ZARELLA, J.
The dispositive issue in the present case, which comes to us upon our acceptance of three certified questions of law from the United States District Court for the District of Connecticut pursuant to General Statutes § 51-199b (d),
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),
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 transactions, 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 Racketeer 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.
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 version
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 repurchase transactions. Because no appellate authority has construed § 21-44 since the 1997 amendment to that statute, and because the question is one of public importance, the District Court certified the following questions 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 pawnbrokers?
"3. If so, are repurchase transactions, as described by the court in Rhodes v. [Hartford, supra, 201 Conn. at 89, 513 A.2d 124], 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 repurchase 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 repurchase 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 certified 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 contemplated by the statute, and (2) § 37-4 excludes all pawnbroker 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 plaintiff, 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 legislative 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 legislature 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
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 transactions 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.
We begin our analysis with the first and second certified 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. at 96-97, 513 A.2d 124; it is necessary to determine whether the legislature'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 relationship, the meaning of such text is plain and unambiguous 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 omitted.) 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. at 763-64, 900 A.2d 1. 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, contains 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 Construction Co. v. New London, 236 Conn. 710, 717, 674 A.2d 845 (1996). This tenet of statutory construction
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. at 96-97, 513 A.2d 124. 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 version of § 21-45 at issue in Rhodes provided in relevant part: "No such lender shall sell or dispose of any personal 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.
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,
Furthermore, even though the plaintiff in Rhodes relied on the fact that the pre-1997 version of General Statutes § 21-39 expressly included repurchase agreements, 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 specific 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, interest in return for the use of money, already adequately indicated that they apply to such transactions." Id. at 102, 513 A.2d 124. The court explained that it "would have been unreasonable for the legislature to have required pawnbrokers who conduct repurchase transactions to be licensed, without also requiring their compliance with ... other pawnbroking statutes." Id. at 103, 513 A.2d 124.
Finally, the court in Rhodes emphasized that it interpreted 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 financing terms that some pawnbrokers might otherwise impose." Id. at 97, 513 A.2d 124. 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 transactions unregulated. Id. at 98, 513 A.2d 124. 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 prevent overbearing lenders and commercial entrepreneurs from exploiting impecunious borrowers and consumers who lack bargaining power." Id. at 98-99, 513 A.2d 124.
The legislature subsequently amended the pawnbroker 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.
Second, the legislature added references to repurchase agreements to several other provisions in the pawnbroker statutes, but did not add such language to § 21-44. When Rhodes was decided, only the pawnbroker licensing statutes; General Statutes (Rev. to 1985) §§ 21-39 and 21-40; expressly referred to both repurchase agreements and pawnbroker loans. In 1997, however, 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.
In 2011, the legislature added language referring to both repurchase agreements and loan transactions to four pawnbroker statutes.
As a result of the foregoing amendments, the pawnbroker statutes use consistent terms in referring to loans and repurchase agreements. These terms conform with the language of the pawnbroker definitional statute, 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 stipulated price...." Accordingly, the current pawnbroker statutory
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]...." (Emphasis added.) In fact, the legislature clarified the references in § 21-44 to loans in the same public act in which the legislature deleted the phrase "directly or indirectly." 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 references 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 agreements. 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 governed 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 considered 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. at 93, 513 A.2d 124. The legislature, however, subsequently clarified the scope of the pawnbroker statutes by adding explicit repurchase agreement language throughout the statutory scheme.
The court in Rhodes also relied strongly on the principle 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. at 96, 513 A.2d 124. Although repurchase transactions can be considered a type of loan in theory;
The third certified question asks whether pawnbroker 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...."
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,
Because the phrase "directly or indirectly" is ambiguous, we turn to the court's interpretation of the identical phrase in the pre-1997 version of § 21-44 for guidance. See Rhodes v. Hartford, supra, 201 Conn. at 95-97, 513 A.2d 124. "In interpreting a statute, [r]elated statutory provisions, or statutes in pari materia, often provide guidance in determining the meaning of a particular word...." (Internal 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 repurchase 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. at 96, 513 A.2d 124.
