Powers v. Royce Inc.’s Empirical Analysis

Citation profile

4 federal appellate · 1 district · 2 state decisions

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 30 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “(37) “Security interest” means an interest in personal property or fixtures which secures payment or performance of an obligation .... Whether a transaction creates a lease or security interest is determined by the facts of each case; however, 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 (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. A transaction does not create a security interest merely because it provides that: (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 tax”

   7 later decisions quote this exact passage · from the majority
   e.g. Mason v. Heller Financial Leasing, Inc. (In Re JII Liquidating, Inc.) · Excel Auto & Truck Leasing, L.L.P. v. Alief Independent School District

2. “In our view, the conclusive presumption provided under [section 1-201(37) ] applies only where the option to purchase for nominal consideration necessarily arises upon compliance with the lease (citation omitted). It does not apply where the lessee has the right to terminate the lease before that option arises with no farther obligation to continue paying rent.”

   2 later decisions quote this exact passage · from the majority
   e.g. Excel Auto & Truck Leasing, L.L.P. v. Alief Independent School District · Banterra Bank v. Subway Equipment Leasing Corp. (In Re Taylor)

3. “[W]here a lessee has the right to terminate the lease before the option arises to purchase the property for no additional or nominal consideration, the lease is a true lease and cannot be a conditional sale.... The Debtor in this case could terminate the Royce Agreements at any time after the initial two-week rental period, making the Agreements true leases under Marhoefer ... We recognize, of course, that for lessees who rent furniture intending eventually to own it, these Agreements function as secured installments sales (provided the lessee makes all the payments). But unlike buyers in standard installment sales, Royce’s hybrid ‘rental-buyers’ are not obligated to make payments, and they can change their minds and return the furniture at any time. This flexibility is not worthless, and in return Royce earns the benefits of a lease when some of its renter-buyers become insolvent.”

   1 later decision quote this exact passage · from the majority
   e.g. In Re Rigg