REO Enters. v. Village of Dorchester
981 N.W.2d 254
Neb.2022Background
- The Village of Dorchester (2017 ordinance) required landlords to sign a guarantee agreeing to pay any unpaid utility charges before a tenant’s utility application would be accepted.
- REO Enterprises owns rental property in Dorchester; when tenant Ange Lara applied for service, the village demanded REO’s owner consent; REO refused and the village opened service under an account in a member’s name.
- REO sued seeking declaratory relief, asserting violations of equal protection, article III, § 18 (special legislation), the federal Equal Credit Opportunity Act (ECOA), and Nebraska public policy (Uniform Residential Landlord and Tenant Act).
- The district court first granted summary judgment for REO on equal protection; the Nebraska Supreme Court reversed that ruling in REO I and remanded for consideration of REO’s other claims.
- On remand the district court granted summary judgment for the village on the remaining claims; REO appealed. The Supreme Court affirms the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ordinance violates article III, § 18 (prohibition on special/local laws) | REO: Singling out renters for guaranty is arbitrary and lacks substantial difference from owners. | Village: Renters pose greater administrative/collection burdens; landlord guaranty reduces costs and aids collection. | Court: No violation — substantial difference exists (collection difficulty/cost for renters) and ordinance is justified. |
| Whether the ordinance violates the ECOA | REO: Requiring a landlord guaranty is a credit condition that discriminates; REO can seek relief under §1691e(c). | Village: REO is not an "applicant" under ECOA and thus cannot pursue relief; ECOA remedies are for aggrieved applicants. | Court: REO is not an applicant/eligible plaintiff under ECOA; therefore it cannot seek declaratory/equitable relief under §1691e(c). |
| Whether the ordinance is void as against Nebraska public policy (URTLA limits on deposits) | REO: State cap on security deposits (§76‑1416) shows public policy against extra landlord liability; ordinance improperly imposes potential additional landlord liability. | Village: No asserted preemption; REO has not shown express or implied conflict with state law. | Court: REO failed to raise a valid preemption/public‑policy ground; ordinance not shown preempted or void as against policy. |
| Whether the district court plainly erred by finding village had statutory authority to enact the ordinance | REO: Although not raised below, court should find village lacked authority (plain error). | Village: Issue not preserved; court cannot grant summary judgment on unpled issues. | Court: No plain error — issue not raised below and court may not decide unpleaded issues on summary judgment. |
Key Cases Cited
- REO Enters. v. Village of Dorchester, 306 Neb. 683, 947 N.W.2d 480 (Neb. 2020) (prior Supreme Court decision reversing district court on equal protection and remanding)
- D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829 N.W.2d 105 (Neb. 2013) (special legislation standards and municipal regulation analysis)
- Dowd Grain Co. v. County of Sarpy, 291 Neb. 620, 867 N.W.2d 599 (Neb. 2015) (constitutionality of ordinances; special legislation test)
- Green v. Box Butte General Hosp., 284 Neb. 243, 818 N.W.2d 589 (Neb. 2012) (court may not grant summary judgment on issues not presented by the pleadings)
- Hawkins v. Community Bank of Raymore, 761 F.3d 937 (8th Cir. 2014) (guarantor is not an "applicant" under ECOA)
- Regions Bank v. Legal Outsource PA, 936 F.3d 1184 (11th Cir. 2019) (ordinary meaning of "applicant" excludes guarantors)