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 considered the economic equivalent of a loan. Id. at 96, 513 A.2d 124. 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 entrepreneurs from exploiting impecunious borrowers and consumers who lack bargaining power." Id. at 98-99, 513 A.2d 124.
Although § 37-4 contains an exception for "pawnbroker[s] as provided in section 21-44," this exception does not exclude
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.
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 generally 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 provision defining which activities required a pawnbroker license; see Public Acts 1905, c. 235, § 1; and another provision
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.
No costs shall be taxed in this court to either the plaintiff or the defendants.
In this opinion ROGERS, C.J., and PALMER, EVELEIGH and McDONALD, Js., concurred.
ESPINOSA, J., dissenting.
The certified questions from the United States District Court for the District of Connecticut
Like the District Court, I conclude that the reasonable interpretation of the sparse legislative record accompanying the 1997 amendment to § 21-44; Public Acts 1997, No. 97-164, § 5 (P.A. 97-164); is that it fails to reveal a clear intent to overrule Rhodes, and, therefore, this court's interpretation of General Statutes (Rev. to 1985) § 21-44 in Rhodes controls. By contrast, contrary to our prior interpretation of the pawnbroking statutes in Rhodes and in the absence of any clear evidence of legislative intent to overrule that decision, the majority concludes today that the rate restrictions of § 21-44 do not apply to a pawnbroker's loan of money upon the deposit of personal property, so long as the pawnbroker has designated that loan by the name "repurchase transaction" rather than "pawnbroking loan." Instead, in direct contradiction to the express exclusion of pawnbrokers from the rate restrictions set forth in § 37-4, the majority concludes that, if pawnbrokers assign the label "repurchase transaction" to a transaction involving the loan of money on the deposit of personal property, § 37-4 does, in fact, apply to pawnbrokers. For two reasons, I cannot agree with the majority's conclusions. First, the majority's conclusion that § 21-44 does not apply to repurchase transactions runs counter to our case law, in which we consistently have required unequivocal evidence of legislative intent before concluding that the legislature overruled one of our decisions interpreting a statute. The majority accomplishes this result without ever expressly addressing the question of whether the legislature intended to overrule Rhodes through its enactment of P.A. 97-164, thereby injecting uncertainty into the precedential force and effect of this court's interpretive decisions. Second, even if I agreed with the majority's unspoken holding that Rhodes has been legislatively overruled, I could not agree with its conclusion that § 37-4 governs repurchase transactions, which: (1) is inconsistent with the plain language of the statute exempting pawnbrokers from the rates set forth therein; (2) relies on a series of unsupported assumptions regarding the legislative intent underlying P.A. 97-164; and (3) fails to give proper effect to this court's prior interpretation of the relevant statutory language in § 37-4. Rather than follow the convoluted path taken by the majority to its interpretation of § 37-4, I would hold that, if the legislature overruled Rhodes, a proposition with which I disagree, the only logical conclusion remaining would be that the legislature intended to allow pawnbrokers to charge any rate, without limit, to the loan of money on the deposit of personal property, so long as pawnbrokers use the label "repurchase transactions." As I have already stated, I would conclude that
The majority acknowledges that in Rhodes v. Hartford, supra, 201 Conn. at 89, 513 A.2d 124, this court interpreted General Statutes (Rev. to 1985) § 21-44 to govern repurchase transactions, but the majority then lays the foundation for its subsequent analysis by characterizing the rationale of Rhodes very narrowly. Without directly stating so, the majority infers that the legislature overruled Rhodes by deleting the phrase "directly or indirectly" from § 21-44; P.A. 97-164; despite the equivocal nature of the substantive changes to § 21-44 made by the 1997 amendment, the eleven year gap between the publication of Rhodes and the 1997 amendment to § 21-44, the lack of any statement of legislative intent to overrule this court's decision in Rhodes, and the fact that P.A. 97-164 had a purpose wholly unrelated to the financing arrangements of pawnbroking transactions. In so doing, the majority fails to give proper weight to a long line of decisions of this court, in which only clear evidence in the legislative record has been held sufficient to support a conclusion that the legislature intended to overrule this court's interpretative decision. The majority also fails to give proper effect to the most fundamental principle underlying Rhodes: that repurchase transactions are pawnbroking loans by another name.
