Justices agree to hear Rainbow Realty rent-to-own dispute

The Indiana Supreme Court granted transfer to two cases last week, including a rent-to-own contract dispute that Indiana Legal Services claims could adversely impact Hoosier tenants across the state if not reviewed by the high court.

The justices unanimously granted transfer to Rainbow Realty Group Empire Holding Corp. and/or Cress Trust v. Katrina Carter, et al., 19S-CC-38. The case began in 2013 when Quentin Lintner and Katrina Carter entered into a 24-month rent-to-buy agreement with Rainbow Realty Group, but were later evicted from the home in 2015.

A Marion Superior judge granted partial summary judgment to Lintner and Carter after finding Rainbow Realty violated the Landlord-Tenant Act. But the Indiana Court of Appeals ruled in favor of Rainbow, finding the agreement was not a lease, but rather a contract for sale.

Specifically, the appellate court determined the agreement was not a lease because it did not have a definite term and did not revert to the lessor. The unanimous appellate panel further found the definition of “rental agreement” in the Landlord-Tenant Act provided only “limited guidance,” and instead adopted a common law definition of “lease” from an 1845 case requiring leases to have a definite term and end with reversion to the landlord. 

Several amicus briefs were filed in support of Indiana Legal Services’ petition to transfer, including briefs from the Economic Justice Project at the Notre Dame Clinical Law Center and the National Consumer Law Center. Rainbow Realty is also the defendant in other lawsuits filed by the Indiana Attorney General’s Office and Fair Housing Center of Central Indiana.

The court also accepted the case of Kenworth of Indpls. Inc., et al. v. Seventy-Seven Limited, et al., 19S-PL-37, in which a dump truck manufacturer unsuccessfully argued that its customer filed an untimely complaint against it. A split appellate court held that Kenworth failed to prove its timeliness argument, also finding genuine issues of material fact regarding when Seventy-Seven’s causes of action accrued. 

Judge Robert Altice dissented from the panel’s affirmation in Kenworth, finding the cause of action accrued upon delivery of the trucks.

The high court also denied transfer to 16 other cases on petition to transfer for the week ending Jan. 18. The full list of transfer decisions is available here.

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