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Home My WebLink AboutCP-21-CR-1647-2007COMMONWEALTH : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CHARGES: (1) THEFT OF LEASED PROPERTY (2) RECEIVING STOLEN PROPERTY EDWARD JAMES LONG: OTN: K3920825 : CP -21 -CR -1647-2007 IN RE: DEFENDANT'S PETITION FOR WRIT OF HABEAS CORPUS BEFORE OLER, J. OPINION and ORDER OF COURT Oler, J., January 8, 2008. In this criminal case, Defendant has been charged with Theft of Leased Property' and Theft by Receiving Stolen Property.2 The charges arise out of Defendant's alleged failure to return a laptop computer obtained pursuant to a written agreement with a company known as Rent -A -Center in Carlisle, Pennsylvania.3 For disposition at this time is a Petition for Writ of Habeas Corpus filed by Defendant, challenging the sufficiency of evidence to support a prima facie case against Defendant with respect to either charge .4 The contentions of the petition are (a) that the transaction in question between Defendant and Rent -A -Center represented a sale rather than a lease for purposes of the first charges and (b) that the property in question was not stolen for purposes of the second charge.6 ' Criminal Information, filed August 1, 2007; Act of August 8, 1977, P.L. 184, §1, as amended, 18 Pa. C.S. §3932. 2 Criminal Information, filed August 1, 2007; Act of December 6, 1972, P.L. 1484, §1, 18 Pa. C.S. §3925. ' Criminal Complaint, filed May 4, 2006. 4 Defendant's Petition for Writ of Habeas Corpus, filed November 26, 2007. ' Defendant's Petition for Writ of Habeas Corpus, paras. 7-16. 6 Defendant's Petition for Writ of Habeas Corpus, para. 17. A hearing on Defendant's petition was held on December 26, 20077 For the reasons stated in this opinion, the petition will be denied. STATEMENT OF FACTS The Commonwealth's evidence at the habeas corpus hearing tended to support the proposition that Defendant had obtained possession of a laptop computer from Rent -A -Center in Carlisle, Pennsylvania, pursuant to a written agreement entitled "Rental -Purchase Agreement," that he had stopped making payments on the agreement, and that he had failed to return the laptop to Rent -A - Center. The purported agreement in question (a) was dated February 25, 2006, (b) defined itself as a "rental transaction,"g (c) described the "rental term" as "weekly, with the payment for the initial term to be $44.99 and successive weekly renewals to be effected by the payment of like amounts by Defendant, and (d) provided for title to be transferred to Defendant in the event that he made 95 weekly payments for a total of $4,274.05, and paid sales tax on the item.9 Significantly, however, the alleged agreement also indicated that Defendant was "not obligated to renew this Agreement beyond the initial term, or beyond any subsequent renewal term"10 and that Defendant was free to "terminate the rental -purchase agreement without penalty by voluntarily surrendering or returning the goods in good repair, reasonable wear and tear excepted, along with any past due rental payments at any time. At the hearing, Defendant's counsel questioned the proper grading of the offenses based upon the value of the item in question. However, this issue does not appear in the motion. Nothing herein is intended to preclude Defendant from raising this issue at trial based upon the evidence presented as to valuation at that time. s The purported agreement further stated that Rent -A -Center "retain[ed] title to the property at all times" and that Defendant was "renting this property." Commonwealth's Ex. 1, Hearing, December 26, 2007. 9 Commonwealth's Ex. 1, Hearing, December 26, 2007. 10 Commonwealth's Ex. 1, Hearing, December 26, 2007 " Commonwealth's Ex. 1, Hearing, December 26, 2007 2 DISCUSSION Theft of Leased Property. Under Section 3932(a) of the Crimes Code, "[a] person who obtains personal property under an agreement for the lease or rental of the property is guilty of theft if he intentionally deals with the property as his own."12 However, Section 3932(d) of the Code provides that "[t]his section shall not apply to secured transactions as defined in Title 13 (relating to the commercial code)." 13 Under Pennsylvania's version of the Commercial Code, a "lease" is defined as "[a] transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creating of a security interest is not a lease...." Act of July 9, 1992, P.L. 507, §3, as amended, 13 Pa. C.S. §2A103 (Supp. 2007). The standard for determining whether a transaction creates a lease or a security interest is contained in Section 1201(5) of this legislation: Determination of lease or security interest.—Whether a transaction creates a lease or security interest is determined by the facts of each case; however: (i) A transaction creates a security interest if the consideration the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease not subject to termination by the lessee and: (A) the original term of the lease is equal to or greater than the remaining economic life of the goods (B) the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods; (C) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement; or 12 Act of August 8, 1977, P.L. 184, §1, as amended, 18 Pa. C. S. §3932(a). " Act of August 8, 1977, P.L. 184, §1, as amended, 18 Pa. C. S. §3932(d). 