In part I of this dissent, I begin with Rhodes, in which this court rested its conclusion on broader principles than acknowledged by the majority. I then detail several decisions that illustrate our consistent reliance only on clear evidence of legislative intent to support a conclusion that the legislature intended to overrule one of our decisions interpreting a statute. Applying that standard, I evaluate the legislative record, concluding that such clear evidence of legislative intent is lacking therein.
The issue of whether § 21-44 regulates the rates that pawnbrokers may charge in repurchase transactions presents a question of statutory interpretation, over which we exercise plenary review, guided by well established principles regarding legislative intent. See Kasica v. Columbia, 309 Conn. 85, 93, 70 A.3d 1 (2013) (explaining plain meaning rule under General Statutes § 1-2z and setting forth process for ascertaining legislative intent). Notwithstanding the passage of § 1-2z, in our construction of statutes, this court's starting point, when we already have interpreted the statute in question, is our prior construction of that statute. See id. at 93-94, 70 A.3d 1 (in interpreting statutory text, we are bound by our prior constructions of statute); Hummel v. Marten Transport, Ltd., 282 Conn. 477, 500-501, 923 A.2d 657 (2007) (§ 1-2z did not overrule this court's prior interpretations of statutes). This approach is consistent both with the principle of stare decisis and the principle that our prior decisions interpreting a statute are not treated as extratextual sources for purposes of construing that statute and may be consulted as part of our reading of the statutory text. See, e.g., Kasica v. Columbia, supra, at 94, 70 A.3d 1 (relying on prior construction of statute during plain language portion of § 1-2z analysis); In re Elvin G., 310 Conn. 485, 500-501, 78 A.3d 797 (2013) (same).
We defined the issue presented in Rhodes as "whether a pawnbroker who engages in a repurchase transaction is, for purposes of [General Statutes (Rev. to 1985)] § 21-44, a pawnbroker who takes or receives, directly or indirectly, interest in return for the use of money he loans on the pledge of personal property." Rhodes v. Hartford, supra, 201 Conn. at 94, 513 A.2d 124. At the time that we decided Rhodes, General Statutes (Rev. to 1985) § 21-44 provided: "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 following rates: For the use of money amounting to fifteen dollars or less, five per cent per month or fraction thereof; for the use of money exceeding fifteen dollars in amount and not exceeding fifty dollars in amount, three per cent per month or fraction thereof; for the use of money exceeding fifty dollars in amount, two per cent per month or fraction thereof." (Emphasis added.)
