Reo Enters., LLC v. Vill. of Dorchester
| Decision Date | 04 November 2022 |
| Docket Number | S-21-752. |
| Citation | 312 Neb. 792,981 N.W.2d 254 |
| Parties | REO ENTERPRISES, LLC, a Nebraska limited liability company, appellant, v. VILLAGE OF DORCHESTER, a Nebraska political subdivision, appellee. |
| Court | Nebraska Supreme Court |
Gregory C. Damman, of Blevens & Damman, Seward, for appellant.
Kelly R. Hoffschneider, Lincoln, and Timothy J. Kubert, of Hoffschneider Law, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.
The Village of Dorchester, Nebraska, enacted an ordinance providing that renters of property could receive utility services from the village only if their landlord guaranteed that the landlord would pay any unpaid utility charges. REO Enterprises, LLC (REO), an owner of rental property within the village, filed an action seeking a declaration that the ordinance was unenforceable for various reasons. The district court initially granted the relief REO sought, declaring that the ordinance violated the Equal Protection Clauses of the U.S. and Nebraska Constitutions. In an appeal filed by the village, however, we reversed the district court's judgment on that question and remanded the cause for the district court to consider REO's other claims. See REO Enters. v. Village of Dorchester , 306 Neb. 683, 947 N.W.2d 480 (2020) ( REO I ). On remand, the district court found that the village was entitled to summary judgment on each of REO's other claims. The case now returns to us, this time at the behest of REO. We find no error on the part of the district court and therefore affirm.
The village enacted the ordinance at issue in this appeal in 2017. The ordinance addresses the village's provision of utility services, including water, sewer, and electricity. The ordinance requires that all residents of the village "subscribe to [the] [v]illage utility services" and provides terms for billing, collection of bills, and discontinuance of service.
The ordinance also sets forth the process by which persons may apply to receive utility services. Under the ordinance, an application for utility services must be submitted to the village clerk, who is to require payment of "a service deposit and tap fees for water and sewer service." Of particular relevance to this appeal, the ordinance provides the following with respect to applications for utility services filed by renters of property: "Before a tenant's utility application will be accepted, the landlord shall be required to sign an owner's consent form and agree to pay all unpaid utility charges for his or her property."
Several months after the ordinance was enacted, REO filed a lawsuit against the village in which it asked the district court to declare the ordinance unenforceable. In its complaint, REO alleged that when one of its tenants, Ange Lara, applied to receive utility services and paid the requested deposit, the village clerk told her that she would not be provided with such services until REO signed a guarantee as required by the ordinance. According to the complaint, when REO informed the village that it would not sign the guarantee, the village provided utility services to the property, but through an account held by a member of REO rather than through an account in Lara's name. Although REO's complaint named Lara as a third-party defendant, nothing in our record indicates that Lara has participated in the proceedings as a party.
REO's complaint alleged that the ordinance was unconstitutional and in violation of state and federal statutes. REO alleged that the ordinance violated the Equal Protection Clauses of the U.S. and Nebraska Constitutions, as well as article III, § 18, of the Nebraska Constitution. It also alleged that the ordinance violated the federal Equal Credit Opportunity Act, see 15 U.S.C. § 1691 et seq. (2018), and Nebraska's Uniform Residential Landlord and Tenant Act, see Neb. Rev. Stat. §§ 76-1401 to 76-1449 (Reissue 2018 & Supp. 2021).
REO asked the district court to declare that the ordinance was void and unenforceable on each of these grounds.
REO and the village eventually filed cross-motions for summary judgment. At the summary judgment hearing, the district court received an affidavit from the village clerk, Gloria Riley. In her affidavit, Riley asserted that she was responsible for managing utility accounts for the village. Riley stated that a previous renter of the property REO rented to Lara failed to pay a utility bill of over $500 and that the residency of that former tenant was unknown. She also stated that the village "has spent substantial resources in trying to locate former residential tenant utilities customers that have left town with unpaid utility account obligations" and that the village had previously used collection agencies to assist in pursuing a recovery for these unpaid bills, but that such agencies would charge 50 percent of the amount collected. According to Riley, the ordinance was adopted to "further the goal of collection by reducing the possibility that [the village] will be faced with the administrative expenses associated with repeatedly resorting to cumbersome and expensive foreclosure or collection proceedings."