3 that: (D) the lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement. (ii) A transaction does not create a security interest merely because it provides (A) the present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into; (B) the lessee assumes risk of loss of the goods, or agrees to pay taxes, insurance, filing, recording or registration fees, or service or maintenance costs with respect to the goods; (C) the lessee has an option to renew the lease or to become the owner of the goods; (D) the lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or (E) the lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed. 14 As the Bankruptcy Court for the Eastern District of Pennsylvania has noted, "[t]he clause that begins immediately after the word `however' at the end of [the first sentence of §1201(5)] delineates an exception to the general rule for leases that are not terminable by the lessee prior to the end of the designated lease term, and which satisfy one of the four factors enumerated in that section. For leases which satisfy the foregoing bright line test, the case-by-case analysis exception applies and the inquiry comes to an end -such leases constitute security agreements as a matter of law." In re Kim, 232 B.R. 324, 330 (Bkrtcy. E.D. Pa., 1999). 14 Act of November 1, 1979, P.L. 255, §1, as amended, 13 Pa. C.S. §1201(5). 11 Finally, under Pennsylvania's Rental Purchase Agreement Act, a "rental - purchase agreement" is not to be deemed to have created a security interest under the Commercial Code. Act of July 11, 1996, P.L. 607, §6, as amended, 42 Pa. C.S. §6902. Under this act, a "rental -purchase agreement" is defined as [a]n agreement for the use of personal property by an individual primarily for personal, family or household purposes for an initial period of four months or less that is automatically renewable with each rental payment after the initial period and that permits the lessee to acquire ownership of the property. Id.; see also Griffin v. Rent -A -Center, Inc., 2004 PA Super 29, 843 A.2d 393. In the present case, the consideration to be paid by Defendant was subject to termination on a weekly basis by Defendant; accordingly, the transaction was not automatically classified as one creating a security interest under the "bright line" test of Section 1201(5)(1) of Pennsylvania's Commercial Code. Furthermore, the agreement in question was consistent with the definition of a rental -purchase agreement under the Rental Purchase Agreement Act. Accordingly, the court finds itself unable to agree with Defendant that the interest of Rent -A -Center in the laptop was that of a mere chattel -mortgagee, incapable of supporting a charge of Theft of Leased Property. Theft by Receiving Stolen Property. Under Section 3925(a) of the Crimes Code, "[a] person is guilty of theft if he intentionally receives, retains, or disposes of movable property of another knowing that it has been stolen, or believing that it has probably been stolen ...." Act of December 6, 1972, P.L. 1482, §1, 18 Pa. C.S. §3925(a). A person who has stolen an item by an initial act may also be guilty of receiving it. See Commonwealth v. Shaffer, 279 Pa. Super. 18, 420 A.2d 722 (1980).15 In the present case, from the court's conclusion that the laptop computer could have been the subject of a theft of leased property on the part of Defendant, it follows that the argument that it could not have been stolen property for 15 Of course, protections exist with respect to sentences in such cases. See Act of December 6, 1972, P.L. 1482, §1, 18 Pa. C.S. §3902. E purposes of a charge of theft by receiving stolen property must also be rejected. Accordingly, the following order will be entered: ORDER OF COURT AND NOW, this 8th day of January, 2008, upon consideration of Defendant's Petition for Writ of Habeas Corpus, following a hearing held on December 26, 2007, and for the reasons stated in the accompanying opinion, the petition is denied. Daniel J. Dye, Esq. Assistant District Attorney Vicki A. Piontek, Esq. 24 West Governor Road Hershey, PA 17033 Attorney for Defendant 0 BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. COMMONWEALTH : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CHARGES: (1) THEFT OF LEASED PROPERTY (2) RECEIVING STOLEN PROPERTY EDWARD JAMES LONG: OTN: K3920825 : CP -21 -CR -1647-2007 IN RE: DEFENDANT'S PETITION FOR WRIT OF HABEAS CORPUS BEFORE OLER, J. ORDER OF COURT AND NOW, this 81h day of January, 2008, upon consideration of Defendant's Petition for Writ of Habeas Corpus, following a hearing held on December 26, 2007, and for the reasons stated in the accompanying opinion, the petition is denied. BY THE COURT, J. Wesley Oler, Jr., J. Daniel J. Dye, Esq. Assistant District Attorney Vicki A. Piontek, Esq. 24 West Governor Road Hershey, PA 17033 Attorney for Defendant