Our construction of General Statutes (Rev. to 1985) § 21-44 in Rhodes was guided by the remedial purpose of the pawnbroking statutes, which were enacted "to protect impecunious borrowers from extortionate interest rates and oppressive financing terms that some pawnbrokers might otherwise impose." Rhodes v. Hartford, supra, 201 Conn. at 97, 513 A.2d 124. We specifically observed that, at the time that the predecessors of General Statutes (Rev. to 1985) §§ 21-44 and 21-45
Consistent with our recognition that one of the remedial purposes of the pawnbroking statutes was to prevent pawnbrokers from relying on repurchase transactions to legitimize usurious lending practices, our
The court in Rhodes turned to the language of General Statutes (Rev. to 1985) § 21-44, therefore, with three principles serving as its analytical foundation: the pawnbroking statutes have the remedial purpose of protecting impecunious borrowers from usurious interest rates; pawnbroking loans and repurchase transactions are distinguishable in name only; and, when possible, pawnbrokers have capitalized on that very limited distinction, and relied on any different legal treatment accorded to the two transactions in order to evade interest rate restrictions on pawnbroking transactions. The court then deliberated the significance of the provision that General Statutes (Rev. to 1985) § 21-44 applied to rates received by pawnbrokers either "directly or indirectly, for the use of money loaned on personal property...." Rhodes v. Hartford, supra, 201 Conn. at 94, 513 A.2d 124. We observed that, by expressly stating that the restrictions imposed by General Statutes (Rev. to 1985) § 21-44 applied not only to direct, but also to indirect interest rates, "the legislature indicated that it intended the statutes 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 equivalents of such a loan." Id. at 96, 513 A.2d 124. We explained: "The difference between the repurchase price and the original sales price of the item amounts to a fee that the customer must pay for the use of the pawnbroker's money. Whether or not the parties to the transaction label it as interest, this premium constitutes the type of indirect interest envisaged by the drafters of §§ 21-44 and 21-45." (Emphasis added.) Id. Thus, this court's analysis rested firmly on the principle that the only distinction between repurchase transactions and pawnbroking loans was the label that the pawnbrokers applied to the transaction. Indeed, we cited with approval the trial court's apt summary of the situation: "[O]ne should not be able to avoid a tax on shoes by calling shoes slippers...." (Internal quotation marks omitted.) Id. at 92, 513 A.2d 124. Therefore, because the difference was one in label only, we viewed repurchase transactions as charging the client for the use of money loaned, and we interpreted the concept of "indirect interest" to encompass the rate charged in a repurchase transaction, notwithstanding the fact that the transaction is labeled a "repurchase transaction" rather than a "loan," and the rate is designated as a "fee" imposed on the service rather than "interest" charged on the principal of the
Eleven years after this court's decision in Rhodes v. Hartford, supra, 201 Conn. at 89, 513 A.2d 124, the legislature enacted P.A. 97-164, "An Act concerning the Regulation of Pawnbrokers." Section 5 of P.A. 97-164 amended General Statutes (Rev. to 1997) § 21-44, and, among other changes, deleted the phrase "directly or indirectly." The majority relies on the deletion of the words "directly or indirectly" from § 21-44 to infer a legislative intent to overrule Rhodes. I disagree that the omission of that phrase, viewed in the context of the entire legislative record, provides clear evidence that the legislature intended that § 21-44 henceforth apply only to conventional pawnbroker loans.
Although we have not expressly stated what evidence is sufficient to allow us to conclude that a legislative amendment was intended to overrule our prior decision construing a statute, we consistently have required clear evidence in the legislative record to support such a conclusion. In most instances, we have relied on express statements by legislators during floor debate to conclude that the legislature intended to overrule one of our decisions interpreting a statute. See, e.g., Hummel v. Marten Transport, Ltd., supra, 282 Conn. at 503-504, 923 A.2d 657 (Borden, J., concurring) (observing that express statements of legislators in legislative history of § 1-2z clarified legislative intent to overrule in part this court's decision in State v. Courchesne, 262 Conn. 537, 816 A.2d 562 [2003]); In re Michael S., 258 Conn. 621, 628-29, 784 A.2d 317 (2001) (relying on testimony before Judiciary Committee that No. 86-185 of 1986 Public Acts was intended to address "a recent [S]upreme [C]ourt case in 1985 that says you can't take an appeal if the [S]uperior [C]ourt ... moves a child ... from the juvenile docket to the regular docket" to conclude that act was intended to overrule In re Juvenile Appeal [85-AB], 195 Conn. 303, 488 A.2d 778 [1985] [internal quotation marks omitted]); Allard v. Liberty Oil Equipment Co., 253 Conn. 787, 801-802, 756 A.2d 237 (2000) (relying on express statements by legislators to conclude that legislative history made "clear" that principal purpose of No. 99-69 of 1999 Public Acts was to legislatively overrule in part this court's decision in Bhinder v. Sun Co., 246 Conn. 223, 717 A.2d 202 [1998]).
