Rainbow Realty Group, Inc., et al., Appellants/Cross-Appellees,
Katrina Carter and Quentin Lintner, Appellees/Cross-Appellants.
Argued: March 7, 2019
from the Marion Superior Court, No. 49D14-1505-CC-16629 The
Honorable James B. Osborn, Judge.
Petition to Transfer from the Indiana Court of Appeals, No.
ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES KARL L. MULVANEY
NANA QUAY-SMITH BINGHAM GREENEBAUM DOLL LLP INDIANAPOLIS,
ATTORNEYS FOR APPELLEES/CROSS-APPELLANTS JON LARAMORE CHERYL
KOCH-MARTINEZ ADAM MUELLER INDIANA LEGAL SERVICES, INC.
INDIANAPOLIS, INDIANA JOHN E. BRENGLE INDIANA LEGAL SERVICES,
INC. NEW ALBANY, INDIANA
ATTORNEYS FOR AMICUS CURIAE STATE OF INDIANA CURTIS T. HILL,
JR. ATTORNEY GENERAL OF INDIANA THOMAS M. FISHER SOLICITOR
GENERAL OF INDIANA INDIANAPOLIS, INDIANA JUSTIN G. HAZLETT
SECTION CHIEF, CONSUMER LITIGATION INDIANAPOLIS, INDIANA
STEVEN P. FRANK MICHELLE ALYEA AMANDA LEE LARA LANGENECKERT
JULIA C. PAYNE DEPUTY ATTORNEYS GENERAL INDIANAPOLIS, INDIANA
ATTORNEYS FOR AMICI CURIAE CONSOLIDATED CITY OF INDIANAPOLIS
AND MARION COUNTY DONALD E. MORGAN OFFICE OF CORPORATION
COUNSEL INDIANAPOLIS, INDIANA MAGGIE L. SMITH DARREN A. CRAIG
FROST BROWN TODD LLC INDIANAPOLIS, INDIANA
ATTORNEYS FOR AMICUS CURIAE INDIANA ASSOCIATION FOR COMMUNITY
ECONOMIC DEVELOPMENT INC. D/B/A PROSPERITY INDIANA MAGGIE L.
SMITH DARREN A. CRAIG FROST BROWN TODD LLC INDIANAPOLIS,
ATTORNEYS FOR AMICUS CURIAE NEIGHBORHOOD CHRISTIAN LEGAL
CLINIC MAGGIE L. SMITH DARREN A. CRAIG FROST BROWN TODD LLC
INDIANAPOLIS, INDIANA CHASE M. HALLER NEIGHBORHOOD CHRISTIAN
LEGAL CLINIC INDIANAPOLIS, INDIANA
ATTORNEY FOR AMICI CURIAE NOTRE DAME CLINICAL LAW CENTER, AND
NATIONAL CONSUMER LAW CENTER JUDITH FOX NOTRE DAME CLINICAL
LAW CENTER SOUTH BEND, INDIANA
ATTORNEY FOR AMICUS CURIAE FAIR HOUSING CENTER OF CENTRAL
INDIANA JAMES STRENSKI CANTRELL, STRENSKI & MEHRINGER,
LLP INDIANAPOLIS, INDIANA
that the parties' "rent-to-buy" agreement is
not a land-sale contract but a rental agreement subject to
Indiana's residential landlord-tenant statutes.
Plaintiffs, which own and manage the properties held in
inventory, are "landlords" that violated the
Statutes by delivering the disputed property in an
uninhabitable condition. We affirm the trial court's
judgment for the tenants and against Plaintiffs on their
claim under the Statutes. On the other counts, we affirm in
part, reverse in part, and remand.
and Procedural Background
Rent-to-buy agreement for uninhabitable house
Cress Trust owns houses in Marion County. Plaintiff Rainbow
Realty Group, Inc., sells, rents, and manages these
properties for Cress. The same individual serves both as
president of Rainbow and as Cress's corporate trustee.
Throughout this Opinion, we refer to "Plaintiffs"
to denote these related parties collectively and refer to
Cress and Rainbow separately as warranted to identify one
party but not the other.
offer four options to customers interested in their housing
• straight sale;
• straight rental;
• land contract; or
• rent-to-buy contract.
straight sale requires payment of the full purchase price in
exchange for legal title. A straight rental offers a house in
a habitable condition in exchange for monthly payments. A
land contract requires a large down payment followed by
monthly payments to finance the sale. And a rent-to-buy is
not currently habitable and involves a lesser monthly payment
than a straight rental.
Katrina Carter and Quentin Lintner are a married couple
living in Marion County. In response to an ad, the Couple
contacted Plaintiffs to learn about housing options. Although
Plaintiffs considered the Couple to have a poor credit
history and told them their rental stock was not available,
Plaintiffs concluded the Couple's $4, 000 monthly income
could qualify them for Plaintiffs' rent-to-buy program.
The Couple applied and paid a $100 deposit to hold a
single-family house on North Oakland Avenue in Indianapolis
with a purchase price of $37, 546. In May 2013, after their
application was approved, the Couple signed a "Purchase
Agreement (Rent to Buy Agreement)". Attachments to the
Agreement included a separate declaration, a truth-in-lending
disclosure, and a residential real-estate disclosure.
the Agreement, Plaintiffs and the Couple agreed that the
House "shall be used as a single-family private
residence and for no other purpose whatsoever". The
Couple agreed they were acquiring the House "as
is", that it was not in livable condition, and that they
would need to make it habitable before they could live in it.
In addition, the Agreement said the House came with no
warranties of condition or habitability, that the Couple
would have to make or pay for any repairs themselves, that
any improvements to the House would become a permanent part
of the property, that payment was due on the first of the
month, and that Plaintiffs could "evict" them for
not paying on time.
the Couple signed the Agreement, the House was missing
toilets, plumbing, electrical wiring, and door locks. All the
windows were broken. There was no security to prevent
break-ins. The basement stairs were in disrepair. The carpets
were beyond ...