Court Opinion

ID: 9756644
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:44:34.853769+00
Date Added: 2024-06-11T09:57:00.506057
License: Public Domain

MONTEMURO, Justice,
dissenting.
I dissent and would affirm based upon the reasoning of the Superior Court opinion. The majority concludes that simply because our legislature provided that the Act of July 9, 1992, P.L. 507, No. 97, § 3 (Article 2A — Leases) would be effective one year from the date of its enactment, a judicial extension of the provisions of Article 2 — Sales to the facts of the present case would constitute an unwarranted usurpation of a purely legislative function. I disagree.
In this case, the Superior Court aptly noted:
Presently, the lower court found that the long-term nature of the lease in Cucchi ... distinguished it factually from the one-day lease of the Thomas front-end loader, and, *28therefore, the warranty provisions were held inapplicable. However, the holding of this court’s decision in Cucchi ... does not authorize different treatment for different types of lease transactions where the warranty provisions are concerned. Rather, the warranty provisions are applicable to all lease transactions. Further support for this ruling is gained from the fact that the proposed extension of warranty provisions to leases set forth in Article 2A of the U.C.C. does not distinguish lease transactions based upon their duration. The “case-by-case” analysis set forth in both Cucchi decisions is necessary only to determine whether a specific provision of Article 2 — Sales—which has not heretofore been extended by analogy to leases — should be applied to lease transactions. See Cucchi 574 A.2d at 569-570, quoting Cucchi 546 A.2d at 1141-1142. Accordingly, we find that the lower court erred when it refused to apply the warranty provisions of Article 2 to the one-day lease of the Thomas front-end loader.
Keblish v. Thomas Equipment, Ltd., 427 Pa.Super. 93, 100-101, 628 A.2d 840, 844 (1993).
The Superior Court also recognized that because no clear majority decision was reached by this Court in Cucchi with respect to whether Article 2 — Sales warranty provisions should be applied by analogy to lease transactions, the prior Superior Court decision in Cucchi which held that the warranty provisions were applicable to leases, is controlling. Id. at 101, n. 3, 628 A.2d at 845, n. 3.
It is well established that an opinion of this Court which does not command a majority is not controlling. LeGare v. Unemployment Compensation Board of Review, 498 Pa. 72, 73 n. 3, 444 A.2d 1151, 1154 n. 3 (1982); Mt. Lebanon v. County Board of Elections of County of Allegheny, 470 Pa. 317, 322, 368 A.2d 648, 650 (1977). Furthermore, it is well established that a Superior Court decision which has not been overruled or reversed is binding authority on this Commonwealth’s trial courts. In re Townsend’s Estate, 349 Pa. 162, 36 A.2d 438 (1944). In In re Townsend’s Estate, we stated that “a lower court has no right to ignore the latest decision of the *29Superior Court of this Commonwealth on an issue which has been squarely decided. Until that decision should be overruled by the Superior Court itself or overruled by the Supreme Court, it is still the law of this Commonwealth----” Id. at 168, 36 A.2d at 441.
Our opinion in Cucchi v. Rollins Protective Services, 524 Pa. 514, 574 A.2d 565 (1990) was by plurality, not by majority. Mr. Justice Larsen, writing the judgment of the court, affirmed the reasoning of the Superior Court regarding the application by analogy of Article 2’s warranty provisions to leases. Nevertheless, Mr. Justice Larsen disagreed with the Superior Court’s opinion with respect to the commencement of the limitation period in a breach of warranty claim, and therefore, reversed the Superior Court’s order on that basis. The concurring opinion in Cucchi joined only in the order of reversal.
Cucchi v. Rollins Protective Services involved a breach of warranty claim on a leased burglar alarm system. The Cucchis were leasing the alarm system from Rollins Protective Services Company (“Rollins”). The lease contract provided that the Cucchis would pay Rollins $15.00 per month for service and maintenance of the system, as well as an initial $500.00 for its installation. The contract specifically provided that title to the system would remain with Rollins and that upon completion of the lease, the system would be returned to Rollins.
The alarm system was installed in the Cucchis’ home in 1973. In 1984, their home was burglarized. It was discovered that at the time of the burglary, the system was, in fact, armed, but not signalling an alarm. Subsequent testing revealed that the alarm was only functioning intermittently. The trial court refused to direct a verdict for Rollins on the warranty issue.1 The jury returned a verdict in the Cucchis’ *30favor with respect to the breach of warranty, and the trial court denied Rollins’ post-trial motions.
In deciding whether the Article 2 — Sales provisions, specifically those relating to warranties, 13 Pa.C.S. §§ 2313-14, and the statute of limitations, 13 Pa.C.S. § 2725, applied to leases, the Superior Court held that