Moreover, in the absence of an express statement of legislative intent, we have interpreted subsequent legislation, to the extent possible, to be consistent with our prior decisions, and have specifically declined to draw inferences that were not directly supported by the legislative record of legislation enacted in response to one of our decisions. For example, in Gormbard v. Zurich Ins. Co., 279 Conn. 808, 820-21 n. 8, 904 A.2d 198 (2006), we concluded, on the basis of express statements during the floor debate on No. 83-461 of the 1983 Public Acts, that the legislature intended to overrule this court's holding in Harvey v. Travelers Indemnity Co., 188 Conn. 245, 248, 449 A.2d 157 (1982), in which this court had interpreted General Statutes § 38-175c to require as a matter of public policy that "an insurer ... provide uninsured motorist coverage for injuries that
It makes sense in light of our role to apply this presumption — that in the absence of clear and unequivocal evidence of legislative intent to overrule one of our prior interpretive decisions, that decision continues to control the meaning of the relevant statutory provision. It is our province to say what the law means. Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803) ("[i]t is emphatically the province and duty of the judicial department to say what the law is"). Once this court has spoken on the meaning of a statute, the presumption is that if the legislature disagrees with our interpretation, it will express its intent clearly and unequivocally.
In the present case, the legislative record does not provide clear evidence that the legislature intended to overrule Rhodes when it amended § 21-44 in 1997. I begin with the two most obvious reasons for my conclusion: the amendment happened eleven years after Rhodes was decided, and there is no mention whatsoever of Rhodes in the legislative record. The eleven year gap between the release of this court's decision in Rhodes and the enactment of P.A. 97-164 is a long time. As I have noted previously in this dissent, this court presumes that the legislature is aware of our interpretation of a statute. Blonski v. Metropolitan District Commission, supra, 309 Conn. at 304, 71 A.3d 465. Therefore, in inferring legislative intent on the basis of the legislature's response, or lack thereof, to our interpretation of a statute, we have placed great emphasis on the passage of time between the release of a decision of this court and any relevant legislative action or inaction. For example, we have relied on the prompt, subsequent passage of contrary legislation as evidence that a legislative amendment to a statute was passed directly in response to one of our decisions. See, e.g., Federal Deposit Ins. Corp. v. Hillcrest Associates, 233 Conn. 153, 167-68 n. 7, 659 A.2d 138 (1995) (observing, with respect to enactment of responsive legislation one year following decision of this court, that "[a]lthough there is no printed legislative history
One would expect that, if the legislature did indeed wait eleven years before overruling Rhodes, it would have been aware of the need to make its intent even more clear than in those cases in which it has reacted quickly to overrule one of our interpretive decisions. That expectation finds further support in the drastic and controversial nature of a reversion to the pre-Rhodes system, which allowed pawnbrokers to select which laws govern their transactions simply by selecting the more advantageous label. This is not the kind of change that would have passed without even so much as a nod. The legislative record, however, confirms what the eleven year gap suggests. The legislature did not have Rhodes in mind at all when it amended General Statutes (Rev. to 1997) § 21-44 in P.A. 97-164. Neither the substantive changes to the statute nor the legislative record provides anything even approaching clear evidence that the legislature intended to overrule Rhodes.
