Hindering secured creditor conviction reversed for insufficient evidence

It’s rare to see a conviction overturned for insufficiency of the evidence because the standard is so high, i.e., no rational jury could have found the accused guilty.  Moreover, after a conviction, the presumption of innocence is replaced with the presumption of guilt.  All questions about the credibility of witnesses, the weight of their testimony, and the reconciliation of conflicts, goes in the State’s favor.  The State, and not the defendant, is entitled to the “strongest legitimate view of the evidence and to all reasonable and legitimate inferences that may be drawn therefrom.”

Given this high standard, it’s not surprising that when there is a reversal for insufficient evidence, it’s in an area of law that students dread and attorneys avoid – secured transactions.  While secured transactions seems daunting, most people have experience with it, e.g., paying for a car overtime.  To use an example, if you owe your neighbor $100 and tell him, “Keep my lawn mower until I pay you back,” you’ve participated in a secured transaction.  Your lawn mower is security for the payment.  If you don’t pay him, he can keep your mower until you do (or eventually and with the proper notice, sell it).  If you do pay him, you get your lawn mower back.

In criminal law, there is theft and there is hindering a secured creditor.  If you steal your neighbor’s lawn mower, you’ve committed a theft.  If you “steal” your lawn mower back from your neighbor after you’ve told him to keep it until you pay the $100 you owe him, you’ve not committed a theft.  Why?  Because you haven’t stolen his property.  The lawn mower isn’t his.  It’s yours.  However, while you haven’t committed a theft, you have hindered a secured creditor, an E Felony.

Under Tennessee Code Annotated section 39-14-116, hindering a secured creditor occurs when:

(a) A person who claims ownership of or interest in any property which is subject of a security interest, security agreement, deed of trust, mortgage, attachment judgment or other statutory or equitable lien commits an offense who, with intent to hinder enforcement of that interest or lien, destroys, removes, conceals, encumbers, transfers, or otherwise harms or reduces the value of the property.

Notably, the intent to hinder enforcement must be present at the same time one “destroys, removes, conceals, encumbers, transfers, or otherwise harms or reduces the value of the property.”  If someone lacks this criminal intent, he may be liable for civil damages, but he isn’t guilty of a crime.

In this case,  the defendant bought a car with a loan, listing the alleged victim as the lienholder on the bill of sale.  Then, the defendant obtained a second loan from Tennessee Title Loans, Inc. without telling them about the first loan.  Finally, he registered the vehicle and did not mention the first loan.

The Tennessee Court of Criminal Appeals held that this evidence was insufficient for any rational jury to convict the defendant of hindering a secured creditor.  The court reasoned that, while the defendant was not forthcoming about the first loan, there was nothing else to support an inference that he intended to hinder enforcement when he obtained the second loan.  Unlike previous cases where the evidence was sufficient, at the time the second loan was taken out, the defendant was not trying to avoid repossession of the vehicle nor was the defendant engaged in a fraudulent scheme to sell encumbered vehicles to third parties.  Given there were no additional facts to support an inference of intent and mere knowledge of a first loan when obtaining a second loan is not criminal, the appellate court reversed the judgment of the trial court and vacated the defendant’s conviction.

State v. Carey, No. E2016-01125-CCA-R3-CD (Tenn. Crim. App. Aug. 9, 2017)