although the differences between leases and sales weigh against the extension of all of the provisions of Article 2 to leases, leases tend to the same economic result as sales, and further, that the provisions of the Code, besides being statutes concerning sales, embody the foremost modern legal thought concerning commercial transactions.
Cucchi v. Rollins Protective Services, 377 Pa.Super. 9, 29, 546 A.2d 1131, 1141 (1988) (citations omitted).
The Superior Court, therefore, determined that Article 2’s warranty provisions and its statute of limitations were applicable to leases. The court supported its determination as follows:
Many consumers and businesses are leasing goods rather than buying them. By leasing goods, parties achieve substantially the same result as by buying and selling. The essence of both transactions is that the lessee/buyer seeks to acquire the right to use goods and the lessor/seller seeks to sell the right to use the goods____ Considering that a large volume of commercial transactions is being cast in the form of a lease instead of a sale, and that leases reach the same economic result as sales, it would be illogical to apply a different set of rules to leases than to sales where there is no justification for doing so.
However, there are significant differences which make the outright extension of Article 2 to leases impractical. These differences include transfer of title, incidents of ownership, risk of loss, financial considerations, taxes, and bankruptcy proceedings. Faced with these differences and the fact that Article 2 was designed to govern sales, we cannot be certain
strict liability and directed a verdict for Rollins on the issue of negligence. *31that the impact of Article 2’s provisions on leases would not be obscure or undesirable. In other words, we cannot be certain that we would not be justified in applying some provisions of Article 2 to sales and not to leases. To gain that certainty, we would have to examine each of Article 2’s provisions. Given the impossibility of performing this task within one sweeping opinion, we would be remiss in holding Article 2 applicable to leases in its entirety at this time. Accordingly, we will analogize the provisions of Article 2 to leases only when the specific provision has been examined and the circumstances of the situation warrant the same treatment for leases which is given to sales.
Id. at 29-30, 546 A.2d at 1141-1142 (citations omitted).
Moreover, the court looked to Comment 2 to 13 Pa.C.S. § 2313 which provides:
Although this section is limited in its scope and direct purpose to warranties made by the seller to the buyer as part of a contract for sale, the warranty sections of this Article are not designed in any way to disturb those lines of case law growth which have recognized that warranties need not be confined ... to sales contracts ... the matter is left to the case law with the intention that the policies of this Act may offer useful guidance in dealing with further cases as they arise.
The court also recognized that under the U.C.C.’s predecessor, the Uniform Sales Act, warranty provisions had been applied to lease situations. Id. at 31, 546 A.2d at 1142 (citing Demos Construction Co. v. Service Supply Corp., 153 Pa.Super. 623, 34 A.2d 828 (1943)).
The Superior Court in Keblish noted that Messrs. Justice Larsen and Papadakos had “found further support in applying the warranty provisions of Article 2 — Sales to transactions involving the lease of goods in proposed Article 2A — Leases which essentially applies intact the warranty provisions of Article 2 — Sales to lease transactions with only relatively minor adaptations.” Keblish, 427 Pa.Super. at 98, 628 A.2d at 843 (citing Cucchi, 574 A.2d at 573, 570-571). In that regard, *32the Superior Court held that “the breach of warranty provisions of Article 2 — Sales of the Uniform Commercial Code apply with equal force to lease transactions, pursuant to this court’s decision in Cucchi v. Rollins Protective Services, 377 Pa.Super. 9, 32-34, 546 A.2d 1131, 1143 (1988), reversed on other grounds, 524 Pa. 514, 574 A.2d 565 (1990).” Id. at 105, 628 A.2d at 846-847.
I agree. I find Mr. Justice Larsen’s treatment of the issue to be particularly persuasive. Appellant, however, argues that our prior decision in Cucchi was based upon the fact that the lease in that case was sufficiently analogous to the sale of goods in order to justify the application of Article 2. Such an interpretation distorts the decision in Cucchi, and furthermore, was specifically rejected by this Court and by the Superior Court.
As Superior Court observed, most, (but not all) courts that have considered the issue have concluded that Article 2 of the UCC (Chapter 21 in Pennsylvania) should be judicially extended to other sorts of transactions in goods, including various forms of leases, under one of several approaches: (1) that Article 2/Chapter 21 is applicable in its entirety to leases of goods because the term “transaction” in goods is broad enough to encompass leases; (2) that some leases are functionally equivalent to sales, and therefore Article 2/Chapter 21 should apply to such lease agreements by analogy; and, (3) that selected provisions of Article 2/Chap-ter 21 should be applied to lease transactions by analogy because, “although the differences between leases and sales weigh against the extension of all of the provisions of [Article 2/Chapter 21] to leases,” nevertheless there are sufficient economic and practical similarities between sales and leases of goods to apply at least some of the provisions of Article 2/Chapter 21 to lease transactions. 377 Pa.Super. at 29-30, 546 A.2d at 1140-42.