The substance of the 1997 amendment to § 21-44, for instance, at best yields equivocal evidence of the legislature's intent. The defendants point to the fact that in 1997, P.A. 97-164 deleted from § 21-44 the key statutory term on which this court in Rhodes relied to conclude that the statute extended to repurchase transactions — the term "indirectly." In Rhodes, we interpreted "indirectly" to refer to "indirect interest," a term that we read to encompass the "fee" charged in repurchase transactions. Rhodes v. Hartford, supra, 201 Conn. at 96, 513 A.2d 124. I disagree with the majority that the fact that the legislature deleted the entire phrase, rather than deleting only the term "indirectly," is insignificant. The deletion of the term "directly," prevents the change from constituting clear and unequivocal evidence of legislative intent to overrule Rhodes and makes it possible to construe the amendment in a manner consistent with Rhodes, in which we relied only on the inclusion of the term "indirectly" in General Statutes (Rev. to 1985) § 21-44 to conclude that the statute governed repurchase transactions. In order to legislatively overrule Rhodes, therefore, the legislature needed only to delete the term "indirectly" and leave the term "directly" in place. With that amendment, § 21-44 would have provided that "[n]o pawnbroker ... shall take or receive, directly, for the use of money loaned on personal property, any more than the following rates...." Such a change would have removed all doubt regarding the legislature's alleged intent to
The purpose of P.A. 97-164 further undercuts the majority's conclusion. The Public Act was focused on increasing the record keeping requirements on pawnbrokers to aid law enforcement in the "control of [the] flow of stolen goods." Conn. Joint Standing Committee Hearings, Judiciary, Pt. 4, 1997 Sess., p. 1233, testimony of John M. Bailey, Chief State's Attorney. The applicable rate restrictions governing pawnbroking transactions were not even remotely part of that agenda. The complete lack of legislative focus on pawnbroking interest rates is further supported by the absence of any testimony offered to the Judiciary Committee or any remarks made on the Senate and House floors that indicated, either expressly or impliedly, that the legislature intended to make any change in the rate restrictions governing pawnbroking transactions, and the lack of any reference whatsoever in the legislative record to the Rhodes decision. The absence of any remarks addressing rate restriction changes to § 21-44 reinforces the conclusion that the legislature's intent in enacting P.A. 97-164 in 1997 focused on the sole purpose of the act, to aid law enforcement in the control of the flow of stolen goods, and that this court's holding in Rhodes was simply not its concern. In summary, the majority's position, that the legislature intended to overrule Rhodes by deleting the word "indirectly" from General Statutes (Rev. to 1997) § 21-44, would require the assumption that, eleven years after our decision in Rhodes, the legislature intended to effect a major change in the law, despite the lack of any acknowledgment of its intent to do so, in a public act that was not focused on regulating interest rates. It is unreasonable to presume that the legislature would effect such a major change in the law in such a circumspect and stealthy manner.
The majority relies on changes made by P.A. 97-164 to three of the pawnbroking statutes to argue that the legislative intent is clear. General Statutes (Rev. to 1997) §§ 21-41 and 21-42 were amended to incorporate references to repurchase transactions; P.A. 97-164, §§ 3, 4; and General Statutes (Rev. to 1997) § 21-47 was amended to add a reference to outright purchase transactions; P.A. 97-164, § 7; transactions which the majority inexplicably characterize as repurchase transactions. I discount the majority's mistaken reliance on the 1997 change to § 21-47 as
The majority also relies on a single relevant change in P.A. 11-100, which added a reference to repurchase transactions to General Statutes § 21-45. What the majority overlooks is that although § 21-45 now mentions repurchase transactions, the language of the statute conflates repurchase transactions and pawnbroking loans in a manner that supports the conclusion that the legislature intended to subject the transactions to the same rules. The full text of § 21-45 provides: "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 or an authorized agent of such person. All such property may be sold or disposed of at the place of business of such pawnbroker or at public sale after such sixty-day period. 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.)
The first sentence of § 21-45, which imposes a sixty day waiting period before a pawnbroker may sell or dispose of personal property left with the pawnbroker, specifies two means by which property may be "left with such pawnbroker": (1) in deposit or pledge for money loaned; or (2) as a result of the purchase of such property on condition of selling the same back again at a stipulated price. In the first sentence of § 21-45, depositing and pledging personal property are treated as part of a pawnbroking loan transaction, and purchasing personal property on condition of selling the same back again at a stipulated price is treated as part of a repurchase transaction. The final sentence of § 21-45, however, makes no mention of property that the pawnbroker has acquired by means of a purchase, and expressly applies only to property that has been "deposited or
If the legislature had intended to overrule Rhodes, it could have made its intent clear by amending the pawnbroking statutes to reject the fundamental principle articulated in Rhodes, that pawnbroking loans and repurchase transactions should be treated as interchangeable.