The district court also received an affidavit of Lara. Lara's affidavit was consistent with the allegations in REO's complaint regarding the village's response to Lara's application for utility services.
Initial District Court Order and First Appeal.
After the hearing on the motions for summary judgment, the district court entered an order granting summary judgment in favor of REO. In its order, the district court found that the ordinance violated the Equal Protection Clauses of the U.S. and Nebraska Constitutions. It reasoned that the ordinance treated residential owners of property and residential tenants differently and that there was no rational relationship between the difference in treatment and the village's interest in collecting unpaid utility bills. The district court did not address the other grounds REO offered in support of its request that the ordinance be declared invalid.
The village appealed the district court's decision, and we reversed. We held that although the ordinance classified residential tenants and residential owners separately, the classification was subject to and satisfied rational basis scrutiny and thus did not violate the Equal Protection Clauses of the U.S. and Nebraska Constitutions. We found that ensuring the collection of utility bills was a plausible policy reason for the requirement that renters obtain a landlord guarantee and that the differential treatment of renters and owners was sufficiently related to the goal of ensuring payment of utility bills so as not to render the treatment arbitrary or irrational.
After receiving and spreading our mandate in REO I , the district court entered an order addressing REO's other claims. It found that the village was entitled to summary judgment on each of those claims and thus granted the village's motion for summary judgment, overruled REO's motion for summary judgment, and dismissed the case.
REO timely appealed. We moved the case to our docket on our own motion pursuant to Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2020).
REO assigns that the district court erred by finding that the ordinance (1) did not violate article III, § 18, of the Nebraska Constitution, (2) did not violate the federal Equal Credit Opportunity Act, and (3) was not void as against the public policy of Nebraska. REO also assigns that the district court committed plain error by finding that the village had statutory authority to enact the ordinance.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law. D-CO, Inc. v. City of La Vista , 285 Neb. 676, 829 N.W.2d 105 (2013).
The constitutionality of an ordinance presents a question of law. Dowd Grain Co. v. County of Sarpy , 291 Neb. 620, 867 N.W.2d 599 (2015). An appellate court independently reviews questions of law decided by a lower court. Id.
The meaning and interpretation of statutes and regulations are questions of law for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below. In re App. No. P-12.32 of Black Hills Neb. Gas , 311 Neb. 813, 976 N.W.2d 152 (2022).
Plain error is error plainly evident from the record and of such a nature that to leave it uncorrected would result in damage to the integrity, reputation, or fairness of the judicial process. North Star Mut. Ins. Co. v. Miller , 311 Neb. 941, 977 N.W.2d 195 (2022).
REO first claims that the district court should have declared the ordinance unenforceable on the grounds that it violates article III, § 18, of the Nebraska Constitution. The text of article III, § 18, prohibits "[t]he Legislature" from "pass[ing] local or special laws" in a set of enumerated circumstances. The section concludes, "In all other cases where a general law can be made applicable, no special law shall be enacted." Id. We have described article III, § 18, as generally prohibiting "special legislation." Big John's Billiards v. State , 288 Neb. 938, 944, 852 N.W.2d 727, 734 (2014). We have said that the special legislation prohibition applies to municipal ordinances. See, e.g., D-CO, Inc., supra .
So what exactly is it that article III, § 18, prohibits? Our precedent holds that a legislative act constitutes special legislation if (1) it creates an arbitrary and unreasonable method of classification or (2) it creates a permanently closed class. D-CO, Inc., supra . REO's sole argument is that the ordinance creates an...
To continue reading
Request your trial