 37-9
provides in relevant part: ‘‘The provisions of sections 37-4, 37-5 and 37-6
shall not affect . . . (2) any loan made by (A) any bank, as defined in
section 36a-2, or any out-of-state bank, as defined in section 36a-2, that
maintains in this state a branch, as defined in section 36a-410, (B) any
wholly-owned subsidiary of such bank or out-of-state bank, except a loan
for consumer purposes, or (C) any Connecticut credit union, as defined in
section 36a-2, or federal credit union, as defined in section 36a-2 . . . .’’
(Emphasis added.) This provision is thus dependent on two considerations:
(1) whether the transaction is a loan; and (2) whether the lender falls within
one of the classes of entities set forth in subparagraphs (A), (B) or (C).
The class of lender also is an important factor in § 37-9 (5), (6) and (8).
Accordingly, we are not persuaded that the fact that pawnbrokers are not
referenced in § 37-9 means that they are excluded from the usury statute
as a class. Instead, we conclude that the exclusion with respect to § 21-44
was set forth in § 37-4, rather than § 37-9, for another reason. As we explained
previously in this opinion, the exclusion with respect to § 21-44 set forth in
§ 37-4 establishes the elastic scope of the two statutes to ensure that borrow-
ers are protected from unreasonable interest rates, regardless of the source
of the transaction.
The dissenting justice also cites State v. Hurlburt, 82 Conn. 232, 233, 72
A. 1079 (1909), in support of the proposition that pawnbrokers as a class
are excluded from § 37-4. When Hurlburt was decided, however, the usury
statute referred to the entire pawnbroker statutory scheme, rather than just
the pawnbroker interest rate statute. See footnote 21 of this opinion. It
thus makes sense that the court in Hurlburt would have concluded that
pawnbrokers were excluded as a class. Because the legislature subsequently
amended the pawnbroker exception and altered the scope of § 21-44, the
scope of § 37-4 necessarily has changed, as well.