This broad definition supports a commonsense interpretation of the statutory scheme, which is that it governs pawnbrokers regardless of which label they append to their transactions. We recognized this in Rhodes, when we offered this very practical insight into our statutory construction of General Statutes (Rev. to 1985) § 21-44: "It would have been unreasonable for the legislature to have required pawnbrokers who conduct repurchase transactions to be licensed, without also requiring their compliance with [the] other pawnbroking statutes." Rhodes v. Hartford, supra, 201 Conn. at 103, 513 A.2d 124. The court in Rhodes abided by a basic tenet of statutory
Common sense dictates that the pawnbroking statutes govern pawnbroking transactions; Rhodes dictates that they do and the legislative record does not provide clear and unequivocal evidence that the legislature ever has disagreed with that proposition. I therefore disagree with part I of the majority opinion.
In order to conclude that § 37-4, the general usury statute, applies to pawnbrokers, the majority not only must ignore the statute's express statement to the contrary, it must also infer that in 1997, when the legislature amended the pawnbroking statutes in an amendment that focused on stemming the flow of stolen goods; P.A. 97-164; it simultaneously, without a single stroke of the pen, or even an oblique reference anywhere in the legislative record, amended the general usury statute, which is in a completely different statutory scheme, to exclude pawnbrokers only when they are engaged in certain transactions.
The third question certified by the District Court, to be addressed only if we answered the first two questions in the negative, requires us to determine whether repurchase transactions constitute loans subject to the interest rate limits imposed by § 37-4. "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 therefore interest at a rate greater than twelve per cent per annum." General Statutes § 37-4. The majority seizes on the phrase "as provided in section 21-44" in § 37-4 to claim that, when the legislature amended General Statutes (Rev. to 1997) § 21-44 in P.A. 97-164 to exclude repurchase transactions, it simultaneously changed the meaning of "a pawnbroker as provided in section 21-44" to apply only to pawnbrokers engaged in pawnbroking loans. The ceiling on interest rates is lower in § 37-4 than the maximum allowable rate in § 21-44. When the majority's analysis of the supposed evolution of §§ 21-44 and 37-4 is viewed as a whole, it is claiming that in 1997, the legislature decided to overrule Rhodes, with the purpose of decreasing the maximum amount
The majority's error is apparent when one consults the plain language of § 37-4, which does not exclude a particular class or classes of transactions from its rate limits, but instead excludes a particular class of persons — pawnbrokers. The majority then compounds that error by misconstruing the nature of the analytical problem presented by the statutory language. Instead of seeking to explain why the phrase "other than a pawnbroker as provided in section 21-44" in § 37-4 should be understood to exclude particular transactions rather than a class of persons, the majority appears to believe that the question of statutory construction is much easier — it seems to think that if it can demonstrate that § 37-4 is intended to apply to loans that involve the "indirect" charging of interest, then it has demonstrated that the legislature intended to subject repurchase transactions to § 37-4. After setting forth the statutory text of § 37-4, the majority, rather than examining that text and then reviewing the language of related statutes, proceeds directly to case law setting forth the well established principle that usury statutes apply to usurious loans regardless of the name by which the lender designates the loan. I am in complete agreement with that uncontroversial proposition, which could have been supported simply by referring to the plain language of § 37-4, which provides that, for the persons and entities that are subject to it, the rate limit applies to direct and indirect loans, and to rates that constitute the direct and indirect charging of interest. The majority then changes the inquiry, focusing on the meaning of the phrase "directly or indirectly," in § 37-4, a phrase that this court already has interpreted in Rhodes, rather than the meaning of the phrase "other than a pawnbroker as provided in section 21-44." By doing so, the majority misconstrues the nature of the question of statutory construction presented in this certified question, and, as I explain herein, for the second time in this appeal, fails to give proper effect to one of this court's prior interpretations of a statute.
