City of New Albany v. Board of Commissioners of the County of Floyd, New Albany Floyd County Indiana Building Authority

FILED
OPINION ON REHEARING Aug 15 2019, 9:17 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Anne K. Ricchiuto BOARD OF COMMISSIONERS OF
Jane Dall Wilson THE COUNTY OF FLOYD
Stephanie L. Boxwell Richard Fox
Faegre Baker Daniels LLP Kristi L. Fox
Indianapolis, Indiana Fox Law Offices
New Albany, Indiana
Bart A. Karwath
Mark J. Crandley
Barnes & Thornburg LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
City of New Albany, August 15, 2019
Appellant-Intervenor/Counterclaimant, Court of Appeals Case No.
18A-MI-1627
v. Appeal from the Floyd Superior
Court
Board of Commissioners of the The Honorable Vicki Carmichael,
County of Floyd, Special Judge
Appellee-Plaintiff/Counterclaim Trial Court Cause No.
Defendant, 22D02-1804-MI-598
New Albany Floyd County
Indiana Building Authority,
Appellee-Defendant/Cross-Claim
Defendant.
Court of Appeals of Indiana | Opinion on Rehearing 18A-MI-1627| August 15, 2019 Page 1 of 4
Bradford, Judge.
[1] The City of New Albany (“the City”) has petitioned for rehearing, contending,
contrary to our opinion in this case, that a purchase option included in an
original lease does not carry over into a holdover tenancy like the other terms
and conditions of the original lease. We grant the City’s petition for the sole
purpose of addressing its contention; however, we disagree, and our original
opinion remains unchanged.
[2] In support of its contention, the City directs our attention to Libin v. Peters, in
which another panel of this court concluded that “[w]here the original lease has
expired and the tenant remains in possession upon the terms of the original
lease the option is not thereby renewed.” 118 Ind. App. 27, 31, 75 N.E.2d 162,
164 (Ind. Ct. App. 1947). While the holding in Libin is duly noted, it appears to
be an outlier from the case law developed by this court regarding holdover
tenancy. In Penmanta Corp. v. Hollis, we concluded that an exculpatory clause in
the original lease carried over into the holdover tenancy, reasoning that “[i]t has
Court of Appeals of Indiana | Opinion on Rehearing 18A-MI-1627| August 15, 2019 Page 2 of 4
been held that where a tenant holds over after the lease has expired the
inference that the parties consent to a continuation of the same terms is so
strong that it is adopted as a rule of law.” 520 N.E.2d 120, 122 (Ind. Ct. App.
1988); see also City of Bloomington v. Kuruzovich, 517 N.E.2d 408, 411 (Ind. Ct.
App. 1987) (“Generally, when a tenant holds over past the term of his lease, the
lease is renewed. The renewed lease contains the same terms, and is subject to
the same conditions, as the original lease.”). More recently, we noted that
In the absence of an agreement to the contrary, when a tenant
holds over beyond the expiration of the lease and continues to
make rental payments, and the lessor does not treat the tenant as
a trespasser by evicting him, the parties are deemed to have
continued the tenancy under the terms of the expired lease.
Houston v. Booher, 647 N.E.2d 16, 19 (Ind. Ct. App. 1995) (internal citations
omitted). We find these cases highly persuasive in supporting our conclusion
that a purchase option in an original lease carries over into the holdover
tenancy along with all of the other terms and conditions in the original lease. As
in Houston, we continue to agree with Judge Sullivan’s concurring opinion in
Penmanta Corp., in which he stated that “[i]f terms and conditions of an original
lease (other than the duration of the tenancy) are to be excluded from a
holdover relationship, that determination should come from the General
Assembly or the Indiana Supreme Court.” 520 N.E.2d at 123.
[3] While we grant the City’s petition to address its contention, we deny its request
to alter the analysis or disposition of our original opinion, which will remain
unchanged.
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Bailey, J., and Brown, J., concur.
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