Superior Court rejected the first approach as contrary to the express language of the UCC, and rejected the second approach as amorphous and inconsistent in application. 377 Pa.Super. at 27-29, 546 A.2d at 1140-41. That court *33then adopted the third approach as the law of this Commonwealth ____ (emphasis supplied).
We agree with Superior Court....
Cucchi, 524 Pa. at 521-523, 574 A.2d at 569-570.
Furthermore, now that Article 2A has been enacted, its comments provide further support for the application of Article 2’s provisions on warranties to the case sub judice. The comment to 13 Pa.C.S. § 2A1022 provides:
This Article governs transactions as diverse as the lease of a hand tool to an individual for a few hours and the leveraged lease of a complex line of industrial equipment to a multi-national organization for a number of years, (emphasis supplied).
******
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A court may apply this Article by analogy to any transaction, regardless of form, that creates a lease of personal property other than goods, taking into account the expressed intentions of the parties to the transaction and any differences between a lease of goods and a lease of other property. Such application has precedent as the provisions of the Article on Sales (Article 2) have been applied by analogy to leases of goods____ (emphasis supplied).
Furthermore, the comment to 13 Pa.C.S. § 2A2103 provides that
*34express and implied warranties of the Article on Sales (Article 2) are included in this Article, revised to reflect the differences between a sale of goods and a lease of goods____ The lease of goods is sufficiently similar to the sale of goods to justify this decision, (citation omitted). Many state and federal courts have reached the same conclusion.
Moreover, the comments to the title of new division 2A, 13 Pa.C.S. § 2A101,4 specifically set forth that
[t]he lease is closer in spirit and form to the sale of goods than to the creation of a security interest. While parties to a lease are sometimes represented by counsel and their agreement is often reduced to a writing, the obligations of the parties are bilateral and the common law of leasing is dominated by the need to preserve freedom of contract. Thus the drafting committee concluded that Article 2 was the appropriate statutory analogue, (emphasis supplied).
Therefore, it seems clear that our legislature did not intend to overrule existing Pennsylvania law regarding the application of certain Article 2 provisions to transactions involving leases. Rather, because leasing was becoming a major force in what otherwise was a traditional buyer-seller relationship, the legislature sought to clarify the application of the Uniform Commercial Code to lease transactions. In so doing, Article 2’s provisions were used as the statutory analogue for that clarification, notwithstanding the effective date of the legislation.
Accordingly, I agree with the Superior Court that based on its prior decision in Cucchi v. Rollins Protective Services, 377 Pa.Super. 9, 546 A.2d 1131 (1988) and our plurality holding in Cucchi, 524 Pa. 514, 574 A.2d 565 (1990), which, although *35reversing the Superior Court’s decision on a different issue, affirmed the Superior Court’s application of the Article 2 provisions to leases, the trial court erred in creating disparate treatment in the application by analogy of Article 2’s warranty provisions based on the length of the lease. I would, therefore, affirm the order of the Superior Court and remand the case to the Monroe County Court of Common Pleas for further proceedings.
CASTILLE, J., joins in this dissenting opinion.

. The complaint included counts for (1) breach of express and implied warranties of merchantability and fitness, (2) negligence in manufacturing, installing, repairing and servicing the system, and (3) strict liability. The trial court granted summary judgment for Rollins on the issue of

. Section 2A102 provides: "This division applies to any transaction, regardless of form, that creates a lease.”

. Section 2A210 provides:
(a) General rule. — Express warranties by the lessor are created as follows:
(1) Any affirmation of fact or promise made by the lessor to the lessee which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to the affirmation or promise.
(2) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods will conform to the description.
(3) Any sample or model that is made part of the basis of the bargain creates an express warranty that the whole of the goods will conform to the sample or model.
*34(b) Formal words or specific intent unnecessary. — It is not necessary to the creation of an express warranty that the lessor use formal words, such as "warrant” or “guarantee,” or that the lessor have a specific intention to make a warranty, but an affirmation merely of value of the goods or a statement purporting to be merely the lessor’s opinion or commendation of the goods does not create a warranty.

. "This division shall be known and may be cited as the Uniform Commercial Code Article 2A, Leases.”