The scope of § 37-4 is defined by the classes of individuals to which the statute applies, namely, persons, firms and corporations or agents thereof — and one class of individuals to which it does not apply, pawnbrokers, who are governed by § 21-44. In other words, § 37-4 does not exclude particular transactions from its purview; it excludes an entire category of lenders from its application. That does not mean that there are no particular transactions excluded from the rate limit in § 37-4. To identify those transactions, I turn to the extensive list set forth in General Statutes § 37-9.
The legislative history of the exception in § 37-4 demonstrates that, rather than functioning as a limit on the class of persons to which the exception applies, namely, pawnbrokers, the phrase, "as provided in section 21-44" provides a cross-reference to the applicable rate limit for pawnbrokers. The cross-reference initially appeared when the usury statute was originally enacted in 1907. Public Acts 1907, c. 238. At that time, the pawnbroking statutory scheme had not yet been delineated into separate statutes; see Public Acts 1905, c. 235; so the usury statute cross-referenced the entire chapter of the Public Act that set forth the laws governing the business of pawnbroking, excluding pawnbrokers from the application of the usury statute. As soon as the pawnbroking statutory scheme was set forth in separate statutory sections in 1918, however, the cross-reference to the pawnbroking statutes in the usury statute's exclusion of pawnbrokers was made more specific, expressly referencing the statutory provision that set forth the rate limits governing pawnbrokers. See General Statutes (1918 Rev.) § 4798 ("[n]o person and no firm or corporation or agent thereof, 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"); General Statutes (1918 Rev.) § 3011 ("[p]awnbrokers 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 following rates"). The most reasonable interpretation of the change in cross-reference is that the legislature took the opportunity to make the cross-reference to the pawnbroking statutes more precise when the different
Our case law confirms that § 37-4 delineates pawnbrokers as a class of individuals not subject to its rate limit. Specifically, we already have construed the predecessor to § 37-4 to exclude pawnbrokers as a class from the rate limits set forth therein. In State v. Hurlburt, 82 Conn. 232, 233, 72 A. 1079 (1909), the defendants appealed from the judgment of conviction for violating the predecessor to § 37-4 (then chapter 238 of the 1907 Public Acts)
My construction of §§ 21-44 and 37-4, which results in the same interest rate limits applying to both pawnbroking loans
In summary, I find the majority's interpretation of § 37-4 — that the phrase "other than a pawnbroker as provided in section 21-44" refers only to pawnbroking loans — unpersuasive. That interpretation must take as its starting point that the phrase "as provided in section 21-44" was intended to limit the scope of the exception in § 37-4, rather than function as a practical cross-reference to the applicable rate limit for pawnbrokers. As I have explained, that assumption is not supported by the plain language of the statute, particularly when it is read together with § 37-9. The majority's interpretation further ignores our prior interpretation of the statute, to which the legislature has acquiesced. State v. Moulton, 310 Conn. 337, 361 n. 22, 78 A.3d 55 (2013) (acknowledging that "under the doctrine of legislative acquiescence, legislative cognizance of the courts' prior interpretation of [a statute is] presumed, and the failure of the legislature to enact corrective legislation constitute[s] evidence of its agreement with that interpretation"). The more reasonable reading of § 37-4 is that it excludes pawnbrokers as a class of persons, who continue to be governed by § 21-44, regardless of which name they append to their transactions, as this court held in Rhodes.
Accordingly, I dissent.
The dissenting justice states that we mistakenly rely on the 1997 amendment 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 "pawnbroker" 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]).
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.
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.
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.
"2. Did the Connecticut legislature, in its 1997 amendment to ... § 21-44, exempt repurchase transactions and the attendant fees charged from the limits on rates received by pawnbrokers?
"3. If so, are repurchase transactions, as described by the court in Rhodes v. [Hartford, 201 Conn. 89, 513 A.2d 124] (1986), considered loans subject to the interest rate limits imposed by [General Statutes] § 37-4?"
