Opinion ID: 4553879
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: REO is a Nebraska limited liability company which owns residential rental property in Dorchester. Prior to May 1, 2017, tenants who leased REO’s property applied for utility services with Dorchester, paid a deposit, and received water, sewer, and electrical services. On May 1, 2017, Dorchester’s village board passed ordinance No. 684 mandating the use of village utility services and setting forth terms for billing, collection of bills, and discontinuance of service. As relevant to the instant case, “Section 3-002: Consumer’s Application; Service Deposit” provides: A. Every person or persons desiring utility services must make application therefor to the Village clerk, who shall require the applicant to make a service deposit and tap fees for water and sewer service in such amounts as set by resolution by the Village Board and placed on file at the Village office. . . . Utility services shall not be supplied to any house or private service pipe except upon the order of the utilities superintendent. B. Before a tenant’s utility application will be accepted, the landlord shall be required to sign an owner’s consent - 686 - Nebraska Supreme Court Advance Sheets 306 Nebraska Reports REO ENTERS. v. VILLAGE OF DORCHESTER Cite as 306 Neb. 683 form and agree to pay all unpaid utility charges for his or her property. In July 2017, Ange Lara entered into a lease agreement with REO for the rental of REO’s Dorchester property. Pursuant to this agreement, Lara contacted Dorchester’s village clerk to apply for utility services and paid a $250 deposit with this application. At that time, Lara was informed that there was a prior, unpaid utility bill associated with a prior renter of the property and that she would not receive the services until this bill was paid and REO signed a form titled “Owner’s Consent and Guaranty of Payment for Unpaid Utility Charges for Rental Property.” Lara told a representative of REO about her interaction with the village clerk. An REO representative then contacted representatives of Dorchester and was informed of ordinance No. 684 and its requirement that REO sign the “Guaranty” before Lara could receive utility services for the property. The village clerk also reiterated the requirement that the prior tenant’s past-due bill be paid. REO responded to these requirements by asserting that ordinance No. 684 is invalid and that it would not sign the “Guaranty.” Due to this noncompliance, Dorchester refused to provide Lara utility services at the property in Lara’s name. However, Dorchester did begin to provide services to the property through an account set up in an REO representative’s name. At the time of this action, Dorchester had retained Lara’s deposit and was continuing to provide utility services for the property, still occupied and leased by Lara, through the REO representative’s account. In October 2017, REO filed a complaint seeking that the district court declare ordinance No. 684 void and unenforceable and order Dorchester to pay REO’s attorney fees and court costs. REO alleged four claims as follows: (1) Ordinance No. 684 violated the Equal Protection Clauses of article 1, § 3, of the Nebraska Constitution and the 14th Amendment to the U.S. Constitution; (2) ordinance No. 684 violated the Equal - 687 - Nebraska Supreme Court Advance Sheets 306 Nebraska Reports REO ENTERS. v. VILLAGE OF DORCHESTER Cite as 306 Neb. 683 Credit Opportunity Act 1; (3) ordinance No. 684 violated the special legislation provision of article 3, § 18, of the Nebraska Constitution; and (4) ordinance No. 684 violated Nebraska’s Uniform Residential Landlord and Tenant Act. 2 Dorchester filed an answer which claimed, in part, that REO’s complaint failed to state a claim upon which relief could be granted and that REO’s claims were barred in whole or in part by the doctrine of unclean hands, laches, waiver, and estoppel. In May 2016, REO filed a motion for summary judgment claiming there were no genuine issues of material fact and it was entitled to judgment as a matter of law. Dorchester, in turn, also filed a motion for summary judgment, agreeing there were no genuine issues of material fact and claiming it was entitled to judgment as a matter of law. Following a hearing, the district court entered summary judgment for REO and overruled Dorchester’s motion. In its order, the court analyzed REO’s claim that ordinance No. 684 violated the Equal Protection Clauses. First, the court found that residential tenants and owners of Dorchester property were similarly situated under ordinance No. 684 for equal protection purposes. The court noted that by requiring a landlord to be a cosigner to a tenant’s utility obligations, but not requiring a residential owner to obtain a third-party cosigner, ordinance No. 684 treated tenants and owners differently. The court then found there was not a rational relationship between the difference in treatment and Dorchester’s interest in collecting unpaid bills from tenants. Specifically, the court reasoned that Dorchester’s policy was applied to tenants irrespective of their creditworthiness and ability to pay without taking into account the tenants’ security deposits and the ability of Dorchester to impose liens on the rented property or provide other remedies to meet Dorchester’s offered goal. Thus, the court determined ordinance No. 684 unconstitu­tionally vio­lated the 1 15 U.S.C. § 1691 et seq. (2012). 2 Neb. Rev. Stat. §§ 76-1401 to 76-1449 (Reissue 2018). - 688 - Nebraska Supreme Court Advance Sheets 306 Nebraska Reports REO ENTERS. v. VILLAGE OF DORCHESTER Cite as 306 Neb. 683 Equal Protection Clauses and, because it found this claim dispositive, did not discuss REO’s remaining claims. ASSIGNMENT OF ERROR Dorchester assigns, consolidated and restated, that the district court erred by finding that ordinance No. 684 violated the Equal Protection Clauses of the U.S. and Nebraska Constitutions.